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1. Can Better Lead-Acid Batteries Compete in a Lithium-ion World?
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2. The Real Reason PG&E Wants to Own Solar Projects: Startups Are Risky
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3. The Weatherization Stimulus Funds: So Much Money, So Little Time
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4. Fisher Coachworks Raises Cash for Lightweight Hybrid Buses
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5. Daily Sprout
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6. SunPower's Strong Earnings Lift Stock, Despite Layoffs
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7. ZeaChem's Lab: From Termite-Gut Bugs to Biofuel
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8. Wanted: Tesla Model S Factory Site, Take Three
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9. Clean Energy Needs $515B Annually by 2030: Davos Investor Report
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10. Tesla: Model S to be Unveiled in March
Can Better Lead-Acid Batteries Compete in a Lithium-ion World?
Josie Garthwaite - Automotive
Pennsylvania-based Axion Power International, funded by Quercus Trust, thinks it does. The company’s lead-acid/carbon, or PbC, battery blends ultracapacitor technology with old-fashioned lead-acid batteries. The problem with ultracapacitors for electric vehicles has been low energy density; next to batteries, the amount of power ultracapacitors can store per kilogram doesn’t measure up. But they do excel in charge time and lifespan. Ultracapacitors can handle far more charge cycles than lithium-ion or lead-acid batteries, and they recharge quickly.
Perhaps more importantly, PbCs have enough in common with the old technology that they can be assembled with existing lead-acid battery infrastructure. Like the conversion companies that have sprouted up to turn hybrids into plug-ins with battery packs, Axion says it can retrofit conventional trucks and SUVs to have an all-electric range of 40 miles-plus for less than $10,000.
“Obama keeps talking about having a million hybrids on the road by 2012,” Granville noted, adding that even with federal incentives to jumpstart the transition, getting that number of new vehicles on the road would take decades. While PbC batteries may not offer the best long-term solution for electric cars, they do offer a way to clean up vehicle emissions without trading out the entire national fleet. Not surprisingly, Axion favors a three-year, 50 percent tax credit for retrofits, but Granville claims the company does not need aid to cover costs at this point, despite reporting a $2.2 million loss for the third quarter of 2008 (an improvement over the $3 million loss we noted in the first quarter). It landed a $1.2 million military grant in October to develop PbCs for cold-weather Marine and Navy operations, and it does contract manufacturing for lead-acid battery makers.
Moreover, Axion plans to ship out a new mobile energy storage system this year for grid buffering, starting with a delayed New York State Energy Research and Development Authority project in upstate New York, and for peak shaving, starting with a test project at a CUNY campus in New York City.
Next to lithium of course, PbCs are still heavy. But as Axion CTO Ed Buiel told the Economist recently, “Not everyone needs or can afford an electric car that accelerates like a Tesla.” In other words, an electric or plug-in vehicle priced for the mass-market (like those in the pipeline at Tesla, GM, Toyota and Daimler) can afford to carry a little extra weight.
A few years ago, Axion pitched its technology to members of FreedomCAR and Fuel Partnership. But the automakers wanted batteries at a maximum $87 per kilowatt-hour. Granville said Axion’s technology costs $240-$260 per kilowatt-hour, and so the deal went nowhere. Toyota, meanwhile, moved ahead with more expensive technology and took a hefty piece of the hybrid battery market as a result. (Lithium-ion and nickel-metal hydride batteries can cost upwards of $300 per kilowatt-hour.)
“Lithium is the element of the month,” Brian Jaskula, a mineral commodities specialist with the USGS told us in an interview earlier this month. “But something else may come along.” In fact, something else may have already arrived. The new generation of lead batteries don’t have to compete head-to-head with lithium-ion: To have an impact on the auto industry and energy grid, they need only show up, ready for work until other chemistries can take the charge.
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The Real Reason PG&E Wants to Own Solar Projects: Startups Are Risky
Katie Fehrenbacher - Energy
Last week the CEO of northern California utility PG&E, Peter Darbee, made one of the strongest pronouncements yet that it plans to invest in and own solar projects — rather than solely buy power from solar developers. By doing so PG&E can help usher along the solar power that will help it reach the state-mandated goal of 20 percent of its electricity generated by renewable energy by 2010, and the company generates billions in taxable income that could provide needed funding.
But here’s another reason: insurance. A lot of the solar projects from which PG&E has agreed to buy power from are being built by young startups, which by nature can be risky, unreliable, and prone to failure — particularly in these difficult economic times when capital is scarce. In recent weeks, three of the solar startups that PG&E has contracted with are showing signs of struggling, laying off staff, refocusing on different markets, and giving hintS of potential construction delays.
Take OptiSolar, which has been planning a 550MW-solar plant — dubbed Topaz Solar Farms — in San Luis Obispo County, Calif. and from which PG&E has contracted to buy power. The Hayward, Calif.-based company said earlier this month that it is laying off 300, or almost half, of its employees, and has delayed construction of a 1-million-square-foot, 600 MW annual capacity, Sacramento plant until at least the second half of this year.
OptiSolar insists that the layoffs and construction delay needn’t change the timeline of its solar power projects. And that very well may be true, as just today the California Public Utilities Commission (CPUC) approved the contract between PG&E and OptiSolar for Topaz Farms, which is supposed to go online by the end of 2011.
Solar startup Ausra, which has also contracted with PG&E, is also facing hurdles. While the startup is a poster child of the recent wave of cleantech firms — backed by Kleiner Perkins and lauded by Al Gore — the company said today that it has cut 10 percent of its staff, or 12 people, and is refocusing on using its technology for steam generation and smaller plants in the near term. Ausra spokesperson Katherine Potter tells us the layoffs had to do with spending capital widely, and those new goals require different skill sets than the development of massive solar plants, explained Potter.
Like OptiSolar, Ausra says that its project with PG&E, which is expected to start generating 177 MW of power in San Luis Obispo in 2010, remains on track and on time.
Other solar plants with contracts with PG&E are also facing potential delays. According to Reuters, solar startup BrightSource could be pushing back the construction date of its 900 MW solar plant in Calif, which was scheduled to go online and sell power to PG&E at the end of 2011, if the stimulus package doesn’t provide enough funds for solar power.
So that’s a sizable three companies, and over 1.5 GW of solar power contracted with PG&E, in the hands of startups that are being hammered by the downturn. That can’t be reassuring for the utility, which has been racing to meet that state mandated deadline. What’s the best way to minimize the risk of the young companies that you’re relying on? Own the plants themselves.
Hear Microsoft, IBM, Dell and Cisco execs at GigaOM’s Green:Net.
The Weatherization Stimulus Funds: So Much Money, So Little Time
Katie Fehrenbacher - Policy
For the thousands of contractors and state and local agencies that have received funds under the Department of Energy’s Weatherization Assistance Program in the past, President Obama’s stimulus bill, which calls for a massive $6.2 billion to weatherize low-income homes, was a little like winning the lottery. The DOE last year allocated just $227.2 million for the Weatherization Program, which was founded in 1976 and has so far helped around 6.2 million families’ homes become more energy efficient by upgrading insulation, heating and cooling systems, air filters and windows.
So the first reaction from the contractors and agencies, naturally, has been elation. As Geoff Chapin, CEO of eco-retrofit company Next Step Living, says, “We were heartened to hear that weatherization plays such a critical role in the stimulus package.” But like winning the lottery, that influx in funds — what the Obama administration calls “the largest weatherization program in history” — is so large that federal, state and local agencies are expected to find allocating them and conducting sufficient oversight around them a real challenge. The DOE and the state agencies will have about a month to allocate the funds and local agencies will have around 18 months to spend them. And industry insiders we’ve talked with (who don’t want to go on record criticizing the package) are very doubtful that the new funds will be dispersed in a smart and timely manner — state and local agencies, they say, just can’t ramp up fast enough.
The DOE, however, says it’s confident it can complete the task. Robert DeSoto, Weatherization Project Manager for the agency, said they’re “up to the challenge;” the funds, he said, will still be allocated in a similar manner as before, just with a couple of expected changes aimed at boosting the numbers of homes that would qualify, such as raising both the amount that can be spent per house (to $5,000 from $3,055) and the income level requirement of families. DeSoto said the real test will be getting the 900 local agencies to spend the funds on construction — which is always capital-intensive and slow-moving — within the allotted time frame. Chapin, as well, is concerned about how the agencies will spend the funds in a timely and effective manner.
While the path ahead is still unclear, the motivation behind President Obama’s decision to make weatherization one of the first aspects of his energy plan is not: It’s one of the most cost-effective ways to invest in energy efficiency. According to the DOE Weatherization Program, a $1 invested returns $1.65 in energy-related benefits, and at the same time leverages $1.54 in other resources from private funding, utilities, state funds, and other federal funds. A home that’s “weatherized” at a cost of several thousand dollars can save some $350 per year on energy bills, claims the Obama administration (that’s conservative, as the Weatherization program sites a number closer to $413).
For low-income families, such savings could be crucial. According to an Oak Ridge National Laboratory study, low-income families paid 17 percent of their annual income on energy, compared with the 4 percent spent by higher-income households.
Increasing home energy efficiency is also low-hanging fruit for the fight against climate change — the technology is widely available (insulation, more efficient building materials), unlike many forms of clean power generation that are still too expensive and still in the R&D phase. Residential homes accounted for 21 percent of all U.S. energy consumption in 2007, according to the Energy Information Administration.
So clearly a boost in the weatherization program is savvy, and ramping up the current funds to such a large extent, laudable. But perhaps more of the $6.2 billion should be put towards ensuring that the funds are being spent properly, or maybe the timeline should be relaxed to accommodate a slower ramp-up. At such a critical juncture in the fight against climate change, close attention needs to be paid as to where this money is going and how, exactly, it will be spent.
Hear Microsoft, IBM, Dell and Cisco execs at GigaOM’s Green:Net.
Fisher Coachworks Raises Cash for Lightweight Hybrid Buses
David Ehrlich - Automotive
It’s not just cars that are getting a cleantech makeover in Michigan; buses are getting a shot at cleaning up, too. Troy, Mich.-based Fisher Coachworks has raised $3.2 million for its new lightweight plug-in hybrid buses, according to a regulatory filing found by peHub.
Hybrid buses are becoming a common sight in bus fleets around the world, but Fisher is developing a bus using lightweight stainless steel that it says is half the weight and gets at least twice the fuel efficiency of current hybrid models. The investors in the company were not disclosed, and the regulatory filing says the cash is part of a larger round of funding, expected to pull in a total of $4.25 million for Fisher.
That cash could come in handy, as the company is planning to invest $7 million to set up a factory in Livonia, Mich., to produce the new buses, creating 539 new jobs.
The heart of the new bus design is Nitronic stainless steel from West Chester, Ohio-based AK Steel. Fisher said the steel is high-strength and corrosion-resistant; the company uses it for all of the major body components of the bus, as well as the suspension, fasteners and others.
The lightweight bus was developed over the last seven years by Autokinetics of Rochester Hills, Mich., with $2.5 million in funding from the Department of Energy’s Oak Ridge National Laboratory. Fisher licensed the design from Autokinetics for use in transit and delivery vehicles, and is working with Autokinetics, Oak Ridge and others on the bus.
Last September, Fisher said its first bus model, the GTB-40 — a 40-foot serial drive hybrid — passed an engineering milestone, successfully completing DOE load test requirements. The bus was filled with a simulated 30,000-pound live load, the equivalent of 200 passengers, which Fisher said was two-and-a-half times the expected maximum load for the bus.
More tests are on the way for braking, suspension durability, bumper protection, passenger safety, and overall maintainability at the Bus Research and Testing Center near Altoona, Penn., but Fisher said it expects to ramp-up its assembly operations this year.
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Daily Sprout
Josie Garthwaite - Misc
Ausra Scales Back Solar Plans: Solar startup Ausra has abandoned plans to build massive solar-thermal power plants in favor of smaller, cheaper units because of a lack of financing. — CNET’s Green Tech
More Money, More Problems?: Congress plans to put $10 billion or more in economic stimulus funding into a DOE loan guarantee program that hasn't backed any projects since it began in 2005. A DOE spokesperson said the program will move more quickly now that it has motivated administrators. — Bloomberg
Obama’s No Jimmy Carter: The new president keeps the Oval Office toasty enough to wear shirtsleeves, opting not to demonstrate energy conservation on the job. — NYT’s Green Inc.
High-Speed Rail Hops on the Fast Track: After languishing for years at the margins of federal policy, passenger rail projects are picking up speed as President Barack Obama joins states in calling for investment in rail infrastructure. — Wired’s Autopia
CIGS on the Rise: Research firm NanoMarkets projects CIGS-based thin film photovoltaics sales will reach $2.1 billion in 2016, up from $402.1 million expected in 2011. — PV Tech
SunPower's Strong Earnings Lift Stock, Despite Layoffs
Kevin Kelleher - Big Green
SunPower saw its shares rally in after-hours trading Thursday after reporting better-than-expected earnings for the fourth quarter of 2008 and a so-so outlook for 2009. SunPower’s revenue in the quarter totaled $401 million, up 6 percent from the previous quarter and 79 percent higher than the same period a year ago. Most of the growth came from sales of components, which rose 122 percent from last year.
But the growth came at the expense of headcount. The San Jose Mercury News said Thursday that SunPower laid off 60 out of its 5,000 workers. Solar companies have been announcing layoffs left and right since the start of the year, including Suntech, OptiSolar, Ausra, SunEdison, Day4 Energy, GT Solar, Emcore and Advanced Energy.
SunPower has been weathering the storm better than most. The company’s operating income was equal to 13.8 percent of revenue, down from 14.2 percent in the previous quarter but above the 5 percent profit margin a year earlier. That helped non-GAAP net income to reach 70 cents a share, up from 39 cents a share a year ago. Analysts had been expecting 57 cents a share.
For 2009, SunPower said revenue would come in between $1.6 billion and $2 billion and net profit would be between $2.20 and $2.80 a share. Analysts are forecasting $1.89 billion in revenue this year and $2.66 a share in profit.
So the company’s new guidance is pretty much in line with analyst expectations, but keep in mind some of them have been lowering their estimates recently because of long-term concerns facing the solar industry.
Tom Werner, SunPower’s CEO, said the company’s vertical business was a key to its success:
“Our fourth-quarter performance reflects the continued strength of our vertically integrated business model, broad channel reach and geographic diversification…Our flexible model enables us to rapidly deploy our solutions across multiple geographies, especially in our worldwide dealer network where we continue to see strong demand both in the United States and Europe.”
SunPower’s stock, which closed down 6 percent during market hours, rose as much as 15 percent to $33 in the aftermarket on the earnings news.
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ZeaChem's Lab: From Termite-Gut Bugs to Biofuel
Katie Fehrenbacher - Biofuels
In an inauspicious building on a strip of offices in Menlo Park, Calif., I recently met with the team behind ZeaChem, a 25-person startup that’s using a common microbe found in termite guts and regular soil to breakdown trees and plants into the next-generation of ethanol. The company is one of a dozen that are moving quickly to build large plants in the U.S. in an attempt to be among the first to produce fuels made from waste plants as opposed to the currently available method using corn. Fresh from raising a sizable round of funding earlier this month, this morning the team walked me around their lab, which makes about 5 gallons of cellulosic ethanol per day.
ZeaChem CEO Jim Imbler described the multistep process in the lab as a set of Legos stacked on top of each other to up one efficient entity. The lab looked more like a complex metallic Erector Set, interspersed with test tubes and beakers filled with a murky brownish liquid that was in various stages of fermentation and purification. At one point Fred Moesler, director of process development, opened up a beaker of the liquid from an early stage of the process and it smelled both sugary sweet and still like the poplar tree from which it came.
The purpose of the lab is to work out the process inefficiencies on the small scale, so that when ZeaChem’s 1.5 million-gallon-per-year demonstration plant in Boardman, Ore. comes online — construction is supposed to start this year — the company can scale up as quickly as possible. The lab is also the place where ZeaChem can test the boundaries of the environment in which its bugs can live, or as Imbler puts it, “We spend a lot of time trying to kill them,” using temperature changes and contamination.
Perfecting the efficiency of the process is key to ZeaChem’s success. The bugs themselves (moorella thermoacetica) are ordinary — they’re not genetically modified, because as Moesler says, nature already built them to be almost perfectly suited to do this task. And the individual steps are simple: Take wood chips or other plant waste, chemically break the material down into a liquid sugar base, add the bugs (hundreds of thousands are sold for cheap in a tiny blue seed), then ferment it, and purify it into an ester, which can then be made into ethanol.
At the same time the company takes a small part of the wood waste that can’t be broken down in the initial chemical process and gasifies it, then adds that into the mix, too. ZeaChem says that small gasification step significantly boosts the amount of biomass that the company can convert, enabling them to produce 40 percent more ethanol per ton of biomass than any known competitor. The gasification is the most expensive part but at the same time makes the process that much more efficient, ZeaChem says.
On a small lab scale, the process seems to run like clockwork. At the end of the tour Moesler showed me the finished ethanol product in a tall retro bottle; he looked like he might just take a swig. But who knows if the company’s efficiency edge will remain once it ramps up to commercial-scale production of 25-50 million gallons per year. At that size, and in commercial production, the company will have to contend with things like picking out dirt from wood waste samples and filling and draining million-gallon vats of fermenting liquid.
The company’s investors, of course, are hoping the process scales well. Earlier this month ZeaChem raised $34 million from Globespan Partners, PrairieGold Venture Partners (a South Dakota firm), Mohr Davidow Ventures, Firelake Capital and giant petroleum refiner Valero Energy. Imbler says the company could end up creating joint ventures with oil refiners like Valero, which could ultimately help the company with its scaling issue. The company’s process can also break down corn, so ZeaChem could work with some of the incumbent corn ethanol guys that already have massive plants, as a stepping stone to cellulosic (when I asked if ZeaChem was working with Poet, Imbler just smiled and said they “talk.”)
There’s also the issue of the difficult economic environment. Building a commercial plant requires money — far more than the $40 million that ZeaChem has raised to date. Back in 2008, many thought 2009 would be a breakout year for the first cellulosic ethanol plants; even GM was paying the technology a lot of attention. But 2009 is looking to be more of a holding pattern year for many of the cellulosic ethanol companies. ZeaChem, however, is one of the few that has been able to raise money recently, and seems to be staying on track.
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Wanted: Tesla Model S Factory Site, Take Three
Josie Garthwaite - Automotive
So it looks like San Jose, Calif., may not be getting the Tesla Motors Model S factory after all. While the Silicon Valley electric sports car maker said in September that it planned to build an assembly plant for its second-generation vehicle at an 89-acre plot between Zanker Road and Highway 237, Tesla spokesperson Rachel Konrad tells us this morning that the company is seriously considering other sites. “We never gave up on other contingency plans throughout the state,” she said. (hat tip to The San Jose Business Journal.)
Tesla is now especially interested in moving the planned facility to a “brownfield” — such as an old site for chipmaking in Silicon Valley or land left over from the aeronautics industry in Southern California — that can be rehabilitated and built upon instead, as the San Jose Business Journal reports.
That’s because the Department of Energy loan program through which the company intends to finance construction (or at another site, retooling) of the facility favors projects on brownfields (two birds, one stone: environmental cleanup and cleantech development). The Zanker Road site is an undeveloped “greenfield,” and could weaken Tesla’s application for $250 million in federal funds for the assembly plant.
And as Konrad pointed out, the company cannot afford to jeopardize those loans. During the application process, she said, “It became clear to us that the other automakers had no shortage of brownfields,” because of the history of manufacturing in Detroit and the Midwest. Committing to a greenfield would put it at a disadvantage, and California has no shortage of brownfield sites, she noted. Tesla, which wants to keep R&D close to Silicon Valley’s engineering talent pool, would needlessly compromise its request for funds if it didn’t consider them, Konrad added.
"We know all the reasons Zanker Road made sense, and it still might make sense depending on how things shake out," Michelle McGurk, a senior policy adviser to San Jose Mayor Chuck Reed, tells the Business Journal. The big question mark is whether or not Tesla receives federal funding or ends up turning back to private investors for the sedan factory.
This isn’t the first time Tesla has shaken up its factory plans. Less than a year ago the company planned to build the factory in New Mexico. In June, California Governor Arnold Schwarzenegger joined then-CEO Ze’ev Drori in announcing that Tesla, headquartered in San Carlos, had decided to come back to California (thanks in part to at least $9 million in incentives). As recently as September, the San Jose mayor cheered cheered Tesla’s decision to build on the Zanker Road site — a project he said would bring 1,000 jobs to the city. All bets are not off yet: Konrad said the company may still use Zanker Road for another facility — either a powertrain plant (also in the running for DOE funds) or the Tesla headquarters.
Hear Microsoft, IBM, Dell and Cisco execs at GigaOM’s Green:Net.
Clean Energy Needs $515B Annually by 2030: Davos Investor Report
Josie Garthwaite - Big Green
The authors — Max von Bismarck and Anuradha Gurung of the World Economic Forum, and Chris Greenwood and Michael Liebreich of New Energy Finance — also note that investing in energy efficiency could produce returns in the range of 17 percent or more. Efficiency, plus carbon capture and storage, smart grids and energy storage technology represent four key enablers for the transition to a clean energy system.
In 2008, private investors poured a record-breaking $155 billion into clean technology. Over the next 18 months, President Barack Obama wants to inject $54 billion into renewable energy as part of a larger economic stimulus plan — but that’s a onetime investment. Without question, reaching the Davos investment target will be no easy task. While the report authors argue that every stimulus package should push the cleantech ball forward (with support for educating a new generation of engineers and rolling out a fully digital power grid, for example), they see a necessary partnership between the private and public sectors:
Policy-makers need to build frameworks which enable corporations and investors to make good returns by squeezing carbon out of the world’s economy. And investors need to understand the scale and nature of the investment opportunity presented by the world’s one-time shift to low-carbon energy.
Echoing the calls of former Vice President Al Gore yesterday and UN climate chief Yvo de Boer at last year’s climate talks in Poznan, Poland, the report authors urge immediate action:
At the very time when commentators are branding green investing as a luxury the world cannot afford, enormous investment in the world's energy infrastructure is required in order to address the twin threats of energy insecurity and climate change. Waiting for economic recovery, rather than taking decisive action now, will make the future challenge far greater. As the cost of clean energy technologies decreases and policy support is put in place, the shape of the eventual energy system is emerging. But the investment demand is substantial. Despite the recent turmoil, the world's financial markets are up to the financing challenge, but they will need continued action from the world's policy-makers and leading corporations.
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Tesla: Model S to be Unveiled in March
Josie Garthwaite - Automotive
Tesla Motors held the first of two planned town hall meetings with customers this week, where it explained to buyers who have not received pre-ordered 2008 Roadsters why the company has decided to charge for options previously included in the sports car’s base price. But CEO Elon Musk was not there to offer only mea culpas (according to Left Lane News, he did express regret over the way Tesla communicated the new charges). He also revealed details about the planned Model S sedan and Daimler’s electric Smart car, set to use Tesla drivetrains in a fleet of test vehicles.
First, the Model S: Musk reportedly (here, here and here) told customers that the startup will show off a prototype of the long-awaited sedan in Los Angeles as early as March 5 (yes, as in five weeks from now), with production beginning in 2011.
Musk also said that Daimler’s electric Smart car will retail for around $20,000 — the “super affordable” price point he envisioned for a third-generation Tesla vehicle (after the Roadster and Model S) last year. He said in September that the car could be produced with a major automaker. With Daimler slated to roll out the electric Smart in 2010, it just might one-up the Model S for Tesla’s second-generation model.
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