Optimistic Vaccine Roadmap

While things look terribly dark in the short term for the US COVID-19 outlook (pro tip: wear a mask, it works), it seems like there is hope soon to come. This is my forecast for what I expect to happen, and how I feel like we’re closer to the end that the beginning. I’m not a medical export or logistics expert but I’ll still give it my best shot.

Still though, wear a fucking mask. I’ve been to Target and Costco lately and there are a few assholes who wear them to get in the door and then put them away or under their chin once they’re far enough into the store and away from the front doors/cashiers.


In December, we should have FDA Emergency Use Approval (EUA) for the first vaccine (Pfizer), which means that the government/military, and front-line health care workers will start to receive the vaccine. By the end of January I’d expect most if not all front-line health care workers to have received the second dose shot, along with other Tier 1 people (government officials, all health care workers who work in hospitals or communal living situations). The interval between shots for this vaccine is 3 weeks, not 4, and the conferred immunity is “effective” 4 weeks from the first dose if everything is on schedule.

We may also have the second EUA from Moderna. Depends on whether the federal government stays open through all of December (there is currently a December 11 deadline to pass a budget resolution). There is significant de-mobilization and re-mobilzation effort within the federal government if a budget isn’t adopted in a timely manner (not December 12 at 1AM). This could impact EUA review at the FDA.

However, this is the darkest month for COVID in America, I expect we’ll likely hit at least 3,000 dead from COVID per day sometime in December (if not more, 5.000 is not unreasonable if people’s behaviors don’t change) and a lot of families will have a terribly sad holiday, missing the 300,000+ friends and family members who died from COVID since the beginning of 2020.

Cumulative population started vaccination: less than 5 million (<2%)

Cumulative population completed vaccination: ~50,000 (those who enrolled in phase 1/2/3 studies in the US in the vaccine arm, and those in the placebo arm who opted into getting the real vaccine at the end of the trial)


Second vaccine (Moderna) gets EAU after reporting out final results in late November, if they didn’t get it in December. By the end of January, most states will have their top tier of those prioritized for getting the vaccine to have their first dose (about 5% of the population, about 30M doses) with the health care workers having received their second doses.

And President Biden is inaugurated.

Cumulative population started vaccination: 30 million (10%)

Cumulative population completed vaccination: 7 million (2%)

February and March

Most states have their top tier groups fully vaccinated, and are working through their second tier (the next 15%, cumulative 20%) which includes teachers, medical staff outside of the first tier, people who work in supermarkets, meat packing plants, and other high-risk areas (Amazon warehouses, not gonna lie). This will require another 100M doses on top of the 30M doses from the end of 2020, which should be achievable by the end of March, especially if we have at least two vaccines going at this point, and probably more.

In February in March, Johnson & Johnson should receive their 1-dose vaccine emergency approval (assuming its effective) and will likely be able to start to vaccinate, and it might be a bit slower to rollout if they need to target various sub-groups if the data on the mRNA vaccines show that they are less effective on certain groups while this vaccine is more effective in those same groups (older, younger, etc.). J&J estimates they may have 100M doses ready by the end of March (worldwide) so I’d expect 30M or so doses for the US.

Also, the Oxford/AstraZeneca vaccine should receive EUA during this time as well as Novavax (again, assuming they are both effective). Each one of those could contribute tens of millions of doses by the end of March, however it will still be early in their logistical ramp.

Cumulative population started vaccination: 100 million (30%)

Cumulative population completed vaccination: 80 million (25%)

April through June

Where the rubber hits the road.

With at least three successful vaccines at this point, and possibly up to five, there is where the logistics and how we go about getting people vaccinated matters to ensure we don’t waste doses to get the bulk of the 80% of the unvaccinated portion of the country through the regimen. In the logistic curve, this is the steep middle part.

I expect once we get further down into the lower tiers, there will be some lottery system (based on birth date?) that will determine when you (or your household) gets vaccinated.

While not everyone will be able to get vaccinated (children under 12 and pregnant/breastfeeding women, for example) I would expect that most of the rest will be vaccinated during this period. By the end of June 2021, I’d expect somewhere in the neighborhood of 60% of the population of the country would be vaccinated. Combined with a weighted vaccine effectiveness somewhere around 85%, that puts us at an effective population immunity at 51%. Not great, so we’ll have to probably wear masks for the remainder of 2021 when we go out in public until the new cases per day is less than 50 per state. Ideally we’d want to have effective population immunity above 70% which reduces the “R number” of COVID-19 to less than 1 which means that each infected person, on average, infects less than 1 person, over time, reducing the infection rate down to close to zero. The higher the number (and the longer we keep wearing masks) the faster the number goes to zero.

Cumulative population started vaccination: 250 million (77%)

Cumulative population completed vaccination: 200 million (63%)

July Onward

Mass-vaccinations may drag on into July and maybe August based on logistical issues, but it won’t be much longer. From then on, it’ll be more about maintaining the current levels of population-level immunity, and trying to reach out to those refusing or just otherwise missed their opportunity be vaccinated. This means immunizing adults when they are eligible for the vaccine (done with pregnancy or breastfeeding) and kids as they turn 12. Children under 12 make up around 15% of the population, so until the vaccine can be proven safe for children, they’ll remain unvaccinated.

However, don’t expect things to be “normal” again for a while. Countries still may not allow foreign nationals to enter until a country has certified that most of its population is vaccinated and there is little to no community spread within the country.

Travel within the US will likely return to normal by late 2021. Expect crowded airports and very expensive flights for Thanksgiving and Christmas 2021 – a lot of older airplanes and older pilots are retiring during the pandemic which means that when travel tries to bounce back, it will run into capacity shortages of both planes and pilots. Travel by car will still be popular, but not by choice.

The Cold Chain

There is a lot of concern about the “cold chain”, that the first vaccines (mRNA-based) will need to be kept at very low temperatures (negative 70-80 degrees Celsius). While this does present some logistical issues, I don’t believe they’re out of hand or will pose major problems. At the cheapest level, dry ice and a very well insulated container can keep it cold (dry ice sublimates at -78.5C). Moderna said their mRNA vaccine doesn’t need to be kept as cold, standard medical freezers would work for 6 months. And Pfizer said they were are currently conducting studies at higher temperatures and will have more in December. But vaccines shouldn’t be stored for more than 6 months – shots belong in arms, not cold storage.

It really comes down to whether you have a can-do attitude or a can’t-do attitude about this whole project.

Communication and Managing Expectations

The final thing that experts and politicians need to start doing as we turn the corner and prepare for large-scale vaccinations is to set public expectations.

Encouraging Vaccination: sadly, this is first on the list. Do whatever you can to ensure individuals to get vaccinated. I worry about a lot of anti-vax pushback (a recent poll showed 12% of people were considering delaying or rejecting a COVID vaccine). Estimating that 15% of the population that can’t be vaccinated initially due to age or other issues, that is a total of 27%, which is pretty high even for a 90% effective vaccine if we want to force the virus out of circulation. The encouragement also needs to be bipartisan. We can’t make it through this if one party rejects the vaccine for political gain.

Masks: you will still need to wear your mask in public for a while after you are vaccinated, even beyond the 7-14 day window from your last dose. One of the underlying unknowns of these studies is that while we know the vaccines prevent symptomatic infections, we don’t know if they prevent asymptomatic infections, and if those individuals who have asymptomatic infections after being vaccinated shed enough virus to infect others. You will probably need to wear a mask until the number of new cases per day in you state drops below a certain threshold (~50 cases a day over a 7 day moving average, more or less depending on state population). The worst-case scenario is that vaccinated individuals have asymptomatic infections and then infect the unvaccinated population (who may or may not have a choice to be vaccinated).

Return to Normal: It will still take a while for the economy to return to normal. Specialized and targeted stimulus might help speed up the process (e.g. lets help all those families who used to run restaurants and went out of business start new ones). We shut everything down in a matter of weeks, but don’t expect things like packed stadiums and concert halls right away. By the end of 2021 and early 2022 I expect the economy to be close to where it was in fall 2019. However, areas that rely on international tourism or business meetings may continue to see economic impact since it will take much longer to open up international borders (CES 2022 will be smaller, but I expect CES 2023 will be back to close to normal).

Source for vaccine amount estimates:

NY Times – The Vaccines Will Probably Work, Making Them is the Hard Part

Good-bye $35,000 Model 3, which we never knew

So Tesla has revamped their product lineup again. Just two months ago I was happy to greet the $35,000 model (and have since purchased the mid-range Model 3, which was then discontinued within 48 hours after my order).

I predicted that the “plus” edition of the standard range model would be the better option, and that model proved to be more popular – 6x more popular than the cloth-seats edition of the model 3 according to Tesla. So much so that they killed the base $35,000 model this week and promised existing buyers that they would get a software locked version of the model 3 SR+.

I also predicted the base model would go away and that was correct too. I just thought it would be 12 months, not 2. You’d think this would teach Elon not to pre-announce prices but he did it again for the Model Y in March so I’m not sure he learned this lesson in time.

Logistically, the original base model would have been hell to deal with. All the additional different parts – cloth seats, manual steering wheel, manual seats, etc. – would have been a supply chain pain in the ass considering the low volumes of SR purchases. It was cheaper for the company to just offer the same SR+ car and software lock it because of the reduction of unique parts for Tesla to stock and manage inventory at their factory as well as service centers around the world.

Beyond that margins would probably have been eaten up by those different low volume parts. By keeping the same interior and just decontenting the car they can keep their margins up.

The other change, including the base autopilot (which is traffic aware cruise and auto-steer), is probably a good idea and the take rate was probably near 100%. The value proposition for buying a Tesla is not nearly as good if the car doesn’t drive itself.

But it’s remarkable to me how much the product lineup has changed in the last two months. I wouldn’t call it “flailing” but having to try a lot of things to see what sticks. If I were to buy today, I don’t think I’d be as happy with my options than I was a month ago when I ordered my blue mid-range 3.

Today I have the choice of either getting a SR+ which is decontented below what I want in a car, or I can get the long range AWD which is too expensive for my budget. I can call for the LR RWD or go into a store but that means the option won’t be around for much longer (and the price isn’t listed on the website).

I understand and agree with dropping the 35,000 base model. The new cheapest model 3 is just under $40,000, but you do get autopilot included. Dropping the LR RWD model isn’t something that I think is good for Tesla. The price jumps from 40,000 to 50,000. A 45,000 option for the RWD model would be perfect in between and the margin should be adequate to keep up the overall profits.

All about that base (model): Tesla’s $35,000 car is here

Today, Tesla announced some very interesting moves. Some are incredibly risky, others have been expected but weren’t expected today.

First, Tesla has announced that the Model 3 Standard Range is now available for sale. For the promised-two-years-ago price of $35,000. The base model is a base model – cloth seats, no power seats, manual steering wheel adjustments, etc. The range is 220 miles per charge, which is fine for a commuter car or to run around town, but maybe not the best road trip machine (even if Tesla’s supercharger network is fairly robust around the US). The most interesting part is that the base trim has a cousin – the “plus” edition that has parts of the premium interior and a slightly longer range – 240 miles – for only an extra $2,000 (which I think is underpriced, I would have made it 3k, add another $1,000 to the mid-range too). I think in hindsight, this is what Tesla would have made the base trim if he didn’t put his foot in his mouth two years ago about the base trim being priced at $35,000. I would expect in a few years the standard range model at $35,000 will go away, and the “plus” model will become the new bottom of the line.

Ultimately, I’d say that for most people the “plus” trim is the Model 3 to get for those who want to get the “cheap” Model 3. You get a little bit better range (an extra 20 miles) but also much nicer interior – power heated front seats, vegan leather seats, better sound, and smartphone docking. For only $2,000 that seems like a steal (again, I think it should be more). If you’re going to spend this much on a car, make it a good experience.

ModelBase PriceDifferentiating Features
Standard Range$35,000N/A
Standard “Plus”$37,000vegan leather seats, better audio, power heated front seats
Mid-Range$40,000264 miles of range, full premium interior (heaters for all seats, satellite view on maps, in-car internet and streaming media, etc.)
Long Range (RWD)$43,000
Full premium interior, 325 miles of range
Long Range (AWD)$47,000AWD, 310 miles of range, full premium interior
Performance$58,0000-60 in 3.2 seconds. ’nuff said.
Option Price
Paint colors: gray, blue$1,500
Paint color: white$2,000
Paint color: red$2,500
Autopilot (traffic-aware cruise, auto-steer$3,000
Full Self-driving (pending regulator approval)$5,000
White interior (full premium interiors only)$1,000

Second, they revamped the autopilot and full self-driving (FSD) option feature sets. What used to be called “Enhanced Autopilot” is now split across AP and FSD. And while EAP used to cost $5,000. AP+FSD now costs $8,000. Of course, the prices of the car as a whole didn’t change, which tells me its not about getting more money out of the consumer, rather its about figuring out what the right options mix, understanding your fixed and variable costs, and getting the ASP of the cars just right so they can meet their profit goals.

Next, and by far the most risky thing Tesla has ever done since the falcon wing doors is the shuttering of their retail stores. Tesla will become a pure online sales company, while they continue to expand their service network. Most stores and galleries will close. This is a radical turning point in the company’s history (whether it’s a good one or not, only time will tell). Tesla is now relying on buyer’s risk appetites (you can return the car within 7 days or 1,000 miles) and other owners selling people on the car, rather than on the ability for someone to go down and see them in person and take a test drive.

The stores closing give me mixed feelings. I recently brought my wife to the local Tesla store, and had her test drive a Model 3 (ostensibly to gain her approval, but also to test the fit of our kid’s car seat in the back). Being able to go see the cars in person and sit in them is a great asset to the company (the gallery approach), but I have to say I was disappointed with the sales rep and the test drive experience – the test drive was literally over within 7 minutes and the total route was less than 2 miles. I think we sat in the car explaining all the do-dads prior to the test drive longer than the actual drive.

I think the galleries would be a much better approach than dealership-style experiences. And Tesla knows that unless you get a lemon, you’re not going to go through the hassle of buying a car and then return it within 7 days (especially not a sexy Tesla). But ultimately people want to at least sit in the car before they buy one. It is very risky. I’d almost be tempted to tell Tesla to bring back a much much much more modest version of their referral program with the store closings to get owners out there and use the network effect to sell the car to new customers.

Finally, Tesla made a few other changes to their lineup – bringing back the Model 3 LR RWD, discontinuing the Model X “Standard Range”, and un-derating the Model 3 LR RWD range back up to 325 miles (it was always that, but Tesla voluntarily de-rated the range).

Things that are actually risk factors for Tesla

With all the crazy reasons the shorts have to short the stock and talk negatively about Tesla, let’s look at the actual risk factors that face Tesla over the next 12 months

1. Lack of demand. This would probably manifest itself and some form of economic recession. The good news for Tesla is that the wealthy tend to prosper no matter what, and that is their target market. 

The other possibility is if Tesla can’t get to the point where they can offer the $35,000 standard range model. A good chunk of the pent up demand will evaporate if those reservation holders can’t buy the $35,000 car. Given Tesla’s work in Q3 2018 to reduce the cost of the car, it is likely they’ll be able to continue that work 10-15% cost reductions per quarter) to allow them to offer the base price car. This has already manifested itself through the Medium Range vehicle now offered because of work done to reduce costs. 

The other ways that a lack of demand could be a problem don’t seem likely – specifically other car manufacturers figuring out how to build compelling electric cars in large enough volumes to meet demand, and choosing to sell them nationwide. Companies like GM and VW promise they’ll introduce a ton of EVs and plug-in cars, but will probably only sell them in CA and OR and anywhere else required by law. And the US is last to get the cars because Europe and China currently have stronger requirements for EV sales. Global manufacturers will design, build, and ship cars for those markets first and the US is an afterthought. 

2. Product mix. This quarter will be the highest average selling price the model 3 will ever have. Because they aren’t selling the cheaper models. The only models sold are the $75,000 performance, $55,000 LR AWD, and $50,000 LR RWD. The average sale price was north of $55,000, which won’t be the case probably ever again (I think it’ll eventually settle around $47,000 – lots of base models with modest option mix and many AWD/LR models and few performance units). 

This means that the free cash flow and the profit Tesla earned this quarter might be only about 15% less than what they will ultimately earn at a full run rate of 7,000+ Model 3 units a week at an average sales price of $47,000 and 25%+ gross margin. So expect somewhat flat free cash flow and profits for the next 6 quarters (which is fine if they bank it and pay off their debt and their stock price rises to above $360 so most of their outstanding convertible debt becomes shares rather than debt). 

3. Paying for future expansion while paying off debt. Specifically the factory for the Model Y vehicle – how much does it cost and where does it get built? Fremont/NUMMI is full and can’t accommodate another model line (if it could there wouldn’t be a tent), so it has to be assembled somewhere else. If the factory costs $3B most of that capex will come in the second half of 2019 and first half of 2020. While Elon wants it to be an alien dreadnought it is more reasonable to expect that there will be incremental improvements – things that have already been discussed are wiring harnesses and wiring bundles that are easy to manipulate by robots so allow more mechanization of the product line. 

4. Federal investigation. Apparently there may be a federal investigation of Tesla going on. Not quite sure what they’re investigating (the SEC has settled the civil charges over the “finding secured” debacle) so we’ll see but unless there is outright fraud going on I don’t think we’ll see charges. If no banking executives were charged criminally after the 2008 crash I find it hard to think that Elon or anyone else will he charged for being too optimistic on their projected growth or anticipated production rates. 

Oddly Specific SMS Spam/Phishing Attempt

So this isn’t good – got a spam SMS at one in the morning. It’s a bad sign when the SMS is specific enough that it uses your name, your wife’s name and its sent to your phone number only. The action to take was a link hidden behind bit.ly URL shortening. It said “there is a new request from {wife’s name} 5 mins ago trying to connect right now” from a number 706-752-xxxx.

I’m trying to think who would have all those pieces of information (my name, my phone number, wife’s full name) and how they could be compromised. Was it a company like Amazon or some other online retailer? Could it be my employer or health care provider? Financial?

In some ways its kind of scary to think how many people have access to this information. I know better than to click on these kind of links, but it is incredibly annoying to sit and wait for the other shoe to drop (the company involved announcing they’ve been hacked) and then work on remediating whatever needs to be addressed. In the meantime, maybe I need to change my passwords again for my email and online shopping websites.

Leaving AT&T – for either Verizon or T-Mobile

So I’ve decided that after 17 years, I’ve had it with AT&T and their now slower-than-Sprint LTE speeds in Las Vegas. So when the iPhone 6s comes out this fall, I’m jumping ship. So who should I switch to? Verizon is the gold standard for cellular networks, but it also has the golden price tag. But, with T-Mobile’s fastest data speeds and John Legere’s promises that they’ll have coverage nearly equal to Verizon by the end of 2015, they’ve become a contender. Like all things, it comes down to money. AT&T has decided that they’re going to increase their dividend by 4c/year per share, while cutting CapEx (how much they spend on capital expenditures, from new towers and equipment to spectrum acquisitions).

On top of the price for service and a single line for T-Mobile (or adding a second line to my fiancee’s Verizon plan), there is also the cost of upgrading to a new phone every year. Previously with AT&T, I was able to use other family member’s upgrades. But that wont be happening in either case.

Figuring out which plan is cheapest for me is way more difficult than it should be. I’ve got at least four scenarios: with Verizon, either traditional subsidy with paying to upgrade the phone every 12 months (paying for a device in full every other year), their Edge program which now requires 75% of the device to be paid off before I can trade it in for a new one; T-Mobile Jump/installment plan or purchasing the device outright. Purchasing the device outright on Verizon is a horrible deal – they still charge you the full $40/mo (which includes a roughly $15-25/mo subsidy that you aren’t using) even though you bought your phone.


Going with T-Mobile’s Jump plan, its $27.08/mo for the device and $10 for the mandatory Jump insurance ($175 deductible). Already we’re up to $37.08/mo. You also have to pay $99 upfront for the 64GB device, as well as the sales tax on the full amount ($60), so we’re up to $160 in up-front costs and $37.08 per month. With the $60mo data plan, the total annual cost is $1,324.96. With the Jump plan I get to trade my phone in for a new one (plus $160) every 12 months.

Buying the device outright, the base price of the 64GB iPhone is $750 plus tax, about $810 in my area. I upgrade my phone every year, so that’s 12 months of usage and depreciation. If I can sell my year-old phone for about $400 ((right now, Gazelle is low-balling me at $345, so I figure 10 more months of use plus factoring in their low-ball price is around $350-400)), that leaves me on the hook for at least $410. To make things more equal between the Jump plan and this option, lets add in AppleCare+ on the purchased iPhone, $99 to cover the phone against accidental damage ($79 deductible). With the $60mo data plan, the total annual cost comes to $1,229, or $95.96 less than the Jump plan, plus a much lower deductible in case something were to go wrong.


Verizon’s subsidy plan means paying $323 up front for the 64GB device every other year (on subsidy) and $810 ($750 + tax) up front every other year (not upgrade eligible), but being able to sell the phone every year for around $400. Purchasing AppleCare+ would be an extra $99 per year. This works out to an average of $166.50 per year for the hardware. The monthly line access would be $40, and the marginal cost over my fiancee’s data plan is $30, so the total cost runs about $1,105.50 per year (higher in some years, lower in others).

Verizon’s Edge plan is a worse deal. While you don’t pay anything up front other than tax ($60), the monthly device payment is $38.40 (phone payment and insurance) and the monthly line access is $15/mo (on 10GB+ plans) and the marginal cost over my fiancee’s data plan is $30. The total cost so far is $1,060.80. But in order to upgrade, you have to trade in the phone and 75% of the device cost has to be paid to Verizon. After 12 months I’ll only have 50% paid off, so I have to cough up another $187.50 to trade in my phone and get the new one, bringing the total annual cost to $1,248.30, $142.80 more than the subsidized plan.


The benefits of going with Verizon here are obvious – being on a multi-line plan is cheaper than two individual line plans. The Edge program is a bad deal, but not by staggering margins. My fiancee might stay on the Edge program since her Android phones only make it about 18 months before becoming very slow and annoying, which fits the current Edge rules very well. As long as she can manage to not damage her phone too badly.

The biggest variable is the resale value of the iPhone after 12 months. If its only worth $300, then the Jump/Edge plans start to look much more attractive because the carrier is taking the resale hit, not the consumer. I think its OK as long as I stick with Apple devices since they seem to have higher resale values than Android devices.

Barring any substantial improvement from AT&T (not likely since they are cutting Capex), I’ll likely be leaving for Verizon when the iPhone 6s comes out. I’ll have to pay AT&T an ETF but I’m OK with that.

Brief thought…

In light of me turning 30 this week…

And while conventional wisdom may offer the dubious claim that your teenage years and early 20s are the “best of your life,” woe be onto to them who confuse one chapter of their life for the whole of it, for they will be doomed to repeat it in a series of cycles whose returns are ever-diminishing, and thus hold themselves back from telling any other story.

In the end, adulthood isn’t a single decision you make, but a long series of decisions you make every day for the rest of your life. And the best reason to grow up isn’t because it is expected or required, but because it means moving forwards. Because while it may also involve incredibly tedious things like mortgages and car payments, growing up is a natural function of seeking a life that is more dynamic than static, of choosing ambition and hope over avoidance and fear, of wanting to know who you’re going to be and not just who you were, even if that takes you away from the things you used to love.

Jumped ship to Google Apps 3 mo. ago, haven’t looked back…

For the longest time (as in, since around 2001) I’ve been hosting my own mail server and web server. I tried to make it a number of things – blog host, email server, place to access documents, data, etc. The only thing it still does today is host this blog.

I’ve embraced the cloud.

Three months ago I switched off my mailserver and moved it to Google Apps hosted service. I only use 4-5 email accounts, and the service is free to those with less than 25 accounts (50 if you’re a non-profit agency). I also moved the email system for this blog, as well as the email system for a non-profit group I volunteer for over to Google Apps as well.

Things have been just about perfect.

Not only do I get all the email hosting services, I get the Gmail web interface, I get syncing to my phone via Microsoft Exchange protocol (better than IMAP or POP3), HTTPS and all the robustness of Google’s incredibly high uptime.

Beyond just email, I also get Calendaring (also through MS Exchange protocol), Google Docs, and soon I’ll be able to roll up all the other Google services I use (Google Reader, etc) into the same account so I don’t have to try and have 3-4 different Google accounts logged in at once – yes you can do it but its prone to errors.

The app with the biggest impact so far is Docs. From any computer anywhere in the world (almost) I can access my library of documents over HTTPS (so my IT department cant see what I write) and just create a word processing document and write down all my ideas, or create a spreadsheet to do some calculations for something for me to refer to later. All the functionality I need is there to write simple documents (nee screeds) and spreadsheets – page/cell formatting, printing to PDF, etc.

Looking back, I have a hard time thinking about how I did this before. If I had an idea while I was at work, I’d have to write it down on my iPhone’s notes app, and then hope I remembered later to open the notes app back and and look at it. Now I can just create a document, write it down, and then when I get home and open up my web browser, the document is there, staring me in the face.

And the best part is that its free. Thanks Google!

Will you ever want to buy an electric car?

Note this is not an attack on electric cars – I think cars like the Chevy Volt and Nissan Leaf are the future. We cant live on oil forever, especially not with China and India adding two billion people to the working class over the next 75 years.

But my question is more a question about innovation. If Li-Ion batteries improve 8-10% per year, do you want to invest anywhere between $8,000 and $15,000 for a battery in the first few years of this decade? Even after prices level out, will a 40% increase in range (or a similar decrease in cost) be enough to keep you from buying the battery outright? What about the residual value of the battery after 8-10 years of (ab)use in a vehicle.

The first premise is that batteries improve 8% per year. This appears to be close to constant (until major step-changes like changing chemistry from NiMH to Li-Ion), and has been noted by Elon Musk of Tesla Motors.

The next premise is that if batteries are constantly being improved, and will continue to improve until at least 2030 (around the time we hit the theoretical limits for Li-Ion), that constant innovation will push prices on older batteries down, in the same way when Intel produces their fastest chip and put it in the top of their price list, everything else gets knocked down a pricing level. Beyond that, as production ramps up, per unit costs will come down. This is a double whammy on battery prices – as such A123 representatives have speculated on end-of-2012 pricing of $400/kWh from about $750 in mid 2010 (a kWh will propel a Prius-like car approximately 4 miles, and a large Ford Explorer-like vehicle about 2.75 miles.

The argument to buy says its bad to lease anything because you don’t end up owning anything. At the end of the five year financing, you own the car and battery. But over time and with each recharge, batteries lose capacity, and that could be exacerbated depending on the climate you’re in, how you treated it (faster recharge = more degradation), if it is liquid or air cooled, etc. The return-on-investment calculations vary depending on your driving patterns, so you need to make sure that an electric car is right for you. If you lose your job or change jobs and your driving patterns change significantly, you might find yourself not having a positive return-on-investment compared to buying a traditional gasoline or regular hybrid car (you might end up not driving enough or driving too much per day).

The leasing argument is much more interesting (and complicated). The reason to lease is that the battery has a fairly fixed lifespan – 1,500 cycles or whatever the cell manufacturer promises. However, even after the batteries might no longer be suitable for driving (this would adversely affect the resale value of the car), they can still be used in applications like power grid storage and stabilization. This residual value of that battery could be 50-75% the price of a new battery. Returning the car after the lease and letting the dealer replace the battery, send it back to be remanufactured into something useful, and then installing a new (lighter, more powerful) battery and updating the car’s system for that battery is an easier course for the consumer instead of having to do that and pay for it before trying to sell it, or take a hit on trade-in value.

Leasing can also bring down the per-month costs – instead of paying for the entire car, and then getting a substantial bump in the trade-in value for the battery, the user (for the most part) only pays for the depreciation of the car during its use. As seen in both the Chevy Volt and the Nissan Leaf, the price for the lease (estimated $350/mo) is much less than what you would expect on cars costing between $27,000-33,000 after tax incentives.

Another non-conventional argument for leasing is the increasing rate of technology invading vehicles. From in-car entertainment, in-car communication (think: replying to text messages verbally), to safety features. While I don’t have a problem buying a new $300 iPhone every year, I certainly will not buy a new car with such frequency because its in-car entertainment is better than the car I currently have (software upgrades aren’t likely to help much in terms of adding new features – my 2009 Ford Escape hasn’t had any new features added to its in-car computer systems since I bought it). By 2015, most cars should have anti-collision systems to stop the car before it rear-ends the car in front of it (its already on some high-end cars today). By 2025 cars will be able to drive themselves down the highway and navigate to the exit, and even around some roads. It wont be fully autonomous but it will take care of 90% of your driving.

One of the ideas being tossed around is a hybrid – buying the car (shell, interior, electric motors, transmission, etc) and leasing the battery, often in conjunction with battery quick-swapping systems instead of dealing with lengthly recharge times – while battery technology might increase 8% a year, there is no way to increase recharging times for a given level of safety and source electrical systems: recharging a battery after 3-4 hours or 250 miles of all-electric highway driving will take 11 hours at 240V/30A (the most you’ll be able to get at home), and 5.5 hours at 240V/70A (the most you’ll be able to get in a commercial environment – e.g. an office building or parking lot). Even a 480V DC 50kW fast-charge circuit will still take 90 minutes. The only way to rapidly recharge the batteries is to have parallel 50kW fast charging systems hooked to one car, however fast-charging batteries can advance their degradation rate.

Its an interesting decision – there are clear pros to each choice, whether to buy, lease, or just buy the shell only and lease the battery. I would recommend that folks lease a first generation electric vehicle if they want to drive one, simply because of how much knowledge car companies and battery makers are going to learn the first few years about automotive batteries, and you don’t want to be stuck with an outmoded design or fatal flaw. By 2015 the prices of batteries will come down enough making the purchase of a second or third generation electric car reasonable if you carefully compare it to your driving habits compared to the vehicle’s EV characteristics.

Quick Thoughts on the new MacBook Air

Got the new 13″ MacBook Air today (which is impressive considering that I ordered it less than 24 hours ago and overnight shipping only cost $16). Loaded out with a 2.13GHz CPU, 4GB of RAM (not upgradable so I’m stuck with 4GB for the next 4-5 years of use), and a 256GB SSD.

Its an engineering marvel. The first MacBook Air was a revolution in that they finally had the idea to minimize the circuit board inside that houses the CPU, memory, etc. and then try and fit it in such a thin design. Though the UFO/Flying Saucer design was novel, it wasn’t until after Apple had more experience assembling things in tiny form factors (see iPad and iPhone 4circuit boards and how small they are compared to the rest of the interval volume being occupied by batteries).

Now that Apple had figured out how to cram everything you needed for a real laptop on a tiny circuit board, it was time to revise the housing and design of the MacBook Air. This was the result. And it was good.

The more (but not completely) square design allows for ports on both sides of the unit. Eliminating the door that was needed by the flying saucer bottom of the laptop. This adds a second USB port, display port out, and SD card reader on the 13″ version. I don’t have a need for the SD card slot, but I’m sure if I was more artsy or hip I’d have a 13MP DSLR and take moody photos and need to unload my SD card somewhat frequently into iPhoto.

When Apple says its the future of laptops they’re right. Intel’s next CPU has a graphics processor on the same piece of silicon. It wont be long before the large areas needed for two separate packages now can be combined into one package. With the advent of the Mac App Store, people will need less CDs and DVDs so optical drives start to disappear. Side note: I wouldn’t be surprised to find large vendors with lots of units (e.g. Microsoft, Adobe) looking to cut special deals with Apple ($99 copies of Microsoft Office Home Edition with Apple taking less than 30%, probably 20%), with the clear goal of going 100% digital, with the side effect of reducing piracy.

People don’t need anything much faster than a 2GHz Core 2 Duo for using the internet, especially if the video they are watching is decoded using the GPU (and less power than a CPU), which it is on the MacBook Air and other Mac laptops with the Nvidia 9400M and 320M chips. Sure if you’re running AutoCAD for the Mac, Photoshop, or Maya you’ll need more horsepower. But then I don’t think this is the laptop you want – you’ll fit better with the 15″ Macbook Pro.

Despite being a niche player in terms of market share, Apple never acts like a niche player. They target their hardware to the broadest possible audience in the segment they’re trying to address. Its why we don’t see Apple quad-core laptops, its why we don’t see more exotic high end video cards (I’m just glad we get decent video cards now – I still have my old Macbook with the GMA950 video, bleck!), its why there aren’t dual SSDs in RAID, etc.

The big push here seems to be the cloud. The problem is that Apple doesn’t have a lot of cloud services to offer – just MobileMe which isn’t that good – I feel like I get better service with my free Google Apps account – email, calendar, docs, etc, and I pay only $20/yr for my domain name for it.

There are only two downsides to this laptop.

First is an artifical restriction by Apple – to get the fastest CPU in the 11″ or 13″ class you have to pick the largest SSD. This isn’t much of a price increase on the 11″ model (64 to 128GB) but on the 13″ model, the jump to a 256GB SSD is a $300 price premium. My original desired model was the 13″ 2.13Ghz with a 128GB SSD. However Apple doesn’t make any in that configuration. So I had to fork over the $300 (ouch) to get that faster CPU. I’m tempted to find someone who has an 11″ model who wants to send me the $300 and their 128GB SSD and I’ll swap them the 256GB.

Higher resolution 13″ display. This might be a pro for most people (and I will list it below under the positive points), with my and my constantly deteriorating eye sight, I have to blow the font size on web pages up pretty high to read the screen on my old Macbook, and with the higher resolution screen I have to hit Command + one extra time.

While there were a number of upsides…

Stereo speakers. And I think Apple applied what they learned with the iPad to make the speakers on this sound decent. I think they’re doing a Bose-like setup (speaker -> small “acoustical chamber” -> output).

Higher resolution screen. As I mentioned above, its a negative for me but a positive for just about everyone else.

Solid state drive. During the keynote Steve said it was 2x as fast, but in reality its much faster than that for the types of disk operations your average application is going to be having compared to a 1.8″ or 2.5″ HDD.

Weight. The laptop is very light. You could carry one around in a backpack all day and not notice it.


For the sufficiently techie looking for an ultraportable (11″) or small (13″) laptop, isn’t averse to paying for a Mac and going without an optical drive (or leeching from a Mac or Windows PC with one), and isn’t looking for a laptop to do heavy lifting, the MacBook Air is the new standard.

I can see the future in the MBA line – in two years when Intel is at 22nm and can put a much faster dual core CPU (in terms of performance, it wont be much faster in terms of GHz) and a built-in sufficiently fast GPU and SATA 6Gb/s with an even faster SSD, we’ll wonder why people hung on to those heavy, chunky laptops for so long. With another 15% of battery life (Li-Ion batteries improve about 8% per year) we’ll see another hour or so of battery life too.