Wednesday, May 1, 2013

Tesla is a sprint. I prefer to take a longer view.

There's been a lot of breathless adoration over Tesla Motors of late and it's pretty easy to see why.  Their latest vehicle, The Model S, is a pretty little thing to look at which has (mostly) led to it being named the "Car of the year" by Motor Trend Magazine. Sure they gush about it's handling, it's power, it's storage space etc. But then you have to take into consideration that this is the same organization which named the horrible Chrysler 300 their car of the year in 2005, and gave the equally terrible Ford Thunderbird the nod in 2002.  They've also honored the PT Cruiser and the Chysler Cirrus with the award, so read into that what you will.  Seen a lot of Volt's around lately?

I understand what you're thinking here, that I'm just negative toward Tesla because I hate the environment and want to ensure that the internal combustion engine continues adding to the world's pollution ad nauseum.  You can think that, but you would not be further from reality.

The reason I'm not enamored with Tesla, Fisker (RIP), the Volt, the Insight or the Prius is that I feel they're all barking up the wrong eco-tree.  At the end of the day the power from all of these cars comes from an electrical grid which is, for the forseeable future, driven by coal and other fossil fuels.  Nevermind the extremely carbon-unfriendly processes that are needed to construct the vehicles in the first place.

No, the real future in the automobile industry is Hydrogen fuel cell technology that doesn't require the burning (mostly) of fossil fuels and for which the only emissions are H2O.  Hyundai is already mass producing them, and Honda has a fleet running around California right now.  Compared to these vehicles plug-in electrics are really just fanciful toys for the smug. They make a certain type feel superior but don't do much in the way of weaning us off fossil fuels for transportation.

Not that I think we're in imminent danger of 'running out of oil' as the Peak Oil theorists suggest.  Will oil require some creative technology to extract in the future?  Sure.  But we've already seen that in the fracking boom, an event that the Peak theorists didn't take into consideration in their initial modelling runs.  I do believe that it's going to continually become more expensive to extract oil however, so I think we need to reserve as much oil as possible for it's true societal benefit: plastics.  That's right, plastics.  Without fossil fuels we wouldn't have many of the medical and technological advances we enjoy today, so we need to ensure that what we are pulling out of the ground is allocated correctly.

All of this brings us to today's bit of speculative blogging regarding the future of Tesla:

Is Tesla the next Apple or Google? Dan X. McGraw, ChronBlog

Tesla is riding a wave of optimism, making some hedge fund managers question whether the electric carmaker could follow in the footsteps of Google or Apple.
Investment firm Longboard Asset Management believes the automaker's stock will be selling for $200 per share within the next five years. The firm said Wall Street is currently underestimating the car company's brand and unfairly tying it Solyndra, the failed solar panel company.

Short-term, I think yes, given the amount of buzz surrounding the company, Tesla's stock will continue to rise because people want it to. They're currently churning out the best product in the entire business segment and there are plenty of people who purchase stuff to increase their perceived social standing to keep them in business for a while.  Where the hot Hollywood car was once the Prius, I see the Tesla taking over that role in short order.

Long-term however I think their fame clock is already reading 14:59.  Once some entrepreneurial sort figures out how to convert Hydrogen to fuel in a cheaper manner, and convinces companies (and the government) to buy into building infrastructure, I see the demise of the plug-in electric car coming suddenly.  While you plug in your car to your home to charge it up currently, there could be a time you plug your car into your home to turn on your living room lights and run the TV.  That's a pretty big difference right there.

A difference that convinces me plug-in electrics are just the wrong way to go long-term.  For that reason I don't see the Tesla rising out of niche status, unless I've missed where they're embracing the Hydrogen future.

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