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Friday, June 10, 2016

Tesla Has A Problem -- A Fair Amount Of Obfuscation -- June 10, 2016

With all the recent notes about natural gas, I thought I would check in on the four Strata-X wells, targeting the shallow Niobrara natural gas formation in Emmons County (east of the Bakken play). Three of the four wells (permits) had been PNC'd. The fourth was TA'd for one year; that status ends, with no option to extend, in just a few weeks, July 1, 2016.

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Updates

July 1, 2016: Tesla has a problem. Now it's the "morality" issue. In a few days this story will require a subscription over at SeekingAlpha. It has to do with Tesla's obfuscation regarding the fatality (Model S) and its failed "autopilot" software (does not use LIDAR).

June 10, 2016: CNN Money also has the story

Later, 11:01 a.m. Central Time: just to clarify. I don't know if my position has changed on this issue or not. As much "grief" as I give Tesla, I truly hope the Tesla Model 3 succeeds. If the Model 3 succeeds (and by success, I mean that it meets its target sales within 24 months of its original target date; in other words, even if it doesn't meet its target sales until "two years late" I would still consider that a success). This would be a huge feather in the cap of the American entrepreneurial spirit; the incredible talent of the American engineers; the awesome ability of American workers to go from start to finish on what appears to be an incredible luxury vehicle in only a few years -- regardless of the source of money. Looking at purely the technology aspect of all of this, it would be quite impressive. 

Original Post
 
At the moment, there are a fair number of stories being reported regarding Tesla. They all seem to have one thing in common: obfuscation.

This is the one that caught my attention: the reason that Tesla has lowered its entry price for the Model S. Tesla says:
Tesla said on Thursday it is discontinuing the 70-kwh version and offering the new model to appeal to people interested in the brand but unable to afford the longer-range versions
"Unable to afford the longer-range versions"?

The two versions:
  • The previous long range version: 250+ miles, $72,500, 70-kw battery.
  • The new version: 200 miles, $66,000, a 75-kw battery but software will cap the range at 200 miles; a software change can increase the mileage.
After that, the linked article simply becomes too confusing with too many price entry points, too many battery options, too many basic options.

It's almost as if we might soon see a Model S priced for a 3-wheel version with an option to pay "a bit extra" for the fourth wheel. Or maybe a software patch to turn on the headlights for driving at night.

Why in the world would one "cap" the range on a perfectly good luxury car with a simple software patch? [Except of course to raise badly needed cash.]

I understand the opportunity to pay extra for leather seats or a "custom sports package," but pay extra for a software patch to increase range from 200 miles to 250 miles. It almost seems parsimonious (Scroogelike, penny-pinching, evil).

But this is the real question: sticker shock for those who can afford a $70,000 vehicle? I'm curious who those folks are who differentiate between a $66,000 luxury vehicle and a $72,500 luxury vehicle. It must be the $69,9999 vs $70,000 psychological threshold. "Gee, Margaret, we can afford the $69,000 vehicle, but we can't afford the $70,000 vehicle."

At zero percent interest, the additional (72,500 - 66,000) over 72 months = $90/month. About $1,000/month vs $910/month. And these folks are not buying the EV as their only car. My hunch is that the average household that has one EV has two conventional ICE automobiles. And probably high end at that.

A google search for "obfuscation" brings me to this link: http://www.wsj.com/articles/u-s-regulators-begin-looking-at-suspensions-in-teslas-model-s-1465508937.

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