Disclaimer; Tesla; Fertilizer Plants In North Dakota -- January 14, 2015

This is interesting. Some North Dakota lawmakers proposing tax incentives for additional fertilizer plants in the state to make use of all that natural gas that's being produced. The bill would also affect the recently announced Badlands NGL facility, which will turn ethane gas into polyethylene for plastic products.

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A lot has been posted today, much of it in haste. I assume there are typographical and factual errors. I will gradually get back to the posts to correct errors if I find them. If you see any significant errors, let me know.

This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read at this blog. If you see something that appears to be wrong, it probably is. This blog is full of opinion, and it is hard to separate fact from opinion on a blog like this. If it's important to you, go to the source. As for me, I'm going to lunch.

Tesla. Story here. And what I think Tesla is all about. And it's not cars. 

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Tesla

It's a battery company disguised as an automobile company:

Musk wants to change the economics of batteries by mass-producing them in the “gigafactory” Tesla is building in Nevada, which is due to open in 2020 and reach production of 500,000 battery packs per year at some point. Musk has said those packs will go into future Tesla vehicles, including mass-market models costing less than $40,000. But he may also need other automotive customers for those packs, which won’t happen unless Tesla’s competitors are building electrics. That helps explain why Tesla released many of its patents last year and called for open-source development of EV technology – with other automakers using Tesla’s technology, instead of the other way around, of course.

One big problem for electrics is that battery technology — unlike semiconductors, which have seen enormous gains in processing power and a corresponding plunge in costs — is evolving slowly, with no huge breakthroughs on the horizon. Putting enough juice in a battery to power a car remains so expensive that the segment still depends on a $7,500 federal tax credit per vehicle. Even then, it’s difficult for automakers to turn a profit on electrics. Most technology becomes more cost-efficient as production ramps up, but it’s still not clear if batteries will ever become cost-competitive with other forms of fuel, absent subsidies.-- from the linked article.

Building out the national, much less a global, charging system will be economically impossible for the private sector; competing standards will make things worse:

Tesla faces as a small-batch manufacturer: different standards for fast-charge stations springing up across the country. Tesla uses a proprietary system the way Apple’s iPhones can only be powered with Apple chargers. 

That’s not a problem for charging the car at home, but when traveling, Tesla owners can only get a quick charge at a Tesla charger, and there simply aren’t enough of them to allow worry-free driving in every market. 

Building a full national network on Tesla's own dime coudl be prohibitively expensive. Teslanauts can charge more slowly through a standard outlet, but such trickle-charging takes hours. That limits the appeal of any Tesla regardless of the price, especially for families that only want to own one car.

Nissan uses a different fast-charge standard for the Leaf, which is catching on in many cities that are building public charging networks. BMW and other German manufacturers rely on a third standard. The Leaf already outsells the Model S nearly 2-to-1, and if a competing charging technology becomes the dominant standard, Tesla risks becoming Betamax in a VHS world. Some critics say Musk missed an opportunity by not making Tesla’s technology available sooner, before other standards were in place.-- from the linked article.

Already in trouble:

Musk declined to report December sales numbers, as he did last year around this time, generating speculation that the numbers must be weak. He also said Tesla won’t be fully profitable until 2020, several years later than some analysts had been expecting. The company’s stock fell by more than 6% following Musk’s remarks. -- from the linked article.

Cheap gasoline, natural gas at just the wrong time:

One of the huge breaks the Bakken got was high-priced oil during the Bakken's discovery and early development stage. The slump in the price of oil occurred when the Bakken had entered the manufacturing phase and production costs for Bakken crude had decreased significantly. With the infrastructure in place, the Bakken can better manage the slump in oil prices. 

It is quite the opposite for Tesla. Tesla is still in its infancy, in its "discovery" phase, and hardly even into a "development stage." As long as the price of oil was projected to increase over the next 20 years, Tesla EVs looked comparatively attractive. However, a spokesman from someone who should know, a Saudi prince, says we will never see $100-oil again. That's a real downer for someone selling EVs.