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Tesla’s Jerome Guillen Talks Gigafactory 1 & Working For Elon With 60 Minutes

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Published on December 10th, 2018 |

by Kyle Field

Tesla’s Jerome Guillen Talks Gigafactory 1 & Working For Elon With 60 Minutes

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December 10th, 2018 by Kyle Field

60 Minutes spent some time with Tesla’s leadership over the last few weeks, including a sit-down with Tesla President of Automotive, Jerome Guillen, at Tesla’s Gigafactory 1 in Sparks, Nevada. The lighthearted interview touches on the current state of the Gigafactory and gets into what it’s like to work directly with Elon Musk. This perspective comes from someone who has been a clutch player on the Tesla team for the last 8 years.

Engineering Fundamentals
Jerome Guillen isn’t your typical business leader. Much like Elon Musk, he built up his own core competency in hardcore engineering, holding a doctoral degree in engineering from the University of Michigan. Before coming to Tesla, Jerome cut his teeth at Daimler subsidiary Freightliner before stepping up to lead central projects at Daimler, like the launch of its carsharing service, car2go.

Since joining Tesla, Jerome has led the Model S program, led the Tesla Service program, led the Tesla Semi program, and most recently, led the Model 3 program, including the establishment of the General Assembly 4 line — also known as the line in the tent.

I Dream In Giga
As anyone familiar with the company knows, the core of Tesla’s business is batteries. The company does happen to sell batteries in some sexy packages, like automobiles and cutting edge stationary energy storage products, but no joy can be had without thousands millions billions of lithium-ion batteries being produced first. Tesla has taken its battery business to the next level with Gigafactory 1, which Jerome shared already builds more batteries than the rest of the world combined. What’s mind blowing about that is that Gigafactory 1 as it stands today is only 30% complete.

That hurts my brain, but means that Tesla has plenty of room to grow at Gigafactory 1. The factory churns out gigawatt-hours of batteries thanks to endless hours of work put in by the 7,000 employees there and a few hundred robots. The video of the interview with Jerome shows some of Tesla’s battery cell conveyors that move the individual cells around in their own little conveyor carts. The segments remind me of minecarts from Minecraft.

The mainstream media focused its coverage on the Model 3 production ramp because that’s where the more visually exciting elements of the Model 3 are built, assembled, painted, and the like, but an equal amount of effort went into expanding and improving operations at Gigafactory 1.

Gigafactory 1 is where every 2170 battery cell that went into a Model 3 was put together. They also bundle up those cells into the battery modules and battery packs that power each car. The Gigafactory is the unsung hero in the Model 3 production ramp and it is clear that it will continue to be the backbone for Tesla’s projects moving forward, particularly since its Fremont, California, automobile factory is approaching or at full capacity.

Jerome said that the Gigafactory was a key component of Tesla’s strategy, since building everything in a single factory is seen as critical in lowering the cost of production as the company pushes for increasingly more affordable electric vehicles.

Working With Elon
Jerome also touched on his relationship with Elon in the interview, noting that Elon was not alone in asking for the impossible from his team during the Model 3 production ramp. Jerome was also pushing the team. That included long hours for Jerome, but no sleeping at the factory for him. While at the Gigafactory, Elon actually slept on the roof of the facility. Jerome said that the views up there are amazing but that “it gets a little cold at night,” with a laugh.

Keeping with the spirit of the 60 Minutes interview with Elon, she asked if Elon was just there as a cheerleader. The question speaks to either her lack of background prep on Elon or a desire to poke and prod at the raw edges just to provoke a response that might earn some headlines. Either way, it’s awkward, but Jerome said Elon is a leader and that he never seems to stop pushing:

“It’s always at the limit of the comfort zone. This is what it takes. What we’re trying to do is very difficult and it’s not going to happen just by cruising. There’s a lot of innovation, a lot of technology, and we are doing this to make the vehicle less expensive so more people can afford them and more people can drive electric,” Jerome said.

He closes by reinforcing the reason Tesla exists. They are doing all of this to make electric vehicles more affordable so more people can drive electric. It is so different than the way any other company operates and yet it just makes so much sense. We need revolutionary products and solutions and that’s what Tesla is bringing to market, but it requires painstaking, difficult, world-changing work. At the end of the day, Jerome is still able to smile and seems to enjoy doing what he’s doing at Tesla.

Source: 60 Minutes via Reddit

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Elon Axios Interview: How Model 3 Production Ramp Almost Killed Tesla, The Massive AI Threat, & Moving To Mars

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Published on November 26th, 2018 |

by Steve Hanley

Elon Axios Interview: How Model 3 Production Ramp Almost Killed Tesla, The Massive AI Threat, & Moving To Mars

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November 26th, 2018 by Steve Hanley

On Sunday night, an Axios interview with Elon Musk aired on HBO. If you don’t have an HBO subscription, you might want to get one. It is, as the expression goes, “appointment TV.” That is, it offers programs too good to miss. But in case you did, here are three takeaways from the program.

How The Model 3 Almost Killed Tesla
Earlier this year, as Tesla began ramping up production of the Model 3, Musk told Axios the company came within a few weeks of going out of business. Tesla “faced a severe threat of death. Essentially, the company was bleeding money like crazy and just … if we didn’t solve these problems in a very short period time, we would die. And it was extremely difficult to solve them.” Asked how close the company came to actually shutting down, Musk replied, “I would say within single-digit weeks.”

Musk’s notes about living, sleeping, and eating at the factory during that stressful time have become a bit of a joke on the internet, but Musk says it was no joke for him personally. “I was in the paint shop, body shop … end of [the] line where we do final check out of vehicles,” he said. “I personally redesigned the whole battery pack production line and ran it for three weeks. Pretty intense.”

“I think what a lot of people don’t understand is that I’m like the chief engineer like that. I actually do lead engineering of the rockets and lead the engineering of the vehicles and production. Ninety percent of my day is spent on engineering and production.

“No one should put this many hours into your work. This is not good. People should not work this hard. This is very painful. It hurts, it hurts my brain and my heart. It hurts. … There were times when I was working literally 120 hours. This is not recommended for anyone. I just did it because if I didn’t do it, then [there was a] good chance Tesla would die.”

The Existential Threat From Artificial Intelligence
When the topic turned to artificial intelligence, Musk’s remarks took on a somber tone. “My faith in humanity has been a little shaken this year. But I’m still pro-humanity. We’re like children in a playground. … We’re not paying attention. We worry more about … what name somebody called someone else than whether AI will destroy humanity. That’s insane.”

He worries that AI will soon outstrip human intelligence, rendering humans subservient to digital masters. AI is “just digital intelligence,” he summarizes. “And as the algorithms and the hardware improve, that digital intelligence will exceed biological intelligence by a substantial margin. It’s obvious.”

“When a species of primate, homo sapiens, became much smarter than other primates, it pushed all the other ones into a very small habitat,” Musk said. “So there are very few mountain gorillas and orangutans and chimpanzees — monkeys in general. They occupy small corners of the world — cages, zoos. Even the jungles that they’re in are narrowly defined so they were sort of like big cages. So, you know, that’s one possible outcome for us.”

Musk has founded Neuralink, a company that is working on finding ways to interface the human brain with computers, which he sees as a way of preventing pure AI from dominating the human race. Neuralink is comprised of about 85 of the “the highest per capita intelligence” engineers ever assembled. “The long term aspiration with Neuralink would be to achieve a symbiosis with artificial intelligence. To achieve a sort of democratization of intelligence, such that it is not monopolistically held in a purely digital form by governments and large corporations.”

What is he talking about, exactly? An “electrode-to-neuron interface at a micro level — a chip and a bunch of tiny wires implanted in your skull. I believe this can be done — It’s probably on the order of a decade.”

In a way, we are already halfway to such a reality, Musk says. “And by the way, you kind of have this already in a weird way. You have a digital tertiary layer in the form of your phone, your computers, your watch. You basically have these computing devices that form a tertiary layer on your cognition already.”

One of the first applications for the technology could be helping people with spinal cord injuries. “We already know how to do this. Implant electrodes into the motor cortex of the brain, then bypass the severed section of the spine and have effectively local micro controllers near the muscle groups. It could restore full limb functionality. As people get older, they lose their memory — incredibly sad to have a mother forget her children, and that can be solved too.”

Then the conversation turned darker. “You could make a swarm of assassin drones for very little money. By just taking the face I.D. chip that’s used in cell phones, and having a small explosive charge and a standard drone, and just have it do a grid sweep of the building until they find the person they’re looking for, ram into them and explode. You could do that right now. No new technology is needed.”

Even scarier to Musk is the ability of AI to impact the electoral process, something America should be wary of as the revelations about Facebook and the 2016 presidential election continue to emerge. He warns us about the power of AI to create “incredibly effective propaganda … influence the direction of society … influence elections.” It can hone a message by watching online feedback and reacting to news, then making the message “slightly better within milliseconds.”

The government is largely blind to the threat, Musk says, and hopelessly behind in its feeble attempts to control AI. “The way in which regulation is put in place is slow and linear. And we are facing an exponential threat. If you have a linear response to an exponential threat, it’s quite likely the exponential threat will win. That, in a nutshell, is the issue.”

Is Mars An Escape Hatch For The Rich?
Musk told Axios there is a 70% chance he will be one of the people who travels to Mars aboard a SpaceX rocket in the future. He thinks the first trip could happen within 7 years. A ticket to Mars could cost as little as “a couple hundred thousand dollars,” a sum some suggest will make Mars an “escape hatch” for wealthy people as the Earth warms to the point where it can no longer sustain human life.

Musk scoffs at that idea. “Your probability of dying on Mars is much higher than earth. Really, the ad for going to Mars would be like Shackleton’s ad for going to the Antarctic. It’s gonna be hard. There’s a good chance of death, going in a little can through deep space.”

Once someone arrives there, it will not be a life of leisure, reclining by the pool and eating bonbons. “You’ll be working nonstop to build the base. So, you know, not much time for leisure. And even after doing all this, it’s a very harsh environment. So there’s a good chance you die there. We think you can come back, but we’re not sure. Now, does that sound like an escape hatch for rich people?”

So, why go? “There’s lots of people who climb mountains. People die on Mount Everest all the time. They like doing it for the challenge.”

It is fair to say that Elon Musk is not risk averse. Indeed, he seems to thrive on risk, feed off it, and then actively seek out more. That appetite for skating up to and sometimes over the edge is what separates him from normal mortals. And it may be the factor that allows Musk to save us from ourselves, although there is no guarantee anything can keep people from sowing the seeds of their own destruction and reveling in the process.

About the Author

Steve Hanley Steve writes about the interface between technology and sustainability from his home in Rhode Island and anywhere else the Singularity may take him. His muse is Charles Kuralt — “I see the road ahead is turning. I wonder what's around the bend?”

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Tesla Autopilot Hits 1 Billion Miles! & Why Tesla Autopilot Is The Top Approach To Autonomy

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Published on November 28th, 2018 |

by Michael Barnard

Tesla Autopilot Hits 1 Billion Miles! & Why Tesla Autopilot Is The Top Approach To Autonomy

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November 28th, 2018 by Michael Barnard

Editor’s note: Tesla just tweeted that Tesla owners have now driven 1 billion miles on Autopilot.

In honor of the milestone (no pun intended), I’m reposting one of my favorite Autopilot articles of all time, a 2015 article by Mike Barnard. Enjoy.

Tesla recently released its Autopilot mode for its cars. It has a fundamentally different intellectual approach to autonomy than Google’s, and it’s superior.

One of my backgrounds is robotics. I spent a year digging my way through PhD theses from robotics programs around the world as I worked on a startup idea for specific applications of swarm-based robots. We got as far as software architecture, simple simulations, 3D modelling of physical robots, and specific applications which had fiscal value. I have some depth here without pretending to be a roboticist, and I’ve continued to pay attention to the field from the outside.

So I feel comfortable in saying that, in general, there are two approaches for robots getting from Point A to Point B.

→ The first is the world map paradigm, in which the robot or a connected system has a complete and detailed map of the world and a route is planned along that in advance accounting for obstacles. Basically, the robot has to think its way past or over every obstacle, which makes for a lot of programming.

Yes, that’s a cat in a shark costume riding a Roomba.

→ The second is the subsumption architecture paradigm, in which a robot is first made so that it can survive environments it will find itself in, then equipped with mechanisms to seek goals. The robot then, without any idea of the map of the world, navigates toward Point B. The robot is robust and can stumble its way through obstacles without any thinking at all. The original Roomba vacuum cleaner was a pure subsumption beast.

Obviously, both have strengths and limitations and obviously, at least to me, a combination is the best choice, but it’s worth assessing Tesla’s vs Google’s choices based on this.

Google is starting from the full world map paradigm. For one of its cars to work, it needs an up-to-date centimetre-scale, 3D model of the entirety of the route it will take. Google’s cars are ridiculously non-robust — by design — and when confronted with something unusual will stop completely. Basically, all intelligence has to be provided by people in the lab writing better software.

Why would Google start with this enormous requirement? Well, in my opinion without having spoken to any of the principals in the decision, it’s likely because it fits their biases and blindspots. Google builds massive data sets and solves problems based on that data with intelligent algorithms. They don’t build real-world objects. And the split I highlighted above in world map vs subsumption paradigms is a very real dividing line in academics and research around robotics. It was very easy for Google and world view robotics researchers to find one another and confirm each others’ biases. Others assert that Google is taking a risk-averse approach by leaping straight to Level Four autonomy, and while I’m sure that’s a component of the decision-making process, I suspect it’s a bit of a rationalization for their biases. It’s also being proved wrong by the lack of Tesla crashes to date, but it is early days.

To be clear, Google cars can do things Teslas currently can’t, at least in the controlled prototype conditions that they are testing. They can drive from Point A to Point B in towns and regions that Google has mapped to centimetre scale, which is basically areas south of San Francisco plus a few demo areas. You can’t get in a Tesla, give it an address, and sit back. These are clear performance advantages of the Google model over current Tesla capabilities, and while not trivial, are enabled by the world map model.

Tesla, on the other hand, is starting with the subsumption model. First, the car is immensely capable of surviving on roads: great acceleration, great deceleration, great lateral turning speed and precision, great collision survivability. Then it’s made more capable of surviving. All the car needs to drive on the freeway is knowledge of the lines and the cars around it. Then it adds cameras to give it a hint about appropriate speed. It has only a handful of survivability goals: don’t hit cars in front of you, don’t let other cars hit you, stay in your lane, change lanes when requested, and it’s safe. Because of its great maneuverability — survivability — it can have suboptimal software because it is more able to get out of the way of bad situations. And it has human backup.

And if that’s where Tesla was stopping, everyone who is pooh-poohing its autonomy would be basically correct. But Tesla isn’t stopping there.

Tesla is leveraging intelligent real-world research assistants to put focused, experienced instincts into its cars. They are called the drivers of the Teslas. Every action the Autopilot makes and every intervention a driver makes is uploaded to the Tesla Cloud, where it’s combined with all of the other decisions cars and drivers are making. And every driver passing along a piece of road is automatically granted the knowledge of what the cars and drivers before them have done. In real time.

So, for example, within a couple of days of downloading, Teslas were already automatically slowing for corners that they took at speed before. And not trying to take confusingly marked offramps. And not exceeding the speed limits in places where the signs are obscured.

Within a couple of days of being available, the first people Cannonballed across the USA in under 59 hours with 96% or so of the driving done by the car. Given Google’s requirements, they would have had to send at least two cars out, one or more with a hyper-accurate mapping functionality, then a day or a week later, when the data was integrated, the actual autonomous car. And there would have been no chance of side trips or detours for the Google car. It literally couldn’t drive on a route that wasn’t pre-mapped at centimetre scale. But the Tesla drivers could just go for it.

People are driving Teslas on back roads and city streets with Autopilot, definitely not the optimum location-only situations that others claim Tesla is limited to. And Teslas haven’t hit anything; in fact, have been recorded as avoiding accidents that the driver was unaware of. Survivability remains very high.

Tesla cars are driving themselves autonomously in a whole bunch of places where Google cars can’t and won’t be able to for years or possibly decades. That’s because Teslas don’t depend on perfect centimetre scale maps that are up-to-date in order to do anything. Subsumption wins over world maps in an enormous number of real-world situations.

Finally, Teslas have a world map. It’s called Google Maps. And Tesla is doing more accurate mapping with its sensors for more accurate driving maps. But Teslas don’t require centimetre-scale accuracy in their world map to get around. They are just fine with much coarser-grained maps which are much easier to build, store, manipulate, and layer with intelligence as needed. These simpler maps combined with subsumption will enable Teslas to drive from Point A to Point B easily. They can already drive to the parkade and return by the themselves in controlled environments; the rest is just liability and regulations.

The rapid leaps in capability of the Autopilot in just a few days after release should be giving Google serious pause. By the time its software geniuses get the Google car ready for prime time on a large subset of roads, Teslas will be able to literally drive circles around them.

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About the Author

Michael Barnard is a C-level technology and strategy consultant who works with startups, existing businesses and investors to identify opportunities for significant bottom line growth in the transforming low-carbon economy. He is editor of The Future is Electric, a Medium publication. He regularly publishes analyses of low-carbon technology and policy in sites including Newsweek, Slate, Forbes, Huffington Post, Quartz, CleanTechnica and RenewEconomy, with some of his work included in textbooks. Third-party articles on his analyses and interviews have been published in dozens of news sites globally and have reached #1 on Reddit Science. Much of his work originates on Quora.com, where Mike has been a Top Writer annually since 2012. He's available for consulting engagements, speaking engagements and Board positions.

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GM May Finally Be Serious About Electric Vehicles

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Published on November 27th, 2018 |

by Frugal Moogal

GM May Finally Be Serious About Electric Vehicles

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November 27th, 2018 by Frugal Moogal

When I saw the news yesterday that GM is closing five plants and laying off nearly 15,000 employees, I was surprised. Not because it was happening, but because this could be an extremely forward looking move by the company.

Before I go on, I feel it’s important to present this article from a business perspective. In other words, what does this mean for GM as a company. The personal story of the people who are losing their jobs aren’t really a consideration in that case, even though obviously they should be.

Having said that, GM like all companies, is in a fight to stay ahead in its industry. Companies don’t make decisions to lay off those people without thinking them through. Even beyond any potential feelings of empathy for the workers, layoffs usually spur poor publicity, and in the case of GM will also create a battle with the auto workers union, neither of which is something the company wants. Yet, the decision to cut positions ultimately is connected to a business strategy that management feels makes the most sense at that given point in time. Sometimes it works, and sometimes it doesn’t.

It still negatively impacts those who lost their jobs. But that isn’t the focus of the rest of this article.

With all of that having been said, let’s dig in here for the reasons that GM may have made this move and why now was the right time.

GM Sales: Dropping?
The majority of the articles written about GM’s announcement talk about how GM sales have been dropping, and that’s the reason for the closures. And it’s true, sales dropped 11.1% in Q3 2018 compared to Q3 2017.

But there are a few problems with that. The first is that Q3 2017 was affected by higher than normal sales due to the effects of Hurricane Harvey.

Additionally, the results that GM posted for Q3 2018 were … well, I’m just going to let this article from Automotive News describe it:

“Stronger-than-expected results in China and North America propelled General Motors to a 25 percent increase in pretax profit in the third quarter and net income of $2.5 billion.”

So, sales dropped, but those drops were expected due to unique circumstances, were less of a drop than was anticipated, and GM still managed to improve its profitability. That’s not exactly the sort of results that cause businesses to lay off thousands and discontinue large segments of their market.

It does, however, work as a good scapegoat to changing your business strategy to try to meet a new market.

The SUV is King?
The media seems to have adopted recently that SUVs and crossovers are all that anyone wants now, and I hate it. I could have devoted an entire article to just this, but there are again factors at work here that I feel are driving the shift, so I’m going to try to encapsulate them here.

First, automobiles are lasting longer than ever before. When gas prices rose significantly, the majority of automobiles that were sold were smaller vehicles, many of which are still on the road today and nearly as good as the newer models. As a simple, single data point, the car that I traded in for my Model 3 was a 2008 Nissan Sentra. The 2015 Nissan Sentra looks physically the exact same as my car did.

Right along with this, a dealership makes the majority of its money on used car sales and service, incentivizing dealerships to sell consumers on these cheaper, new-looking sedans instead of directing them into the most recent 100% new model.

On the flip side, if you want a crossover or SUV, there are far fewer old, used options. Remember that when gas prices rose quickly about 10 years ago, people were dumping their SUVs because they could no longer afford to fuel them. Sedans made up the majority of new sales, and the used market had a glut of SUVs that dealers couldn’t give away.

Those used SUVs have aged out of the market — how often do you see Hummers driving around now, for instance — meaning if a driver wants to move into that vehicle segment, chances are she or he is going to be opting for a new vehicle or paying a lot for a used one.

At the same time, 2010 fuel standards are based on the vehicle’s footprint, or size. Thus, a larger vehicle needs to achieve less stringent fuel efficiency than a small vehicle. This example from Wikipedia’s article on Corporate Average Fuel Economy (CAFE) explains it perfectly:

“For example, the fuel economy target for the 2012 Honda Fit with a footprint of 40 sq ft (3.7 m2) is 36 miles per US gallon (6.5 l/100 km), equivalent to a published fuel economy of 27 miles per US gallon (8.7 l/100 km), and a Ford F-150 with its footprint of 65–75 sq ft (6.0–7.0 m2) has a fuel economy target of 22 miles per US gallon (11 l/100 km), i.e., 17 miles per US gallon (14 l/100 km) published.”

This gives automakers a few incentives to sell larger vehicles — not just can they charge more for them, but the technology to get them to be CAFE compliant is cheaper.

These two factors I think often go overlooked in the SUV “boom,” and it may be less of a boom than a temporary realignment. The narrative of an SUV surge and changing car buyers tastes is a good excuse by car companies, however, to hold off costly development into new cars.

Electric Vehicles Are A Material Risk to Legacy Automakers
This can’t be understated, yet it seems that the majority of investors haven’t grasped this. Electric vehicles are a material risk to legacy automakers.

The gasoline car market is extremely well developed and competitive. Margins are difficult to come by. GM achieved a $2.5 billion profit based on a margin of about 10% on its vehicles. While $2.5 billion seems like a huge number, GM pays shareholders a significant dividend, hovering near 25% of its expected profits in a year. (Ford’s is around 45%!)

Here’s a weird yet true fact — GM “burned” more cash in Q1 2018 than Tesla did. GM reported an adjusted automotive free cash flow of negative $3.464 billion. Tesla, which pundits were lined up to declare as a cash burning machine after Q1 2018, reported free cash flow of negative $785 million.

I’m highlighting this for a reason. Legacy automakers are having a difficult time creating a compelling electric vehicle that they make money on, and they have to spend significantly more money than Tesla does just to retain their position in the gas car business, a business which is expected to decline as electric vehicle sales increase.

Instead, GM (and every legacy automaker) has been forced into a difficult corner. Developing proper EV tech is not as easy as dropping a battery and electric motor into a car and calling it a day, as Tesla has clearly shown us. In 2010, it was estimated that bringing a new car model to market costs an automaker around $1 billion to $6 billion. I can only assume a whole new architecture would be even more.

Invest too much too soon, accidentally kill your gas car business, and you’ll burn so much money that the company will go bankrupt within a year or two.

Invest too little, and if the market shifts to electric cars that you haven’t yet developed, your margins crash and you burn all your money trying to quickly catch up and create a compelling, high-volume EV.

Is the Model 3 to Blame?
This may sound crazy on the surface, but I don’t think we would have been here without the Model 3 doing what it has done. To keep their smaller cars CAFE compliant, GM has to spend more money to develop better technology, which leads to smaller margins on those cars. A smaller margin on these vehicles means even a minor drop in sales could lead to significant losses.

What could have led to a drop in smaller sedan demand? According to AAA earlier this year, one in five drivers wants an electric car as their next vehicle.

I don’t think it’s a coincidence that both Ford and GM have discontinued huge segments of their sedans in the past seven months. Both companies see mounting development costs for a product that could be rapidly replaced. Ford seems to have no real plan, but GM seems to be trying to meet the challenge head on.

And, it’s going to get worse for legacy automakers soon. By 2020, Tesla will have the $35,000 Model 3 and could be spooling up production for the Model Y and truck. If a large number of buyers hear about these new electric models and decide to hold off purchasing a new gas car to see what is brought to market, that drop alone could be enough to put a legacy automaker that hasn’t created compelling electric options of their own into a tailspin.

Back to Yesterday’s News
This is what makes yesterday’s news so interesting. Most reporters stated that GM is responding to falling sales by focusing on its larger and more popular models.

Looking at the numbers, that isn’t what seemed to happen. GM is discontinuing the Chevy Cruze (31,971 Q3 sales), Impala (16,290), and Volt (5,429), the Buick LaCrosse (2,290), and the Cadillac XTS (4,101) and CT6 (2,281). Of these, both the Volt and XTS actually had increasing sales in Q3.

The Cruze, even with a 27% decrease in sales, was still Chevy’s fifth best selling model, and it accounted for over 6% of all Chevys sold.

We could contribute the decrease in Cruze sales to a lot of things, but if an automaker were to believe that the decrease in sales came partially from buyers holding off until they found a compelling electric car, this might be the time to ditch those models before they bleed too much money. This might be the time to quickly rush the new electric vehicles to market. When automakers suddenly find a luxury-priced sedan is all of a sudden competing on the best selling car list, it may be a wake-up call of sorts.

There isn’t a compelling, reasonably affordable SUV or truck option. Yet. But with the Tesla M..

Tesla Partners With Auction Companies To Manage Used Car Market

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Published on November 27th, 2018 |

by Steve Hanley

Tesla Partners With Auction Companies To Manage Used Car Market

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November 27th, 2018 by Steve Hanley

Car auctions move billions of dollars a year and are essential to the US automobile industry, yet operate out of the public eye. Every week, tens of thousands of used cars get redistributed from dealers and leasing companies to wholesalers and other dealers. The auctions are not open to the public, so very few people know about them, but they provide a means of turning cars in inventory into cash for sellers, and they provide a steady supply of fresh inventory for used car dealers.

Until now, Tesla has been managing its own used car inventory, but as sales of new cars ramp up, there are more Teslas being traded in. As much as Tesla likes to be a vertically integrated company that controls every aspect of its business, established auction houses like Adessa and Manheim are very good at what they do, and so Tesla has contracted with them to help manage its burgeoning supply of used cars, according to CNBC.

The majority of cars that go through the auction process are off-lease vehicles — something that Tesla is starting to have a lot of as leases from 2016 and earlier are just starting to mature. To handle the influx of more used cars — some of which may be trade-ins from other manufacturers or repossessions — Tesla now has postings on Glassdoor for used vehicle quality specialists, a remarketing manager, and used vehicle sales advisors. The company is targeting a “30-day or less turn-rate in the sale of pre-owned inventory.”

Many people have a negative attitude toward cars purchased from auction houses, but in truth, the supply of off-lease cars is the lifeblood of the used car industry. They are typically 2 to 3 model years old with between 30,000 and 50,000 miles on them. They are professionally reconditioned by the auction staff and often cannot be told from new. If you think all 300 used cars in inventory down at your local dealer are local trade-ins, you don’t understand how the used car business in America works.

Because Teslas will now be available at major auctions, that means they will soon start showing up on dealer lots alongside other cars in the used car inventory, meaning people interested in buying a used Tesla will have more options and possibly somewhat lower prices.

The secret to the used car business is turning the inventory. Many of the top used car retailers set 30 days as the maximum time a car can remain on the books. After that, it goes back up for auction. The theory is that it is better to lose a little money now if the proceeds can be reinvested in fresh inventory that will sell quickly and generate a profit later.

When your children ask you for career advice, tell them to become an auctioneer. Those who make it are typically some of the wealthiest people in the community. They get paid a fee by sellers to include their cars in the auction and another fee by buyers when the car sells. Most operate finance companies that loan buyers the money to purchase the cars. They operate inspection and reconditioning services that generate income as well.

Forget being a lawyer or a doctor or even a Wall Street trader. Being an auctioneer is where it’s at. You own nothing and have little overhead. No one dies or goes to jail if you make a mistake. It’s the perfect business for anyone who wants to make a lot of money with minimal headaches.

And it’s addicting. Once a week, the cars start rolling across the auction block at 9:00 am at a rate of 2 per minute until well into the afternoon. The bigger auctions have up to 15 lines running simultaneously and sell as many as 1,500 cars in a day. It’s insane, and crazy good fun. Way better than playing video games in your mom’s basement.

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Tesla Adds Warehouses In Lathrop, California, To Relieve Pressure At Its Fremont Factory

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Published on November 27th, 2018 |

by Kyle Field

Tesla Adds Warehouses In Lathrop, California, To Relieve Pressure At Its Fremont Factory

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November 27th, 2018 by Kyle Field

New Video Highlights Progress At Tesla’s New Facility In Lathrop, California

Tesla has continued its ongoing expansion with the construction of its new Distribution Center in Lathrop, California. The facility sits just over 50 miles from its Fremont factory.

The company originally moved into Lathrop back in 2014 as it fleshed out plans for the then-new Model X. It is now working to expand its footprint in the city to accommodate the surge in volume required for Model 3.

Tesla’s 10K filing with the SEC from 2017 noted that, “We manufacture our vehicles, and certain parts and components that are critical to our intellectual property and quality standards, at the Tesla Factory and our manufacturing facility in Lathrop, CA.” It went on to list 4 warehouse and manufacturing locations in the city, totaling nearly 1.4 million square feet of floor space.

A new YouTube video that was posted on Reddit (featured above) shows that Tesla continues to push into the small city with the construction of another massive facility. The sheer size of the new facility has many speculating that it will come online as a distribution center that will allow Tesla to offload some of the more space-intensive delivery preparation work away from its Fremont manufacturing plant.

As Tesla’s near-term production target of 6,000 Model 3s per week stacks on top of its existing base of 100,000 Model S and X per year, Tesla is pulling out all the stops to roll as many cars as possible through its Fremont factory. Actually, 412,000 vehicles per year is already more than Tesla thought it would produce from the factory, and it now has plans to continue to ramp up Model 3 production to a target rate of perhaps even 10,000 Model 3s per week!

Cramming the production of more than 600,000 vehicles per year into the Fremont factory is going to require a bit of ingenuity, but that’s just business as usual for Tesla, which has built its business on challenging the status quo and redefining normal — one day, one innovation at a time.

Tesla has not announced the North American manufacturing location for its yet to be unveiled electric CUV, the Model Y, but it has admitted that it will need another production facility since Fremont is already bursting at the seams. It recently broke ground on its third full-scale manufacturing facility, dubbed Gigafactory 3, in Shanghai, China — its first production facility in Asia — where it will produce the Model 3 and the Model Y when production begins in 2020.

Though, in the midst of the international expansion, it has largely been ignored that back in Lathrop, California, Tesla continues to ramp up its operations. Dozens of logistics, administrative, and metal-working jobs have been posted in the greater Lathrop region by the California company.

Source: YouTube via Reddit

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Albertsons Pre-Orders 10 Tesla Semi Trucks

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Published on November 22nd, 2018 |

by Steve Hanley

Albertsons Pre-Orders 10 Tesla Semi Trucks

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November 22nd, 2018 by Steve Hanley

In order to reserve a Tesla Semi, the buyer has to pony up a $20,000 deposit. That means Albertsons, the second largest grocery chain in the US after Kroger, has just forked over $200,000 to pre-order 10 Tesla Semis whenever they become available. The latest thinking is that will happen sometime in 2019. Although, 2020 may be more likely, since the company currently has no production facility (that we know of) for the all-electric tractors. Plus, “Tesla time” and all that.

If you’re not familiar with the name Albertsons, that’s because it operates under several names, including Safeway, Shaw’s, Vons, and Pavilion. It also owns the Jewel-Osco chain of drugstores. In all, Albertsons operates 20 brands across 35 states and operates a truck fleet of more than 1,400 units, according to FreightWaves.

In a press release, Tom Nartker, vice president of transportation for Albertsons, says, “Advancing supply chain efficiency and sustainability is an important goal for our company. We’re excited to pilot this expansion of our transportation program with trucks that help us limit our overall carbon footprint.”

The company plans to use the Tesla trucks as part of its operations in southern California. It has ordered the upgraded version of the Tesla Semi, which is expected to have a range of 500 miles towing a fully loaded semi-trailer. The price of those units is around $180,000 a piece.

During a conference call in May of this year, Elon Musk said the company has received about 2,000 pre-orders for the Semi, despite the fact that the company has made no effort to solicit orders for the vehicles. “We haven’t really tried to sell the Semi. Orders for the Semi are, like, opportunistic,” Musk said at the time, according to Car and Driver. “It’s just not something we really think about much.” How nice to have customers beating a path to your door.

To do a little math again, 2,000 times $20,000 = $40,000,000. That’s a lot of reservations for a concept electric semi truck that has seen only a tiny amount of showtime.

“Our employee promise is to Make Every Day a Better Day,” says Albertsons CEO Jim Donald. “That means being a good community partner and a committed steward of the environment. We take that obligation seriously because our company is growing and innovating at lightning speed. And when we move forward, we leave a trail behind.” Clearly, Albertsons wants that trail to contain as few carbon emissions as possible.

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The Fight For A Tesla Gigafactory In Poland

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Published on November 18th, 2018 |

by Jacek Fior

The Fight For A Tesla Gigafactory In Poland

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November 18th, 2018 by Jacek Fior

When writing my letter to Elon Musk a few weeks ago, little did I know about the real actions undertaken by so few for so many. Tesla is a dream — a dream of an extraordinary electric vehicle everybody wants to own, a dream of an out-of-the-universe leader, Elon Musk, who everybody wants to follow, and a dream of a gigafactory every nation wants to attract. It seems now that Poles around the world are joining forces to save Elon from making a terrible mistake by going some other place than Poland. 🙂 Here is the story.

There is a Polish woman in America who is strongly involved in the space industry and rocket science. Ewa is a passionate investor in new technologies and a space adventurer. She apparently has “access” to Elon when attending SpaceX rocket launches and has become quite determined to help Poland make the right pitch.

There is a Polish man in Poland who runs the most popular Facebook fan page here, called Tesla Klub Polska. Mariusz is passionate about Tesla and runs the fan page as a hobby. He knows more about Tesla than most other people I know. So, Mariusz is in touch with Ewa and chat after chat he suggests he could help connect the US team with our government authorities. He has prepared a huge portfolio of information about Tesla, its operations, its CEO, its investment plans, and its gigafactories. The file has gone to the Polish Minister of Investment and Economic Development, Jerzy Kwieciński.

What happens next is … not much. Kind of classic, as it boils down to mutual talks between the American supporter, Ewa, and the ministry about the terms and conditions of cooperation. Being a patriot is one thing. Doing significant work for the country is another and needs to be remunerated, and I mean remunerated well. The state of affairs a month ago, when I first learnt about it, was that Poland had never been in the cards for Elon and Tesla (something I find difficult to believe after my persuasive letter to Elon) and it would take a lot of effort and wit to be allowed at the table. As far as we could learn, nobody from Poland, apart from crazy enthusiasts like myself or Mariusz, had ever reached out to Tesla before the joint efforts of Mariusz and Ewa. Somehow disappointing. [Editor’s note: It was near the top of my list of question during the past two Tesla conference calls]

The good thing is that the Polish government has finally understood what scale of investment we are talking about here and has braced itself to join the race. As we have reportedly reached the Prime Minster level of involvement, chances are Poland will at least have an opportunity to pitch directly to Tesla. Not a place nor time to repeat all the arguments I have quoted before (hint, hint). I do believe we are the best choice for Tesla for many reasons. However, what our government must realize is that the competition is fierce – Germany is in the game as a country and various individual German states are making their own pitches, with Berlin on top of them in its recent bid. Can we beat other competitors and prevail? Yes! Influential advocates in the USA and determined authorities here in Poland need to believe it, too. I’m here to help, by the way.

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Jacek Fior Jacek is an entrepreneurial type who sees opportunities all around. He runs his own corporate language training company and international translation agency, Better Horizons. One of his many passions, besides card tricks and mixology, is electric cars and their introduction on the market. He is currently working on launching the Polish platform of CleanTechnica — cleantechnica.pl — in the hopes of helping people to understand the revolution we are witnessing. Jacek is also a founding partner of Tesla Shuttle.

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Tesla Reaching Out To US Model 3 Reservation Holders To Ask If They Want A Refund

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Published on November 15th, 2018 |

by Zachary Shahan

Tesla Reaching Out To US Model 3 Reservation Holders To Ask If They Want A Refund

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November 15th, 2018 by Zachary Shahan

Update: There’s even hotter news that Tesla has opened up the Model 3 configurator (to design and complete your order for the car) in China. As a commenter nicely summarizes, “There have been reports elsewhere about phone calls. I think this is about production planning to figure out what these remaining orders actually are. And clearing out any reservations that aren’t going to convert into orders.”

Tesla is in an interesting position. Hundreds of thousands of people put down reservations for a Model 3. Perhaps 100,000 of them have now gotten their cars (or not quite 100,000 of them, since many buyers have come in “off the street”). That most likely means that hundreds of thousands are still waiting to order their cars. Many of those people are overseas, but plenty are surely still in the United States. Who are they? Are they going to order? If not, are they ever going to ask for a refund?

One of our writers is sitting on a reservation. This evening, he received a text message from someone at Tesla asking if he wants a refund. He went on a test drive a few months ago but has otherwise not reached out about anything, so he found it a bit interesting and surprising to receive this text message on his phone.

The message was short and sweet. As you can see on the right, after a brief hello (I’ve clipped off that part to exclude the names), the sales advisor wrote, “We saw you’ve not ordered your Model 3. Please let us know if you’d like your $1k deposit returned. Thanks.”

This is interesting for a few reasons. One is that you’d think Tesla would like to hold onto the cash as long as possible, so it’s surprising to see the company offering to give it back.

That said, the money can’t really be used by Tesla anyway (it’s not counted as real revenue at this stage), so why not? With Tesla’s bank account looking as good as ever, perhaps the company decided it was time to unload some of that dead cash. Additionally, Tesla may be trying to ensure customers have a good experience and don’t feel like the company is holding onto their money longer than it should.

Some more business-y explanations may be at play as well — and the above ideas may not have anything to do with it.

Perhaps this is an approach Tesla is now using to push consumers — in a super subtle and low-pressure way — to finally move forward and order a car. The company has sent out a handful of emails over the past several months encouraging reservation holders (like me) to convert into buyers and order a Tesla Model 3 Long Range … Tesla Model 3 All-Wheel Drive … Tesla Model 3 Performance … Tesla Model 3 Mid Range — whatever’s fresh. I’ve personally received a handful of reminders (including this week) that cars are available for test drives.

Another possibility is that Tesla is eager to learn more about remaining reservation holders in the US. Are they really planning to buy a car? Are they just waiting on the $35K car? With a nudge, will they admit they aren’t going to order and accept a refund? Tesla staff are probably trying to figure out what remaining demand from reservation holders actually is so that they can plan production, shipping, and delivery schedules accordingly.

There’s also the chance the message was a one-off from a rogue employee, not a big company-wide template message. That seems unlikely, but we should find out soon enough.

We likely won’t figure out the full story behind this message. There are many possible explanations for it, and Tesla’s probably going to hold them close to its chest. But there’s always room for speculation and hypothesizing, right? Any other thoughts?

I reached out to Tesla for commentary and talked about this but did not receive any extra information.

If you’re looking to buy a Tesla, appreciate my work, and need a referral code, here you go: http://ts.la/tomasz7234

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Zachary Shahan Zach is tryin' to help society help itself (and other species). He spends most of his time here on CleanTechnica as its director and chief editor. He's also the president of Important Media and the director/founder of EV Obsession and Solar Love. Zach is recognized globally as an electric vehicle, solar energy, and energy storage expert. He has presented about cleantech at conferences in India, the UAE, Ukraine, Poland, Germany, the Netherlands, the USA, and Canada.

Zach has long-term investments in TSLA, FSLR, SPWR, SEDG, & ABB — after years of covering solar and EVs, he simply has a lot of faith in these particular companies and feels like they are good cleantech companies to invest in. But he offers no professional investment advice and would rather not be responsible for you losing money, so don't jump to conclusions.

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Tesla President Jerome Guillen Lays Out Path Forward For Gigafactory 1

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Published on November 13th, 2018 |

by Kyle Field

Tesla President Jerome Guillen Lays Out Path Forward For Gigafactory 1

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November 13th, 2018 by Kyle Field

Tesla President of Automotive Jerome Guillen recently opened up about Tesla’s plans for expanding and optimizing Gigafactory 1 in Sparks, Nevada. As usual, Tesla is keeping a watchful eye on the future with the construction of its new Shanghai Gigafactory, but Gigafactory 1 isn’t yet close to reaching its own max potential.

CNBC recently toured Tesla’s Gigafactory in Sparks, Nevada, during which it took a look at the Model 3 battery pack assembly lines before sitting down to talk with Jerome. In the interview, he opened up about Tesla’s plans to grow its production capacity at Gigafactory 1, building on three main pillars of effort:

Building more battery cell manufacturing lines at the Gigafactory
This is being done in concert with Tesla’s exclusive battery cell manufacturing partner, Panasonic. This not only increases the total production capacity of the Gigafactory, but also allows the company to leverage greater economies of scale, which spreads fixed costs associated with running the company out over a larger volume of batteries.

Tesla needs to build more batteries, as its demand for 2170 lithium-ion battery cells currently outstrips what it can produce at the Gigafactory. As Tesla looks to 2019 and the rollout of the Model 3 to European and Asian markets, it is going to need boatloads of additional battery capacity to support those volumes.

To support that expansion for the near term, it is going to need more batteries from Gigafactory 1. Long term, the company plans to build additional gigafactories in each major market, with the first gigafactory outside of the US being already under construction outside of Shanghai. Another gigafactory is slated for Western Europe, with Elon Musk noting months ago that it would likely be somewhere along the French–German border.

Improving the design of the battery cell manufacturing lines
Tesla lives and breathes innovation and it is this continuous innovation that has driven it to produce cars, energy storage products, and solar products that get better with every generation — sometimes even after they have been sold to customers.

Improving its battery cell manufacturing lines plays out most clearly for its new production lines at GF1 and future gigafactories, but some of those improvements can also be rolled into existing production lines at GF1 in Nevada.

Jerome said that the improvements being made to the battery cell production lines are being made to improve the yield, the throughput, and the capacity of each production line. Squeezing out extra batteries from a single line means Tesla is getting more return on the capital it invested in existing production lines, which translates to lower capex in the long run.

Improving the design of the 2170 battery cell
Tesla started off building its vehicles using commodity 18650 lithium-ion battery cells but did so with a watchful eye to the future, to the day when it would be able to build its own cells. The Gigafactory in Sparks, Nevada, made that dream a reality and ushered in Tesla’s proprietary 2170 form factor, which stretched the diameter of the round 18650 cells 3 mm to a 21 mm diameter and stretched them from 65 mm long to 70 mm long.

The idea was that this 2170 form factor was the perfect blend of energy density — or the amount of energy stored in a given volume — and surface area for cooling. Batteries run hot when being charged and heat management is directly linked to the performance and longevity of the batteries, making heat management one of the key systems in any electric vehicle.

“The design of the cell is not frozen. It evolves and we have a very nice roadmap of technology improvements for the coming years,” Guillen said in the interview. This is consistent with what we know of Tesla and its relentless pursuit of perfection in engineering, design, production, chemistry … you name it. They just don’t stop innovating. (And thank God for that!)

Source: CNBC

An inside look at Tesla’s Gigafactory from CNBC.

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