Coal Miner’s CEO Calls Tesla a ‘Fraud’ and Elon Musk Tweets It

For its part, Tesla was downgraded to neutral from a buy rating by Goldman Sachs Group Inc. last week. The company’s shares have dropped as it moves forward with its plan to buy rooftop solar installer SolarCity Corp., which some analysts have deemed a risky bet. Musk is chairman of SolarCity, and his cousin Lyndon Rive serves as its chief executive officer.

Customers who purchase an electric vehicle can claim a $7,500 federal income tax credit and several states offer additional incentives, according to Tesla’s website.

Tesla will let Musk’s tweet “stand as a comment,” spokeswoman Alexis Georgeson said in an e-mail. The Clinton campaign didn’t immediately respond to a request for comment.

The Only Thing on Autopilot at Tesla Is the Hype Machine

Just over a year ago, Tesla sent out a software update to its cars that made its “Autopilot” features available to customers, in what the company called a “public beta test.” In the intervening 12 months, at least one customer died while the Tesla was in autopilot mode. Cars have crashed, regulators have cracked down, and the headlines proclaiming that “Self-Driving Cars Are Here” were replaced with Tesla’s assurances that autopilot was nothing but a particularly advanced driver-assist system.

Given all this, one might assume that a chastened Tesla would take things more cautiously with its next iteration of autonomous technology. But in a launch event this week, Tesla introduced its Autopilot 2.0 hardware with the promise that all the cars it builds from now on will have hardware capable of “the highest levels of autonomy.”

Tesla’s proof that its new hardware is capable of driving in the “complex urban environment” was a brief, edited video of the system navigating the area around its headquarters near Stanford University in California. Though exciting for enthusiasts who can’t wait to own a self-driving car, the video is hardly proof that Tesla’s system is ready to handle all the complexities that are holding back other companies that have been working on autonomous technology for longer than Tesla. As impressive as Tesla’s system is — and make no mistake, it is deeply impressive — navigating the Stanford campus is a hurdle that even graduate school projects are able to clear.

Tesla’s new sensor suite upgrades what was a single forward-facing camera to eight cameras giving a 360-degree view around the car. It also updates the 12 ultrasonic sensors, while keeping a single forward-facing radar. Yet independent experts and representatives from competitor firms tell me this system is still insufficient for full level 5 autonomy- the National Highway Traffic Safety Administration’s highest rating — which requires more (and better) radar, multiple cameras with different apertures at each position and 360-degree laser-sensing capabilities.

Major Updates For This Month

Tom Pyle from the Institute for Energy Research (IER) wrote a great blog on The Hill about the high cost of private solar subsidies. Tom’s conclusion: “…our public utility policies don’t reflect the costs that net metering imposes. It’s time to reform net metering policies so that the general public no longer subsidizes those wealthy […]

The high cost of rooftop solar subsidies

Renewable energy like wind and solar has become politically popular in recent years. So much so that Hillary Clinton is proposing to install half a billion solar panels if she is elected president. Yet her plan for “a solar panel on every roof” doesn’t reconcile with her stated concern for lower-income Americans. A new study shows that solar energy is driven by subsidies that increase electricity rates of poorer Americans and send that money to richer Americans.

One of the most significant solar subsidies is called net metering. Net metering is a program through which home and business owners with solar panels are credited for the excess energy they send to the electric grid. A new study by Arduin, Laffer & Moore Econometrics, commissioned by my organization, the Institute for Energy Research, shows that the default pricing structure and the intermittent nature of solar energy make these programs a bad deal.

The biggest flaw with net metering is the price paid to customers with solar panels. The default is to pay customers with solar panels the retail rate instead of the wholesale rate for the electricity they produce. This causes huge distortions in the way we all pay for the power grid.

The net metering subsidy creates a strong incentive for building owners to enter the solar market and indeed states have been flooded with applications to join net metering programs, which is why many states are now capping or reforming their net metering programs. In other words, many property owners are eager to be on the winning side of the cost shift.

The problems with net metering go beyond the wholesale vs. retail price. As the technology stands today, electricity at utility scale cannot be stored in batteries in a cost-effective way. That means grid operators must be on the ready 24/7 to increase or reduce the amount of energy flowing onto the system in response to electricity demand. Too much or too little at any given time can lead to power outages and the inconveniences and productivity slowdowns they entail. This recently happened in South Australia when wind power fell very quickly and the region was hit with a blackout.

It doesn’t take a degree in photovoltaics to recognize how solar energy exacerbates this issue. Solar energy is only accessible when the sun is shining, which means even on the sunniest days of the year there is a strong mid-day peak preceded and followed by hours-long valleys. Unfortunately, electricity demand is frequently highest in the early evening when the sun is setting.

This means grid operators have to accommodate for massive influxes of solar energy for a few hours each sunny day, but then need to ramp up the delivery of other energy sources when high demand hits later on. This ramping up and down taxes the system more than simply matching demand with electricity supplied from traditional power plants. The result is that net metering customers are actually making the grid more difficult and costly to operate. Much worse, these costs are transferred to the rest of the utility’s customers, who face higher utility bills as a result.

Arizona’s largest utility, Arizona Public Service, found that a net metering customer avoids around $1,000 annually in costs they impose on the electric grid, which results in the rest of their customers being on the hook for $16.80 more. This may not seem like much, but as the pool of net metering customers grows, so too does the cost for non-solar customers.

When we look closer at the breakdown of net metering customers and regular customers, the policy is downright regressive. According to the California Public Utilities Commission, the average net metering customer in California has an annual income that is over one and a half times that of California’s average annual income. The expenses involved in installing a solar energy system on a home make the prospect cost-prohibitive for all but the upper echelon of income earners which means that net metering is essentially welfare for wealthy people.

As the Arduin, Laffer & Moore Econometrics study clarifies, our public utility policies don’t reflect the costs that net metering imposes. It’s time to reform net metering policies so that the general public no longer subsidizes those wealthy enough to afford solar panels. The sun, it seems, is not free after all.

Has Elon Musk Finally Run Out Of Rope?

Summary

The public’s willingness to take everything Elon Musk says at face value appears to be wearing thin.

Elon’s long-established pattern of following bad news with grandiose announcements and, frankly, truckloads of baloney, has lost its appeal and is having an ever more minor and temporary effect on Tesla shares.

Even Tesla’s biggest institutional supporters appear to be losing patience and casting a skeptical eye toward his plans, and this does not bode well for TSLA investors.

And this is not even a comprehensive list of all the signs of eroding confidence in Elon.

Conference calls have transitioned from seemingly scripted softball sessions to something approaching real conference calls with poignant and skeptical questions coming from those in attendance.

The financial community is no longer taking everything Elon tells them at face value. I don’t know of a single analyst that believes Tesla will sell 500,000 vehicles in 2018, as Elon promised during the Q2 earnings call.

All in all, the rose-colored glasses are coming off and there are signs that reality is beginning to carry the day.

Musk’s Wall Street cheerleaders drop their pom-poms over Tesla

Elon Musk is losing some of his Wall Street cheerleaders just when he needs them the most. Goldman Sachs Group Inc., one of Musk’s top bankers, has reversed course and cut its recommendation on the entrepreneur’s flagship Tesla Motors Inc., following a similar move by another big booster, Morgan Stanley.

Goldman’s decision, announced Thursday, comes as Musk is under growing pressure to rally investors for a new fundraising round. While the banks are subject to strict rules designed to separate their research and underwriting, the downgrade underscores how Musk’s Wall Street enablers have played multiple, even conflicting roles as he’s chased ambitions — from electric cars to solar power — where profits are hard to come by.

“I am sensing that some Tesla cult members think he’s not as brilliant as they thought he was,” said Barclays Plc analyst Brian Johnson, who has advised selling the shares for the past year. “He will be able to raise money but maybe they have to do it at a discount.”

Both Goldman and Morgan Stanley have been big owners of the stock. Their analysts have, on occasion, recommended the shares right around the time that the firm’s underwriters were lead managers on a new round of funding.

In addition to underwriting Tesla stock offerings, Goldman and Morgan Stanley have loaned Musk $275 million, and $200 million respectively, according to regulatory filings. Some of the loans were used to buy Tesla stock, the filings said.

Tesla representatives didn’t respond to requests for comment.

In August of last year, the company hired Morgan Stanley as one of the managers of a $783 million offering, priced at $242 a share. Three days after the announcement, Morgan Stanley analyst Adam Jonas raised his estimated future price for the stock to $465 from $280.

Avoid Tesla due to aggressive discounting: Analyst

Pacific Crest told investors to be wary of Tesla shares, citing the profit margin risk from increased price discounting.

“Checks indicate Model X orders have improved, but we detected aggressive Model S discounting at U.S. sales centers intended to maximize Q3 deliveries,” analyst Brad Erickson wrote in a note to clients Tuesday.

“So while a strong Q3 delivery number could provide some reprieve for the bulls, our view of declining quality for incremental Model S demand poses ASP and margin risk while calling longer-term demand into question.”

Stop Elon From Failing Again

THE ONE STOP DATABASE ON STOPPING ELON MUSK

Failure