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Flash analysis: the Fisker debacle and its implications on investing, innovation, and government incentives

Katie Fehrenbacher — Fri, 03 May 2013 06:55:07 +0000

Electric car startup Fisker Automotive, along with its plug-in sports car, is turning out to be one of the worst venture capital bets of all time. We asked GigaOM readers a variety of questions about what they think will happen to Fisker and what they think will be the broader implications of and lessons learned from Fisker’s high-profile crash and burn. Here are the results.

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Cleantech first-quarter 2013 analysis and outlook

Mon, 08 Apr 2013 16:55:57 +0000

The first quarter of cleantech was a mix of good and bad news. Avis’ purchase of Zipcar and Silver Spring Networks’ long-awaited IPO finally occurring were further signs of thawing capital markets and movement in the acquisition space. However, in both situations valuations were lower than hoped, a sign of how investors view cleantech.

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Ups and downs for cleantech in Q1

Mon, 16 Apr 2012 06:55:41 +0000

The year 2012 may be remembered in the cleantech space as one of both hope and disappointment. Electric vehicles from the plug-in Prius to the Mitsubishi i to the long-awaited Tesla Model S rolled out, but disappointing sales mean the market may not have caught up to innovation. Acquisitions and investments chugged along in the smart-grid market, with Landis+Gyr’s acquisition of Ecologic Analytics and the anticipation of a Silver Spring Networks IPO that has not yet materialized. Meanwhile the quest for the low-power server continued in the green data-center space with AMD’s purchase of SeaMicro for $334 million. We examine these events and others in this report, which also provides a near-term outlook of trends and companies that will be important to watch in 2012.

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Battery breakthrough could bring electric cars to all

Katie Fehrenbacher — Sun, 26 Feb 2012 23:03:56 +0000

A startup working on battery technology says it’s developed a key breakthrough that could one day lead to an electric car that has a 300-mile range and could cost around $25,000 to $30,000. Envia Systems, backed by venture capitalists, General Motors, and the Department of Energy, plans to announce on Monday at the ARPA-E conference that the company has created a lithium ion battery that has an energy density of 400 watt-hours per kilogram, which Envia CEO Atul Kapadia told me in an interview could be the tipping point for bringing electric cars to mainstream car owner.

The secret sauce

Energy density is how much energy a battery can store and provide for the car with a given battery size — the more energy dense the battery, the less volume and weight is needed. For electric cars it is particularly important to have a high energy dense battery because electric cars need to be as light weight as possible (any extra weight just drains the battery faster), and batteries that are smaller and use less materials can also be lower in cost.

Kapadia tells me that current lithium ion batteries deliver an energy density of around 100 to 150 watt-hours per kilogram, while Envia’s battery can deliver 2.5 times that energy with about the same weight as the current electric cars that have hit the market. To build a 300-mile range electric car with standard lithium ion batteries, it would cost around $40,000 just for the batteries alone, says Kapadia.

Envia says with an energy density of 400 watt-hours per kilogram, its battery cell costs could be at $125 per kWh. Tesla CEO Elon Musk has said recently that he sees battery cells dropping in price to below $200 per kWh in the coming years. Current electric cars like the Volt have been reported to be closer to $500 to $600 per kWh, and the Nissan LEAF at $375 per kWh.

Envia, founded in 2007 in the Palo Alto public library, began its business by developing technology for a low-cost cathode. A battery is made up of an anode on one side and a cathode on the other, with an electrolyte in between. For a lithium ion battery, lithium ions travel from the anode to the cathode through the electrolyte, creating a chemical reaction that allows electrons to be harvested along the way. After Envia developed its cathode technology, it started working on a silicon carbon anode, and then paired these two innovations together, with a high-voltage electroloyte.

Kapadia says the innovation is also important because many scientists have thought that the lithium ion battery had certain limits on how efficient and cheap it could get: “The rumors of the demise of lithium ion batteries are greatly exaggerated.”

Kapadia also says: “Gone are the days of relying on ancient consumer batteries for automobiles and stifling this revolution by making expensive electric cars.” And in case you didn’t get this reference, Tesla Motors uses small format standard lithium ion batteries like the ones found in laptops for its cars.

Getting the battery into cars

Charging up the Volt

Envia is announcing at the ARPA-E conference that it has reached this 400 watt-hours per kilogram milestone in tests, but the company is still in the prototype stage, and an Envia battery will probably take about three years to move into the commercial auto market. Envia plans to work with battery and auto partners, potentially licensing or creating joint ventures to get the batteries manufactured. Kapadia tells me that Envia plans to avoid the capital intensive model of trying to be a startup that does all its own manufacturing.

General Motors is one of Envia’s high profile investors, and invested $7 million into Envia about a year ago. GM has said that Envia will provide battery technology for future generations of GM’s Volt electric car. Other investors in Envia include Japanese giant Asahi Kasei, Pangaea Ventures, and Redpoint Ventures.

Envia received a $4 million grant from the DOE’s ARPA-E program to attempt to hit the 400 watt-hour per kilogram milestone. Expect Envia to be touted throughout the ARPA-E event, as proof that its program is working to develop green innovation in the U.S.

Images courtesy of Envia Systems.

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The case of the Tesla “brick”

Katie Fehrenbacher — Wed, 22 Feb 2012 19:21:27 +0000

Tesla Roadsters lined up outside of the Model S Beta Customer event

Blogger and entrepreneur Michael DeGusta wrote a long piece on his blog The Understatement on Tuesday about several Tesla Roadsters that have been left without a charge for an extended period of time (weeks and months) and have turned into “bricks,” or basically have completely discharged their batteries and destroyed them. I haven’t confirmed the details behind this story — like the length of time that the batteries were left uncharged, or how Tesla has dealt with these potential problems — but it is true that after a really long period of time without a charge early Tesla Roadster batteries can go dead.

Tesla tells me that:

All automobiles require some level of owner care. For example, combustion vehicles require regular oil changes or the engine will be destroyed. Electric vehicles should be plugged in and charging when not in use for maximum performance. All batteries are subject to damage if the charge is kept at zero for long periods of time. However, Tesla avoids this problem in virtually all instances with numerous counter-measures. Tesla batteries can remain unplugged for weeks (even months), without reaching zero state of charge. Owners of Roadster 2.0 and all subsequent Tesla products can request that their vehicle alert Tesla if SOC falls to a low level. All Tesla vehicles emit various visual and audible warnings if the battery pack falls below 5 percent SOC. Tesla provides extensive maintenance recommendations as part of the customer experience.

Tesla’s Roadster was the first electric sports car on the market and the company learned quite a bit from those early cars. What will be most important is using those learnings for the Model S, its second car, an electric sedan, that will start shipping this Summer. Electric car owners are also learning how to take proper care of their cars, given the very early market.

Tesla’s stock was briefly down in morning trading but is moving back up.

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Tesla scores electric Mercedes-Benz deal

Katie Fehrenbacher — Wed, 15 Feb 2012 21:51:34 +0000

Model X with falcon wings open

Tesla reported fourth quarter and full year earnings on Wednesday and in its shareholder’s letter revealed that it has started a development program with Daimler to build a new electric Mercedes-Benz vehicle with a Tesla powertrain. Daimler is already an investor in Tesla and uses Tesla battery packs for its electric Smart cars. Daimler’s electric Mercedes plans have been talked about for years.

Tesla says that the electric Mercedes-Benz program will include use of a full powertrain — including the motor, gearbox, inverter and software — but Tesla didn’t go into details about timing of the launch of the car or volumes of production of the car. Tesla says it’ll recognize revenue from the program beginning in the second quarter.

The Mercedes-Benz deal is Tesla’s latest good news, following the unveiling of its third car the Model X model in Los Angeles last week (check out our photos, our video, and our research note on the Model X). Other good news in Tesla’s earnings are that it remains on track to deliver its first Model S cars to customers starting this Summer, that its DOE loan and relationship are in good standing, and that its anticipating guidance for the year ahead of between $550 million and $600 million. Here’s details of the company’s financials announced today:

Revenues for Q4 were $39.38 million, up from $36.29 million from Q4 2010 year prior. For the full year revenues were $204.24 million, up from $116.74 million from the year 2010.
Net loss for Q4 was $ 81.49 million, representing a larger loss than the net loss of Q4 2010 of $51.36 million. For the full year 2011, net loss was $254.41 million, which was a larger net loss the $154.33 million for the full year of 2010.
Total Roadster deliveries worldwide hit 2,150 and Tesla says it expects to sell its remaining 330 Roadsters in Europe and Asia by the end of 2012.
Tesla’s capital expenditures were about $54 million in Q4, used to continue to build out the factory for the Model S. Full year 2011 capex was $198 million.
At the end of the year, Tesla had cash and cash equivalents on its balance sheet of $304 million and another $189 million left to draw down from the DOE loan. Tesla says it has about $493 million in available capital. Tesla says it drew down $51 million of the DOE loan in Q4. “Our projects continue to be on track with the DoE per the terms of the loan agreement, and our relationship with the DoE remains strong.”
In terms of guidance, Tesla says it expects to deliver 5,000 Model S sedans and is estimating full year revenues in the range of $550-600 million.

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Tesla says reservations of Model X have hit $40M worth of cars

Katie Fehrenbacher — Wed, 15 Feb 2012 00:36:44 +0000

Tesla Model X with falcon wings fully open

Tesla’s flashy unveiling of its Model X electric SUV/minivan last week looks like it’s paid off in reservations. The car company announced on Tuesday that just a day after the launch, Tesla had accumulated reservations for more than $40 million worth of Model X sales, without any advertising. Of course, reservations don’t always translate into direct sales, but Tesla says this is the fastest selling Tesla model ever.

Say the car costs on average $60,000, then that’s about 666 cars. Tesla says the Model X will cost around the same as the Model S, which costs between $50,000 to $70,000. Update: Tesla says it has 500 Model X reservations.

We were at the launch last Thursday and brought you these photos, this video (also below) and this research note. The Model X is Tesla’s third car and it signals to the world that the company has bloomed into a full-fledged automaker that has a line of cars for all demographics. The car is supposed to be launched at the end of 2013, with volume sales starting in 2014.

The Model X is also Tesla’s first crossover family car, and it is an example of how one day electric cars could truly go mainstream despite the current difficulties in the EV market. A minivan — the world’s least cool car — is becoming hip, green, and sporty.

Tesla decked out Model X car with innovative design features that could attract the soccer-mom crowd. That includes the so-called falcon-wing doors that open vertically and enable passengers to stand up in the car when packing in items like kids and groceries.

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Why Tesla’s Model X electric SUV is important

Katie Fehrenbacher — Fri, 10 Feb 2012 16:18:56 +0000

Tesla’s unveiling of the Model X, an SUV-minivan electric car, this week signals to the world that the electric car can truly go mainstream despite the current difficulties in the EV market. In short, a minivan — the world’s least cool car — just got hip, green, and sporty.

Tesla decked out the car with innovative design features that could attract the soccer-mom crowd. That includes the so-called falcon-wing doors that open vertically and enable passengers to stand up in the car when packing in items like kids and groceries.

In addition Tesla is also telling the world that it’s bloomed into a full-fledged automaker that has a line of cars for all demographics, not just an expensive luxury car (the Roadster) for the One Percent.

To read my full analysis go check out GigaOM Pro (subscription required).

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Tesla Model X launch party photos

Katie Fehrenbacher — Fri, 10 Feb 2012 13:00:09 +0000

Following the sneak preview of Tesla’s third electric car the Model X, an SUV/minivan combo, on Thursday, Tesla threw a party where it officially unveiled the car and invited a thousand or so guests to celebrate the launch. California Governor Jerry Brown kicked off the event, followed by the unveiling of the car by Tesla CEO Elon Musk, and later on the band Foster the People played. Here’s some pics from the event:

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Hands-on video with Tesla’s electric Model X

Katie Fehrenbacher — Fri, 10 Feb 2012 04:00:39 +0000

Tesla unveiled its third electric car the Model X, an electric SUV/minivan hybrid, during a sneak preview at its design studio in Hawthorne, California on Thursday. We took GigaOM TV’s Green Overdrive show down to the event and got this first hands-on video with the car and an interview with Tesla’s CEO Elon Musk. Check it out:

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