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SMT and Tesla
colin overton
Posted: 18 November 2017 11:10:24(UTC)

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Electric cars (and Hydrides) are very expensive to buy, but cheap to run, at least at the moment.
I just did a quick calc.
Very crudely you halve your direct cost per mile going from petrol (assuming 50mpg) ~ 11p/mile, to electricity ~6p/mile (all in cost per KWhr of 20p). This is very crude and if I get the time I'll improve it. So on 10,000miles per year you'd save £500 per year.
I thought it would be more and if the price of electricity is less or you get less than 50mpg then the difference would increase/decrease pro rata.
So over ten years you save £5000 on fuel, perhaps somewhat more. How the price of power and petrol will differentially vary in the next 5 years is hard to tell.
Perhaps the way is to couple the free, unused power from solar panels to charge your new electric car.
There are other factors. Electric cars are said to be cheap to service and perhaps will be less expensive to purchase when 10s of millions are made. Also they'll become more efficient at using electrical power(?). Conversely government support to purchase and tax will go away when ~20% of people have electric cars. The days of free electricity to recharge your cars are numbered.
cliff aner
Posted: 18 November 2017 11:27:35(UTC)

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The only problem with that price comparison is most of the petrol cost is tax.When we all go electric other taxes will have to rise--just a green issue really.
Mat1
Posted: 18 November 2017 11:40:58(UTC)

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colin overton;53384 wrote:
Electric cars (and Hydrides) are very expensive to buy, but cheap to run, at least at the moment.
I just did a quick calc.
Very crudely you halve your direct cost per mile going from petrol (assuming 50mpg)


Motorway miles? I get half of that on average in London
Alan Selwood
Posted: 18 November 2017 16:58:37(UTC)

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Total costs of each method of transport will vary considerably, depending on the user profile.

The main cost factors are:
Purchase price (including opportunity cost of spending the money up front instead of investing it)
Cost per mile of usage
Depreciation
Repairs and servicing costs
Resale value after x years.

Now if you buy an expensive car, the opportunity cost goes up, as does the depreciation between day 1 and day of scrappage.

Repairs and servicing costs will depend partly on usage, partly on complexity and construction-quality of the vehicle, and cost of replacement parts.

Resale value will depend on expected change between date of purchase and date of sale, which will be influenced by expectations of the remaining life until date of scrappage and expected yearly costs of repairs and servicing.

A high-mileage user will have more to gain from cheaper fuels, and this might make it possible for a car to be viable that either costs more to buy, or costs more to service, or that depreciates more. A low-mileage user will do best with a car that is cheap to buy, slow to depreciate and cheap to service - the fuel cost per mile will for that user be trivial.

On top of all these factors will be taxation.

If existing fossil-fuelled cars have fairly high tax added to the construction+marketing cost when new, and then have very high taxes/duties/levies added to the fuel cost, it must be assumed that any tax advantages derived from switching to electric/hybrid/fuel cell cars will be eroded once take-up is significant, otherwise tax will need to be added to other goods and services in order to compensate. The only exception might be that if electricity were to be generated in the UK instead of buying oil from abroad, the government might not need to tax quite as heavily in order to support the balance of payments figures. But governments have a tendency to keep wanting more, so don't expect much tax-saving from this quarter. Expecting tax levies to go down is like expecting a tangle of string to remove its own tangles and become neat again!
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Jeff Liddiard on 18/11/2017(UTC)
Freddy4Skin
Posted: 19 November 2017 09:22:31(UTC)

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All of the above may well be true but Elon Musk is a rock star:

Elon Musk Rock Star
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DJLW on 19/11/2017(UTC)
Freddy4Skin
Posted: 22 November 2017 01:17:50(UTC)

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I came across this article today:

Tencent closing in on Amazon

What caught my attention was where it states:

Tencent also owns 8.2 million Tesla Inc. shares TSLA, +0.00% or 4.9% of the shares outstanding, to be the electric car maker’s fourth-largest shareholder.

I recently returned from Hong Kong where I saw many Tesla cars on the streets.
Makes me think that if a company that has just surpassed Facebook believes Tesla has a future worth investing in then maybe I'll hold on to SMT a while longer.






King Lodos
Posted: 22 November 2017 02:32:49(UTC)

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Tencent's my top holding – they mentioned the stake in Tesla on BBC Click the other day.

Tesla's self-driving trucks, that they unveiled the other day, look to me like the first serious business proposition .. Huge savings vs what companies use today .. The Tencent connection means they benefit each other in terms of AI and image recognition technology (and that might have a lot to do with Tencent's investment).

But then I hear Uber are investing in self-driving cars now – and they've gone to Volvo .. Which is sort of how I envisage things playing out: Tesla pushing the technology, and Volvo, Toyota, etc. profiting
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North Star on 22/11/2017(UTC)
Joe Soap
Posted: 22 November 2017 03:27:37(UTC)

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Just a relatively minor point here. If you look at the truck batteries, the range, the claims about charging etc..... You might just get a flavour for the kind of infrastructure that would have to be put in place to just keep the electric trucks mobile. Of course, it might happen one day. But who is going to foot the bill for the billions and billions of $$$ that is required for that kind of infrastructure, I can't imagine. As a starter for ten, take a look at the claimed battery capacity, the claimed charging rate and then do a quick calculation to see how big the cables have to be. Simple stuff really, but it all matters once the glitz and glamour and hype have long faded away.
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Micawber on 22/11/2017(UTC), Captain Slugwash on 22/11/2017(UTC), North Star on 22/11/2017(UTC)
King Lodos
Posted: 22 November 2017 05:27:55(UTC)

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But weigh that against halving costs of transportation.

With companies like Amazon barely running at a profit to keep margins tight, any supermarket or distributor beaten to driverless is going to be left behind .. I imagine they'll be investing on 20 year horizons at least

Ludditeme
Posted: 22 November 2017 08:51:14(UTC)

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King Lodos;53493 wrote:


But then I hear Uber are investing in self-driving cars now – and they've gone to Volvo .. Which is sort of how I envisage things playing out: Tesla pushing the technology, and Volvo, Toyota, etc. profiting


That's a little hard on Vovo KL. They have invested a fortune in engineering time and materials over the last 15 years plus, so I wouldn't place them in the late comers to the party!

I have witnessed their progress, and know where my money will ultimately go. Tesla shout out about their vision and attract huge attention and money; the Swedes get on with it and will produce the goods.
King Lodos
Posted: 22 November 2017 09:04:47(UTC)

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No criticism of Volvo .. You would go to Volvo or Toyota.

Tesla have a track record of overpromising .. You'd want a company a) that's going to be able to fill the order, and b) is very likely to still be around when vehicles need serving/upgrading .. If I were Musk, I'd wonder if he couldn't just focus on prototypes and patents?
2 users thanked King Lodos for this post.
North Star on 22/11/2017(UTC), Ludditeme on 22/11/2017(UTC)
colin overton
Posted: 22 November 2017 13:46:22(UTC)

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Dear Mat1. If you only get 25 miles to the gallon you could cut your Direct cost per Mile by 75% by going electric now, assuming my fingers are roughly correct. Until recently I had a 12 year old, medium-sized diesel car that did 50 miles to the gallon on about 50-50 city and motorway/highway driving There are smaller more modern cars that will achieve 50 miles to the gallon or more. I guess if you live in London and only average about 10 miles an hour, electric cars would be even more attractive. I haven't had time to look into these costs more closely but given Alan's excellent contribution will do so in the next few weeks.
jvl
Posted: 22 November 2017 14:20:36(UTC)

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King Lodos;53499 wrote:

Tesla have a track record of overpromising .. You'd want a company a) that's going to be able to fill the order, and b) is very likely to still be around when vehicles need serving/upgrading .. If I were Musk, I'd wonder if he couldn't just focus on prototypes and patents?


It seems to me that Tesla have a track record of producing products that customers really, really, really like and that must be worth something.

That keeps hitting me. I picked up a recent Which magazine. According to them, Tesla owners are by far the most satisfied of any car owners.

Tesla don't have a problem about people not wanting their products. They have a problem supplying enough to meet demand. People like them so much that they're willing to put their names on a waiting list, knowing that they'll be waiting a long time. Isn't that a good kind of problem to have?

Intuition tells me that's worth something. How many companies have products that are so loved?

If they focused on prototypes and patents they could be another Torotrak or BTG rather than another Apple.
jvl
Posted: 22 November 2017 14:24:08(UTC)

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Micawber;53370 wrote:
After getting caught, they're the least likely to do it again.....

But I guess some investors might factor moral vengeance into their investment decisions?


There's some basic technical incompetence in there, I suggest. Why couldn't they just create a car that passed the (not over-onerous) tests? Perhaps they're not quite as good as you assume.
King Lodos
Posted: 22 November 2017 17:38:47(UTC)

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jvl;53515 wrote:
It seems to me that Tesla have a track record of producing products that customers really, really, really like and that must be worth something.

That keeps hitting me. I picked up a recent Which magazine. According to them, Tesla owners are by far the most satisfied of any car owners.

Tesla don't have a problem about people not wanting their products. They have a problem supplying enough to meet demand. People like them so much that they're willing to put their names on a waiting list, knowing that they'll be waiting a long time. Isn't that a good kind of problem to have?

Intuition tells me that's worth something. How many companies have products that are so loved?

If they focused on prototypes and patents they could be another Torotrak or BTG rather than another Apple.


I believe Apple were planning a self-driving car (an iCar?), but looked at the situation and decided it would be better to focus on software, which could be licensed out .. I could imagine Tesla filling more of a Google/Android role.

I don't know that there isn't a lot of *smug* with Tesla owners .. My worry there would be that these things can go in and out of fashion a bit .. And then will they be able to produce something competitive with Toyota when they're competing in the same space?

Mat1
Posted: 22 November 2017 19:46:41(UTC)

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colin overton;53513 wrote:
Dear Mat1. If you only get 25 miles to the gallon you could cut your Direct cost per Mile by 75% by going electric now, assuming my fingers are roughly correct. Until recently I had a 12 year old, medium-sized diesel car that did 50 miles to the gallon on about 50-50 city and motorway/highway driving There are smaller more modern cars that will achieve 50 miles to the gallon or more. I guess if you live in London and only average about 10 miles an hour, electric cars would be even more attractive. I haven't had time to look into these costs more closely but given Alan's excellent contribution will do so in the next few weeks.



I'm waiting for the Model 3! The current crop of electrics aren't very inspiring.
Freddy4Skin
Posted: 28 November 2017 01:32:57(UTC)

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Just read an article in the Times and couldn't wait to cut and paste the following passages:

James Anderson has just returned from Shanghai, very pleased with the souvenir he picked up there — a £19 million stake in a fledgling electric car business. It will be, he predicts, “the Chinese Tesla”.

The bet on Nio is also a joyful two-fingers at those who have blasted him for his huge investment in Tesla, Elon Musk’s adventure into electric cars and battery technology.

and await the avalanche of scorn and derision.
Keith Cobby
Posted: 28 November 2017 07:56:14(UTC)

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I think seeing driverless cars and trucks on our roads are very many years away. It reminds me of flying cars which always seem to be a decade away and has been since the 1960s.

Interesting comments from James Anderson.
King Lodos
Posted: 28 November 2017 08:39:03(UTC)

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But if the commercial benefits are there tomorrow, or next year, adoption will be very fast.

Companies like Uber and Amazon are entirely focused on margins and market share .. I think by next year we'll be phasing lorries and taxis into commercial use
Keith Cobby
Posted: 28 November 2017 09:47:51(UTC)

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I cannot see a taxi let alone a lorry hurtling around the M25 anytime soon. I can envisage a future when perhaps most or all are self-driving but getting there will be very difficult.
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Mickey on 28/11/2017(UTC)
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