Sunday, September 5, 2010

why Tesla Motors will probably fail


Don't get me wrong, I love Tesla, and Elon Musk is probably the most capable entrepreneur on the planet. But Tesla and Elon have picked a losing power train architecture. Battling this disadvantage may prove impossible.


Expectations rule our reactions. Someone with low expectations will react positively to an event that someone with higher expectations may react negatively to. Because of this, the level of expectation people hold regarding a product will dictate in large part the success of that product. Ideally a marketing firm will be able to convince the public that the product is worth buying before the product is available. And when the product is available it should exceed the expectations set by the marketing firm by some degree creating positive impressions on early adopters who will share those impressions with friends thus giving free publicity to the maker of the product. Of course for this to work the product actually does have to be very good.

People have existing expectations about cars, Tesla cannot change them much. They expect cars to be able to go from A to B, they expect cars to be comfortable and to always be ready to go any distance. They don't want to have to think at all about whether their car will be able to do what they want it to, and they don't. Because modern cars are that good. The biggest quibbles that car reviewing companies usually have with any new car model is something like the suspension isn't tight enough or the speedometer lighting is a funny color, you just don't see things like: this car just doesn't go from A to B reliably. We simply take for granted that the basic functioning of the car will always be flawless and available. This is not the case for Tesla Motors products. 

First a bit about batteries. Tesla made the decision to power their vehicles with off-the-shelf li-ion batteries. Six thousand eight hundred thirty-one of them to be exact. The most critical performance metrics relating to automotive batteries are energy density (how much energy a battery can hold per unit mass or volume) and power density (how much power a battery can produce per unit mass or volume) and cycle life (how many times a battery can be charged and discharged before decaying to 80% of original capacity). Energy density rules the cars range for a given battery pack size. Power density rules the cars potential performance for a given battery pack size, and cycle life (along with energy density) determines how far you can drive before you need to replace your battery pack, or as Tesla would say, your Energy Storage System (ESS).

Li-ion batteries are energy density champions. They can hold at least 5x the charge of lead acid batteries for a given mass and about 2x the charge of Ni-MH (Nickel Metal-Hydride) batteries per unit mass. Critically, typical Li-ion batteries have a rather poor cycle life of about 500 cycles, more on that later. Li-ion cells are only average when it comes to power density, but power density itself is not really an issue as a large battery pack (like Tesla's 53 Kilowatt hour one) of almost any current chemistry can make more power than most suitable electric motors can handle. But there is a flip side to power density. How fast a battery can discharge it's energy (power density) is usually directly proportional to how fast a battery can accept energy (get re-charged). And how fast a battery can get recharged is another critical metric for electric vehicles. This is the Achilles heal of pure electric cars right now (though  there is a solution to be discussed later). It is unacceptable to the average consumer to have to wait for a minimum of three and a half hours while their car re-charges... and this is a best case scenario with a special 240V 70A charger. Charging from a normal 20 amp outlet will take more than a full day

The unacceptable time penalty should such a car run out of juice creates an anxiety in the driver that has been dubbed "range anxiety" by pundits. In a great example of an action that is legal but not ethical General Motors has just applied to trademark the term "range anxiety" (note: hey General Motors, you didn't invent that term, grow up) and Tesla's response was less than honest as well. Here it is:

"By all means, GM can have 'range anxiety.' To Roadster owners, the term is as irrelevant as 'gas stop' or 'smog check.'"

But the term is not irrelevant to Roadster owners. If you were to poll (Tesla) Roadster owners about whether they would prefer a car that recharges in three minutes or a car that charges in three and a half hours I think everyone knows what the outcome would be. I sincerely doubt that a significant percentage of consumers are willing to embrace the possibility that their expensive new car will be out of commission for at least three and half hours after a long drive and that cross-country road-trips are now impractical. Our expectations are already set. Such inconvenience is not acceptable.

Back to batteries. Trying to make the perfect battery is like trying to balance the Rocket Equation (something Elon Musk has experience with). Increasing energy density will decrease cycle life and/or power density. Decreasing charging time will decrease energy density and/or cycle life. Batteries are sensitive to heat and cold, they are sensitive to high discharge rates, they self-discharge slowly over time and cannot be stored indefinitely, deeply discharging the batteries or charging them to 100% also lowers cycle life. To combat this Tesla has developed a sophisticated liquid cooling system for their batteries that keeps the batteries at the right temperature but itself takes energy from the batteries to power. By using a large battery pack they also do not need to worry about high discharge rates damaging cycle life. They have also prevented the cells from charging to above 95% capacity which will benefit cycle life. But they still cannot escape the limitations of the Li-ion chemistry they've chosen. Tesla claims a range of 244 miles and a total battery life of 100,000 miles. This is not bad but is worse than a gas engine, it also tells us that Tesla estimates the cycle life of their batteries to be around 500 cycles which is right in line with what the average Li-ion cell gets. Owners will likely be less than enthused to learn that a new battery pack will (almost certainly) cost more than $40,000. But Tesla does have other cell options.

The choice of standard (Co cathode) li-ion cells looks shortsighted to me. Alternative Li-ion chemistries such as the iron-phosphate of A123 Systems or the titanate spinel of Altairnano would have been wiser long-term decisions. The reason for this is that while they have ~35% lower energy density (or worse for Altair) they have 10x the cycle life (Altairnano claims 30x the cycle life) meaning that battery replacement could have been every ~650,000 miles instead of every 100,000 and (critically) they can both be fast-charged in less than 20 minutes. Fast charging such a huge battery pack however does bring problems of its own. To charge a 53KWHr pack in 20 minutes would require more than 660 amps at 240V. That kind of power is simply not available at the average residence or business and has serious hazards associated with it. For this reason I think that gas stations will continue to serve a roll as fast charge stations even in the event that electric cars completely conquer the consumer automotive market (they will not conquer the semi-trailer market for a very long time if ever). All this to say that building standard Li-ion battery packs into their cars is building bad-publicity into their future. Owners will not be happy with a $40,000 battery replacement bill when there are alternatives. And there will be alternatives.

The best alternative is the serial hybrid power-train architecture. I'd bet money that this will be the power-train of choice until batteries have roughly doubled in performance and can provide gas-like range with sub-twenty minute charge times at a reasonable price. The serial hybrid is the power-train architecture that was chosen for the Chevy Volt and it brings the efficiency advantages of the pure electric without losing the convenience of gas. Unlike the Prius which is a parallel hybrid, the Volt carries an engine that does not directly power the tires (update 10/11/2011 GM just revealed that it actually can in some circumstances). The engine will only kick in to power a generator or alternator (I'm not sure which it is) that will in turn be capable of directly powering electric motors and charging the battery pack. Converting power to electricity before sending it to turn the wheels results in ~10% efficiency loss but that is made up for by the engine being able to run at it's most efficient rpm and manifold pressure at all times. The battery is big enough to power the car unassisted for ~40 miles but when it is depleted the car can simply switch to the gas engine. Most people drive less than 40 miles a day so most people will still use zero gasoline but they still retain a freedom from range anxiety and they don't have to bear the cost of an enormous battery pack. Because less total energy is required, it is easier for the manufacturer to choose a chemistry that has greater cycle life and is more tolerant of heat and cold. Essentially the serial hybrid brings 90% of the pure electric's advantages while retaining none of its disadvantage. This is the route GM has taken, this is the route that my least favorite start-up, Fisker Automotive, has taken; and I expect all other major manufacturers to announce serial hybrid designs within a year or two. Tesla has secured massive funding from the DOE and elsewhere but at some point they're going to have to turn a profit. At some point they're going to have to achieve significant market share. To do this, they need a serial hybrid or a breakthrough in battery tech. I wouldn't hold my breath for the latter.


Edit 4/22/2013: I have changed my opinion on this issue, I now believe that Tesla will succeed brilliantly, I have been long TSLA since early March and have advised close friends to do likewise. My speculation regarding battery technology in this post was incorrect, unsurprisingly Elon knew what he was doing.

12 comments:

  1. That's fucking retarded. Tesla is opening the door to the future, The 40 mile Leaf is already taking one step back.

    Perhaps if GM was in the business of making CARS and not MONEY, it would be more successful with both.

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  2. Whether or not Tesla is opening the door to the future, and I think they are to some degree, is a different question than whether or not they will succeed from a business standpoint; which is the subject of this post.

    That said, things are looking better for Tesla right now than they were when this post was written, Musk is a magician, but I still very much doubt that they will be able to achieve significant market share until the price per Watt-hour of batteries is half to a third of what it is now (for a given mass/volume).

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    1. Nate your article was a really good read. I enjoyed the perspective and knowledge I don't get from any forum thread comments or other articles.Some people don't get science.

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  3. Hey Moron,
    Tesla is the car of the year in 2013, oh yeah I forgot you couldn't look into the future from 2010 to see that, and yet you made that prediction, that's what makes you a MORON.
    Plus one more thing to stick in your pipe to smoke, that Model S smoked the doors off a new BMW on a drag race.
    Not bad for a drive train that was going to fail.......

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  4. I invested in TSLA last month.

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  5. Still plenty of time for Tesla to fail. Winning car-of-the-year should be the death knell. The article is still spot on and brilliantly written (minus the 4/2013 edit).

    EV's based on electro-chemical battery technology are colossally stupid and it'll be several decades until they're even remotely viable for the everyman. For now, they're self-indulgent toys for the narcissistic wealthy class.

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  6. Some of these comments are really rude. It's like they take this article as a personal attack since they've invested so emotionally in the "future" that is supposedly Tesla Motors. I agree with Anonymous here that it's a terrible idea to have straight electric cars that run off batteries. The bottom line is that you have to get the energy from somewhere - probably a coal-fired power plant, at this point.

    Let's think about something. If you burn coal at ~35% efficiency, then have losses in electical transmission, then lose more to heat while charging the battery, then lose more when the battery gets hot during operation, then is it really "green" to drive electric? Environmentalists don't want coal because it's dirty and supposedly melts the ice caps; they don't want nuclear because they think it will all explode (which is impossible); wind is out because it kills the birds and uglifies the landscape (not to mention you need a real power plant for when the mills stop); hydroelectric is viewed as an enemy to the fish and the ecosystem of valleys and what-not; solar technology is prohibitively expensive and rumored to be unclean to produce. What the heck is left? The earth has been cooling for a decade, and the ice caps are huge right now. We need to just burn the most energy-dense fuel available: petroleum. With gasoline or diesel, there's only one process where you lose energy to the surroundings (heat). In-fact, the diesel engine is the most efficient heat engine ever created.

    The comment about how GM should make CARS and not MONEY is ridiculous. You can't make cars if you don't make money. Oh wait, unless you have a fascist government that seeks to control business by giving away everyone else's money...

    To Joe, a drag race has nothing to do with anything. A rocket car could beat a BMW in a drag race, but that doesn't mean we all want to plow into a wall at 400 mph anytime soon.

    Can't we all just think logically and rationally on this subject? Sure, electric is a neat idea, but the future it is not, methinks... not unless you want to change the energy infrastructure as a whole.

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  7. We love the hard work and effort Tesla Motors and Elon Musk have done, way to rock the competition! www.youtube.com/watch?v=SrzMdoKPPaA

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  8. What about magnets? Or was that too much of an investment to roads and infrastructure?

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    1. I haven't done the math on it but I'd guess that installing in-road wireless charging on all the interstates would run into the hundreds of billions if not trillions, which isn't an intractable problem given the size of the transportation industry, but is still a significant deterrent. Personally I'd worry about vandalism and unauthorized uses of such a massive inductive network too, but these issues probably wouldn't be insoluble.

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  9. Failure is something that cannot be avoid in any fields. We don't know when it will fail, but once you fail, u'll success.

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