Tesla Motors CEO: Gas Should Be $10/Gallon

[johnnymk]

http://www.cbsnews.com/stories/2009/06/15/tech/cnettechnews/main5090301.shtml


CNET) "I'm anti-tax, but I'm pro-carbon tax," Tesla Motors founder Elon Musk said onstage at the Wired Business Conference here Monday--a remark that prompted interviewer and Wired editor-in-chief Chris Anderson to quip that he was a "true Silicon Valley libertarian."

Gasoline "should probably be $10" per gallon, said onetime PayPal co-founder Musk, who is also attempting to make sending satellites into space cheaper with a start-up called SpaceX. "I'm not paying for the true cost of gasoline at the pump...since nobody's explicitly paying for the CO2 capacity of the oceans and atmospheres, it's getting consumed. We will pay for it down the road, but we are sort of ignoring it for now."

Musk's company has put out the Tesla Roadster, a pricey sports car that runs exclusively on electric power. On the way is the Model S, a more affordable sedan. Separate from the technology, Tesla has gained a reputation for financial difficulties and corporate bickering. Earlier this month, former CEO Martin Eberhard sued Musk and the company for libel and breach of contract.

Musk's rash attitude and devotion to cutting-edge innovation has constructed him as a figure less than willing to compromise. He didn't sound too satisfied, for example, with the level of innovation in the Toyota Prius, the car that is practically synonymous with environmental consciousness in the auto industry.

"A Prius is not a true hybrid, really," he said. (A plug-in Prius is on the way.) "The current Prius is like, 2 percent electric. It's a gasoline car with slightly better mileage."

That said, Tesla shines quite a bit brighter due to the utter disarray of the U.S. auto industry, with major automakers falling into bankruptcy and Detroit in a continuing downward spiral. This, according to Musk, was the inevitable result of a completely broken system.

"Great companies are built on great products," he said, and when those products take a turn for the worse, so does the company. Automakers, Musk theorized, focused too much on the money rather than innovation. "The path to the CEO's office should not be through the CFO's office, and it should not be through the marketing department. It needs to be through engineering and design."

Musk said that unions weren't inherently the problem but the way that they were structured was. "It's not out of the question to have unions. But if they do have a union, they've got to understand that they're on the same side of the company," Musk said. "I really am kind of against having a two-class system where you've got the workers and the management sort of like the nobles and peasants." In other words, Musk thinks Detroit could use a dose of Silicon Valley corporate culture.

Surprisingly, Musk implied that Detroit will survive. "I think it'll probably be a healthier place. This has been somewhat cathartic. Maybe, I think, maybe I'm being overly optimistic, but I think this will be a cathartic experience," Musk said. "I think GM and Ford, maybe not Chrysler, but GM and Ford will come out of this healthier...and more competitive."

He wants Tesla to be part of that, obviously.

"I'd like to take up some of the manufacturing plants," he said. "When the mess gets sorted out I'd like to have a conversation with whoever's in charge."

[mechmike0034]

What "carbon tax" would Mr. Musk place on coal? I am sure he realizes that most of the electricity generated in the US comes from coal-fired powerplants...

[InfiniteNothing]

It would be an interesting experiment. If this went through I'd support removing alot of other laws/taxes that are essentially trying to accomplish the same thing like the gas guzzler's tax, the federal credits for green cars, CAFE, cash for clunkers. All those programs are trying to adjust human behavior. The thing I don't like about them is that they aren't graduated enough and that they are too complicated. If cutting down driving is our goal then this will let the free market most efficiently allocate gas and the resulting pollution as a scarce resource.

One good thing about it is that it will encourage local industry. Suddenly vegetables from Peru would be much more expensive and local farmers could fill the gap. Heh, Texans would buy Dell; Californians would buy Apple ;) You'd see alot more biking and public transportation.

[InfiniteNothing]

What "carbon tax" would Mr. Musk place on coal? I am sure he realizes that most of the electricity generated in the US comes from coal-fired powerplants...

I thought it was natural gas. Still puts out CO2 though. Nuclear I think is around 3rd so that wouldn't get taxed nor would solar, wind, water.

Along the same lines of my last post if you taxed gas and coal, you could drop much of the federal funding of the alternative energy programs as they would be effectively subsidized. It seems like it really would be a much more efficient solution.

More to your point, even if you taxed both electricity and gasoline, on a per carbon basis Tesla would still come out way way ahead because power plants are much more efficient than ICE mostly due to scale.

[VTGreg]

I'm sure he is for $10/gallon gas. That would really bolster the value of Tesla.

[johnnymk]

I'm sure he is for $10/gallon gas. That would really bolster the value of Tesla.

The only problem is that runaway inflation would definitely occur, peope woud be broke and no one would be able to afford his expensive cars.

[InfiniteNothing]

The only problem is that runaway inflation would definitely occur, peope woud be broke and no one would be able to afford his expensive cars.

People would change their habits. They'd bike or take public transportation. They'd carpool and buy economy cars.

[InfiniteNothing]

I'm sure he is for $10/gallon gas. That would really bolster the value of Tesla.

Ad hominem

[guiseppewv]

I thought it was natural gas.

For 2007 (thousands of MW-hrs):

Coal: 2,016,456
Nat Gas: 896,590
Petro: 65,739
Other Gases: 13,453
Nuclear: 806,425
Hydro: 247,510
Other Renewables: 105,238

Source: http://www.eia.doe.gov/cneaf/electricity/epa/epat1p1.htmlhttp://www.eia.doe.gov/cneaf/electricity/epa/epat1p1.html

Coal production is about equal to ALL of the other source combined. Natural Gas is a distant 2nd and nuclear is a close 3rd to Natural Gas.

[guiseppewv]

Ad hominem

No, I think that is pointing out that he is biased b/c he stands to gain an increase in market share if gas were $10/gal. I don't think he attacked his character. The guy is an entrepeneur that is what (i.e. make their product more valuable or more utilized) they do.

[mechmike0034]

More to your point, even if you taxed both electricity and gasoline, on a per carbon basis Tesla would still come out way way ahead because power plants are much more efficient than ICE mostly due to scale.

Is what I have bolded in your quote above your opinion, or fact?

Also, when you talk about "Tesla coming out way ahead", are you taking into consideration the $101,500 list price of the Tesla roadster (http://www.teslamotors.com/buy/buyshowroom.php)?

[johnnymk]

People would change their habits. They'd bike or take public transportation. They'd carpool and buy economy cars.

Bike? 60% of Americans are obese and/or lazy. Pus if you work more than a few miles from home, forget it. Public transportation..yes, but it's not that readily available. Carpool..definitely. I carpooled during the first oil embargo in the seventies. Buy economy cars..only if we aren't in the middle of a great depression.

You're not going to be happy until Americans change their driving habits either by hook or by crook, are you?

[VTGreg]

Ad hominem

You're welcome to take his comments at face value but I'm more than welcome to question his motives. I stand by the fact that $10/gallon gas would be a boon for Tesla and thus a boon for his wallet.

[InfiniteNothing]

Is what I have bolded in your quote above your opinion, or fact?

Also, when you talk about "Tesla coming out way ahead", are you taking into consideration the $101,500 list price of the Tesla roadster (http://www.teslamotors.com/buy/buyshowroom.php)?
When I said coming out ahead I was talking about in terms of if you tax both the net benefit to electric owners is greater.

This site talks a bit about those sort of calculations:
http://auto.howstuffworks.com/fuel-efficiency/alternative-fuels/fuel-cell4.htm

It comes up with a worst case scenario of 26% for electric cars starting from a 40% efficient coal plant. Compare to 20% cited for cars.

Of course natural gas plants can be up to 60% efficient:
http://en.wikipedia.org/wiki/Fossil_fuel_power_plant

And in a nuclear power plant there are no fossil fuels.

The nice thing about electric cars though is that everyone gets an upgrade when newer more efficient or alternative energy plants are created.

Coal production is about equal to ALL of the other source combined. Natural Gas is a distant 2nd and nuclear is a close 3rd to Natural Gas.

Ahh, thanks. I didn't realize coal was so big. In California it's next to nothing (1.3%)

You're welcome to take his comments at face value but I'm more than welcome to question his motives. I stand by the fact that $10/gallon gas would be a boon for Tesla and thus a boon for his wallet.

No, I think that is pointing out that he is biased b/c he stands to gain an increase in market share if gas were $10/gal. I don't think he attacked his character. The guy is an entrepeneur that is what (i.e. make their product more valuable or more utilized) they do.
Ad Hominem doesn't mean "attacking ones character". It means you are not addressing the argument. Even if you are biased you can still make reasonable points and arguments.

Bike? 60% of Americans are obese and/or lazy. Pus if you work more than a few miles from home, forget it. Public transportation..yes, but it's not that readily available. Carpool..definitely. I carpooled during the first oil embargo in the seventies. Buy economy cars..only if we aren't in the middle of a great depression.

Regarding fat or lazy Americans I'm just killing two birds with one stone. Public transportation would be made publicly available if the economics supported it. People would change jobs and work closer to home. If you're worried about transitionary effects you can ramp up to $10/gal slowly ;)


You're not going to be happy until Americans change their driving habits either by hook or by crook, are you?
Nope. :)

[guiseppewv]

This site talks a bit about those sort of calculations:
http://auto.howstuffworks.com/fuel-efficiency/alternative-fuels/fuel-cell4.htm


Ummmm....they forgot to take into account transmission (electricity not the auto/manual/CV transmission of the vehicle) losses.

According to the following article that is 7.2%:
http://en.wikipedia.org/wiki/Electric_power_transmission#Losses

Using the equation in your linked article with the 7.2% loss taken into account you get (92.8%*40%*90%*72%) ---> 24%




Ahh, thanks. I didn't realize coal was so big. In California it's next to nothing (1.3%)


Actually 15-30% of electricity (depends on the season, demand, etc..) used in CA comes from out of state which means that way more than 1.3% of CA's consumed electricity is from Coal.


How high is California’s electricity demand, and where does the power come from?

California uses 265,000 Gigawatt-hours of electricity per year. Consumption is growing at a rate of two percent annually.

In the last decade, between 29 percent and 42 percent of California’s in-state generation used natural gas. Another 10 percent to 20 percent was provided by hydroelectric power that is subject to significant annual variations.

Almost one-third of California’s entire in-state generation base is more than 40 years old.

Fifteen percent to 30 percent of statewide electricity demand is served from sources outside state borders.

Peak electricity demands occur on hot summer days. California’s highest peak demand was 52,863 megawatts and occurred July 10, 2002.

Peak demand is growing at about 2.4 percent per year, roughly the equivalent of three new 500-megawatt power plants.

Residential and commercial air conditioning represent at least 30 percent of summer peak electricity loads.

Privately owned electric utilities serve 80 percent of the load in California.

http://www.cpuc.ca.gov/cfaqs/howhighiscaliforniaselectricitydemandandwheredoesthepowercomefrom.htm




Ad Hominem doesn't mean "attacking ones character". It means you are not addressing the argument. Even if you are biased you can still make reasonable points and arguments.


Actually Ad Hominem means that. It also has another definition (see below). If you weren't using definition #2 then I don't think you were using the word properly. Either way you were either using the word improperly (i.e. not correctly wrt its meaning) or you were using the word inaccurately (i.e. Greg was not attacking his character therefore your use of it was inaccurate).



1. Appealing to one's prejudices, emotions, or special interests rather than to one's intellect or reason.
2. Attacking an opponent's character rather than answering his argument.

[InfiniteNothing]

From wiki:

A (fallacious) ad hominem argument has the basic form:
Person A makes claim X
There is something objectionable about Person A
Therefore claim X is false

Let me try and fill in the blanks

A = Elon
X = "I'm not paying for the true cost of gasoline at the pump...since nobody's explicitly paying for the CO2 capacity of the oceans and atmospheres, it's getting consumed. We will pay for it down the road, but we are sort of ignoring it for now."
The objectionable quality is that he works for Tesla and therefore has a conflict of interest

I guess I'll just repeat myself now "just because a person is biased doesn't mean he's wrong."

EDIT:
After a bit more reading on wiki this is more specifically:

Ad hominem circumstantial
Ad hominem circumstantial involves pointing out that someone is in circumstances such that he is disposed to take a particular position. Essentially, ad hominem circumstantial constitutes an attack on the bias of a source. The reason that this is fallacious in syllogistic logic is that pointing out that one's opponent is disposed to make a certain argument does not make the argument, from a logical point of view, any less credible; this overlaps with the genetic fallacy (an argument that a claim is incorrect due to its source).
On the other hand, where the source taking a position seeks to convince us by a claim of authority, or personal observation, observation of their circumstances may reduce the evidentiary weight of the claims, sometimes to zero.[4]
Examples:
"Tobacco company representatives should not be believed when they say smoking doesn't seriously affect your health, because they're just defending their own multi-million-dollar financial interests."
"He's physically addicted to nicotine. Of course he defends smoking!”
"What do you know about politics? You're too young to vote!"
http://en.wikipedia.org/wiki/Ad_hominem#Ad_hominem_circumstantial

[Showtime]

Battery tax, anyone?

[bachviet]

People would change their habits. They'd bike or take public transportation. They'd carpool and buy economy cars.
Not suitable for Californians since public transportation here sucks. I travel over 20 miles to work so bike is our of the question. I don't have money to waste on an economy car.

[InfiniteNothing]

Not suitable for Californians since public transportation here sucks. I travel over 20 miles to work so bike is our of the question. I don't have money to waste on an economy car.

I've addressed this. Public transportation would improve to fill the demand. Many people will probably either move closer to work or change jobs.

[attgig]

coal plants do pay 'taxes' they actually have a limit of how much co2 they can purchase more emissions credits from other companies if they want to run their plants more than they're allotted.

so, in a way, the electricity that you're getting to your house already has a 'carbon tax' on it from your utility.

[InfiniteNothing]

coal plants do pay 'taxes' they actually have a limit of how much co2 they can purchase more emissions credits from other companies if they want to run their plants more than they're allotted.

so, in a way, the electricity that you're getting to your house already has a 'carbon tax' on it from your utility.
Sounds like cap and trade which I thought wasn't happening yet. Interesting though. More info please.

[bachviet]

I've addressed this. Public transportation would improve to fill the demand. Many people will probably either move closer to work or change jobs.
Change job during this time? It's hard enough to keep the current job.

[johnnymk]

Change job during this time? It's hard enough to keep the current job.

This is dream world reality IN is speaking of. i.e. alternative energy will solve most of the world's problems, increased taxes will solve everything else and we will evolve into a wonderland of bliss and utter happiness, thanks to government intervention.

[InfiniteNothing]

Change job during this time? It's hard enough to keep the current job.
Likely, there will be vacancies from people moving to jobs closer to their home. Otherwise, yeah, public transportation or move closer to work.

But, if you're still worried about transitionary effects, the tax can be phased in.

[bachviet]

Likely, there will be vacancies from people moving to jobs closer to their home. Otherwise, yeah, public transportation or move closer to work.

But, if you're still worried about transitionary effects, the tax can be phased in.
I'm married with young kids. My wife works very close to where we stay right now and I work 20+ miles away. My wife takes care of dropping off the kids at school/baby sitter and she definitely doesn't want to move far away from where she works. So moving closer to my work place is out of the question.

[mechmike0034]

Yeah, public transportation is the answer:

MARTA is the Metro Atlanta public transportation provider:


As the economy has slid, the sales tax revenues MARTA expected to get next year from Fulton and DeKalb counties have shrunk by $74 million. In addition, the recession means fewer people paying to ride to jobs and shops, and lower gas prices meant fewer people choosing MARTA over their cars. Altogether, the MARTA budget for the fiscal year that’s about to start came up $109.8 million short.

http://www.ajc.com/traffic/content/metro/stories/2009/06/15/MARTA_hearings.html

[attgig]

Sounds like cap and trade which I thought wasn't happening yet. Interesting though. More info please.


Sorry. I believe it's a regional thing in NY, and a few other states. not a nationwide cap and trade system.