A Fair Criticism Of Tesla — We Need More Tesla Taxis!
I have watched every single Elon Musk interview I can find. People often ask the same questions of him (which is unfortunate since there is so much more we would all like to know). One of those questions is, “how does one start a successful company?” Elon will essentially respond with two main simple pieces of advice. First, work 100 hours a week, and secondly, ask for as much constructive criticism as possible. It is within this spirit that this article is written.
With the latest IPCC report, it has become clear that even with fairly rapid adoption of personally driven electric vehicles (EVs), we have a snowball’s chance in hell of preventing catastrophic climate change. Climate change is occurring faster than initially anticipated. CleanTechnica‘s Steve Hanley recently wrote an article which Elon Musk shared on Twitter titled: “We Are So Screwed: Study Warns Of 5 Degree Celsius Warming By 2100.”
We have to quickly transition away from personally owned vehicles, which is part of Tesla’s Master Plan Part Deux. (Note: until full self-driving is safely achieved, early adopters of Tesla vehicles are playing an extremely important role in advancing the technology and increasing economies of scale. If you want a Tesla, do not let this article dissuade from buying one. Early adoption of an EV (Tesla) is probably the best thing you can do for the environment, next to operating a Tesla taxi or shuttle).
However, it is as clear as day that sales to taxi operators should be a priority over — or at least equal to — personally owned vehicle sales. Taxi drivers drive many more miles a year than normal drivers, which means much bigger emissions reductions if they switch to electric vehicles.
However, taxi operators who have bought Tesla vehicles have been refused access to superfast charging at Tesla Superchargers. The ban has significantly blindsided and hurt these taxis operators.
To be fair to Tesla, it has had to focus on getting Model 3 production to scale. If Tesla was a private company, maybe it would have made this decision differently. Musk and every Tesla employee is working at a frenetic pace, and they have had to put on blinders to get through production hell. As such, it is hard to write this criticism, but I think it is right. I think taxi owners should have priority.
Providing Supercharger access for taxis is a challenge. In a statement regarding a Supercharger ban in Amsterdam, Tesla stated:
“In Amsterdam Zuidoost. This Supercharger is located at the same location as Tesla’s headquarters for Europe, also service center as well as sales location. This increasingly leads to queues for the Supercharger during peak hours and an unclear, and sometimes even dangerous (traffic) situation, for customers, employees, suppliers and other visitors. In view of (traffic) safety at this location, we reserve the right to change the access for taxis to this Supercharger…”
Additionally, while Tesla has the best battery pack on the market, improper charging of EVs can still degrade the battery. However, there are straightforward solutions to these problems that Tesla could implement.
First, Tesla vehicles purchased by a taxi company could have a different warranty. This way, if they aggressively/foolishly charge and discharge their batteries, Tesla is not stuck replacing batteries. Second, taxis could pay a higher price for Supercharger access. More Superchargers could be installed, or they could be purchased by the taxi operators.
A taxi reduces emissions 20–50 times that of a personally owned car according to the EV taxi company OHPEC (One Hundred Percent Electric Company, and the pun is indeed cleverly intended). To clarify, that figure depends upon how many rides are shared. OPHEC was a small company with big dreams to provide sustainable taxi service using Tesla vehicles in New Zealand. It was hoping to prove a business model that could be copied and saw itself as die-hard supporter of Tesla. OHPEC has the same goal as Tesla, which is to accelerate the transition to sustainable transportation. OPHEC intended to continue maintaining a fleet of Teslas once self-driving is perfected.
Who knows how long it will take before Tesla can begin its own self-driving fleet. Certainly, it will take many years to get the Tesla-controlled fleet going all around the globe. Until that time, as many Tesla vehicles as possible should become taxis and/or shuttles.
When The Boring Company (TBC) came out with an animated video of an electric car traveling on a skate, it was criticized as being wasteful. Musk responded to that criticism by stating pedestrians would be priority, and TBC would have shuttles to transport pedestrians. As far as I know, all The Boring Company projects underway are for shuttles. Ought not this logic apply to Tesla cars? Since Tesla is production constrained, shouldn’t Tesla taxis have the priority over personally owned cars? Isn’t that the most efficient use of scarce and valuable resources?
It will likely be a while before self-driving taxis become fully electric. In the long run, EVs should win the race. However, in the short to medium run, companies like Waymo will go with whatever they can get — which is likely a combination of plug-in hybrids (PHEVs) and EVs, with the former being the larger share.
Sadly, when OPHEC was (out of nowhere) denied access to Superchargers in New Zealand, the business model was no longer feasible, and they shut down service. It appears that the founder of OPHEC cares little for the economic losses that he incurred. His singular concern is climate change. Prior to writing this article, I asked the founder of OPHEC to give me a summary of the company’s history, and I have decided it is best to publish this account in its entirety simply because I am not comfortable cutting any of it. I find it extremely compelling. I think this company’s intentions are as altruistic as Tesla’s.
Here is the story of OPHEC, its founder, and a summary of its business plan:
I am an average New Zealander with a house and a mortgage. I spent most of my career as a self-employed software designer and coder.
I have been closely following the science of Climate Change for 20 years or more. At first, I was mainly interested in the science itself, rather than the political or economic side. Twenty years ago it seemed like we had many decades to change our use of fossil fuels, etc. I then started to follow thinkprogress.org (previously Climate Progress) and became more interested in the political and economic side of Climate Change.
I gradually became more aware of the diminishing time we had to do what was required. When I came across the writings and presentations of David Roberts from Grist (now at Vox), I realized that it was the people of my time which needed to make the changes required. I decided to do more personally about the problem. I installed 10 kW of solar PV, got rid of my home gas connection, only have electric tools, and mostly stopped eating red meat. I also privately imported solar PV systems for friends, family, and workmates.
When Tesla announced in Nov 2016 that they were coming to New Zealand in March 2017, I ordered a Tesla Model X. At the same time I placed my order, the Paris COP was happening. I was also doing some Uber driving in a Mitsubishi Outlander which I thoroughly enjoyed, particularly informing riders about electric vehicles. I got to thinking that it would be a fun idea to use the Tesla in a similar way.
And so it started. I then thought that I could try to use four Teslas and be a bit more influential. This meant that I would need to have other drivers and would need to have it financially stand on its feet. So, I sat down and ran the hard numbers. This process made me realize that I could run a taxi service using Tesla vehicles and out compete taxis and indeed Uber. I developed a business case and created OHPEC in the beginning of 2017. We started operating in fits and starts with one Model X in June 2017 and then as a Small Passenger Service (SPS) from Oct 1 2017. A SPS can operate in New Zealand as a taxi, private hire, rideshare and shuttle.
I ordered 8 Model X vehicles which would mostly arrive in the latter half of 2017. Tesla had announced in 2016, and still said as late as April 2017, that they would have Superchargers in Auckland in June 2017. From August 2017, I was in contact with Tesla representatives about getting access to Superchargers at a much larger scale than Tesla was planning. OHPEC offered to pay the price that Tesla wanted for the power, which Tesla had already set at 35¢ per kWh when pay-per-use would be introduced, even though at that time it was free for life and there was no ban on Supercharging. (That is, at the time of ordering the vehicles, OHPEC would have access to Supercharging and expected to have Superchargers available when the vehicles arrived.) Our active discussions went on for 3 months. In November 2017, I was asked to write a document to be presented to a meeting that Tesla was having in the USA to discuss the global Supercharger network.
Tesla, at a high level, were fully aware of what OHPEC was about, and had our Business Case and Business Plan. Tesla had been encouraging OHPEC to order several hundred more vehicles at this time. I told Tesla that I would not order them until I had a commitment from Tesla that they would provide the Supercharging the business required.
When the meeting had finished I texted my main Tesla contact and asked what the result of the meeting was. I was told that there was no answer yet but no news was good news. A few hours later I learned of the ban on the web. Since that time, Tesla has offered no option for OHPEC to charge their vehicles. Tesla will not give a reason for their ban. I exercised a buy-back guarantee on two unused vehicles and one used vehicle.
You can read OHPEC’s entire business plan here: www.ohpec.com/plans
The most influential cost for a passenger service is time spent not driving for a fare (1). The majority of the direct cost of a passenger service is the driver (2). The other costs are depreciation (3), fuel (4), maintenance (5), loan interest (6), and other expenses.
OHPEC intended to attack all of these. An average taxi or Uber (when not over supplied) is earning a fare about 50% of the time. OHPEC would operate as both at the same time, and therefore have a greater fare time. I also expected OHPEC to become supply constrained while growing in the first few years since we would have the best, safest, and coolest vehicles. Additionally, we would have the best prices, would be powered by mostly renewable energy, we would provide fair remuneration for our drivers, and would have great policies for our passengers.
Why the Tesla taxis needed a full speed charge?
An OHPEC vehicle would travel 500-1000 km per day since it was on the road 24/7. Auckland is mostly low density housing and geographically spread out. We would need to charge up to 200 kWh per day per vehicle. This required 2-4 charging sessions daily. If CHAdeMO is used, which averages 40 kW, then this requires 5 hours of charging. The direct driver cost, charging cost, plus lost opportunity cost, is such that it is totally uneconomic when competing with a cheap taxi or Uber. 120 kW is fast enough to charge the vehicles while they are otherwise idle. This includes waiting at the airport, a hotel, other common passenger pickup areas, and during mandatory driver breaks.”
I can only imagine the excitement of starting a company like OHPEC. I can easily imagine Tesla taxi drivers educating the public and giving people their first ride in a Tesla. It is saddening that Tesla was not able allow this business (experiment) and others like it to continue. Hopefully, now that Tesla has somewhat caught its breath and is experiencing profits, it can rethink this most unfortunate ban. At least one Taxi company won the right to use Superchargers, in the Netherlands. However, this is not something Tesla should be forced to do. It is something Tesla should try to do because it fits best with Tesla’s mission to accelerate sustainable transportation and energy.
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