Nerdgasm—Thoughts on Tesla's Battery Day

Like many, I was looking forward to what Elon Musk would say about what is easily the most critical and expensive part of building an electric vehicle—the batteries. The presentation was literally breath-taking. Several times I found myself holding my breath as I tried not to miss any important details. Musk and company had gone to great lengths to simplify their descriptions of what they were attempting. Unfortunately for me, I hadn't taken a Chemistry course since 1966 so I found myself fishing in some forgotten waters. Fortunately, it was easy to watch repeats on YouTube so eventually the requisite understanding returned. (I needed four tries ;-)

There is really no sustainable energy future without effective storage. Anyone who has ever lost their electricity knows that life gets extremely difficult VERY fast. Yes, I know humans survived without electricity in hazardous places such a North Dakota in winter. But those people were unusually hardy, strong, and clever. Even so, preparations for winter began the first days of spring. If you had trees, you chopped wood. Trees are stored energy. Unfortunately, there aren't many trees in North Dakota. Fortunately, there are energy sources that will sustain human life up there—lignite coal and then after the 1950s, oil and natural gas. Now that burning fossil fuels has become a big no-no, North Dakota also has abundant wind power but harnessing it as a practical matter requires storage.

Energy storage has been the big scary boogieman since the invention of fire. We like to treat the problem socially the same way we treat hauling out the trash and for many of the same reasons—it is UGHLEE. Clear-cut forests, oil refineries and tank farms, and the like smell funny and in myriad ways are offensive if not serious health hazards. Storage is especially tricky when the energy is electricity. Electricity moves at roughly the speed of light. With tiny exceptions, therefore, electricity must be used the instant it's produced. While this nearly instantaneous speed is easily electricity's most useful characteristic, it seriously hampers more widespread adoption of renewable energy.

Running on empty

DW looks at the institutional impediments to change in the all-powerful automobile industry. And OMG are the car folks all powerful—for some very good reasons. Germans invented the internal combustion engine—both gasoline and diesel. The nation's driver associations have even managed to keep parts of the autobahn speed-limit free. And should a driver do something seriously stupid and crash, the authorities have access to rescue crews on hair-trigger alert. This is not to say the rest of the country always approves of these James-Dean wannabees setting transportation policies. Environmental activists recently managed to ban automobile traffic in central Stuttgart—the home of Porsche and Mercedes Benz.

But the serious power is still held by the manufacturers and their conventional wisdom which says—the automakers are the most important element of the German economy and you tamper with them at great risk. In that nearly rules-free environment, they twiddled their thumbs and made fat profits from ICE cars. Now their biggest market, China, is demanding that they get serious about selling electric cars. This is proving much harder than it looks—and WAY more expensive. Here DW has captured a fascinating look at smug auto executives spouting the conventional wisdom / Institutional Inertia.

Greta Thunberg comes to New York

The Fridays for Futures movement inspired by the frankly incredible Greta Thunberg has been fun to follow since it started only a year ago. She was a disgusted child who decided to skip school to camp out in front of the Swedish Parliament. The goal was to remind the politicians that they were not doing enough to arrest the climate crises. Her logic was absolutely impeccable:

• The scientific consensus is that unless there are significant changes in how societies operate, we only have twelve years before the CO2 tipping points have been breached and all hell is going to break loose.
• The most commonly reported tipping point was 1.5°C (2.7°F) We are almost there.
• 2018 broke records for high temperatures and widespread forest fires in Sweden. Anyone who wasn't frightened to death by these developments was probably clinically unconscious. It was an amazing demonstration of what environmental collapse could look like.
• Greta did the math. She was 15. 12 years and she would be only 27. This is a very grim future.
• "Why educate yourself to be a useful and productive citizen when the future is so hopeless?" reasoned Greta. Besides, she was extremely studious so missing a little school to make a political point seemed a logical path. Her grades weren't going to suffer.

A typical angry teenager, she distilled her beef with the world in the perfect summation, "You adults are shitting on my future." It is almost impossible to imagine a more powerful battle cry if the goal is to unite the world's young into a vast protest movement. But I am almost certain that not even Greta had any idea of the firestorm she was igniting.

She has spoken to the European, British, and French Parliaments. She went to Davos to scold the filthy rich for their role in the crimes against the climate. She has been nominated for the Nobel Peace Prize. And her latest was her decision to address the UN General Assembly which meant a transatlantic trip. Since she doesn't fly, this left her with few options. The one she chose was to sail on an environmentally-friendly racing yacht.

Sandy Munro does a teardown analysis of Tesla

This YouTube interview of Sandy Monro is interesting to the point of being profound. Some background.

Monroe lives in Michigan and has a bunch of commercial ties to the car business. His specialty is tearing down cars to see how they were built and whether better production practices could make a better car. His company has about 100 employees, because cars are incredibly complex with dozens of systems so he needs a wide assortment of specialists.

The reason Monro has become a sensation is because he tore down an early Tesla Model 3. At first he was pretty critical but as time has gone on he has become convinced that most legacy automakers are now almost hopelessly behind. He has some wonderful stories about how institutional inertia works at a place like Ford Motor. His inside look at Teslas will probably sell well for at least a decade

And then he says some really enlightening things about China and their rapid industrialization plans. His observations may be skewed because he is probably meeting their best and brightest, but even taking a hefty discount for that, the story is still about as compelling a look at China as anything I have seen in a long time—maybe ever.

Tesla buys Maxwell

The guy who was an ultra-capacitor geek n college has purchased probably the most promising next-gen storage technology. My guess is that this is the start of a promising relationship. Capacitors will probably never run an EV for a host of real-world reasons. But because they can charge and discharge so rapidly, they can certainly help—especially in leveling the loads in real-world traffic conditions.

But the real reason for Tesla's hookup with Maxwell is likely to be their ability to make a superior anode that doeasn't use cobalt. Cobalt is found greatest quantities in parts of the world known for corruption, major human rights abuses, and violence. Relying on such a rickety supply chain for a critical part of a manufacturing process is something to be avoided at all costs. With this purchase, Tesla will be able to make cobalt-free anodes that are objectively better.




Fred Lambert over at Electrek has much wisdom to add about this high-level Industrial Class hookup.

And Autoblog explains the importance of ultracapacitors

The way its supposed to work

The Diamond-Star auto manufacturing facility in Normal Illinois was shut down by Mitsubishi in 2015. Selling an old auto plant is amazingly difficult. They tend to be very large (2.6 million square feet—242,000 sq. meters) surrounded by rail yards an other transportation hubs. When in operation, an auto plant is an operating investment of roughly $1billion, with 1200 skilled operators to make it all work. At one point, this operation cranked out 200, 000 cars per year—or about one a minute.

This plant is being refitted to make electric pickups called Rivian. The selling price was $16 million. Some of the equipment is unusable. Some, like a paint shop, is extremely valuable. But the biggest advantage is that the plant has only been closed for four years. This means that many of those valuable producer-class types it takes to create a working production plant are still in the area. My guess is that the Rivian roll-out will be a lot smoother than the Tesla Model 3.

When I was in college, I worked at an auto-parts store that was part of a small chain. The head of purchasing once told me to never order parts from California—parts made in the Midwest were better-built, cheaper, and they arrived as promised. He was right in 1970. It will be interesting to see if the Midwest is still home to some world-class manufacturing expertise.



I am NOT a truck guy so I have NO idea if these things will sell to the folks who like their pick-ups loud and petroleum-fired.  Scaringe looks like HE knows trucks so this might work.

Developing Nations Are Stepping Up Into Global Clean Energy Leadership

The importance of "sunk costs" looms larger by the day. Turns out it is really, REALLY hard to replace old technology with new. And it only makes sense even IF the only consideration is how much money has been invested over the years in the electrical grid, filling stations, etc—things that by rights should be rotting in technology graveyards by now. Of course, it isn't just the interests of pension and hedge funds at stake here—there is also matters of pride in technology, etc. We have successfully made the transition from one technology to another: tubes to transistors, film to digital photography, fax to email attachments, etc. but nothing on this scale.

So now we see that the people with the least infrastructure to displace happen to live in areas with the most sunlight. So it is really no surprise that the least developed countries in the world are embracing solar power with the most enthusiasm. It is the cheapest energy solution by far.

Catching up to Producer Class innovation

The only truly successful "revolutions" in human history have been brought to us by the Producer Classes. Think about it. A Leisure Class occupation like politics hasn't progressed much, if at all, for hundreds of years. George W. Bush was most certainly not an improvement over Abraham Lincoln even though both were Republican Presidents. In that same time, the Producing Classes completely changed transportation, communications, chemistry, manufacturing expertise, metallurgy, etc!

So when I insist that climate change is a Producer Class problem that can only be solved with Producer Class solutions, I am not wrong. The so-called climate activists didn't change anything when they marched or chained themselves to the White House fence. It's the guys who were beavering away at making solar cells affordable who have changed everything. And like the good Producers of the past, they have discovered they still have to drag the mindless idiots of politics and finance into accepting their new and improved tools. Somewhere the ghosts of the Non-Partisan League are smiling knowingly.

And while insisting that they are only asking for "market" solutions, today's renewable energy revolutionaries might do well to look at what those North Dakota farmers were demanding in 1916. They could demand a great deal more. After all, they hold the only answers for the very survival of human civilization.

Sunk costs

In 1972, I talked my dad into buying a Saab 99. Saab was mainly an aircraft company financed by the Wallenberg Bank in the late 1930s to build fighters for the defense of Swedish neutrality. After the War, they decided to take their skills into automobile manufacture. They hired the rising star of Swedish industrial design, Sixten Sason, who would go on to design the Hasselblad camera that NASA sent to the moon on Apollo 11. So a company full of aircraft expertise built a car they believed would be better with a little airplane built in. The 99 was brimming with innovation. For example:

1. The structural integrity of the passenger compartment was superb. Monocoque, stressed-skin design combined light weight with a crazy-strong roof. Saab's early promotion included winter rallying. Their driver rolled his car so often while continuing the race he got the nickname Carlsson på taket (Carlsson on the roof).
2. The cockpit was the first real manifestation of sound ergonomics. The seating and driving position was excellent. The instruments were clear and easy to understand.
3. Four-wheel disc brakes had multiple backup systems.
4. It was versatile with a fold-down rear seat.
5. And it was the only sorted-out front-wheel drive car sold in USA. (In snowy Minnesota, that was a big deal.)

Saab is no more. by 1990, every car-maker on earth had a version of the Saab 99. Some, like the Toyota Camry, had taken all those good ideas and refined them significantly. Cheaper and more reliable is a winning combination.

Right now, Tesla is at least as far out in front of the EV pack as was the Saab 99. Below is an excellent description of the institutional problems facing the established car companies. They have BIG bucks invested in a way of producing a product that is rendered obsolete by fun, comfortable, exciting, electric cars. Yes, they are dragging their feet. But giving what they face, you would too.

The cautionary tale of Saab is a reasonable outcome for Tesla. Yes, its competition will lag. The Germans, Americans, and Japanese may well be hindered by the Institutional inertia. But that leaves the Koreans and the Chinese. Either one has the potential to swamp Tesla.

The Germans have the largest amount of Institutional inertia. But this may be changing. According to DW, they are finally realizing that the future of transport will be electric and are beginning to make serious investments in batteries, etc.

What happens with the new round of sanctions aimed at Russia

Regular readers already know the party line around here is that sanctions have proved very beneficial to the Russian economy because they cut off the country from the worst of the neoliberal economic advice that shows up with integration into the global Washington Consensus institutions. The economics of self-sufficiency has again produced superior results.

One of the details about Russia I learned in 1972 on a tour of Leningrad was that she had within her borders commercial supplies of every element on the periodic table. When I heard that, the thought crossed my mind "if this country could get rid of their economic crackpots, it would be easily the richest country on earth."

Alexander Mercouris presents an informed argument for why Russia is well-prepared for another round of USA sanctions.

It's harder than it looks (part...)

Amid the soap opera of Tesla, Musk, and whether the stock market is "properly" valuing the EV car market, it is easy to lose sight of the fact that what Tesla is attempting to accomplish is nothing short of miraculous. Because an electric car can be built by a hard-working shade-tree mechanic, the idea that any established car company should be able to build an EV if they just put their mind to it tends to become a sort of conventional wisdom. Tesla shorts repeat this mantra until big money is involved.

It turns out that an EV is a dramatically different sort of animal because many of the skills required to make an ICE car are simply not relevant. Literally millions of hours have been spent over the years to make a smooth-shifting, reliable, transmission. An EV usually doesn't even need a transmission—or a fuel pump, or a bunch of other things that make cars so complex. But what they do need are reliable batteries—LOTS of them. And the problem of buying enough batteries for a backyard EV conversion do not scale up to the problem of producing thousands of battery packs for long-range vehicles every week.

So all the issues surrounding Tesla's driven, grumpy, charismatic leader are way less important than whether the company can produce enough batteries. And that makes Tesla's boring Nevada gigafactory important enough to (almost) justify its market capitalization—which is higher than GM which makes and sells more than 2.6 million vehicles per year compared to Tesla's goal of 250,000.

Producer v Predator—a battle of Titans

The news that Elon Musk wants to take Tesla private has provided us with a further confirmation of Veblen's class theories. Musk is such an excellent example of a Producer Class Superstar, we should probably be selling a Musk bobble-head doll around here. And he has just pulled off a production miracle. And honestly, he looks terrible—120 hour workweeks will do this to a now middle-aged man. And so he looks up from that effort and discovers that a bunch of Predators are trying to suck out the energy from Tesla by shorting the stock.

My pioneer forebears discovered this grim reality while trying to farm in Minnesota. It was like going on a camping trip to hell. With small children in tow. Winters featuring -30° temps, summers with incredible heat and swarms of biting insects, the problems of breeding animals and sowing crops, and 100 other similar annoyances. And when you had survived that, you had to deal with crazy shipping fees by a railroad monopoly, crooked grain grading systems, usurious money-lenders, and the corrupt politicians bought by those thieves. The producing classes had to organize politically. In Wisconsin it was LaFollette and the Progressive Republicans, in North Dakota is was the Non-Partisan League, and here in Minnesota, it was the Farmer-Labor Party. In fact, nearly all the prairie farm states had  political movements to protect the interests of the Producing classes.

Musk vs the Wall Street crooks will be a titanic showdown. Wall Street is on at least a 45-year winning streak. Musk has been taunting the shorts for several years. Musk does not have a political movement backing him—in fact what he does know about the Producer-Predator conflicts seem to be self-taught. But Musk has a LOT going for him. He has that ultimate Producer skill—vision and the organizational abilities to turn his visions into reality. That skill is so rare that people who possess it attract followers. And Musk has a bunch of them. Does he have enough to take Tesla private at $420 per share? We will see.

Monetary Theory and the Left

Tony (probably correctly) believes that I should write more about monetary theory.

Good point. Without monetary reform, there is simply no way the the world can pay the huge bills that will be incurred running an effective program to combat climate change. So in no particular order, here are my excuses for not writing about the subject every damn day—like it probably deserves.

1) I have written extensively on money and the economics of development. I still consider the chapter on Money to be the most well-thought-out chapter in Elegant Technology. But over the years, I have sort of run out of things to say.

2) The "left" is notoriously uninterested in monetary debates—lord knows I have tried. I have heard money debated in barber shops, gas stations, feed mills, church basements—sometimes (rarely) even in political forums. I grew up in the corn belt. My grandfather was an active member of the Farmer-Labor Party. But I haven't heard anyone from the "left" discuss the money subject since I started at U Minn in 1967. And the few people I have tried to engage either get lost in the math or the fact that fractional banking is not as established / legitimate as the big myths of banking and finance. The fact that the evidence is beyond rational debate does not sway minds—especially those who believe that "the personal is the political" and so shun the notion that something as impersonal as money may be the most important political subject of them all.

3) That leaves the "right." There are people like Ron Paul who are very good critics of the Federal Reserve. But his "solution" is the Gold Standard. Now the Fed has fallen into the hands of some serious fools, but on their very worst days, they are still a superior alternative to the Gold Standard.

4) Ellen Brown. Enter her name in the search box of this blog and you will find dozens of posts related to some well-written argument she is making. She loves the Bank of North Dakota—easily the best idea Progressives ever had. Strange how no one has duplicated that institution in other states, but she has done a nice job of lighting the fire that may lead to a California version.

5) There are a lot of crackpots out there. Because the nature of money is a subject that is virtually absent in the mainstream financial press, most people who develop any theories at all are usually self-taught. Now because there are a wealth of good books written about money and folks like Franklin, Edison, and Ford took an active interest in the subject, it IS possible to get your arms around this sprawling subject by reading alone, but it is difficult. It's the folks who aren't willing to do the necessary homework that end up as cranks.

Anyway, I promise to try to address legitimate monetary questions directed my way.

NPL in North Dakota (cont.)

Last Thanksgiving, Tony produced a short post on the Nonpartisan League. Think of this as an update. I happen to think the history of the NPL is important because it shows how effective a movement can be if they have a workable agenda. Instead of running against parties and personalities, an agenda-driven party wins because they are FOR something. Even better, an agenda usually outlives even the best supporters. And the State Bank of North Dakota is arguably the best political idea Progressives ever had—the signal accomplishment that lives on to this day.

Hard times coming?

For those of us who believe that energy is a primary need for survival, the collapse of oil prices since 2014 was quite frankly, surreal. How can a globe with a billion light vehicles not continue to need petroleum? The demands for liquid fuels are embedded in the design of our societies. Most people, unfortunately, view the oil giants as these powerful people who can get wars started to defend their interests. Up close, the people who actually get the gasoline to the neighborhood filling station see themselves in a mad, scary scramble to meet this insatiable demand—a demand that will not go away any time soon.

Of course, supply and demand do not always determine price. Lots of crazy stuff happens in the commodity markets so we can have low oil prices while global demand goes up. And high oil prices do not necessarily shrink demand—demand is built in, remember. Yes folks can cut out frivolous consumption but the rest of the demand is considered "inelastic." So high energy prices mostly damage the other folks trading in things that are considered less necessary than energy. So at some time, one of the primary economic laws will kick in—hello $6 a gallon gasoline. And if you run an restaurant, for example, be prepared for fewer customers with less money to spend.

Below is a YouTube of someone who was in charge of getting the crude that the majors convert to the fuels we need. Spent around 40 years at it. His explanation of the supply problem is clear and probably quite accurate.

Hudson on debt cancellation

Michael Hudson has a new book coming out. It addresses the most fundamental economic question of the age—what to do about the unpayable debt. The reason I am so interested in this subject is that IF the austerity geeks get their way, there will not be the money needed to build the solar future.

Coming from the rural Midwest, I have heard these debates for a long time—even one that Hudson highlights below—his contention the Christianity was about progressive economics. The King James translators had it right when they wrote the Lord's Prayer as "forgive us our debts, as we forgive our debtors." Most Protestants have wimped out and changed this radical notion to "forgive us our trespasses, as we forgive those who trespass against us." Last I heard, the Presbyterians still use the older, more accurate version. Considering the implications, I am not sure that reopening that wound is wise since it is as old as Christianity itself. The religion of slaves become the religion of the Roman Emperor in only 300 years so it is not especially surprising that the interests of the creditor classes would come to dominate—even so far as to rewrite the freaking Lord's Prayer. (Where are the fundamentalists when you need them ;-)

And of course, this is Hudson so he gets it right. I wish he would take up the subject of "odious" debt (and maybe he does in his new book). The way I see it, because we can no longer operate our societies with technologies that produce CO2, all investments in these technologies should be written off as "odious." Actually I don't give a damn what reasoning is used so long as there is a serious global debt restructuring.

Building a net-zero house

A couple of days ago, I saw my brother grinning broadly and occasionally giggling. The occasion for this mirth was a recent encounter with his meter-reader for the local utility company—Duke Energy. The news was that last month his photo-voltaic cells had generated roughly 300 kw of electrical power more than he had consumed. While much of this joy is due to the fact that he was billed the $9.86 minimum for being connected to the grid while most of his neighbors were getting $350 bills for homes of similar sizes, the giggling was probably due to the idea that he is "sticking it to the man."

Tony heard this story yesterday and insisted I explain what was involved in producing such a house. So this morning I asked and while his story was hardly complete, it highlighted the parts he thought important. So in no particular order, here they are.

1) His property in the country was large enough so the house's site orientation was pretty much anything he wanted. So the house's ridge line runs east-west, the roof pitch was selected to maximize solar gain, and the overhangs are large enough so the south wall is completely shaded between the equinoxes.

2) The holding tank for the solar hot water heater was located close to the showers so the water used to get hot water on start-up is minimized.

3) The air handler for the air conditioning system was located smack dab in the middle of the house which does wonders for efficiently distributing the cool air.

4) Room for the insulation was designed in from the beginning. The exterior walls were framed with 2 x 6 studs and the roof trusses were scissor-type which made for higher ceilings while provided plenty of space for 16" of insulation.

5) Because excessive heat was the primary problem in Florida, aluminized Mylar was chosen for the moisture barrier.

6) The steel roof was put on sleepers which allowed the underside of the roof to stay cooler and dry.

7) The original air conditioning compressor was a SEER 13, which in 1992 was the most efficient unit one could buy. It was replaced in 2010 with a SEER 18.

And so on. They key to understanding this house is that VERY important decisions that significantly affected long-term performance were made in the planning stage. None of the features mentioned above cost much to implement but have saved thousands in energy costs over the years. As I have said since the 1980s, pollution is a function of design.

Then in 2008, the decision was made that photo-voltaic cells were now inexpensive enough so adding them to the mix should be cost effective. This was pretty easy to do because the roof was already pointed in the right direction. PV cells were still pretty spendy in 2008 so only 5 kw were purchased. By 2011, the costs had dropped significantly so another 5 kw were added which leads to the monthly grinning when the meter is read.

So while the costs of building a solar home from scratch are not much more than conventional construction, retrofitting an existing house is difficult, time-consuming, AND quite expensive—even though the price for PV cells is now lower than $1 per watt.

Protectionism flickers to life

There are times when the conventional disgust with "protectionism" rises to the level of the outrage over pedophilia. Which is strange when you think about it. From Ben Franklin to Abe Lincoln to H. Ross Perot, there have been strong supporters of many of the ideas that the high tariff folks believed in so strongly. When a country is developing a sophisticated manufacturing base, the protectionists usually triumph. It is only when a country gets rich and imperial do the "free" traders win the day. The traders are a fraction of overall economic activity but when the dominant economic strategy favor traders over manufacturing, they get to write the rules in their favor.

Hudson is pretty good on trade issues. He's a ways from Lincoln but he's way better than your typical cable business talking head. So I thought he might celebrate the fact that Trump has at least moved the needle away from the free trade extremism as practiced since the late 1970s. Well, I was wrong. Hudson instead faults Trump for not having a coherent trade policy to back his Twitter outbursts on trade. Fair enough.

Me, I am happy that someone is reopening the Free Trade debate—which has been pretty dormant since the Battle for Seattle in 1999. Free trade has been such an unmitigated disaster there is barely time to count the ways. As someone who comes from the Naomi Klein wing of the DFL when it comes to trade issues, I find it a bit odd to hear some of our best arguments come from the mouth of Trump. I only hope he understands that by even questioning the free trade establishment, he has committed an unspeakable heresy and the the race is on among those who author papers glorifying the conventional economic wisdom to see who can denounce this sin with the greatest fervor.

Even the Paris 2015 climate accords won't solve the problem

Robert Hunziker is perhaps the politician that best understands climate change—and has for some time. He is running for a seat in Washington's 8th Congressional District. I certainly hope he wins.

Whenever I stumble across someone who has a profound and deep understanding of a subject, I am immediately curious as to how he came to be that way. I am especially curious if that person is young. His campaign literature sort of explains his enlightened worldview. Turns out that there CAN be some significant advantages to learning a society from the bottom up. So here's to someone who has had enough exposure to Producing Class virtue to understand that no matter how enlightened a Leisure Class actor, that person cannot build the sustainable future.

Infrastructure funding

Whenever I discuss possible solutions to climate change, it isn't long before someone demands, "How much will this cost??!! And how do you propose we pay for it?" These are in fact excellent questions because the MAIN reason why this civilization-threatening problem doesn't get seriously addressed is the sticker shock that occurs whenever someone gives a realistic estimate for a fix.

Then there's Ellen Brown who reminds us that the problem of not enough money should be the easiest problem to solve of all.  Then she gives us historical examples of why democratic money creation suggest the perfect solutions to the funding problems. Unfortunately, folks who saw the world like Ellen does mostly disappeared by the early 1950s so she has become an almost lone voice for a sane monetary and banking organization.

Which is all the more reason why she should be read.