Tag Archives: Oil prices

Tesla Backgrounder

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November 3, 2015

 

Tesla Motors was not started by Elon Musk, but it was jumpstarted by him. He is currently a cofounder of Tesla Motors, Chairman of SolarCity, CEO of Space X, and got his start by developing Zip2, a web software company, and co-founded X.com which later became PayPal and was bought by eBay (Contributors, 2015).

Before Tesla Motors, the North American, and global automotive industry seemed stuck in the old paradigm of internal combustion engines using fossil fuels. There was little innovation and hope for an exciting, fossil fuel free future was harder to envision. Tesla Motors has jumpstarted the global electric vehicle industry with all other major manufacturers following suit (Petty, 2015).

Tesla Motors is named after Nikola Tesla’s and the motors using the vehicles are direct descendents of Nikola Tesla’s original 1882 alternating current electric motor design (Contributors, Tesla Motors, 2015).

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Tesla Motors was incorporated in July 2003 by Martin Eberhard and Marc Tarpenning and Elon joined the Board of Directors and led the first round of investment funding in 2004. Elon contributed $70 million of his own money and help secure five rounds of funding to keep the company alive until it announced its first profit in 2009 (Contributors, Tesla Motors, 2015).

 

In 2009 Tesla received 465 million in interest-bearing loans and in 2013 was the first car company to repay the government where Ford and Nissan etc. had not (Contributors, Tesla Motors, 2015).

On June 29, 2010 Tesla made an initial public offering at $17 per share; as of November 3, 2015, Tesla is trading at $210.70 per share.

Tesla Motors has a strong fan base and customers report a 98% satisfaction rate and they would happily buy another Tesla (Edelstein, 2015). Tesla also comes out on top in customer repair satisfaction surveys (DeMorro, 2015), and was given the highest safety rating and may be the safest vehicle ever tested to date and in fact broke the testing equipment (Lavrinc, 2015).

 

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Tesla is doing more than just building luxury supercars at a fraction of the price, they are building a network of superchargers, a gigafactory that will nearly double the world’s output of lithium-ion batteries and help lower the price  as well as complement their residential and commercial Powerwall energy storage initiatives (Tesla Motors, 2015). With the success of Space X supplying the international space station and the overall success of Tesla Motors to date, it would be a mistake to underestimate Elon Musk and Tesla.

Other distinguishing features of Tesla Motors is the giant touchscreen that the vehicles use as an interface and the ability for Tesla Motors to push out software upgrades to its fleet all at once, overnight, while you sleep. Recently, Tesla Motors upgraded their Model S and Model X vehicles wirelessly to utilize the pre-existing hardware installed that allows the vehicles to access an advanced cruise control. This is seen as a precursor to fully autonomous vehicles which are predicted to hit the market as early as 2017 according to Elon Musk and 2020 according to Google.

While the future is always uncertain, the enthusiasm of Tesla’s owners and supporters along with the consistent top 10 ratings in customer satisfaction, safety, and performance seem to indicate a bright future (Autoblog, 2015).

 

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Works Cited

Autoblog. (2015, October 27). car and driver 10 best lists Tesla. Retrieved from Autoblog: http://www.autoblog.com/2014/11/21/car-and-driver-10best-list-tesla-model-s-bmw-2-series/

Contributors. (2015, October 3). Elon Musk. Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Elon_Musk

Contributors. (2015, October 3). Tesla Motors. Retrieved from Wikipedia: https://en.wikipedia.org/wiki/Tesla_Motors

DeMorro, C. (2015, October 3). Tesla tops Consumer Reports repair satisfaction survey. Retrieved from Gas 2: http://gas2.org/2015/02/05/tesla-top-consumer-reports-repair-satisfaction-survey/

Edelstein, S. (2015, October 3). tesla-model-s-tops-consumer-reports-customer-satisfaction-index-again. Retrieved from Green Car Reports.com: http://www.greencarreports.com/news/1095745_tesla-model-s-tops-consumer-reports-customer-satisfaction-index-again

Lavrinc, D. (2015, October 3). Tesla model S crash test. Retrieved from wired.com: http://www.wired.com/2013/08/tesla-model-s-crash-test/

Petty, A. (2015, October 3). Tesla-Nissan-Chevy-jumpstart electric vehicle market. Retrieved from The Piedmont Highlander: http://tphnews.com/2013/04/tesla-chevrolet-nissan-jumpstart-electric-vehicle-market

Tesla Motors. (2015, November 3). About. Retrieved from Tesla motors.com: http://www.teslamotors.com/en_CA/about

Tesla Motors. (2015, October 3). Supercharger. Retrieved from Tesla motors.com: http://www.teslamotors.com/en_CA/supercharger

 

Gas price back up, Oil price back down.

So climate change is real and there is a “90 percent probability that human activities over the past 250 years have warmed our planet.

The industrial activities that our modern civilization depends upon have raised atmospheric carbon dioxide levels [and] the rate of increase in global warming due to these gases is very likely to be unprecedented within the past 10,000 years or more”, if you believe NASA.

So why does that matter?

The worldwide price of oil still low at $48.50/barrel and on the decline, local gas prices have crept back up from $0.95/L to $1.05 in the last week; it seems like somebody is making profits. We may explore who in a later post.

The ripple effects through the economy really highlight our dependence upon oil. Personally I am a big fan of Tesla and hope to own of his electric automobiles one day. As MarketWatch reports:

“Maybe people are still going to line up to pay $70,000 for one of his fancy new battery-powered Tesla S models. But it was a lot easier to sell the concept when gasoline was $3.70 a gallon than it is at $2.25…According to data compiled by Edmunds, the automobile market research company, sales of light trucks and other “gas guzzlers” … are suddenly booming again. And sales of hybrids, electrics and other fuel-efficient vehicles have suddenly, er, tanked…already U.S. car buyers are shunning fuel-efficient vehicles and buying themselves a new SUV. When enough do that, gasoline consumption goes back up, and so do prices”.

Good thing Tesla makes a very good automobile.

Here in Canada, the lower price of oil has serious consequences for what is now Canada’s largest economic generator, tar sands. Already, “already, top Canadian player Suncor, .. has cut $1 billion from its budget and is slashing 1000 jobs”.

Discussions with a student at Camosun tonight had him wager that oil would stay below $80 per barrel for the next six years.

What would that do to Cenovus, Tesla, the Canadian economy and the human part of the human caused climate change? Does it matter? How will alternative energy and renewable energy industries react?

Works Cited

Arends, B. (2015, January 02). Can Tesla survive collapsing oil prices? Retrieved from MarketWatch.com: http://www.marketwatch.com/story/can-tesla-survive-collapsing-gas-prices-2014-12-31

French, C. (2015, February 03). Time to panic? Layoffs loom large in Canada’s oil patch: survey. Retrieved from Yahoo: https://ca.finance.yahoo.com/blogs/balance-sheet/layoffs-loom-on-oil-patch-but-not-panic-yet-165924793.html

Gasbuddy.com. (2015, Feb 04). Downtown. Retrieved from http://www.victoriagasprices.com: http://www.victoriagasprices.com/index.aspx?site=Victoria&area=Victoria%20-%20Downtown

NASA. (2014). Nasa. Retrieved from Causes: http://climate.nasa.gov/causes/

Reuters. (2015, Feb 04). Energy. Retrieved from CNBC: http://www.cnbc.com/id/102394676#.

 

Anybody living in British Columbia, and possibly the rest of the world, is aware that oil prices have fallen from historic highs over the last couple years reaching over $140 per barrel to under $60 a barrel currently.

So what? Now I can fill my van for $70 instead of $98 so everything is great right? Money is tight so I really could use a break on gas. But, what about that global climate change thing and 2014 being the hottest year on record that humanity has ever measured, again? Leaving that aside, what does this mean for Canada economically? This current federal government has been stripping environmental oversights, Arctic research and protected areas paving the way for exploration, extraction and pipelines in the name of prosperity, financial security and progress. Something from my grade 7 social studies bugs me though when they spoke about Canada’s tar sands saying that the price of oil would have to be over $100 a barrel (working entirely from memory here) in order to make the tar Sands a reasonable development prospect? Well, it happened, and the tar sands development exploded over the last 10 years but can it continue with Saudi Arabia and OPEC dumping cheap oil on the market? If you believe the Russian media it is a Western/Saudi Arabian ploy to break the power of the Russian gas fields to Europe while other media say OPEC is trying to break United States shale oil producers, and can.

The Bank of Canada surprised everybody today by announcing a lowering of the key interest rate from 1% to 0.75% saying that “already, the drop in oil prices has led to layoffs in the oil patch, postponed energy projects and signs of a housing bust in Alberta”. Indeed, one sharp friend of mine observed on Facebook, “They got to prop up Calgary house prices”, While another observed “we look desperate cutting further while the US is raising rates”. The Bank of Canada is forecasting no increase until the end of 2016, two years from now.

Can the low oil prices stop the tar sands development? Will it slow down the Fracking and shale oil producers? Will it contribute to accelerated global climate change? None of this is really known yet but what is for sure is the oil industry has to respond, somehow. Believe it or not, they have made great strides in changing public opinion through careful and deliberate advertising campaign over the years and Cenovus media relations advisor Brett Harris explains. “We have to engage with people, including our critics, and what we have to do is to educate them about what’s really going on out there”. And educate us they have with at least one “And educate us they have with “the latest effort in an ongoing, two-year campaign to improve the public image of Canada’s oil industry—particularly the lucrative but much-maligned bitumen extraction business in the oil sands of northern Alberta”.