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Why China Will Beat Tesla in the Electric Car Race
F rom a cursory look at the recent news from Tesla, a casual observer could be forgiven for thinking that the dream of transitioning the world to electric vehicles has stalled. The Tesla brand is more closely associated with electric vehicles than any other, and in the past year the company has struggled to deliver the $35,000 Model 3. CEO and founder Elon Musk described the internal delays related to producing Tesla’s battery and an outside supplier’s falling behind as “production hell,” while customers vented on social media and the company declared a record third-quarter loss of more than $600 million.
As Tesla scrambles to maintain its position as the world’s foremost electric-vehicle brand, traditional automakers in the U.S. and Europe have invested billions of dollars to advance the technology. And a slew of Chinese companies are churning out hundreds of thousands of electric vehicles a year.
“The story is not just about Tesla anymore,” says John Gartner, an analyst at Navigant Research. “There’s an ecosystem.”
The battle will determine which country dominates the global market for electric vehicles, which are forecast to be a third of all passenger vehicles on the road by 2040, up from less than 1% today, according to Bloomberg New Energy Finance. Currently, China has the upper hand.
“It’s clearly the case that China will lead the world in EV development,” William C. Ford Jr., the executive chairman of Ford Motor Co., said in Shanghai in December, according to the New York Times.
In some ways, Tesla’s “production hell” helps explain why China is better situated to develop the electric vehicle of the future. Despite top design, engineering and marketing talent, Tesla has struggled with basic manufacturing. Automated processes have failed on the factory floor, and the company has struggled to secure the supply chain to operate on the scale it needs to produce a mass-market electric vehicle. Musk has taken responsibility for the delays while also downplaying their significance. “In the grand scheme of things, this is a relatively small shift,” he told investors in October.
China has invested heavily in policies to develop its electric-vehicle industry. It has offered subsidies to buyers to the tune of $15,000 per vehicle, threatened to block automakers that don’t make electric vehicles from selling traditional cars and funded electric-vehicle infrastructure like charging stations across the country’s highway network. Earlier this month, China simply halted production of more than 500 models of heavily polluting cars. China is expected to spend some $60 billion in electric-vehicle subsidies in the half decade preceding 2020, according to a Financial Times analysis.
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Tesla Loses More Money Than Ever, but Says Profits Are Coming
The future of Tesla hinges on the Model 3, the lower-priced sedan that Elon Musk wants to sell in large numbers. The company has to both build them fast enough and make a profit doing it. Fail at either one, and the company will struggle and eventually sink.
A month ago, the company gave production numbers for the second quarter of the year, and said it had finally met an oft-pushed-back target of building 5,000 Model 3s in a week. So that’s one box checked.
Today, though, Tesla released its financial statements for the same quarter, and revealed the biggest loss in the company’s history: $717 million. But that was balanced by some good news: $2.2 billion in cash reserves, which is higher than many analysts were expecting, and means there’s money on hand to keep building without borrowing more.
Cash burn is not necessarily a bad thing, if the money is being invested in a way that will lead to future growth and profit. When a company is ramping up production of a new product, it’s expected to invest a lot in machinery, supply lines, and staffing, often using borrowed money. But that can’t go on forever, which Musk acknowledges. He doubled down on a promise to be profitable toward the end of this year, and then to keep the cash coming in. “Our goal is to be profitable and cash flow positive for every quarter going forward,” said Musk today on an earnings call, working hard to convince investors he can check the second box too.
On the last earnings call Musk called investors’ questions “bonehead,” and “dry,” after which Tesla stock dropped about 10 percent. Today, Elon Musk was restrained and contrite. He apologized for sounding tired (“I’ve been working like crazy in the body shop lately”), and more significantly, he apologized for being “impolite” to investors three months ago.
Tesla has yet to deliver a $35,000 Model 3, the supposedly affordable model. All variants so far have been high spec, including bundled options like a premium interior. And Tesla recently started taking orders for an even more extreme, high-performance version that will cost at least $64,000, instead of focusing on the cheaper car.
That’s a disappointment for anyone waiting for an affordable Tesla, but this focus on the high-end vehicles is allowing the company to make a profit on them, which will keep investors happy. Just a small profit per car in Q2, Tesla says, without being specific, but it’s expecting around 15 percent profit margins in Q3. So far, so good, but Tesla will have to figure out how to continue to make a profit on each car, when it’s selling them for half as much.
Another issue when it comes to sales is that the federal tax credit of $7,500 for buying an electric car is starting to phase out for Tesla, now that the company has hit the milestone of 200,000 vehicles. Cars delivered before the end of the year will qualify, then the credit gets cut in half for six months, then half again, before finally disappearing at the end of next year. That could potentially put it at a competitive disadvantage, as other manufacturers scale up their electric offerings. (The Jaguar I-Pace, Audi e-tron, and Porsche Taycan, are all due to go on sale within the next year, and will all quality for the tax credit, for example.)
Tesla also looked to reassure shareholders that the rate of 5,000 Model 3s per week wasn’t a fluke, or the result of impossible-to-sustain overworking. “During the month of July, we have repeated weekly production of approximately 5,000 Model 3 cars multiple times while also producing 2,000 Model S and X per week,” its update letter says.
Nikola Tesla: The Life and Times of the Genius Who Lit the World
Nikola Tesla was a truly remarkable man whose life saw him ride the rollercoaster of the American Dream into legend.
Nikola Tesla, often cited as the “Genius Who Lit the World”, is rightly famed the world over for his contribution to Science and Engineering.
His development of AC current and the rotating magnetic field earned him a place in the hall of fame of engineers. Despite this, Tesla died penniless and without the recognition he deserved during his tempestuous life.
Born in 1856, in Smiljan (Then part of the Austrian Empire but now Croatia), Tesla emigrated to the United States in 1884. Briefly working with Thomas Edison, he parted ways to start his own enterprises (more on this later).
Later, Nikola Tesla sold several patents, including AC machinery, to George Westinghouse. His 1891 invention, the “Tesla Coil”, is still used today, though mainly as leak detectors in high vacuum systems and igniters in arc welders.
Tesla died in New York on the 7th January 1943.
In the following few thousand words we’ll take a tour of Tesla’s life and times, follow him from his birthland to America and explore his tragic end.
We’ll also stop off to look at some of his more important innovations, patents and thought experiments. Mr. Tesla, I for one salute and thank you for your, often tragic, contributions to science and mankind.
Nikola Tesla – Early sparks of life
Nikola Tesla was the fourth of five children to his father, Milutin Tesla (an Orthodox priest) and mother, Đuka Tesla (whose father was also an Orthodox priest). According to Tesla, his mother had a talent for making home-made appliances and tools and an excellent memory. Nikola credited his eidetic memory and creative abilities to his mother’s genetics and influence.
Nikola’s interest in science helped him to resist his father’s wishes of joining the clergy.
After studying at Realschule, Karlstadt Polytechnic Institute in Graz and The University of Prague in the 1870’s, Tesla moved to Budapest. Here he worked at the Central Telephone Exchange.
It was during his time in Budapest that the idea of the induction motor came to Tesla. After several years of failing to gain outside interest in his invention, he decided to leave for America.
Nikola Tesla – The American Dream
Nikola Tesla arrived in the U.S. in 1884, literally with little more than four cents in his pocket, the clothes on his back and a letter of introduction to Thomas Edison.
Edison had at this time been pushing fiercely for the standard adoption of his DC-based system to electrify the country. Impressed with Tesla, Edison hired him, starting a closer and tireless relationship. Edison was an aggressive businessman, however, and cracks soon began to show between the two. After offering to redesign Edison’s inefficient motors and generators Edison remarked:- “There are fifty thousand dollars in it for you—if you can do it.”
Months later Tesla returned with his new improved design and understandably inquired about the proffered reward. Edison true to form refused to pay:- “Tesla, you don’t understand our American humor” and instead offered a $10 a week raise. Understandably deflated, Tesla soon became disenchanted with working alongside Edison and decided to part ways with him several months later.
In 1885 Tesla managed to secure private funding from investors for his fledgling company the Tesla Electric Light Company under the proviso they develop improved arc lighting.
Tesla’s investors showed little interest in his designs and plans for his new form of motors and electrical transmission equipment, however. Poor old Tesla worked as a laborer to make ends meet after being ousted from the venture.
Tesla, in 1887, found further interest in his AC system and the Tesla Electric Company was born. Tesla successfully filed several patents for his AC system by the end of 1887.
Nikola Tesla – One door closes, another opens
In 1888 Tesla caught the attention of George Westinghouse, who was looking for a method of long-distance power supply.
Westinghouse, convinced that Tesla’s AC system would be perfect for this, purchased his patents for $60,000 (around 1.5 Million today) and stock options in Westinghouse Corporation. This joint venture would put Tesla in direct competition with his former ally Thomas Edison.
Edison soon began a negative press campaign about AC power in an attempt to protect his market presence. Edison’s campaign ultimately failed and the Westinghouse Corporation was chosen to supply the lighting at the 1893 World’s Columbian Exposition in Chicago. Tesla conducted further demonstrations of his AC system at this event.
Tesla designed one of the first AC Hydroelectric power plants in the US at Niagara Falls in 1895. Tesla’s AC system was used to power the city of Buffalo, New York, getting great publicity across the globe.
AC’s continued success and favorable press catapulted it to become the world’s go-to power supply system of the 20th Century. An acumen it still holds to this day.
As if developing an entirely new electric distribution system wasn’t enough, he went on to design dynamos and induction motors. He also helped pioneer radar technology, X-Ray technology, remote control and rotating magnetic fields. A fertile mind hardly begins to describe the genius of Tesla.
Nikola Tesla – What goes up must come down
Around 1900, he became obsessed with creating wireless transmission of energy. He was set about attempting to develop a global, wireless communication system. His design centered around a large electrical tower for sharing information and providing free electricity to the world.
Investors in his idea included J. P. Morgan. In 1901 Tesla began construction of a laboratory, with a dedicated power plant, and the required tower. This site was on Long Island, New York, that became known as Wardenclyffe.
Sadly, doubts began to rise about the project viability amongst his investors. Tesla’s situation was made worse by Guglielmo Marconi’s advancements in Radio technology. Marconi received financial support from Tesla’s, now bitter rival, Thomas Edison and Andrew Carnegie.
This market pressure saw Tesla forced to abandon the Wardenclyffe project. Wardenclyffe’s staff were laid off in 1906 and the site fell into foreclosure in 1915. Tesla was forced into bankruptcy in 1917. Wardenclyffe closed the same year, which was later dismantled and sold for scrap to help clear his arrears.
Nikola Tesla – A Brilliant man bad at business
His career as an inventor began early in his life. At the age of 26, whilst working at the Central Telegraph Office, Budapest, he is reported to have first sketched his principles for a rotating magnetic field. As previously mentioned an idea still in use today.
This innovation laid the groundwork for much of his later work and inventions. Including alternating current motors. It was this idea that led him to New York in 1884. His admiration for Thomas Edison and his groundbreaking engineering factory also playing a part.
Given all this, it is often said that as brilliant as Tesla was, his business skills were atrocious. He was unable, or unwilling, to see the commercial value of his ideas. It may also be possible that he desired his inventions to better mankind rather than cash in on them. We will never really know.
His “hero” at the time, Thomas Edison, couldn’t have been more different to young Tesla. Edison was a business mogul fixated with the bottom line. He and Tesla often clashed over methodology and ideology during their time together. It was unlikely, that these two minds could coexist in peace for very long. Tesla only lasted a year working with Edison.
When Tesla opened his new Laboratory, Tesla Electric Light and Manufacturing, his genius was allowed to be unleashed. Here he experimented with X-Ray Technology, electrical resonance, arc lamps and many other ideas.
He often moved between Colorado and New York where his work coincided with other great scientific feats. These included advances in turbines, the first hydro electrical power plant at Niagara Falls, and of course his perfection of the alternating current system.
Nikola Tesla’s innumerable patents
Although heavily disputed, the exact number of patents filed by Tesla is an interesting unknown in history. Tesla is often reported as having around 300 inventions, many related to one another, to his name.
Several dozen of Tesla’s patents were related to alternating current science. Over the course of his career there were countless additional unpatented ideas that he developed during his life and times. Tesla was certainly a prolific inventor.
Given Tesla’s busy life and times we thought it might be a good idea at this point to take a look at some of the great innovations Tesla left society.
Nikola Tesla’s alternating current
Alternating current is certainly his most important invention. At the time it was a groundbreaking alternative, no pun intended, to Edison’s rather inefficient Direct Current system.
Tesla’s alternating current systems could overcome some major restrictions of Edison’s Direct Current power plants and distribution systems. DC power, for example, sent electricity flowing in one direct, straight line; AC could change direction easily and deliver power at a much higher voltage.
It is an interesting point to note that Edison’s power lines that crisscrossed the Atlantic were rather short and weak. AC power lines, on the other hand, could transport electricity over much greater distances.
Thomas Edison had considerably more resources and reputation to throw at his pet project but this wasn’t enough to outcompete the much-improved efficiency of Tesla’s AC power grids.
Nikola Tesla’s Coil
The Tesla coil is an impressive machine that transforms energy into extremely high voltage charges. This creates powerful electrical fields that can generate spectacular electrical arcs. As impressive as these are for visual spectacles they also have a rather practical use and were used in wireless radio technology and medical devices.
Tesla’s unchained genius certainly ran at full speed during the later years of the 19th century.
Nikola Tesla – The true father of radio
As early as 1892, Tesla was tinkering and playing with radio wave technology. He even debuted a radio wave controlled boat in 1898 which received a great reception from the crowd at an electrical exhibition at New Yorks’ Madison Square Gardens. Tesla expanded on this technology and patented dozens of inventions related to radio communication.
Radio, after all, is just another frequency that needs a transmitter and receiver. Tesla successfully demonstrated this technology in 1893, during a presentation to the The National Electric Light Association.
In 1897, Tesla applied for two patents US 645576, and US 649621. News of Tesla’s work got out, it was picked up and ran with by Italian Inventor Guglielmo Marconi. In 1904, The U.S. Patent Office reversed its decision on Tesla’s patents, awarding them to no other than Marconi. Could they be influenced by Marconi’s financial backers? These backers were no other than Thomas Edison and Andrew Carnegie, clearly, they held a grudge.
This decision allowed the U.S Government, amongst others, to avoid paying royalties to Tesla for use of the technology. Tesla’s financial naivety once again cost him, figuratively and literally, when Italian Guglielmo Marconi completed his first trans-Atlantic radio transmission. This message was a piece of Morse code sent from England to Newfoundland effectively using Tesla’s innovations.
This battle between Marconi and Tesla waged for decades before the U.S Supreme Court ultimately revoked some of Marconi’s patents in 1943. This, at least, restored Tesla’s place as the father of radio in a legal sense.
Tesla and Remote Control
Tesla’s US patent No. 613809 was for his first remote controlled boat we mentioned earlier. This was naturally an extrapolation of his work on radio technology.
His design used several large batteries, radio signal controlled switches and of course more traditional boat bits. The switches energized the boat’s propeller, rudder and even some scaled down running lights. Although not used regularly for some time we can now appreciate the power of this technology. Whether it be for recreation or indeed, less happily, war. Radio controlled tanks were actually used by the Germans During WW2.
Clearly, current uses for this technology, especially for drones, would probably horrify Tesla if he was alive to see it.
Tesla’s Electric Motor
It’s not simply a nod to the genius Tesla that a certain car brand carries his name. Granted, the current designs and technical specifications of the modern vehicles are far beyond the scope of Tesla’s invention.
Suffice it to say, that Tesla’s invention of motors that utilize rotating magnetic fields was a great innovation at the time. This has had major ramifications for humankind ever since and could possibly have freed our dependence on oil many decades ago.
Tesla’s original concept was overshadowed in the 1930’s with the great depression and devasting war that soon followed.
His invention had been fundamental for many devices we now take for granted. Industrial fans, household appliances, water pumps, machine tools, power tools, disk drives, watches, compressors and much more. Pretty nifty.
Nikola Tesla and Robotics
Tesla once stated:- “I have by every thought and act of mine, demonstrated, and does so daily, to my absolute satisfaction that I am an automaton endowed with power of movement, which merely responds to external stimuli.”
Tesla’s great mind and enhanced scientific insight led him, perhaps inevitably, to think that all living things were merely driven by external impulses. The concept of a robot was born. Tesla had a vision of a future with intelligent cars, robotic companions, sensors and autonomous systems.
Tesla asserted that human replicas should also have limitations such as growth and propagation. Nikola, however, unabashedly embraced all things that intelligence could produce. His vision is nicely discussed in this entry in the Serbian Journal of Electrical Engineering.
Laser vision of Nikola Tesla
Even lasers can trace their ancestry to the great Tesla. Lasers have completely revolutionized the world around us, transforming medical surgery in an undeniably beneficial way.
This technology has also given rise to much of our current digital media. Lasers are also a great example of how man has leaped from science fiction to reality.
Future uses could include ambitious projects such as Ronald Reagan’s “Star Wars” laser defense systems to future laser rifles and other directed energy weapons, “Death rays” so called.
Ionizing radiation and electromagnetics were heavily researched in the late 1800’s. Nikola Tesla was no exception and played a central role in developing this field. From the precursor to Kirlian photography, purported to be able to record life force, to devices we use in modern medical devices, X-Rays have been a transformative invention for which Tesla played an important role.
Tesla’s work on X-Rays was driven by his observation of mysterious damage to photographic plates in his laboratory. At this time they had no official name, it was only 1894 after all.
Tesla experimented with Crookes Tubes but also built his own vacuum tubes to assist in his studies. Tesla’s apparatus was a special unipolar X-Ray bulb. It consisted of a single electrode that emitted electrons.
The tube had no target electrode and, therefore, the electrons were accelerated by peaks of the electrical field which was produced by a high voltage Tesla Coil.
Tesla, even then, realized that the source of the X-Rays was the site of first impact of the “cathodic stream” within the bulb. He suspected this was either the anode in the bipolar tube or the glass wall in the tube itself. Today we call this form or radiation Bremsstrahlung or braking radiation.
The first X-Ray image
At around this time, Tesla appears to have produced the first X-Ray image in the US, when he attempted to obtain an image of Mark Twain using his tube. Tesla was surprised that the resulting image didn’t show Twain at all but the screw for the camera’s adjusting screw. Tesla later managed to obtain images of the human body that he termed shadowgraphs.
Tesla’s work on X-Rays stemmed from his belief that everything we need to understand in the universe is virtually all around us, at all times. Good old Tesla reminds us today that all we need to do is use our minds to develop real-world methods to find and, in some circumstances, exploit it.
Some great Nikola Tesla quotes
Not just a man of science and innovation, Tesla appeared to have a flair for philosophy and sound bites. Here are just a few of his many memorable words. Food for thought for all of us, I think you’ll agree.
“The scientific man does not aim at an immediate result. He does not expect that his advanced ideas will be readily taken up. His work is like that of the planter — for the future. His duty is to lay the foundation for those who are to come, and point the way. He lives and labors and hopes.”
— “Radio Power Will Revolutionize the World” in Modern Mechanics and Inventions (July 1934)
“Money does not represent such a value as men have placed upon it. All my money has been invested into experiments with which I have made new discoveries enabling mankind to have a little easier life.”
— “A Visit to Nikola Tesla” by Dragislav L. Petković in Politika (April 1927)
“The scientists of today think deeply instead of clearly. One must be sane to think clearly, but one can think deeply and be quite insane.”
— “Radio Power Will Revolutionize the World” in Modern Mechanics and Inventions (July 1934)
Visitors to MIT’s Barker Engineering Library are greeted by a bust of Tesla who is known to dress up on occasion. Happy birthday, #NikolaTesla!
— Massachusetts Institute of Technology (MIT) (@MIT) July 10, 2020
Nikola Tesla – Death and Legacy
Tesla, sadly, suffered a nervous breakdown but eventually returned to work as a consultant engineer. Growing increasingly eccentric, Tesla began to withdraw from society and spent a lot of his time caring for wild pigeons in New York’s parks.
8 Curious Facts You Didn’t Know About Nikola Tesla
Later, Tesla’s ideas became increasingly outlandish and impractical. Rumors of Tesla’s “Death Beam” drew the attention of the FBI but also the interest of the Soviet Union.
After living in New York for 60 years, Tesla died at the ripe old age of 86 on the 7th January 1943, penniless. A sad, sad end to a great and prolific scientist, inventor and part-time wordsmith.
Tesla’s legacy is one that is self-evident and he may be one of the most underrated inventors and engineers of our time. Perhaps it’s time to officially recognize “Nikola Tesla Day”?
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