With EV charging, America is divided into two parts: Tesla’s network and everything else.
By Wolf Richter for WOLF STREET.
ChargePoint, the largest public EV-charging network (open to all EVs) in the US issued a series of announcements last night: That, based on its preliminary estimate, revenues in Q3 plunged; that the board had sacked the CEO; and that the CFO had departed, both effective immediately. And all heck re-broke loose, and the shares made one big kathoomph after having already collapsed.
It’s of course a creature of the SPAC era. It had announced back in September 2020 that it would go public via merger with a SPAC and completed the merger at peak hype-and-hoopla during that infamous February 2021, which marked the beginning of the end of it all.
Currently, shares [CHPT] are trading at $2.01, down 35.6% for the day, and down by 96% from their peak three years ago, and by 80% of the SPAC share price of $10. The plunge today is just a tiny dip in this awesome SPAC-collapse chart, the likes of which are now densely populating my pantheon of Imploded Stocks:
At the peak, ChargePoint had a market capitalization (share price times shares outstanding) of over $10 billion, a testament of the consensual hallucination, as I call it, of the times; today, it has a market cap of $725 million.
Last night, in addition to the sackings, it announced preliminary results for its Q3, ended October 31.
Revenues plunged. It said revenues would come in at a range of “$108 to $113 million,” down from its recent guidance of “$150 to $165 million.” The low end would be down 28% from its actual revenues in Q2 of $150 million.
There’s a $42 million charge for an undefined “impairment,” “resulting in GAAP gross margin of negative 23% to negative 21%.” Negative gross margins are always fun.
It slashed its “pre-impairment” non-GAAP fake positive gross margin to “19% to 21%, as compared to 22% to 25% as previously expected.”
The losses will continue. The company has always had losses, every quarter, and this is set to continue, with GAAP operating expenses – now estimated at “$129 million to $131 million” – much higher than its revenues (“$108 to $113 million”). The net losses will be bigger still.
But it’s not going to run out of cash right this minute. At the end of the quarter, it had $397 million in “cash, cash equivalents and restricted cash.”
The reason it still has this much cash left to burn is that it raised $232 million in new cash in October by selling newly issued shares. Institutional investors had agreed to take $175 million and it had sold $57 million to the public through its “at-the-market” facility.
The day before the news of the share sales came out, shares traded at $4.50. Upon this announcement on October 11, they plunged 15% and then continued to sag. And now they’re at $2.
The company also has $296 million in debt. But no problem, it can still borrow $150 million on its unused revolving line of credit. And the debt doesn’t come due until 2028, it said.
And the new CEO blamed the economy, LOL. After the sacking of the old CEO and the CFO, and after losing money every quarter, the new CEO said in the announcement yesterday: “Our core markets of North America and Europe both came under pressure late in the third quarter, with revenue falling far short of expectations. Overall macroeconomic conditions, along with fleet and commercial vehicle delivery delays impacted anticipated deployments with government, auto dealership and workplace customers.”
With EV charging, America is divided in two parts:
1. Tesla’s network
2. Everything else.
Tesla is vertically integrated. It has built its own charging network, using its own chargers, its own app, and its own payment system, to charge its own cars. It controls all parts of it. And that works.
As far as the rest is concerned, it’s the wild west, beset with problems. Public charging networks have to work with all EVs. They control the chargers. But they don’t control the EVs. And the payment system is third-party, such as credit cards. And maintenance and repairs are required, but these companies have trouble keeping up. So there are endless complaints about chargers not being able to communicate with the cars, or the payment systems not working, or the chargers being out of service, or malfunctioning.
The shares of the public charging networks got further hammered in recent months when more and more automakers announced that they were holding their nose and making deals with Tesla to allow their EVs to use Tesla’s huge network of Superchargers. This brings Tesla’s charging system – what it called the North American Charging Standard (NACS) when it rolled it out in 2012 – a step closer to becoming the de-facto standard in the US.
And public charging networks face the biggest competition of all: EV owners topping off their batteries at home every night.
ChargePoint is the largest of the public EV charging networks, in terms of revenues. It was the first that went public. Its SPAC merger, which raised a net of $493 million for the company, included $225 million in “private investment in public equity” or PIPE, which was also common at the time. These private investors were anchored by Baillie Gifford and funds managed by Neuberger Berman Alternatives Advisors.
In the announcement of the SPAC merger, the now-sacked CEO Pasquale Romano said: “With our business model tested over more than a decade and approximately $480 million in net proceeds raised from this transaction, I’m confident that ChargePoint is well positioned for continued growth in North America and Europe as the shift to electrified mobility takes hold globally.” The hype-and-hoopla show was quite something.
Evgo, the next charging network in line with about one-third the revenues of ChargePoint, went public via merger with a SPAC that was announced in January 2021 and completed on July 1, 2021.
It raised over $600 million in cash, including $400 million from a PIPE, anchored by funds managed by PIMCO, BlackRock, Wellington Management, Neuberger Berman Funds, and Van Eck Associates.
And on July 2, 2021, as part of the incessant hype-and-hoopla show that must go on, it rang the opening bell at the Nasdaq in New York City.
In its last quarterly report, it said that revenues in Q3 plunged 30% quarter-to-quarter, to $35 million. It’s just a tiny outfit. Its shares [EVGO] plunged too, and today trade at $2.96, down 88% from their high, giving it a still inexplicably high market cap of around $900 million. Long live Consensual Hallucination:
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Many things start with a hype and then generates the real value later after balance. Dot.Com bubble popped up but number of web sites exploded after the pop. Same thing for cloud computing and AI. EVs were also overhyped. In the long term, the small number of EV producers and charging station providers will survive, with realistic market values.
CMGI…
That is except for auto size, and speed limit, which is the rope (one of many) the capitalists are hanging themselves by.
Along with the rest of us.
An EXCELLENT example…and Japan is actually DOING IT.
To most here this comment is like wanting a bridge to Hawaii.
Perfect example of the Gartner Technology Hype Cycle. EVs and associated infrastructure have passed the Peak of Inflated Expectations, and are descending into the Trough of Disillusionment.
https://en.wikipedia.org/wiki/Gartner_hype_cycle
Not disillusionment, but reality.
You should look up what “disillusionment” means
Bad analogy, I think, Jason. There were many niches back then, we are just talking about ONE NICHE and a fully vertically integrated company with a nasty ass CEO. Hell, he’s even into big media.
R&D may scrape up a few fractions of a % here and there, as will Production and Sourcing and all along the above separate pieces of above mentioned Vertical Integration, but no breakthrough worth a whole new company is coming. Musk will just buy enough law to take it, if it happens…..and give them a however many $Mil it takes.
Most all that can be “invented” in those areas are bullshit words for idiots who made their entire living selling and talking and playing arbitrage….money merchants…managers….still a lot of those around…many here….with lotsa money piss away and trash planet, and plain old “just hoping” lower level folks who the media keeps pumped up full of shit, who are going to live forever, anyway.
Established auto companies can beat Tesla at the top end, and likely are, but like I said, unless there is a major switch (like to H), EV and Musk are in the catbird seat.
Climate change may bring other problems before it all plays out, anyway.
Not a black swan, a vulture.
Censored Neg Nabob,
Every time you change your screen name or email (even a typo, which happens a lot), you’re a new commenter and go into moderation. That’s how my system is set up. Just an FYI. But fine with me.
I’m sure. Like I’ve always said, “It’s your show.”
Good luck, and I mean it.
The weird title was for most of your “commenters” here, and I’m sure they will be glad to see me go….wasn’t just one censored comment….been building up as commenters change….I don’t belong here.
And like I said, I don’t get insulted easily, so all is fine by me, too.
(maybe less complaining e-mail about your service?…… to me it was and is a “source”)
Sorry, snarky and uncalled for, still think you are a good man.
NBay,
What’s your problem suddenly? I’ve deleted two of your many comments, maybe in ever.
But my system AUTOMATICALLY sends any new commenter into moderation, which protects the site from spam attacks and other attacks. AUTOMATICALLY. So if you change anything in your login, my system considers you a new commenter and sends the comment to moderation. And you’re doing some of that.
I don’t have an electric car but a lot of friends that do have them have told me that almost all of the chargers other than the Tesla “Superchargers” don’t work well (aka they charge you lots of money but you don’t get much of a charge). Does anyone here have a similar experience with the “ChargePoint” or other chargers?
P.S. Earlier this week I read on Zero Hedge “Lucid Lost $227,000 Per Car Sold In Q3” P.P.S. I got to drive a Lucid Air Sapphire earlier this year the ~$200K car is faster than a $3mm Bugatti Chiron (that is “scary” fast)…
I just used a CP fast DC charger for the first time this week. After figuring it all out and downloading the app, I got a good charge of 73 miles in 44 minutes for $6. I was quite satisfied.
Wow, that’s why I’m waiting for version 3.0 on EVs. Not nearly good enough for me. You early adopters go have fun.
My experience is that Tesla have a better charging product but the competition are finally starting to figure out what they got wrong and things are drastically improving in the last 9 months. If you total all Lucida development costs and divide it by the amount of cars sold you get that value, but if in year 0-5 they burn $500m and only produce one car, that car hasn’t really made a loss of $500m dollars. We need to see the value over the life of the vehicle, but yes that investment needs to be earnt back
Of course, as there are two sides for every transaction. In this case the article presents the seller’s collapse, featured with no mention of what happened to the poor saps that bought these promises of untold wealth potential that didn’t work out.
The risk in the form of shares was sold to the public which lost at least as much, in aggregate.
All we need to understand is that Tesla invested in their own charging network while GM and Ford left it to others. Either EV’s are a dead end or GM and Ford are.
For me personally, with the debacle of the Cybertruck shipping with 25% less range than promised 3 years ago, the viability of EV’s in other than urban commute situations is pushed out another 10 years
“…with the debacle of the Cybertruck shipping with 25% less range than promised”
LOL.
1. Cybertrucks are NOT “shipping” yet.
2. That was deduced from a video of a “prototype” that briefly showed the dash.
From Electrek: “The navigation shows that there are still 16 miles in the current trip, and the truck expects to be at 65% state of charge (down from 71%) by the time it gets there. If you scale that up, it would add up to about 267 miles of range at 100% state-of-charge.”
You have no idea what kind of testing/driving conditions this prototype went through on this “trip” to get this range. They’re test vehicles.
This is not EPA range.
Cybertruck will find it’s market. It is too unique not to. Most will be surprised.
It reminds me of the Honda Ridgeline. There is probably a yuppie “lifestyle” market for it, but it won’t be the contractors, farmers and rednecks who comprise the large-volume majority of the pickup market.
When I had a hobby farm of 7 acres, I bought a ridgeline. The thing was awesome and just what I needed. It handled any offroad situation I got into perfectly. Hauled just enough. And I could fit the whole family in it. Got decent gas mileage too. I’ve heard others say its not a real truck, but it handled everything I threw at it as good as an F150. Yea, its not going to replace a one-ton diesel pickup.
“but it won’t be the contractors, farmers and rednecks who comprise the large-volume majority of the pickup market.”
I know a ton of guys who own pickups, and not a single one fits your profile. Most are office workers.
For what it is, the Honda Ridgeline is a very good vehicle.
I also think that most will be surprised. We have been refining the crude, burning wood as our source of energy since man has been capable of controlling such things.
I can’t help but think the correct solution is the hybrid. The head long rush into battery dependent electric only systems, seems limited.
On the other hand, the majority of driving is suburban trips of far fewer miles than range of fully charged EV.
I don’t know. Maybe my retirement vehicles will last at least as long as me and I won’t have to make that gut wrenching decision of the ICE epoch versus a crude version of the likely future.
dang – a good observation of one of the myriad aspects of our urban/rural divide…
may we all find a better day.
Q= Mc delta T cold batteries
I hope the $296 billion in debt is a typo.
I think they hope too, LOL. Thanks
Another issue is the massive increase ( inflation) in the cost of parts and construction on high voltage/high amperage electrical installations. Wire, busbar, breakers, and disconnects have got up in price greatly over the last few years, and the cost of the electricians certified to do this type of work has also skyrocketed ( no residential wire pullers allowed).
Plus the utilities that need to provide the connections to the grid ( despite in being in their best interests) are slow and hard to work with. So the construction costs and times for building out these chargers has probably skyrocketed over what they were planning on.
Of course, your message is like hollering warnings to the team from the sidelines that the infrastructure deficiency is a major complication.
The fact that America no longer has the manufacturing prowess to supply the necessary equipment, that was formerly designed, manufactured, and delivered by Americans.
The good news is that America is the best prospect for establishing a manufacturing facility for a number of reasons.
My favorite is access to the most productive work force in the world.
dang – have always wondered (going back to WWI & ol’ Henry letting the djinn too-much out of the bottle) at the linkage of a people’s economic ability to enjoy that which they primarily produce to that prospect…(or, is it really: “…I’d like more things, please…”?
Of course, this would long-term ignore the state of the planetary larder…).
may we all find a better day.
Bought my first car 60 years ago. I’ve had everything from Mercedes, BMW, Cadillac all the way down to VW bug.
Currently have two Teslas. There is no car like those cars and I continue to test them all. Wolf is right, Tesla built out the charge network along with the cars and it is a seamless system.
The rest of the industry, yanked out the engine, threw in an electric motor with zero thought about how the consumer would deal with charging. The public charging folks gave no thought to the interests and needs of the EV consumers.
The whole rest of the EV industry needs a reset starting with the legacy manufacturers. my humble opinion. the model that works is right before their eyes, all they need to do is open them.
I’m starting to see a lot of Rivians – both pickups and SUV’s – in Texas and Florida. They’re good-looking vehicles and have a lot of interesting features. Reviews seem to be positive as well.
I’m not a big Tesla fan and for sure you couldn’t pay me to drive their already outdated looking bullet proof space truck. Guess I’ll keep driving my German ICE SUV for now.
A few months ago, I attended a happy hour hosted by the company that installed my rooftop solar array. It works like a charm and I was only too happy to tell them that in person.
The company owner drives a new Rivian, and I have to say that I was very impressed. Well built and well styled.
What is a roof top solar array, on your EV or your home ? Since you are recommending certain products, you should continue your sales pitch with the appropriate statistics.
The final frontier. Worse than car salesmen on the one hand while potentially educational on the other.
Hey Louie,
Thanks for your views. I agree, the legacy manufacturers are in a lot of trouble. The biggest is that their market is leaving them but they have a number of other significant problems too. I bought my first Elon/Tesla at the start of this year end rally.
One of the advantages of the Tesla business model is the end of the outmoded business model of “dealers” who sell cars. People shop for deals and then go somewhere else for service (also a racket).
I think the profits from service are much bigger than from car sales.
I don’t think the legacy manufacturers can get around this–contracts with legacy dealers.
Agreed. The non Tesla model of selling cars is desired by 0.02% of the US population.
The reason the revenues are dropping in both of these companies is because they won’t fix their chargers. I have practically given up on both as at about half the locations, their chargers are dead or won’t charge at the specified rate. It’s a clusterf**k trying to use Plugshare or another app to help you find *active* chargers operated by these two clownshows.
On the few short trips I have taken with my 2023 Chevy Bolt, I gave up and used the Tesla Destination Chargers with an adapter I bought. (Tesla Superchargers won’t work on off brand cars).
It’s a good thing I can charge at home with my 240 volt, 48 amp setup and GM supplied charger or I would sell this car and buy a Tesla.
I’m in the UK and have a friend who’s consulting business did a technical review of some of the chargers on the market here. We had a similar charger investment bonanza during the free money era.
He said the build quality on these things was absolutely atrocious. They are basically a fancy looking cabinet with a jumble of cobbled together bits inside all poorly wired together. He was not surprised at all that so many have problems in the field.
But with the free money flowing there was basically no incentive to pay an engineering team to make a proper one. Remember that while these CEOs and CFOs have been fired, they have likely made their multi-millions out of this scam, so job done. Why would they want to hang around as it all unravels anyway?
This is just another reason why free money is such a stupid idea, but hey, I don’t run the economy so what do I know.
Well maybe that is an accurate description of your friend’s experience, but your experience with the complications is just a simpleton regurgitating what he thought he herd.
Firstly, there had been an engineering team that designed a system that was approved for construction. Whether the process design worked as constructed is a completely different issue.
Not sure what your selling. Obviously, their system failed. You however are what the court calls an uncorroborated testimony which is considered as likely a lie as the truth.
We were fortunate to own a 2016 LEAF for over five years before taking the plunge on a 2023 Tesla MYLR. We learned the ropes of home charging and the deficiencies of the long-distance charging system. Our LEAF was never more than 75 miles from home. The LEAF cost us $.04 a mile to operate with home charging. The EV sweet point for most people is home charging, a couple hundred miles max range, and 90% local driving.
We made several “short” trips with the MYLR that required one or two supercharger stops. Again, we learned the ropes. These went well, and then we did a 3,000-mile seamless trip. A second is planned this winter.
The secret to any successful vehicle purchase is knowledge. Many skip this point.
ChargePoint puts glorified home chargers in parking lots and leaves maintenance to others. It’s not worth charging during a trip to the grocery store. Support was incapable of closure. Credit cards were not accepted. We knew we had to stick to a proven charger system upon an upgrade.
Unless the legacy automakers adapt, their sales, dealer networks, and credibility will continue to decline. I do sense a government bailout in the future.
Thanks Wolf! Unbelievable! I remember back then headlines hating oil!
One problem with the EV Charging Stations including Tesla is they have no imagination. Charging stations are dull and boring. The motorists are mostly sitting in their car looking at their phone. Some out of the box ideas would be coupling the locations to points of historic interest or how about including wi-fi and a car wash. You have a captive audience so why not a discount card to an adjacent Starbucks or even create something like a Geo Cash game for EV customers as they roll around the country. The ideas are endless. Anything that would take 15-30 minutes with options for kids so they would be jazzed to stop? something as basic as the video screen like the ones at Maverick gas stations only playing historic videos or points of interest in the immediate area.
Maybe they should bring back drive in movies. With charging hookups for each car where the little speakers you hung on your window used to be. Get a full charge and the Movie is free.
Not sure about other areas but in lower mainland British Columbia pretty much every EV charging station that I spotted was either in a mall parking lot, a nice park or a shopping plaza with restaurants, coffee shops, grocers etc. Up closer to the arctic north chargers seem to be put up next to community centre’s with swimming pools etc., usually not much else going on in these small communities. I think it’s a step in the right direction and a good idea.
I still run ICE and will for a while since my car is only 4yrs old and to be honest I still love it but even with that detouring and spending 10-15min at the pump is annoying, if it was 45min charging it’d be more irritating especially on a long multi fill up or charge trip (Canada is pretty big lol) when you’re in a race against your own stamina and daylight. However, if in the future the charge times can be further reduced it will be a very different story for people like me, 10-15min vs say 20-25min starts to become very practical. But yeah, hopefully near something to do or see for that 20-25min
Seba,
They also have them at hospital parking lots, rest areas, downtown parking lots, etc….BC Hydro installations from what I can see. Have yet to see anyone using them. Seriously, not once.
Mathematically, if someone is traveling beyond the range of their home EV charger then they should rent a gasoline driven car.
It never has made sense to drive your personal vehicle unless your were hauling toys.
Charging at a SC is so simple takes most of 20 min. Go to a market or McDonalds. Or sit and watch Netflix or Youtube etc. Again it is solely a Tesla experience
MJ – geocaching cash?
may we all find a better day.
Tesla making NACS an open standard was probably the best thing that could have happen for EV. A long protracted multi-decade period of multiple standards post mass adoption would have made it all the more frustrating for everyone. Not sure if theyre getting paid for these deals with Ford and GM and others or just pinning on revenue from charging those EVs, but its a win for everyone, including the other automakers.
I vehemently disagree! Now, back to scouring the interwebs for Betamax titles…
Here’s the deal:
480 volts of direct current in a “supercharger.” Stack any combination, up to twelve of the Superchargers with 250 kW each, and blast up to 3,000 amps of current into your EV. Not really all that complex. Sourcing the DC voltage and current is a bit of a trick. That is one hell of a lot of juice!
Of course, Tesla cars “talk” to Tesla Supercharging stations when they are connected together. And only “Tesla-certified” technicians can set up the charging installation centers.
Wolf is spot-on. In the USA, you have:
1) Tesla’s network
2) Everything else
Mr. Musk did an interview a couple weeks ago, and he used an interesting analogy on charging the lithium ion batteries in a Tesla. The speed to get to an 80% charge is much faster than completing a charge after that. Musk’s take was to think of cars going to park in a shopping mall. When the parking garage is near empty, it’s easy and fast for a car to park & when a battery is low on charge, it’s easy and fast for energy to park. But when the garage is nearly filled, you have to drive around to find a place to park. It takes more time to park each car. The closer a Tesla’s batteries are to being fully charged, the longer it takes to add to the level of charging.
Musk’s advice for making longer trips as quickly as possible was to charge your Tesla to 80% at one of the Tesla charging stations, and be on your way.
On 7 November, Xcel Energy announced a newer and scaled back $45M plan to build 730 high-speed charging stations. There is a lot of conflict between Xcel, the Public Utility Commission and the Minnesota Department of Commerce on all of this. I own Xcel stock, but not an EV, and I pay taxes. So, where will the money come from? Where will the money go?
Thank you for the report, Wolf!
It was probably wrong to comment that a Tesla could take that much current. 3,000 amps into one car would be too much.
I think that 3,000 amps it the total current for a charging station.
Apologies.
Should have done the math first. A charge at 480 volts and 250 kW of energy requires 521 amps.
Yes, 250 kW is “V3 Supercharging.”
Yikes, better not be inside that car while it’s charging. No margin of error to getting instantly roasted.
Reminds me of a recent vacation to London (July to be exact). Stayed in Chelsea. Each block had one charging station on opposite sides of the street. One car to each for the night. Can’t wait to see a charging station for each home in these row like apartments common to much of London.
The engineering at scale requirements for the system-of-systems supporting the EV “environment”, it is easy to envision, will far exceed the tight (faux IMO) climate change politics driving 2030 to 2050 mandates.
But, returning to theme, for me it boils down to cost. Eliminate the huge subsidies from gov’t and let the market chips fall where they may.
For ****s and grins my friends and I thought about disengaging the chargers just to create some observable chaos the next morning. But then we remembered our ages and stations in the grand community of mankind and adjusted accordingly. Will others?
FYI, the cable locks into the vehicle port while charging so you can’t just pull it out. If you can then it means the vehicle has finished charged (typically it unlocks at this point so someone else can use the charger).
The people who design this stuff are not stupid.
And, having spent a healthy portion of my professional life supporting various agencies/companies in cybersecurity, I can with high confidence assure you that every system has exploitable vulnerabilities.
Sadly, for all of us living in these trying times, it gets down to moral obligation and self-control: both of which are declining rapidly.
…have often wondered if problems like this boil down to: ‘ages and stations’ and if you have a lawn…
may we all find a better day.
You see EV charging stations in a lot of parking deck projects. They are often bought by the contractor as part of the overall electrical package. I would say that Charge Point was probably the most specified product.
But I have no clue why they do this. Is it some sort of LEED certification? I don’t know. Do the owners of the lot get some of the proceeds from equipment? Like the bubble gum machine at the barber shop? Don’t know. For sure the owner isn’t going to know how to service the thing.
Yes, installing EV charging stations on a parking lot is a way for the landlord to generate cash flow from a parking lot. That only works for free parking lots or garages, such as at malls or in front of stores.
That’s great but the issue is not how many volts or kilowatts but kilowatt hours. How long can the electrical system deliver that power.
dang,
When reading Wolf’s report on the EV charger SPACs, the first question I had was what are the power delivery “specs” to one of these Tesla Superchargers?
But, I’m a person who looks at “specs”; from audio gear, to bicycles, to motorbikes and to cars.
“How long can the electrical system deliver that power,” is a good question, but it comes in a few parts. To deliver the charging power to an EV, I believe that the answer lies in Musk’s analogy. As the car’s batteries become near fully-charged, the flow of current must surely decrease.
But another two questions, in a broader sense, is first, related to power supply from the electric grid to the charging system(s) and second, how long can a system operate at full capacity. My TIG welder is rated at 25% of its 100 amp max output, for example, but yeah, the charging stations are probably not capable of being run at 100% output non-stop. Environmental temperature (the weather outside) must have an effect. and many other variables must come into play as well.
But to me, the most important spec: 480 volts DC & over 500 amps of current is what plugs into one’s Tesla for a quick charge.
One of the things that struck me as interesting in Matt Simmons’ epic book ” Twilight in the Desert” was his assertion of how much it would cost to replicate the petroleum/ auto fuel delivery system as of the books release in 2005. His point was that if ” on that date” the space aliens came down and wiped out the entire petroleum distribution network from pipelines to gas stations it would require a petroleum price of $250 a barrel ( at that time) to create the capital to rebuild the entire distribution network. This was a network that was built out over almost a 100 years with much of it payed for by the monopoly profits of Standard Oil in the old days.
His point was that any new fuel would also have the need to generate a massive amount of capital to build out a system to distribute it.
What these Spac’s are learning was the charge station business will require massive amounts of capital expenditure before they generate profits and get big enough to matter.
Tesla had the advantage ( kinda like old John D Rockefeller ) of having a massively inflated valuation that could be leverage to pay for the build-out of the Super Charger network.
We don’t have another 20 years of cheap energy. Without it, industrial civilization will collapse. It’s just math.
Daiela ,
I agree with your statement about the industrial age and the comment about the USA replication of ICE and 250 usd oil probably has a higher range . Once the EV market vegans to experience the “not in my backyard “ and environmental issues that came late to the game in the ICE business. Road trips through central and west Texas , Oklahoma, and Kansas highlights the environmental impact of windmills and solar vs fossil fuel underground hidden infrastructure. Lots of countries will benefit from EV especially Europe because of expensive fossil fuel imports but the transition will be slow . This article from Wolf highlights the importance of understanding hype as AI is hitting the investment community. Will be interested in a few years how the hype plots hits the Wolf community. Higher for longer if Wolf can keep the drunken sailors spending . So far Wolf spot on about no pivot and the issues with broken financial system from free money and the Fed. Just have to keep the Federal and State Governments in check .
Environmental impact of windmills? I travel through West Texas and the wind farms are beautiful. I just wish there were many more of them. They make money for ranchers and school districts.
We have at least 250 years of cheap plentiful fuel to burn and perhaps thousands more.
I’ve got maybe 15 years to burn some of that fuel.
Most of the sources I have read say about 50 years of oil left and about the same of natural gas. Will it all be cheap to produce? I doubt it. And of course there are the environmental problems.
Sounds like you think that’s a good thing.
One detail, part of the distribution infrastructure to charge EVs is already in place. The electrical grid. Charge at home and the system can be said to be in place. Maybe not with the capacity wished, but useable.
Of course we humans are stuck with the probability that the simplest solution is usually the correct one.
Replicating the petroleum industry is silly. There were events that occurred in the formation, development and maturation of this industry that can never be replicated beginning with two world wars.
The petroleum industry will change with a change in demand for their product which the EV revolution has yet to demonstrate unless we assume the insatiable growth in the appetite for petroleum fuel would have have been worse without the EV market.
I recall the Beta vs VHS tape standard competition for VCRs. VHS won, but both eventually lost to better technology. If you don’t know what a VCR is, don’t worry, they are no longer produced. In their day, they were very cool.
“In their day, they were very cool.”
They and punch cards.
I actually used an IBM punch card machine. For those who want to know, it used to be the only “simple” way to input programs into a computer. Just don’t make a mistake, because you then had to punch a whole new card (80 characters per card).
At the university I needed to scan and OCR a lot of pages, years ago. We bought a Kurzweil scanner for $17,000. I can do the same nowadays with a $50 scanner and a free OCR program. This price reduction is something “hedonic quality adjustment” is supposed to account for in the CPI. Although it does not account for the hedonistic pleasure of using and looking at these giant pieces of equipment.
Ah yes. Fond memories of the IBM 029 key punch machine in the mid to late 60’s. A lot of hours spent on those things. In an ancient language called Fortran. :-)
…punched paper tape, anyone?…(…a misunderstanding amongst the admin at my initially-‘experimental’ high school in San Diego-they were offered an obsolete NASA ‘Recomp II’ ballistic tracking computer, and were sure (‘computer’ still a powerful word in those pre-HP35 days) some of the number of bright young sparks in attendance could adapt it for student record-keeping duties. Useless for that purpose, but we enjoyed having our own campus hangout and running flashing-nixie programs with unintelligible copy flying off of the printer for them for over a year before they wised up…).
may we all find a better day.
Of course, like with all technology, the newest and bestest has its detractions – but we can all learn to be happy in the super surveillance state!
Btw…I recall dropping a large card deck being a major league headache.
Remember “key punch rooms” at the corporate offices? Rows of key punchers typing in data from “forms” submitted by the accounting staff. And….wait for it….there were NO monitors at key punch desks to verify the key strokes were correct. They’d run a printed report to verify the data!!
Accounting programs were loaded for every computer job. They were hauled around in pucnch card carts…Yes, carts! loaded into a “reader” something like a cash counting machine that loaded the program into the “main frame”.
Best money could buy at that time. Fun times to remember but painful at the same time. Ah, but way off topic. Sorry.
Create your deck of punch cards, bind them with an elastic band, then deliver them to the IBM operators too run overnight. Rush to get the results which was your homework only to be informed that there was a syntax error and the program failed. Try again.
Yes punch cards are cool! I met my wife standing in line to feed the punch cards in to the card reader on the IBM 360 mainframe we used for our computer science 101 class, freshman year in engineering school. I let her go in line in front of me and the rest is history.
🤣❤
It’s an old old rule, an American specialty. We never invent anything, but we always turn inventions into Systems. From Morse to Bell to Edison to Sarnoff to Jobs to Elon, it works every time.
What about a universal electric street car system?
What? I can’t swipe my personal screen and play my ego music or a brainwashing podcast. While in my $50,000 eco friendly virtue signal bubble on the petroleum based tar monstrosity thing I deplore – an asphalt paved 7 lane highway.
If EV’s are the global solution…why not an emphasis on mass transit?
An airport people mover treadmill, for miles. A shopping mall escalator on steroids.
Capitalism rewards the tyrants, not the Saints.
As a simple human. Some shelter from the elements. Food for nutrition and sustenance, medical care for ailments.
The rest is luxury.
Insane stupid luxury that exploits humanity. For profit? Then more profit?
Strike!
Or one can just ignore the insanity and buy more stuff that makes the “more” superior to the less?
Think on this, drink on this, we are all in this…together.
Most public trasit is powered by the combustion of diesel fuel.
When I lived & worked in the city, I used to commute on a trackless trolley route… basically a bus that is powered by overhead lines. I really enjoyed how quiet and smooth the ride was, but the city has been replacing them w diesel buses bc the infrastructure is too expensive to maitain.
It happened in the Bay Area. We used to have a very nice electric trolley system on tracks that covered the whole Bay Area, called Red Cars I think. It was completely replaced by horrible busses and freeways. Then the equally horrible BART came along. I think it is called regression.
WL – I’ve seen pictures of the SanFran trolleys. Aways wanted to ride one.
In Boston, a good chunk of our bus routes are former trolley routes. Its unfortunate that buses are the more economical solution.
Correction. The Bay Area system was called the Key System. The Red Cars operated in Southern California.
I believe that the market rejected the public transit system as a viable alternative for SF. It was cute, inefficient, and hardly used by the people that lived there, left with their guilty memories how they should have done more to save it.
You bet….I can imagine the easy life were you in charge. Oh the hours spent wistfully discussing Rousseau and man in state of nature. Not sure where Darwin, Spenser and natural selection would slide into the “science” conversation – but who cares. Knowing my fellow man is a pleasure that far exceeds any material/luxury benefits technology can provide to pass the day.
Because, after all, so many amongst we billions are just so damn interesting and creative! Lux of luck with that ambition!
Yary,
You need to plan a vacation to Qatar and possibly Dubai.
Qatar has a 7 star mass transit system throughout their entire city of Doha that was built for the next generation. A real experience.
What earthly system does not reward the tyrant? Under capitalism, the tyrant is the masses and the advertisers.
At least under capitalism, us peons get choice after choice of what to spend our money on. I can spend it at Target for more pillows, or buy some hiking shoes and go into the mountains.
I think your fundamental delusion is your acceptance that capitalism, as you have known it, is defined by the ultra-right wing exploitation that has been the economic plan since at least Reagan.
Previously, FDR’s America was also capitalism that built the system of public wealth worth exploitation.
In the case of America, the tyrant is of our own choosing.
We had that in Los Angeles until the 1960s when we tore all of that junk out and made the roads free and open again!
Yeah, two weeks ago I drove from So. Cal up to the Bay Area. Yesterday I got a “Toll Invoice” in the mail from the “bayareafastrak.org”. $7.00 US
Ugly rumor. Asphalt to be replaced with the toxic depleted Lithium Ion battery elements. Only EVs with hardened tires can ride on the surface as pedestrians would be die like cockroaches walking through roach dust. If must be true, I read it on the internet!!
Isaac Asimov wrote about such a system of moving walkways in The Caves of Steel. There were multiple parallel walkways moving at different speeds. You’d enter on the slow one and move over to the fastest. When you neared your destination you reversed the process. Good novel.
Anyone know if Charge Point or EVgo received or receives financial support or any sort of subsidies from government (taxpayer) sources? If yes, the magnitude, duration and agencies/departments involved would be of interest.
A summary of that info would be important to many investors, voters and consumers, IMO.
What happens to the chargers themselves if/when they go out of business? Can they be coverted to the Tesla standard?
History is full of examples of competing standards & one winning out…who remembers LaserDisc and Zip Disks? Or BluRay vs HD DVD for a more recent example.
Most auto manufacturers have adopted (or plan to adopt) the Tesla charging standard (also known as the North American Charging Standard (NACS) SAE J3400). Nissan, Honda, Fisker, Rivian, Hyundai, Kia, BMW, Lucid, Polestar, Volvo, Ford, GM, and others have already announced this. Some DC Fast Charging stations will have (or already do have) both the Combined Charging System (CCS) and the NACS connectors. Adapters will be available until the auto manufacturers make the switch over to NACS which will be in 2024 and 2025.
Lucid and that Chinese company Polecat will soon be gone!
1. Probably yes.
2. Probably no.
1. It’s funny. I’m seeing Lucid ads on this website. I mean, thank you Lucid. But that’s a really really bad sign that they have to blow a bunch of money on advertising at this stage of their game. Tesla STILL doesn’t advertise, saves billions a year. But Lucid is trying to build high-end cars, and that market is very crowded, and not enough people want to spend $80,000-plus on a car from a brand-new company. Lucid has become a giant money-suck for the Saudi investment fund.
2. Polestar is majority owned by Chinese giant Geely, which bought Volvo, and Polecat was Volvo’s EV division. So this is a brand of a Chinese legacy automaker, and I doubt they’re going to let it go. But they floated a small portion of their theirs in the US via SPAC merger, and US shareholders may get screwed (already got screwed).
Maybe not the charging «pole», but all the other infrastructure at the charging station can be used or converted to a different standard.
I can just hear the pushers now, saying they are the only ev charging co. behind Tesla, how demand is exploding, how they couldn’t be better poised for success. Buy, buy, but, you’d be a fool to miss this opportunity! And in a short 2.3 years…kathoomph! The grammatical sound effect made me chuckle. (It’s easy to see who made the money when you check out these charts. ;)
And I had owned every stock in that headline at some point in time. Feeling pretty dumb about it right now.
Saw a picture of a diesel generator running a charging station….
that picture was worth 2000 words
Private back-up generator near a charging station that is on a ranch, and ranch owns backup generator. Since when are back-up generators on a ranch bad?
This BS has been debunked years ago, and you still crap it into here????
What the legacy manufacturers suffer from is the entire concept of third party relationships.
The manufacturer should have taken the initiative to build out the charging networks and not rely on third party suppliers.
The same is true of selling the car in the first place. There is no reason on earth in today’s world for a manufacturer to be relying on independent dealerships to sell their cars.
Example; walk into any dealership, as I do frequently, and show an interest in their EV product. Invariably, you will be met with a salesman who, in one form or another, say “aw, you don’t want one of those”. I don’t know the motivation for that kind of attitude, but I expect it is because they really don’t want to sell them. Not enough downstream potential revenue? I don’t know but if I were a manufacturer, I would not be marketing my EV product through conventional dealerships. Either standalone EV dealerships (expensive) or simply sell them online, the Tesla way.
Independent dealerships are REQUIRED by state law in all 50 states and are a necessary and essential part of vehicle delivery and service in all 50 states and around the entire world.
Not all around the world. The dealerships may be necessesary, but may be tightly controlled by the automaker. Often some sort of franchise or owned subsidary.
Yup, no doubt about that. Just a reminder the consumer did not lobby for those laws, the manufacturers and dealers, primarily the dealers, lobbied for those laws and they can and should be changed. there is no reason for auto dealerships to exist today.
“Required by state law” meaning lobbyists bought the votes needed to prevent competition. You ever notice politicians ride in dealer sponsored vehicles in local parades?
State franchise laws were designed many decades ago to protect auto dealers (independent businesses) from their own manufacturers. When automakers start selling directly to the public, they compete with their own dealers and drive their own dealers out of business since they can always sell for less than dealers can who have to buy from the automaker, and the automaker sets that price. Dealers are supposed to compete with each other, and not with their suppliers — that’s the idea. These franchised dealers number in the tens of thousands. Ford alone has over 4,000 dealers in the US. Most of them are small to medium-size family-owned businesses. I know a couple of those dealers myself.
It’s a bad system. I worked in it for way too long back in the day, and hated it back then too. And there is part of me that says it should be allowed to vanish. But then there are these tens of thousands of businesses that depend on its existence, and if the franchise laws vanish, and automakers start selling against their dealers, these businesses will be toast.
Maybe dealers will resist EVs because they don’t want to invest in what it takes to sell and service EVs, and they don’t believe that EVs will ever amount to anything in their area, and it’s all just a waste of time and money, and the salespeople are steering customers away from EVs – and there is some of that – well, then maybe the franchise system will go away on its own because the legacy automakers will get run over by EVs and die and take their dealers down with them. That’s a possibility in the 10-20-year timeframe, if they don’t shape up.
Consentual halucination, big kathoomph, and Impoled Stocks are so accurately descriptive, they should be copyrighted.
Wonder how many more there will be before the huge “free money” pot and the returns made therefrom, run dry.
I think your Imploded Stocks will grow, and grow for some time to come.
I look forward to every installment, thank you!
Can’t talk about the USA but second hand EVs have collapsed in the UK… Cars that were £65,000 pounds new, now selling for £25,000 after three years……ouch……
Tesla massively cut prices on its NEW vehicles (did you miss that?), which was then followed by other EV makers. Dropping new-vehicle prices is exactly what consumers and this economy needs, after years of rampant price increases.
As a consequence of these price cuts on new EVs, the prices of used EVs dropped. This is a great thing for consumers, except those who bought EVs at the higher prices over a year ago.
But it’s a terrible thing for GM and Ford that cannot build EVs at those low prices without losing a ton.
Tesla destroyed the entire EV plan of the legacy automakers, who’d hoped to be producing EVs that sell for $80,000-plus and where they could make $20,000 or more a piece in profit like they do on their full-size pickup trucks.
And I hope Tesla destroys the pickup truck cartel. There are only four makers of full-size pickup trucks, and they have been displaying oligopolistic pricing behavior for 20 years, ripping off consumers every step along the way, which is why many of those trucks now cost over $80K, and it doesn’t take much to get over $100K. I hope Tesla will bust that cartel with lower pricing to begin with and then future price cuts on the Cybertruck.
I’m with you- been waiting to buy my dream Diesel land yacht for years now, once repos hit hard. Diesel lasts for years if stored properly. Not /s
Feels like it might be like college where university book stores massively jacked prices. When a competitor came in they lowered them until the competitor was out of business and jacked prices again. Probably Teslas plan unless we get some solid Chinese EVs or other competition.
£65,000 cars loosing a lot of value may not be confined to EVs. Sound more like what happen when something that was new and fashionable get old and less fashionable. Not uncommon in the «luxory» car segment. And as Wolfe say, prices on similar new cars have dropped. Also new, for the moment more fashionable cars have entrered the market.
How’s that any different than ICE vehicles? It’s called depreciation.
It took the Russian Sputnik to hover over our sky and wake Americans up and start innovating. Their delusional cow herding, stubborn ignorance like a bad dream got interrupted. It is ok to believe that polluting coal and diesel engines are the future. Keep subsidizing big oil, keep holding back already promised IRA funds from green companies and keep blaming them. But, remember the world will move on and the time will come when saying “nobody wants EVs” will not cut it anymore, pretending the sale of EV that cost 100K will not cut it anymore. Look around in the world, how come EVs cost 5X here compared to China? How come South Koreans and Chinese are building battery fabs around the world and the largest global car companies are signing contract with them for future products?
Perhaps because in the pursuit of maximum profit corporations decided to exploit natural resources and labor on other countries and benefit from loose regulations. Not sure that will get turned around any time soon but I suppose it can happen at tax payer expense(no irony there).
“2. everything else”
WSJ:
I Visited Over 120 EV Chargers: Three Reasons Why So Many Were Broken
Our columnist’s Los Angeles power struggle featured out-of-order signs, payment errors and connection problems
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There is so much money out there that they are willing to take such risks…We need to stop printing money and the QT must accelerate x6…
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But it’s not going to run out of cash right this minute. At the end of the quarter, it had $397 million in “cash, cash equivalents and restricted cash.” The reason it still has this much cash left to burn is that it raised $232 million in new cash in October by selling newly issued shares.
I had to laugh at this because it reminded me of the great speech given by Danny Devito in the movie Other People’s Money…
“You just heard The Prayer for the Dead, my fellow stockholders, and you didn’t say, “Amen.” This company is dead. I didn’t kill it. Don’t blame me. It was dead when I got here. It’s too late for prayers. … We’re dead alright. We’re just not broke.”
DM: GM’s Cruise CEO resigns after firm warned it will lay off staff after 950 robotaxis were recalled when one hit woman and dragged her 20 feet down a San Francisco sidewalk as losses mount to $2billion this year
Kyle Vogt, who founded Cruise in 2013, has resigned from the company following a string of incidents including one which saw a woman dragged 20 feet by one of its cars.
In spite of the objections from their former CEO, Chargepoint is predominantly a hardware company. Most of their revenue comes from sale of chargers. That is a low margin business with lots of inventory risk as they manufacture a broad product line with Level 1 (120V Home chargers), Level 2 (240V mostly at commercial spaces), and Level 3 (DC fast chargers). They have to compete with companies like Delta and Liteon who have manufacturing scale. As of July their accumulated shareholder deficit was $1.36B. Clearly a change seems neccesary as the current path is not working.
EVGO is a services company and owns and operates level 3 chargers that they purchase from OEMs such as Delta. The cost of a DC Fast Charger installed is around $300K and the unit economics of selling marked up electricity never pencils out with those capital costs. By comparison a gas pump is maybe $20K capital.
The charging network in the USA that is the most like Tesla, but at much smaller scale, is Electrify America which is funded by Volkswagon’s penalties for falsifying emissions data.