Motoring Weekly

Electric cars roll out

July 10 -16, 2019

Gulf Weekly Electric cars roll out

Electric car manufacturer Tesla is finally bouncing back after a poor first quarter with three months of record sales up to the end of June.

Last quarter, keys to 95,000 vehicles were handed over to customers which is 51 per cent more than in the previous three months. That improvement alone should be a relief for investors of the $40 billion outfit because it quells fears that demand for the mass-market Model 3 has dropped and based on this performance, Tesla’s cash burn should be reduced.

However, its numbers and its stock jump to seven per cent in after-hours trading aren’t enough to restore the American automotive company’s status as its overall production of around 87,000 vehicles was barely higher than the previous record set in last year’s fourth quarter.

Elon Musk, Tesla CEO, recently introduced cheaper variants which should drag down margins and the company also delivered fewer than 18,000 of the high-margin S and X vehicles last quarter.

The tech mogul has been pushing Tesla to cut costs, but fixing poor-quality cars and shoddy after-sales service requires investment. Plus, the capital expenditure needs a boost with barely a tenth of Musk’s 2019 target of $2.5 billion spent in the first quarter. While getting production and sales reeling again is encouraging, his hopes of turning a profit aren’t going to be easy.

Perhaps the billionaire SpaceX CEO should set his sights back on his electric plane idea which would create reductions in carbon emission and is fairly cost-effective even with the current state of battery technology.

It seems his electric vertical take-off and landing (VTOL) aircraft concept, which required an improvement on the energy density of batteries to fulfill his design, might finally come to fruition. Musk estimated that Li-Ion batteries would need to achieve a 400 Wh/kg energy density for his electric aircraft to be viable. Today, battery cells with high cycles are achieving about 300 Wh/kg of energy density.

If battery energy density is improving by more than 30 per cent over the next five years, then that could potentially result in commercial electric planes and also have an impact on Tesla’s cars as well as other electric vehicles. This would made electric vehicles cheaper, lighter and with promising longer range.

More on Motoring Weekly