2017 Investor Roundtable:General Discussion

[SBenson]

Tesla's Bulls and Bears Dig in

Gene Munster, co-founder of Loup Ventures, and Brian Johnson, Barclays U.S. auto analyst, debate the outlook for Tesla Inc. with Bloomberg's David Westin on "Bloomberg Daybreak: Americas." (Source: Bloomberg)

Video length: ~3mins

 

[RobStark]

China already turned down requests to soften the BEV timeline a month ago

China upholds strict electric car sales quotas despite industry protests

"BEIJING (Reuters) - China upheld strict sales quotas for electrically powered vehicles in a draft regulation issued on Tuesday, ignoring concessions agreed between Chinese Premier Li Keqiang and German Chancellor Angela Merkel earlier this month."

I thought "Premier" meant THMFIC. But THMFIC is "President" of China Xi Jinping

But that is what I remember reading over a month ago. China agreeing to a one year delay to implement the 8% rule. Automakers simply don't have battery cell capacity to make 8% of current production BEV or PHEV with significant AER.

So they will have to reduce the number of ICEv they produce.

 

[ggies07]

China already turned down requests to soften the BEV timeline a month ago

China upholds strict electric car sales quotas despite industry protests

This part is great:

while German policymakers say they fear they are part of a Chinese strategy to help domestic carmakers overtake global rivals in developing 'green' vehicles.

I guess they should have been more forward thinking when they were designing the i3! Everyone has had plenty of time since 2012.

 

[SwTslaGrl]

"BEIJING (Reuters) - China upheld strict sales quotas for electrically powered vehicles in a draft regulation issued on Tuesday, ignoring concessions agreed between Chinese Premier Li Keqiang and German Chancellor Angela Merkel earlier this month."

I thought "Premier" meant THMFIC. But THMFIC is "President" of China Xi Jinping

But that is what I remember reading over a month ago. China agreeing to a one year delay to implement the 8% rule. Automakers simply don't have battery cell capacity to make 8% of current production BEV or PHEV with significant AER.

So they will have to reduce the number of ICEv they produce.

The one year delay was in the first agreement - China later reversed this and "upheld strict sales quotas"

The first agreement is here: China bends electric car quotas to accommodate Germany - report

 

[ValueAnalyst]

Solar panels and batteries are not free so no it's not zero. The 4c is more of a back of napkin cost and it's based on the cost of the panels, batteries, install and maintenance over roughly 25 years divided by total KWh generated, minus some precent lost in inverters and round trips through the batteries. In short, I pulled it out of my arse but it's probably close enough to assume it would be very profitable. I'm sure you could find some info on utility grade solar + battery cost and assume Tesla is 40% cheaper because they are eating their own dog food.

I think someone posted an article about growth in EV used of electricity going from 6TWh to 1,800TWh by 2024. If Tesla has half of that and half charge at superchargers, that's 450TWh x .12c/KWh = 36,000,000,000 per year in net margin. That would make Tesla one of the biggest utilities in the world. The biggest contribution would come from the 300,000 semis driving 120,000 miles per year with very little choice but to charge with Tesla, up to 2MW/shift to go 500 miles.

What I don't get is how they will supply city based superchargers with solar + battery. Not nearly enough room on most roofs for enough solar for a 12+ stall Supercharger. They could just setup some utility sized projects outside each city and offset what is used, and they should, but that is not quite as efficient.

Isn't 2MW too much to go just 500 miles even for a semi? I understand these semi's will be very heavy and all, but that's 35x of a model 3 battery which will go 235-245 miles?

If an ICE Semi gets 6 mpg that's 1/5th of an ice auto on the highway.

Using those two figure, we can estimate Tesla Semi should get 500 miles with 700 kWh of energy tops.

Agree? Disagree? Don't care?

 

[EnzoXYZ]

Isn't 2MW too much to go just 500 miles even for a semi? I understand these semi's will be very heavy and all, but that's 35x of a model 3 battery which will go 235-245 miles?

If an ICE Semi gets 6 mpg that's 1/5th of an ice auto on the highway.

Using those two figure, we can estimate Tesla Semi should get 500 miles with 700 kWh of energy tops.

Agree? Disagree? Don't care?

Semis are diesel so you have to use the same for passenger diesel cars which is probably closer to 50+ on highways. If not more.

 

[AlMc]

For those that like to have 'max pain' info. Looks like we are hovering there now.

 

[GoTslaGo]

For those that like to have 'max pain' info. Looks like we are hovering there now.

I couldn't get it to work! Thanks!

 

[myusername]

For those that like to have 'max pain' info. Looks like we are hovering there now.

it's like magic... isn't it?

 

[TMSE]

it's like magic... isn't it?

If it ain't magic, tell us what will it be for next week, the week after that, and so on.

 

[Ugliest1]

If it ain't magic, tell us what will it be for next week, the week after that, and so on.

No, @myusername still owes us explicitly detailed answers to the following:

2017 Investor Roundtable:General Discussion

2017 Investor Roundtable:General Discussion

Cross-posted from Market Action thread.

 

[SteveG3]

Even at your estimate of "$160-$170/kWh at pilot plant scale" would lead to a more than 45% gross margin for $250/kWh Powerpack pricing.

45% is 1.5x of my current DCF assumption of 30%.

Also, "30% cost reduction" from Gigafactory was the earlier guidance. Most recent guidance is 35% reduction.

I think VA might have been a little distracted while making these calculations (TSLA was, after all, running up $13 at the time, so this would be quite understandable), but wouldn't these assumptions mean 32% to 36% margins? What's more, a little later in the thread, I believe techmaven was saying that he saw COGS closer to $200 when all costs were included (corresponding to a 25% margin).

 

[SteveG3]

Google Translate

"

• From 2008 to 2016, Daimler will have sold over one million vehicles in Europe and the USA with excessively high pollutant emissions.
• The technical subtleties are similar to those of VW and Audi, the prosecutor's office Stuttgart and the US Department of Justice are determined with great force.
• The question is whether the Daimler case will be something like Volkswagen 2.0."

Honestly - I don't understand how anyone is surprised by this.
Use logic for a second - if one of these companies had engineers with the technical knowledge to make diesel engines that had exhaust numbers within regulatory limits and performed as advertised, surely that knowledge would seep to the other car companies through hiring.

Given that one of the biggest companies - VW - couldn't figure this out, the technical knowledge doesn't exist anywhere. It's fugazi.

My understanding was that for years there was something of a mystery as to why VW could seemingly do substantially better with its diesel vehicles (better performance and cleaner emissions) than the rest of the auto industry... I don't remember if this (false) perceived gap with the rest of the industry was just thought to be with VW products, or multiple German automakers. So, not sure about the assumptions of your reasoning, though the reasoning itself makes sense.

 

[RobStark]

Semis are diesel so you have to use the same for passenger diesel cars which is probably closer to 50+ on highways. If not more.

Compacts and Subcompacts yes.

Mid Size and Large No.

 

[green48]

This may still be a few years off and I don't have perfect fundamental knowledge of this issue by any means, but is anyone here at all concerned about blockchain tech and DAOs disrupting Tesla's potential for a "Tesla Network"?

Some of the top blockchain guys I follow seem to believe Uber's model will die at the hands of blockchain. While most of us here would probably say that Tesla will beat Uber first, I don't think that really matters in the long run.

If the power of blockchain can be applied to shared rides, what is to say that Tesla will be able to compete there long-term?

 

[GoTslaGo]

This may still be a few years off and I don't have perfect fundamental knowledge of this issue by any means, but is anyone here at all concerned about blockchain tech and DAOs disrupting Tesla's potential for a "Tesla Network"?

Some of the top blockchain guys I follow seem to believe Uber's model will die at the hands of blockchain. While most of us here would probably say that Tesla will beat Uber first, I don't think that really matters in the long run.

If the power of blockchain can be applied to shared rides, what is to say that Tesla will be able to compete there long-term?

Can you elaborate how?

 

[green48]

Can you elaborate how?

I'll try my best, again - my knowledge is nowhere near perfect so any blockchain experts please feel free to jump in.

Uber aggregates data. When Uber pairs a driver and a passenger, the company serves as an enforcer. Uber must verify the ride went well and once the transaction is complete, Uber sends money from the passenger to the driver (while keeping some themselves).

Our argument for Tesla would likely be that Tesla will soon be able to do the same thing without a driver, and therefore undercut and ultimately defeat Uber.

In this scenario Tesla doesn't actually change much in the relationship between driver and passenger. Tesla would still be a middleman, albeit a less expensive middleman than Uber.

With Blockchain, theoretically drivers would be able to connect directly with passengers as the blockchain is a P2P system. There would be no need for middlemen. This would be similar to how bitcoin transactions don't require a bank...just one party transacting directly with another.

Because this Tesla Network model is built on the idea of capturing revenue as a middleman, I'm concerned that P2P transactions won't need a middleman to enforce contracts and that Tesla will be left without a sustainable model.

Thoughts?

P.S. This is a good primer article on the concern I have for those interested:
http://www.nasdaq.com/article/move-...ble-real-sustainable-sharing-economy-cm716709

 

[erthquake]

I'll try my best, again - my knowledge is nowhere near perfect so any blockchain experts please feel free to jump in.

Uber aggregates data. When Uber pairs a driver and a passenger, the company serves as an enforcer. Uber must verify the ride went well and once the transaction is complete, Uber sends money from the passenger to the driver (while keeping some themselves).

Our argument for Tesla would likely be that Tesla will soon be able to do the same thing without a driver, and therefore undercut and ultimately defeat Uber.

In this scenario Tesla doesn't actually change much in the relationship between driver and passenger. Tesla would still be a middleman, albeit a less expensive middleman than Uber.

With Blockchain, theoretically drivers would be able to connect directly with passengers as the blockchain is a P2P system. There would be no need for middlemen. This would be similar to how bitcoin transactions don't require a bank...just one party transacting directly with another.

Because this Tesla Network model is built on the idea of capturing revenue as a middleman, I'm concerned that P2P transactions won't need a middleman to enforce contracts and that Tesla will be left without a sustainable model.

Thoughts?

P.S. This is a good primer article on the concern I have for those interested:
http://www.nasdaq.com/article/move-...ble-real-sustainable-sharing-economy-cm716709

Off the top of my head, Tesla won't allow the use of their driverless technology unless both parties (owner and passenger) allow Tesla to facilitate the transaction. Plus, as I understand it, why would owners want to cut out Tesla? That would force the liability burden onto the owner instead of Tesla's deep pockets.

 

[GoTslaGo]

I'll try my best, again - my knowledge is nowhere near perfect so any blockchain experts please feel free to jump in.

Uber aggregates data. When Uber pairs a driver and a passenger, the company serves as an enforcer. Uber must verify the ride went well and once the transaction is complete, Uber sends money from the passenger to the driver (while keeping some themselves).

Our argument for Tesla would likely be that Tesla will soon be able to do the same thing without a driver, and therefore undercut and ultimately defeat Uber.

In this scenario Tesla doesn't actually change much in the relationship between driver and passenger. Tesla would still be a middleman, albeit a less expensive middleman than Uber.

With Blockchain, theoretically drivers would be able to connect directly with passengers as the blockchain is a P2P system. There would be no need for middlemen. This would be similar to how bitcoin transactions don't require a bank...just one party transacting directly with another.

Because this Tesla Network model is built on the idea of capturing revenue as a middleman, I'm concerned that P2P transactions won't need a middleman to enforce contracts and that Tesla will be left without a sustainable model.

Thoughts?

P.S. This is a good primer article on the concern I have for those interested:
Move Over Uber: Blockchain Technology Can Enable Real, Sustainable Sharing Economy - Nasdaq.com

So there would still be a need for some mediating party (or app) for the driver and passenger to connect in the first place. Presumably the app would be a platform only, not extracting any fees (like a bulletin board of old in college) and when the driver and passenger agree on a price the P2P system via the blockchain would mediate payment. Is this correct from my reading?

My concern with this model is the lack of a vetting body for the drivers. Uber already has problems with drivers assaulting passengers. Regular taxis have this problem as well. Even if a "bulletin board" can screen the drivers through some background check criteria who is ultimately liable if something does happen? Right now, Uber is theoretically ultimately responsible if a driver goes off the deep end, and in the future, Tesla could be as well.

That being said, if FSD works, the whole issue of driver on passenger violence (and opposite) would no longer exist. With FSD, I can see the P2P system could work, but there you would encounter the restrictions placed on using FSD to generate income by Tesla Network. Which you will have to sign before you can use it for such. Thus I doubt Tesla Network will be adversely affected by P2P systems, IF they can get FSD to work in this manner.

 

[Ameliorate]

Off the top of my head, Tesla won't allow the use of their driverless technology unless both parties (owner and passenger) allow Tesla to facilitate the transaction. Plus, as I understand it, why would owners want to cut out Tesla? That would force the liability burden onto the owner instead of Tesla's deep pockets.

Big difference vs being the driver(uber) and sending your car to drive somebody.

Send to Tesla network. Set it and forget it. Car operates maximally with minimal hassle.

Cut out Tesla and operate on your own?
Accept/decline incoming requests? (sort through them all) find out where your car is, which customer is closest, do a background check on the customer. And on and on. Oh my god no I don't want to babysit my car all day if I'm getting this for cash flow. Insurance would be a huge factor to me.