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TSLA Market Action: 2018 Investor Roundtable

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Is it just me or did Elon Musk sound pretty cold-blooded on that call? Like a "its-just-the-start-folks" kinda mentality to where Tesla's going in the next 12 months and forward?
With the final speech about how they did everything they could to help the other car companies, and how they will still help them (anyone can join the Supercharger network!), but how the other car companies simply wouldn't take them up on it, and how this has given Tesla their massive unbeatable advantage?

Yep. I wouldn't call it cold-blooded, exactly -- more "rubbing it in".
 
If they can get margins in 15% range on Model 3 SR, I think they'll start selling them, even if MR/LR were experiencing high orders. Just build first come first serve (batched for efficiency, of course).

Yeah, and building them in a limited units makes sense even in a capitalistic sense, as the $35k entry price draws in customers who might chose a more expensive version for which there is less wait time.
 
I've had time now for the past 48 hours to sink in.

My initial excitement was about the cash. Yes, it's great to turn $60K into $100K. But the gain is taxable and it's not really going to change my life.

What will change my life is having hope for the future. Tesla is now full on into disruption mode. The Tesla Effect is officially a thing, and it's going to sweep away coal, oil and eventually gas. When people see that greenhouse emissions can and do go down, they will see that this magic needs to be repeated everywhere - concrete, steel, fertiliser etc.

Hope has returned. For that, I thank Elon Musk and all at Tesla. Fantastic work.
I always say, I'd be perfectly happy to give someone 35 cents to get a free and easy dollar.. I wouldn't worry about the short term tax implications, take the money.
 
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Not just shipping costs, the much bigger gain is tariffs: in China they avoid 40% import tariffs, in Europe they avoid 10% import tariffs.
Also, I think Elon leaves open the potential of future tarrifs being more reasonable, but assumes we know that the continental factories will circumvent that anyway. But good point!
 
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What I'm hearing is they are planning to make 12k-18k/week M3 longer term. I'd never heard larger than 10k/wk. That's bullish. And making them in EU/China is better, as shipping costs will be lower.
I don't recall if they ever stated what they thought the global demand across all eventual factories would be, just planned production at Fremont, and that they planned to have at least a couple more factories in EU and China.

So other than relaxing the urgency of 10k/week in favor of pulling in GF3 (and perhaps, GF4 by extension) sooner, I don't think we know that their plans have changed globally one way or the other. Though I do think long term a less aggressive Fremont ramp and a more aggressive global ramp is the better move.

In fact, if it turned out that North America had a 10k/wk or higher demand for Model 3, I would rather they build a GF5 somewhere at the other side of the country from Fremont, and run a mix of products (presumably 3,Y, TE storage, pickup, ...) there with an appropriate production distribution to roughly match the geographic distribution, rather than trying to min-max Fremont for the whole of NA.
 
Summary:
1. 5k a week Model 3 is the new 10k a week. Kiss that 10k/week good bye. 5k/week enough to support Europe, China and US demand in Q1. Gotcha!
2. All talks about 10k a week vanished.
3. Was the $35k Model 3 contingent upon 10k a week Model 3 on a sustained basis? I think it was. So bye bye that too.
4. FSD bye bye.
5. $100 a KWh battery has been hyped up for so long in the past. Gone. Won't comment anymore.
6. Solar roof tiles that was ready to sell 2 years ago is now in R&D and testing!

The only sad part is I can't find shares to short.

Well thats a whole lot of words you managed to put together in a row there. Congratulations. You are getting pretty good with this altternative reality scenarios fantasy world you are creating for yourself..
 
One of the main take-aways for me is that HW3 is on track for end of Q1 – *this is crazy soon*. Andrej Karpathy talked about how the 10x increase allows for the deployment of a much larger (and more accurate) neural network. @neroden, I remember you posted this in the luvb2b-thread about your pessimism for FSD, and have been brewing on a response, so I hope it's cool with y'all than I clutter the celebration up with some attempted substance:



I think you might be missing some knowledge *collective gasp* about deep learning and the techniques Tesla and specifically Andrej Karpathy bring to the table. If one had to specify the problem specifically (as one normally does in CS), you would be right, that would take forever – but one of the major things deep learning accomplishes is *problem specification*. It figures out how to best approximate the problem itself.

One of the key factors in deep learning though – besides the specific architecture of the network – is figuring out how you can measure *when the network makes a mistake*. This is represented by the so-called "loss-function", which tells the network how wrong it was according to the desired output. It can then update the weights on each neuron to better approximate the desired result. The difficulty now though, is figuring out *when you are wrong*.

This, however, is quite a bit more simple than specifying self-driving - and shadow mode is exactly this. It enables training of a network against baseline "perfect" human behaviour. They do other stuff, of course, but shadow mode has the potential to be immensely helpful.

In case you guys haven't read Andrej Karpathys thoughts on software 2.0 (you might have seen his Autopilot lecture, which covers some of the same ground), this is a good primer – albeit a bit old:

Software 2.0 – Andrej Karpathy – Medium

Basically the FSD network will do something along these things:

Labeling each image > estimating 3D position of objects > figure out how to drive (okay simplifying here)

Each of these components are either independant software 2.0 processes, as described in the Medium post, or may even be merged into one network. I recall Andrej mentioning before that he believed "a single network to rule them all" was superior, but this was back when he was a phd and he was very coy about the techical details. He might have been working on some paper that never saw the light because he started working for Tesla. He might still believe this though – and the recent architecture improvements to the NN actually seem to suggest that indeed he still does.

Regardless, I think Tesla is (and has been for a long time) on the absolute forefront on applied deep learning and the sudden exponential increase that has happened to other problems attempted by deep learning, seem to be on the cusp of happening with FSD. Not that we'll be there in Q1 next year, but things seem to really be picking up steam, so I doubt it'll be a decade.

You are right that the problem specification is part of the training magic for things like DOTA AI Bots or Go players, but the problem with autonomous vehicles is the dimensionality of the problems is enormously higher and there is not a reasonable simulator to generate the legions of data you need (and shadow mode is insufficient because it's not actually controlling the car to measure its decisions). I do not think you can train autonomous vehicles with a pure NN solution at this point, you have to decompose it into planning (procedural code) and perception (NN). This isn't a very effective process either because of the long-tail of exceptions which takes you straight into the same problem AI always had before NN came about which are the exceptions.

Autonomy in 99.99% of situations is like near-singularity type AI. To get there before that is a process of iterating on problem specification, figuring out hacks and compromises and 'just good enough' and so on. I think Neroden is right to be skeptical. My guess is it takes 5 years before we begin to see a reasonable and non-hand wavy path to it.
 
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...letting tesla OWNERS be DRIVERS and take less than the 25% spiff that Uber takes. that could occur I think, use your Tesla (with lower operating costs) to do ride share service,

Meanwhile increasing EV usage over ICE, and expanding knowledge of Tesla's. Give your passengers your business card with your referral number on it. Extra buck for a fast ride, $2 extra for self-drive demo! You could milk it... I'd probably do it just to see people's faces.
 
Correct.


Ah... but it doesn't.

You have to hire perfect drivers and then drive these perfect drivers through every possible situation. If you're just using random incompetent schmoes... you're not going to be giving the network accurate feedback as to whether it's wrong.

This is what you, and practically everyone else, has missed. I do NOT want a "self-driving" car which is as crappily incompetent as the average American driver!!!! And neither does anyone else. There are stupid, incompetent, dangerous things which *the majority* of American drivers do. How are we going to train the car to not do that?

Tesla is doing great at the tech and missing the human factors. Which is actually totally normal for them. I hope they eventually wake up about the human factors.

This isn’t really true. They aren’t likely going to be just grabbing 100% of all user data and labeling that as perfect driving. Rather, they can pull useful information from that data of both safe driving and examples of unsafe driving(what not to do). Better is that, with the right metrics, they get some level of automatic labeling of good vs bad driving by treating it as a reinforcement learning task, with detected crash or near miss being punished.

So, assuming training works, you end up with a car that matches up with the best performing Tesla drivers at their best under all situations.
 
I think they want to stick with Panasonic for cell mfr, just to try to keep the chemistry confidential. Process will slowly leak out, but maintaining their innovation edge should be better working with one vendor who’s life depends more and more on one partner.

I am not saying that they will outsource battery production, just that they will source the minerals for batteries locally. I imagine most future GF's will be in partnership with Panasonic.
 
This isn’t really true. They aren’t likely going to be just grabbing 100% of all user data and labeling that as perfect driving. Rather, they can pull useful information from that data of both safe driving and examples of unsafe driving(what not to do). Better is that, with the right metrics, they get some level of automatic labeling of good vs bad driving by treating it as a reinforcement learning task, with detected crash or near miss being punished.

So, assuming training works, you end up with a car that matches up with the best performing Tesla drivers at their best under all situations.

Yeah you can deduce good driving from a cluster of bad driving actually just like you can manufacture the perfect attractive human from a pile of ugly faces. It's the statistical mean.

edit: For the record I'm not serious about that. The dimensionality is too high. It would be like trying to synthesize the perfect face from a stack of pictures where you only have 3 random pixels per picture.
 
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and shadow mode is insufficient because it's not actually controlling the car to measure its decisions

That's wrong, shadow mode very likely runs and logs the vehicle control logic as well, except that it doesn't actively control the car. This offers a measurable differential between human reactions and (shadow mode) vehicle control reactions.

This is what @diatz was talking about.

Tesla has a massive NN training feedback advantage by having hundreds of thousands of vehicles capable of running their test NNs in shadow mode.
 
I was wondering the same thing. Is everyone glued to the call??
?? I'm seeing otherwise.
Screen Shot 2018-10-24 at 17.04.31.png
 
Yeah, and building them in a limited units makes sense even in a capitalistic sense, as the $35k entry price draws in customers who might chose a more expensive version for which there is less wait time.

I could be mistaken - but having your cheapest car “only” getting ~15% Gross Margin is a very good situation to be in right? especially when it offers large post purchase paid software upgrades for future revenue. And that 15% margin is going to increase as costs continue to fall.
 
I could be mistaken - but having your cheapest car “only” getting ~15% Gross Margin is a very good situation to be in right? especially when it offers large post purchase paid software upgrades for future revenue. And that 15% margin is going to increase as costs continue to fall.

Only if there are no other customers waiting for higher priced versions.

I.e. the $35k car should be made from excess capacity, not from oversubscribed capacity.
 
Yup. And where Uber had to fight legal battles for ride sharing, expect those battles at least twice harder for Tesla's FSD. :(
I was thinking half the opposite: that Uber will have paved the way for Tesla's shared-car-taxi-aspect ("Tesla Network"). The FSD introduction will be borne by the whole Tesla branded cars with AP, not just the taxi-like services.
 
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