Sunday, November 2, 2014

Elio, Tesla, and Vespa

Little known fact: It takes about 17 minutes to assemble a Vespa scooter. Most of the components are made in China, most of the bikes are assembled in China but certain models are built in Italy. The components cost $150, approximately. The labor is around $20. So a Vespa actually costs around $170 to build, plus shipping to the dealer in a small crate. If they were built here, a lot of people could afford to buy them because we wouldn't be charging $2-4000 markup like Vespa does. That markup is so insulting it really puts me off. Particularly since I live in a place with steep and twisty mountain roads, so the 49cc engine is pointless. Also, we don't have the 49cc exclusion from motor vehicle licensing like all other states in the USA. You have to pay registration and put a plate on it and carry motorcycle insurance just like any motorcycle that goes 100 mph. Yes, the local motorcycle laws of California also allows lane splitting, and we have fewer motorcycle deaths because of the mandatory training program, and the best weather for riding because we're dry 300 days a year. Still, a scooter is slow and very easy to ride it would be nice if they backed off the expensive requirements so more poor people and students could ride them. They're really fuel efficient, take little space, and allow people to ride to paying jobs so they can gradually climb the ladder of prosperity rather than stay trapped at the bottom of the electric car wall.
 
A proper Tesla S goes for around $65K, fully equipped. This is what a good Porsche sports car goes for, or the fancy racing Jag and the next up class of Mercedes Benz. These real cars can be refueled at gas stations dotting the landscape. The Tesla needs a charger. Battery swapping stations are supposed to be built in a few places, but the costs are higher than a gas station fill up, though I think I've read they plan to make the swaps free, eventually, and the stations for them everywhere. And they might, but the economic value of green technology is always tightly tied to Federal grants that run out because only a few rich loonies end up able to afford them.
 
Tesla is building a battery factory, eventually, in Reno, processing lithium salt brine into lithium batteries and selling them to car factories around the world. This will become their biggest product and source of profits outside of collecting Federal matching grants in compliance with various "green" laws passed a few years ago. It is possible they won't end up making many cars after all, since selling the batteries will be bigger profit. And the batteries won't require building all those charging stations at a loss. The Japanese, Chinese, and Koreans are all very interested in Tesla's batteries. And that's a fine thing. But it also means that Tesla cars aren't going to be a huge player in the general car marketplace after all. You and I won't own them because we can build a decent house for $65K, and the house can't be carjacked by all those people who can't afford a $65K vehicle in the Post-Jobs economy the Democrats have created for us. Remember that at the polls. It was Democrats who had control and Democrats who got rid of everyone's jobs.
 
The Elio Motors reverse trike car is interesting because it was engineered to use as many off the shelf components as possible, a respected and reliable engine from the 1960's (Triumph 3 Cylinder, water cooled and fuel injected), offers a crash safe tandem car body with antilock brakes, works in the snow, has a roof, windshield wiper, A/C and heat and doesn't require a helmet to operate, yet gets 80 mpg. And it costs about twice what a Vespa does. And is probably much harder to steal. The Elio has a lot of potential for basic transportation, since its freeway capable, unlike the Vespa, and cheap enough to buy outright, or with a loan even if you're only making minimum wage as a janitor or waitress. Provided Elio actually makes the cars rather than folds, it will probably become a major player in transportation. Right now, the shift from showing off and taking orders to building the cars at the plant in Shreveport Louisiana is the thing they need to do next. Build the cars. When they're on the road they are advertising. The key thing about the Elio is they are built with as many off the shelf car parts as possible. No exotics, nothing to go to war over. Its efficient because it is light, and it is cheap because all the components are common. It will work, if they build it.
The Elio car will be a tough sell for the Soccer mom doing the school run with a car full of kids. She's going to have to drive a regular hatchback or pay through the nose for gasoline in her SUV until the kids are grown and we see more ultralight cars that carry more people, at lower fuel economy and probably speed, but the school run can become the school waddle if need be. Convincing Soccer Moms to drive a stick shift with a clutch will be the tough part, but birth control options are cheap and relatively effective. Having lots of kids is a choice, after all, and the cost of raising them is the cost of raising them. She can drive a hybrid till the batteries stop working and then convert it with either new expensive batteries or rip them out and find its faster, more economical, and handles better without them. The Toyota Yaris is similar to the Prius without batteries, though its a more conventional engine, and gets around the same fuel economy. If it has the Atkinson Cycle engine it would do better, but Toyota doesn't allow that engine to be tweaked or sold in junkyards, as I understand it. It might prove to Embarrass their Prius if fuel-economy-racers could tweak it to better performance. Sadly, my driving game doesn't allow the option of real fuel economy races. I expect there will continue to be hybrids for the next few decades anyway. Its just when the batteries don't do much but increase the vehicle weight and a existing tweaks to large engines like shutting down cylinders on demand has been around for 60 years, and works well, we should be using these options instead of building a car fleet out of lithium, which is rare and expensive. Scalable technologies matter. The Elio car is great for solo commuters going to work or school, and is double the fuel economy of the Prius, realistically speaking. While some people get 55 mpg with a Prius, most are down in the low 40's. The Elio will reach 60 faster, as well.
 
Things are going this way because the writing is on the wall about fuel economy, fuel costs, wages, and jobs. There is no recovery. Quantitative Easing is just delaying the crash, and using up international good will, and the internationals own a lot of US bonds, which are a big part of the value of the dollar. Dumping those bonds is changing the exchange rate. Eventually we won't need trade tariffs to end dumping of Chinese goods below cost. We won't be able to afford them anymore so we'll HAVE TO restart domestic manufacturing because it will be cheaper here. How's that for Irony? By that point I expect that Baby Boomers will have wasted their last dime buying Mass Quantities and no longer have enough majority to vote themselves more debt for the future they won't have to pay off because they're planning to die first. That is their typical playbook approach. Leave us to clean up. Every soccer mom straining to haul her babies out of the back seat of a subcompact car will curse them forever. 


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