Matthew Klippenstein and I tackled the Tesla Model 3 unveiling, Tesla Model 3 reservation estimates (before and after the unveiling), the Tesla Model S and Model X refresh, and the odd case of coal potentially helping to kill natural gas.
You can listen to the show via the embedded player below, on iTunes, or on SoundCloud. Below the embedded player, you can read Matthew’s helpful show notes. And you can check out our Cleantech Talk archives for previous shows if you haven’t listened to them yet.
We started this episode of TeslaTech Talk… er, CleanTech Talk 🙂 discussing Fremont’s Model 3. And while some people online think the now-400,000+ reservations are relatively non-committal, the CTT consensus was that they’re pretty sticky. After all, if you’re putting money down on a future Tesla … well, chances are you’re doing it because you want to buy a Tesla, and not just any electric vehicle!
Thinking more generally, one would be inclined to think that reservations are the most “sticky” for luxury consumer products: a Rolex, a limited-edition champagne or whiskey, perhaps some Harry Winston jewelry. The Tesla Model 3 is probably similar to the iPhone in that both are aspirational products which happen to be affordable enough to drive massive sales volume.
Reservations would probably be less “sticky” for commodity products, where the customer doesn’t care about the brand, and simply needs the service(s) the products offer. The Tesla Powerpack would probably be in this category — the purchasers will mainly be utilities or commercial power users whose main goal is to save money. If they can save a dollar by going to a different vendor, they’ll do so.
(The Tesla Powerwall probably fits in between the Model 3 and the Powerpack, in that many people putting down reservations will specifically be doing so because it’s a Tesla product, but many others will probably be price-sensitive, and be willing to go to another vendor, if they can find a cheaper price, or a more convenient service.)
The “mutually assured destruction” of Coal and Natural Gas
Bloomberg’s Liam Denning recently put out a great article pointing out that, far from natural gas benefiting from coal’s collapse, coal was liable to pull natural gas down with it. Which, oddly enough, brought to mind an episode from season 3 of the Simpsons (“Homer Alone”) in which Mayor Quimby threatens Chief Wiggum:
“Now listen to me, if Marge Simpson goes to jail, I can kiss the chick vote goodbye. And if I go down, you’re gonna break my fall.”
Well, coal is going down, and natural gas will be (almost certainly unwillingly) breaking its fall.
As Denning explains, since utilities are now burning less coal, their existing on-site inventories actually represent more days’ worth of fuel supply than the tonnage itself would indicate. And with environmental legislation (finally!) on the way, the time to burn that coal is now. (Burning the coal would also improve the companies’ balance sheets, because it’s probably already been paid for.)
In this scenario, natural gas consumption could be lower than expected. That would be welcome news if natural gas stockpiles were low and needed replenishing — but instead, natural gas stockpiles are at historic highs. (At least, in terms of recent history.) Which means that — like an elegant trick shot in pool/billiards — coal’s trouble could stagger the natural gas industry for a year or two as well.
That year or two may not seem like much in the big picture, but with solar and wind continuing their relentless cost reductions, that extra time allows renewables to become that much more competitive, putting us in a better position to outmuscle both fossil fuels when they get a temporary second wind, and to facilitate our energy transition!
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