Analysis: Tesla may have made over $100 million off the CARB enabled battery swap ZEV credit scheme

They MAY have made $100m but what have they actually made??

I calculated battery output compared with petrol cost of the equivalent energy, and also divided the results with typical efficiencies of them both. I also repeated the calculation for several far off countries just to make sure. Well …There is no way to make a battery worth it’s lithium … unless of course you dump a lot of incentives to it.

So what? Private company employs a purely legal scheme to make some money. Personally I think the scheme is nuts but that is a question for the politicians, not the company. Deal with it.

What a boondoggle… making fortunes as rent-seekers.
And the money has to come from somewhere, no matter how hard politicians try to hide that fact.

Environmentalism – the play toy of the rich
Global warming – their mansion
The Tesla – their car

This post could benefit by a short and highlighted (colored box) explanation of what is meant by “battery swap” — someone new here might not be aware and the story is buried elsewhere. A link to someplace else is less helpful than stating the issue here. If a person tries to search, one of the stories that comes up is about “Better Place” rather than Tesla.
Anyway, Elon was named Fortune Magazine’s businessperson of the year for his insights. This was somewhat of a low hurdle. He only has had to be smarter than the politicians.

It was a legal route to keep his business profitable, so Musk worked it into this business plan. If it wasn’t in place, he would have gone another route. I can’t blame Musk for working within the law to build a strong company.

Tom J says:
March 12, 2014 at 5:57 am
Environmentalism – the play toy of the rich
Global warming – their mansion
The Tesla – their car

I have not seen a Tesla car, but my guess is that is not their car, not their principal car, anyway. My guess it that their principal car is a Mercedes, BMW or Rolls Royce, or something along those lines.

Alberto, just want to cheer you on in your work. This stuff is so corrupt it’s disgusting, all the while the stock price goes up and up and up. The media’s infatuation with Tesla and all it’s glory is truly bizarre and needs to be called out.

I still maintain that this is a matter for the SEC, in particular if carbon credit income was used to lift them from an operational loss into profitability.

Tesla’s windfall is a perfect example of how taxes and regulatory BS act to redistribute wealth from low- and middle-income people to super-rich elitists. Buyers of Escalades get a break, in effect, on the backs of people who can’t afford Escalades, and Tesla gets $100 million of taxpayer money for producing nothing (“good feelings” don’t count).
None of these cockamamie contraptions like Tesla’s would have a snowball’s chance in hell in a truly free market. Bassackwards.

This is quite the racket! The dude who repeatedly sold the Brooklyn Bridge
could learn a thing or two from Tesla.

The effort and time involved in swapping the batteries on a Tesla is about the same category as doing an engine swap in a conventional car. Tesla mecanics will laught at you if you tell them the battery can be swapped (easily like intended by the credit gurus).

How many commercial battery swap stations exist?
It is not that I begrudge Tesla for 7 ZEV credits per battery swap vehicle. But if no customer can actually use a built-in feature, then it does not really exist, and then the 7 ZEV is ill gotten gains.

The libz will never call Tesla to account for this obviously shady and fraudulent scam. Tesla by their very sympathetic standard is the green economy’s sole “success story”. It is quite likely that the CA bureaucracy and Tesla worked this hustle out together to help out Tesla. If Tesla went out of business it would be the ultimate black eye for the green “economy.”

@Andyj at 1:41 am
People have now crossed the USA using their standard and free for life rapid charging facilities.
Yes, but how long did it take them?
People crossed the USA in Conestoga Wagons, too, but their sustainably green mules took overnight to recharge.

The Tesla team of 15 people in two Model S, a balky sleeper van, and another swag wagon traversed 3,464.5 miles in 76.5 hours [=45.3 mph avg] via a wormlike pattern of superchargers that connect the spaces between major cities. …. Telsa says you can get over 300-mile range at 55 mph.
Tesla used two Model S P85, nicknamed Thunder and Lightning. Supercharger fuel [??] costs nothing extra to owners of the Model S 85; supercharger access can be upgraded for $2,000 on the Model S 60.
It takes 40 minutes to charge a Model S at 80 percent, which provides enough charge to make it between superchargers, even in the cold.
A half-charge can be completed in 20 minutes, and the Tesla team took full advantage of the technology in a Model S to plot their course, which included more than a few detours

Ok. They earned a Guinness Book of World Records. Doesn’t mean it’s ready for the family vacation.

1) I don’t understand why the blame is getting placed on Tesla when it’s CARB that came up with the ridiculous scheme, Tesla is just savvy in taking advantage of it. Do I need to bring up how much government assistance other automakers got a few years back?
2) They are trying to break into the auto industry which is notoriously difficult even for conventional vehicles, much less electric ones. It’s hard to blame Tesla for taking every advantage they can get.
3) Lots of companies take advantage of government schemes, it’s the nature of business, be like water and change with the regs and incentives.
4) While many companies fail despite government incentives, the reason Tesla is doing well is because their product also happens to be very good. I’m far from a greenie, but their cars have been almost universally lauded as not only competitive with similarly priced luxury cars, but in many ways superior in performance, comfort, safety, and utility. This is not a goofy Chevy Volt that was ultimately a bailout on wheels.
5) Some people may buy Teslas for the cause, but the reality is that’s not enough to keep a company afloat.

Anthony,
Please review this website and the VERY RELEVANT content.
He contends that because there really aren’t any publicly accessible battery swap stations (or not enough of them), that the higher credit value per car is undeserved and possibly illegal.
More here:
http://doubtingisthinking.blogspot.com/
He’s asking for FOIA help with CARB.
.

Why are you purposefully trying to confuse “battery swap” (the ability to physically swap batteries) with “ZEV reclassification”?

What was Tesla supposed to say? No please don’t give us more credits as part of your arbitrary scheme, CARB!
You are barking up the wrong tree here. Getting angry at companies that take advantage of goofy government programs is silly; get angry at the government for giving away tax dollars.

Wow. You guys really don’t like Tesla Motors, do you?
OK. If I get this correctly, the author is saying that incentives, subsidies, loans, and credits for companies producing Zero Emissions Vehicles are patently unfair and grossly corrupt in concept and execution. Right?
Further, you believe that having programs in place, supposedly to support and encourage the expansion of lower and zero emissions efforts, are likewise unfair, etc. Fine.
Honestly, there is nothing wrong with having those feelings. Too many things in government are set up to offer back-room deals and kickbacks to some. Too often there are licensing criteria that are very obviously designed to encourage monopoly and eliminate competition. Way too much of what is put into legislation at the national, state, and local level has a stated purpose that is the exact opposite of the actual purpose. I get it. That sort of thing really gets on your nerves. It should.
Here the thing is, though… Unlike you, I have long thought that having electric vehicles would be a good thing. Going back to the TYCO slot cars I got for Christmas as a child, I was amazed by the ‘scale speed’ of those tiny replicas of track racers. I took them apart and examined the mechanisms that powered them. I realized then that having such a high percentage of the cabin occupied by the motor was far too large to be of practical use in full sized vehicles.
I’ve been an automobile enthusiast since childhood too. Like many my age, I was greatly inspired by the television show ‘Speed Racer’. My favorite vehicle in the real world is the Chevrolet Corvette, precisely because of its resemblance to the fictional Mach 5 from the television show.
Because of my enthusiasm over cars, I am aware of the myriad of improvements to Internal Combustion Engine vehicles since the early 1970s. I also know full well that the grand majority of those improvements came about as a direct result of rulings by the Environmental Protection Agency (EPA), statistics from the National Highway Traffic Safety Administration (NHTSA), legislation by the Great State of California, and the regulations put in place by the California Air Resources Board (CARB). Thus, I know that every single American automobile maker for over 40 years has fought tooth and nail against making the innovations that have allowed their vehicles to improve in that time frame. The whole time they claimed it was ‘unfair’ and that it placed too heavy a burden on them, and that the public didn’t want ‘any of that stuff’.
General Motors, Ford, and Chrysler would have been perfectly happy to keep pumping out Pony cars that got 3 MPG city and 5 MPG highway. They would have been giddy to continue making luxury vehicles that moved like a comet, steered like a cow, and hoped to reach 12 MPG on the highway. They would have been ecstatic to be able to count on being able to crank out the exact same pig iron based engines and spare parts with wide tolerances that could be, and needed to be, removed and replaced every three to six months. They would not mind in the slightest if everyone in Los Angeles had to wear a gas mask and oxygen tank everytime they ventured outside today.
In only ten years Tesla Motors has caught up to US manufacturers that are at least 80 years older than they are. The Tesla Model S is not perfect. It is lightyears ahead of what those other manufacturers claimed was possible. It is in my opinion precisely the car that Detroit should have been able to deliver twenty years ago.
It is in fact, every bit as good in terms of range, 0-60 speeds, and 1/4 mile times as those Pony cars from the early 70s. All that while being made to:
1) Seat 5 or 7 (instead of being a 2+2);
2) Having the comparative carrying capacity of a station wagon (instead of a duffle bag)
3) Being the safest vehicle on the road (instead of a deathtrap)
Now, imagine what Tesla will be able to accomplish in the next five years. With luck, they’ll go beyond the need for incentives, rebates, credits of any sort. They might deliver the prerequisite 22 cupholders, 8 coat hooks, and 4 map pockets that nitpickers have complained over the absence of so far… They might be able to push the automobile industry another fifty or so years into the future.
Personally, I think those are good goals. I don’t mind a relatively microscopic portion of my tax dollars going toward such an endeavor. And if Tesla Motors is profitable as well, that is something I can heartily live with as well.

On Battery life: from http://www.plugincars.com/tesla-roadster-battery-life-study-85-percent-after-100000-miles-127733.html

After 300 to 500 cycles at 100 percent depth of discharge, a lithium-ion cell’s capacity will drop to 70 percent. But partial discharge “reduces stress and prolongs battery life.” Drain the batteries consistently to only 50 percent, as is often the case with electric cars that get plugged in frequently, and life expectancy of a healthy battery zooms up to 1,200 to 1,500 cycles. That, of course, translates to 366,000 miles, but don’t expect numbers like that on your odometer. Other wild cards such as frequency of fast recharge can also affect battery life.

dbstealey resorted to flag-waving with, “By all accounts, Russia produced high quality nuclear submarines.”
Man. It really gets me when people do this. It happens on the Internet all the time. Never ceases to amaze and surprise me.
The truth of the matter is that the Soviet Union failed at least fifteen years ahead of schedule. A lot of people were rather perplexed, because they really, truly wanted to ‘prove’ that a Nuclear War could be ‘won’. Personally, I’m rather glad that I don’t have to wear Sunblock 10,000,000 today.
The Soviet Union failed for two main reasons: 1) The people in charge forgot how important GREED is to the human psyche; and 2) President Ronald Reagan played the greatest game of high stakes Nuclear Poker known to mankind — GOD BLESS HIS SOUL.
The only reason we have sent troops to Iraq — TWICE — and for way too darned long in Afghanistan, is that somebody wanted to test all the pretty new highly destructive weaponry toys they didn’t get to use against the Soviet Union.
But none of that has the slightest anything whatsoever to do with the debate over alternative means of propelling vehicles over streets, roads, and highways in the United States of America.
PERIOD.
The Russkies are not coming for you. EVER. Neither are the Chinese. Or the North Koreans. Or the French. Or the Canadians. Or the Mexicans. Trust me on this. Really.
“If Tesla can’t produce cars without all these excessive subsidies and shenanigans, then I do not care how fancy it is. … If they can’t do it on their own, to hell with them. Don’t know about you, but I want their fingers out of my pockets.”
Tesla paid back a ten year loan to the United States government in full — NINE YEARS EARLY. Tesla barely has the tip of a fingernail near the stitched seam of your pockets. They can’t get their hand in there, because the megacorporations they are fighting against for market share have THEIR HANDS stuffed into your pockets up to the ELBOWS. No matter how much Tesla ‘rakes in’ from the Government, it will be dwarfed by what the other manufacturers get on their own.
Even in the article above, the writer basically admits there is a strong likelihood Tesla won’t need any of these credits, for themselves, AT ALL within three years. But they are a commodity that was developed for Ford, Chrysler, and General Motors to take advantage of… Something like 25 years or more ago. They didn’t. At least, not the way that the regulatory changes intended. Tesla Motors is only ten years old for criminysake!
Please turn the telescope around and take another look. This is like crying foul if someone who is on Public Assistance and gets Food Stamps actually has a home with a refrigerator to put that food in… Oh, wait…
http://mediamatters.org/blog/2014/03/14/watch-jon-stewart-eviscerate-foxs-poor-shaming/198485

Stephen, I found an old image projecting the extent of the Supercharger Network for Winter 2013. I believe this was the route taken for the Cross-Country Rally in January 2014. I hope this helps!
http://www.edmunds.com/tesla/model-s/2013/long-term-road-test/2013-tesla-model-s-fancy-a-drive-to-mt-rushmore.html

dbstealy stated, “My comment flew right over RS’s head.”
No. Your comment didn’t go over my head. You were doing what too many people do these days… You compared anything that has to do with alternative fuel consumption to Communism. That amused me.
dbstealy protested, “The rest of us just do not want to be forced to subsidize your toys.”
Pretty much every single major company, in every single major industry there is, lobbies to get some kind of subsidy in their favor at every level of government. They do it because they know it can be done. I don’t understand this incredible sentiment of protest being directed at Tesla Motors in particular, when literally every other automobile manufacturer that has a plant on North American soil has received incentives and subsidies of some sort. Many of them have received those benefits literally for decades.
You make it seem as if these subsidies were invented specifically for Tesla Motors and no one else. You make it seem as though Tesla Motors is the sole benefactor of those subsidies. Every automobile manufacturer in the United States of America has the same level of regulation they must meet in terms of production of clean air vehicles. All of them have access to incentives to subsidize movement in that direction. They were put in place beginning at least two decades ago — before Tesla Motors was even in existence!
Really, it seems the reason you ignore all that is because rather than building an ‘economy car’, a cute little deathbox on wheels that nobody wants… Tesla went high end instead, and built a fully functional ‘luxury car’ that can only be attained by ‘rich people’… Basically, your complaint is that even if there are good reasons for subsidies to exist, they should not apply to something of this dollar value.
Dude. Call your local Congressman and get your Senators on the line and let them know what you think. Make sure they know precisely why you think it is so important to single out one particular automobile manufacturer for actually doing what dozens of others claimed was impossible for the better part of 35 years.
The way you phrase it, the United States of America should have worked on providing personal jet packs for every single tax paying man, woman, and child within its borders before launching the Apollo missions to the moon. That isn’t the way it works. Technology trickles down — we are able to communicate with each other today via the internet because the government ‘wasted money’ on the ARPANET decades ago. Because Tesla Motors is able to sell fully functional luxury electric cars today, every manufacturer will be able to offer affordable electric cars tomorrow.
The Ford Model T was developed from the outset to be a mass market vehicle. When it was first introduced, it was too expensive to meet that mark. But with improvements in the assembly line and techniques to build them, the price dropped rapidly.
The Tesla Model S is not this company’s mass market vehicle. It is the custom horseless carriage that is meant to impress the bigwigs and gain their investment dollars. It is the marketing device that will keep the company afloat long enough to complete the design/build process for their mass market vehicle. As impressive as it may be today, it is certain to be eclipsed by the vehicles that follow.
The Tesla Model E may well follow the same path as the Model T. Hopefully before long our streets will no longer smell like exhaust, just as they stopped smelling like horse manure. I would welcome that eventuality, whether you do or not.
REFERENCES:
How much did it cost Henry Ford to build the Model T automobile?
http://answers.yahoo.com/question/index?qid=20100107160657AAbnlO9
Henry Ford and the Model T: A Case Study in Productivity (Part 3)
http://www.econedlink.org/lessons/index.php?lid=692&type=educator

Alberto Zaragoza laid bait, “They didn’t. The law is very clear: a Type V ZEV must go 285 miles after a 15-minute refuel. The Model S goes 265 miles after 75 minutes, or about 90 miles after 15 minutes. It isn’t even close to the requirement. The exploited the battery swap loophole, which isn’t really a loophole but a hoax: the car cannot actually swap batteries in 90 seconds, and there are no swap stations anyway.”
I’m pretty sure that 90 seconds is considerably less than fifteen minutes… Let’s see… 60 seconds per minute… Times fifteen… Carry the two… Hmmm… Yup! 900 seconds! Seeing as the video Demo that Elon Musk offered did not one, but two Tesla Model S vehicles in a handful of ticks over three minutes, I think they’re fine.
In terms of range… Meh. I seem to remember a voiceover that goes ‘Your Mileage May Vary’. That’s why the mileage numbers are called ‘EPA Estimates’ instead of ‘EPA Certified’ or ‘EPA Guaranteed’. There have been independent road tests that exceeded the 285 mile barrier with the Tesla Model S… If not necessarily the 300 mile distance their marketing material hopes for in that magical world where you coast downhill on a 6% grade for 20+ miles near the end of a course.
In terms of the battery swap being staged… Uhm… It was on… a stage.
Look, I know what you mean. The production version of the Tesla Model S has protective barriers that cover the entire underside of the vehicle. That stage demonstration seemed to presume that the parts that cover the battery pack had already been removed. But there are perhaps 8 – 12 bolts that secure those panels in place. Someone working alone, with a standard issue airgun and bit, in a grease pit would still be able to remove the panel in less than two minutes. They might need help moving it out of the way, of course.
The likelihood that the battery swap would be done automatically, in the wild, at charging stations, anytime you entered the option into an automated drive through valet…? Not likely to happen. Ever.
That doesn’t mean I wouldn’t be able to get the battery changed, in under fifteen minutes, at a Tesla Service Center though.

Sorry, I didn’t notice the link to another article. I went straight through to the comments below. I’ll let you know what I think about that one when I get a chance, OK?
Here the thing is… Do you really, truly believe that CARB, EPA, and NHTSA allowed the Tesla Model S to be reclassified to Type V ZEV status based upon that stage demonstration alone? I would expect that, just as they do with all the other mileage estimates, this would be something they would want to test themselves for verification. If it is instead, just a checkbox on the qualification form that reads:
>>> CAN THE BATTERY BE REMOVED AND REPLACED? (Mark ONE) [YES] [NO]…
Well, that’s another thing entirely.
The claims of falsehood, hoax, lies, and especially ‘stealing’ by Tesla Motors are all rather sensational from my point of view. I believe that President Bush may have been misquoted as saying, “The absence of evidence is not evidence of absence.”, or something to that effect. Perhaps there is a way to contact the regulatory bureaus directly to learn what criteria they used to reassign the Tesla Model S to Type V ZEV status?

Alberto Zaragosa wrote elsewhere, “Translation: we know Tesla is a scammer, but we don’t want them to go bankrupt so we’ll let them milk the battery swap cow for another couple years.”
~*YAWN*~ Sorry, I should have been asleep five hours ago. Well, based upon your own numbers and estimations… It seems as if Tesla Motors may be banking the very credits you dispute, ‘just in case’ they are forced to return them to CARB at some point, rather than selling them on the CAFE credit trading market. Apparently they get to hold them for up to five years before they disappear into the ether anyway, expiring automatically.
Alberto Zaragosa noted, “She says Tesla did demonstrate the battery swap to the agency, back in 2012…
“…but the details are confidential. How convenient!”
OK… Nice to know you have done your own due diligence in this regard. Perhaps it is time to resort to the good, old-fashioned Freedom of Information Act? You might need to know the form number, or case number for the test to verify its existence though, and have it pulled for confirmation.
Alberto Zaragosa continued, “As for the EPA and NHTSA, I don’t think they would be involved in this issue. AFAIK the ZEV system is managed by CARB alone, certainly I found all the documents and references in their website.”
These ‘extra credits’ are from CARB, but the whole program is apparently managed by the big boys:
CAFE credit trading provisions (Wikipedia)
http://en.wikipedia.org/wiki/Corporate_Average_Fuel_Economy#CAFE_credit_trading_provisions
Well, it helps to have a more solid understanding of your position on all this. There is certainly enough to keep looking for evidence. I don’t think there is a ‘smoking gun’ yet. I believe the fires are elsewhere in the Automotive industry.
Ultimately, I am a car guy. Yes, I really do like the Tesla Model S a whole lot. I’ve given a bunch of the reasons why above. That’s saying a lot, because typically I despise sedans, and barf when they are called ‘sports sedans’. I see this as the perfect family car. And I hope that at some point before too long, there is a version with an easy 450+ mile cruising range — just in time for me to take delivery of my very own.
I honestly do not believe that Tesla Motors is a Ponzi scheme, or any other type of scam. I do believe that the other US Auto Manufacturers wish like hell it was, so they could get them off their back, for good. If you can prove your suspicions, more power to you. Take care, and good night (morning).

dbstealey ventured, “…I would wager that Red sage is either:”
I’m a guy who really likes science and technology. I am also really impatient. I like the Tesla Model S, but honestly don’t understand why it didn’t exist 25 years ago. I feel that today, rather than a marvel, it should be instead, to quote a co-worker from an Architectural firm I used to work at, “…an ordinary $#!+ car… Like a Chevy.” What I really want to see is flying cars with Mr. Fusion in the back. 2015 is only a year away, Doc Brown.
I’ve been writing and debating a variety of technological issues in various forums on the Internet since 1995. I do so because from my point of view, it is important to understand that others have other points of view. That is, just because we disagree with each other, doesn’t mean I don’t want to fully understand your position on the issue at hand.
I literally do not know everything. I know just enough to understand there is more to learn. I’m just smart enough to appreciate there are people in this world who are a whole lot smarter than I am.
In any case, like most people on the Internet, I have a strong tendency to state my opinions as fact. The quotes that you posted before, are opinions that differ from mine. I recognize that the people who said those things consider them factual… I disagree.
It’s a shame that you and I don’t seem to fully understand each other here. This is one of the pratfalls involved with attempting to communicate with people through a keyboard on the Internet. But even so, if you look at what was said between myself and Alberto Zaragosa last night, I finally developed some insight as to his intention in writing the original article. He is really just one solid piece of evidence away from proving all his suppositions absolutely sound.
“…people are getting very tired of the Big Government/Big Money conspiracy…”
My point, pretty much from the outset stands. The Tesla Model S is a really nice car. Even if there is some sort of conspiracy involved in its existence and profit/sales model (I really don’t think so), there are far more profitable ones out there, that are much more obvious, and more easily proven.
“…the public would flock to it without needing subsidies and special arrangements.”
I believe they will. The difference though, is that other auto manufacturers for decades said it was ‘impossible’. They all said it would ‘never happen’. Those statements never rang true for me. Not once. No, it won’t happen immediately, or overnight. But Tesla Motors will be fully weaned off all of these incentives, rebates, tax breaks, whatever… and will never need them again.
See, in the ‘long game’, the changes that have been introduced by Tesla Motors will appear to be ‘overnight’ to auto manufacturers such as the Big Three. Five years from now, electric vehicles with a Tesla badge will be as ubiquitous as compact cars from Toyota, Datsun/Nissan, and Honda were 30 years ago. Ten years from now, Tesla electric vehicles, and derivatives from other manufacturers, will be more than as popular as SUVs were in the early-mid 90s.
I understand your concerns. Many companies have made big promises and delivered nothing, time and again. Windows 95 was Microsoft’s attempt to match MacOS 89, which was Apple’s attempt to surpass AmigaOS 84… Times change at the speed of technology, but also at the rate of acceptance.
I… could be wrong. Elon Musk and the rest at Tesla Motors might just be building up a facade, so they can get everyone to go all-in before they pull the rug out from under Wall Street. But… I don’t think so. I believe this is pure, honest, actual change. And it’s beautiful to behold.
Now, where are my flying cars?

I was looking the neighborhood for charging stations. It seems H.E.B. is putting them. A grocery stop is a good turn over time, especially for quick charge.
http://www.plugincars.com/ultimate-guide-electric-car-charging-networks-126530.html
Cost Per Charge: Blink fees are priced on an hourly basis. In its Blink Plus plan requiring a $30 annual fee (waived through 2013), charging is $1 per hour. Blink Basic, not requiring a fee, is charged at $1.50 per hour. Blink Guests pay $2 an hour. All of these rates are for Level 2 240-volt charging. Prices have not been established for DC Quick Charging on the Blink Network.
$2/hour. Some of that is electricity cost, the rest has to go to pay for the station and upkeep. That is when someone wants to plug in. It give a whole new meaning to Trickle-down economics.
I can pump $30/minute into may car. A pump at Costco can probably rack up $200/hr if used only 10% of the time and rack up more than $2/hr in profits.

@Red Sage 12:07 am
It is clear that you don’t want to tell us where anyone can drive up and get a S85 battery swap in under 15 minutes.