2017 Investor Roundtable:General Discussion

[Reciprocity]

They had a fire sale during the Great Recession and have no other brands besides Ford and Lincoln.

Lucid's projected base price is $60k for the Air before incentives for the 260 mile range 400 HP version. And well over $100k for the 400 mile range 1000 hp with Private Jet rear seat version.

There is zero chance Air would be sold as a Ford. Either Lincoln(which exist in China but not Europe) or Lucid. Or some entirely new brand. I don't see the benefit of Ford giving Lucid cash but not buying them. Ford should want those ~300 Silicon Valley engineers and their work on a Model 3 competitor.

In Silicon Valley the Lucid Air is known as the revenge car. Peter Rawlinson was the Chief Engineer for the 2012 Model S. Just before the Model S launch Elon wanted to fire Peter but Tesla couldn't afford a severance package so Elon demanded Peter's resignation. Like Elon thought he was POTUS LOL. Well, eventually Peter left. On very bad terms. So doubtful Lucid and Tesla cooperate on Supercharger Network.

In that case, I dont see how 300 Silicon Valley engineers want to work for Ford. Could see a sale to Ford then a mass exodus of engineers. I just dont see them making sure the Lucid air gets built and Lucid wont sell out based on the tech value alone. And I would think the engineers are not slaves and would go their own way, at least enough to make sure the purchase was not useful to the buyer. I could very well be wrong and I know you are not arguing that it would happen. I get your point on Lucid's founder, I was not fully aware of this history, only understood that he was the lead designer on the S. Maybe those 300 engineers want to work on the Y or the Tesla Pickup.

 

[mongo]

The other part I forgot to mention is that the yard has its own rail spur line that crosses some of the area roads, and loading the trains is a ridiculously arduous operation, because loading those rail cars is done via the end of the car, and that means you have to disassemble the whole train in the yard, load all the cars into the railcars, and then reassemble the train. In doing this, the train spends a non-trivial amount of time blocking the city streets in the area.

Perhaps a purpose built machine could take an assembled train of railcars, peel one rail car off it, automatically load it with cars, and then reassemble the train on the output side? Sounds like a cool idea, though I have no idea if technically feasible, never mind economically viable.

The section along Lopes might make a good staging area. If the car are outfitted with multi-function couplers, the linking and unlinking can be fairly automatic. If they extend the 6 loading spurs as far as possible, it would maximize cars per rail section. Using rail-summon, the human factor aspect of needing to walk back from the furthest location is eliminated. Slowest operation would be the people strapping the cars down. Might even be, by the time the 6th section is in place, the 1st is ready to reattach.

I may be off base with the car storage, but I can't think of what else would be arriving that would need that volume for storage. Gigafactory has lots of room, and shipping can be well scheduled. Bodies or vehicles are the least dense items. Nothing else should be building up on the intake side.
Unless its the global disruption contingency plan, and Tesla will have some number of weeks of parts inventory on site (very non JIT, but cautious). Doesn't seem to fit in the rapid revision or cash flow agendas though.

 

[MXWing]

More laughable is our friend Anton Wahlman of Seeking Alpha.

How The Chevrolet Bolt Strangled Tesla's U.S. Growth Rate Down To Only 6% - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha

I think TMC is broken.I tried clicking funny 100 times but it would only take once???

Any case, I have coupons from from Chevy so I can buy a Bolt for 3500 off the lowest negotiated price. $5000 off sticker has been floated around so that works to $8,500 off a Bolt for me.

Rather pay $8,500 more for a Model 3 and this is not hubris.

 

[MP3Mike]

Tesla will have some number of weeks of parts inventory on site

Just 2 weeks of battery packs would be ~15,000 packs. (10,000 for Model 3, 5,000 for S/X)

That would take up a lot of room. Not to mention the ~10,000 drive units. (Or ~20,000 drive units once they go to all-wheel drive.)

 

[RobStark]

In that case, I dont see how 300 Silicon Valley engineers want to work for Ford. Could see a sale to Ford then a mass exodus of engineers. I just dont see them making sure the Lucid air gets built and Lucid wont sell out based on the tech value alone. And I would think the engineers are not slaves and would go their own way, at least enough to make sure the purchase was not useful to the buyer. I could very well be wrong and I know you are not arguing that it would happen. I get your point on Lucid's founder, I was not fully aware of this history, only understood that he was the lead designer on the S. Maybe those 300 engineers want to work on the Y or the Tesla Pickup.

If Ford buys Lucid then the Air gets built. If they don't want to build the Air then they won't buy Lucid.

Why wouldn't they want to work for Ford if the pay is good and the work interesting? And they don't have to move to Dearborn? I did make the point they are workers not slaves in another thread but still. Ford has about 200 Silicon Valley engineers working for them right now.

The Lab - Space | Ford Research & Innovation Center

There may be ~1000 Faraday Future Silicon Valley engineers looking for work soon. The crème de la crème never need worry about looking for jobs but not everyone can be a rock star in their field.

IF those 300 Lucid engineers wanted to work for Tesla and Tesla wanted to hire them there is nothing stopping this from happening right now. Again, not slaves. Hint: many of the top guys at Lucid are former Tesla employees. Many say they don't enjoy the 100 hr work week that Tesla demands.

That is ok for single dudes without children. Many people with families left Tesla because of life/work balance.

 

[esk8mw]

To me, it looks like Lucid is running into a bit of trouble, probably with raising money.

I'm far from a Silicon Valley entrepreneur, but I know many successful start-ups with a bright future don't want to sell and cash out before they have produced anything or at least developed the infrastructure to produce something. The big payday happens when you can demonstrate a real product and a pathway forward to produce it - you just need to capital to do so.

I'm thinking it's hard to be a "me too" automaker following in Tesla's footsteps after FF's spectacular flameout. If I'm an investor I'm worried about my money getting burned in the desert just like those FF backers. I haven't heard much about Lucid's AZ factory lately...Just about anyone can produce a nice prototype. Willing it into existence and mass producing it takes a superhuman force.

It's a shame because I was hoping Lucid would be a legit entry into the EV space someday. Unlike FF, I thought they had some promise. Now, I'm not so sure.

 

[Bgarret]

The other part I forgot to mention is that the yard has its own rail spur line that crosses some of the area roads, and loading the trains is a ridiculously arduous operation, because loading those rail cars is done via the end of the car, and that means you have to disassemble the whole train in the yard, load all the cars into the railcars, and then reassemble the train. In doing this, the train spends a non-trivial amount of time blocking the city streets in the area.

Perhaps a purpose built machine could take an assembled train of railcars, peel one rail car off it, automatically load it with cars, and then reassemble the train on the output side? Sounds like a cool idea, though I have no idea if technically feasible, never mind economically viable.

Excellent crowdsourcing...so let's add some math. Elon & Co. are likely scaling this operation for the 10,000/wk in 2018 goal, so roughly 2,000/day. 6 rail lines connected to the new building. 20 Model III per box car, about 800 cars/train (source: How Auto Transport Works). So if 5 of the 6 rail lines are for rear loading, and the 6th is for assembling the linked rail cars, then the building may be for 500-800 cars/train.

Process would be:
1. Car is produced and passes QA in batches of multiples of 20, likely same builds - color, interior, number of motors.
2. Car autonomously leaves QA via well-marked corridors and enters new "black box" building at the end of the rail line and put in que for transport, facilitated by car connectivity.
3. "Black box" spits out 20/rail car that autonomously load.
4. Rail car is moved to 6th and outward bound rail spur to build train.
5. Train is dispatched geographically and software tracks "inventory" needs by region.
6. Initially you pilot test at 500 cars/day, (hopefully some time in November) 1 train/day going to Mountain, Midwest, East Coast, and eventually East Coast for shipping to Europe, etc. By this time next year, 4-5 trains/day....fill the box, drain the box.

Would be interesting to see where Tesla currently ships and if there is a logical destination for this mode of solving a logistical challenge....not necessarily a "black box", but where the process could be reversed and multiple rail lines exist where cars could use this autonomous "roll on, roll off" method for loading and unloading. The savings in manpower alone, much less time, would be material.

Just a thought experiment to pass the time, but would be an elegant, first principles deconstruction of what, on its face, looks to be a logistical nighmare.

 

[Fallenone]

If each one is as profitable as a GM dealership

That's an invalid assumption. Tesla stores don't make money by design. Their gross margin for service is around 0%, which leads to negative net profit because you need to pay staff and rent. Tesla stores are pure OpEx drains. That's the downside of not having dealership. You don't need to give away part of the profit, but you need to pay up for setting up the shops and what's not.

In fact, the Tesla stores is one of the major reason Tesla is losing money despite of 25% gross margin products.

 

[RobStark]

To me, it looks like Lucid is running into a bit of trouble, probably with raising money.

I'm far from a Silicon Valley entrepreneur, but I know many successful start-ups with a bright future don't want to sell and cash out before they have produced anything or at least developed the infrastructure to produce something. The big payday happens when you can demonstrate a real product and a pathway forward to produce it - you just need to capital to do so.

I'm thinking it's hard to be a "me too" automaker following in Tesla's footsteps after FF's spectacular flameout. If I'm an investor I'm worried about my money getting burned in the desert just like those FF backers. I haven't heard much about Lucid's AZ factory lately...Just about anyone can produce a nice prototype. Willing it into existence and mass producing it takes a superhuman force.

It's a shame because I was hoping Lucid would be a legit entry into the EV space someday. Unlike FF, I thought they had some promise. Now, I'm not so sure.

Obviously, Lucid is having trouble raising money.

A few months ago they said they wanted to raise $700M to build their new Factory. Then about a month ago they said they wanted to raise $240M to open the first phase of the factory. Unlike your typical SV startup you can't just stream the Air over internet to your customers. Nor less typically subcontract Foxconn to manufacture 1M widgets next month to ship to your customers.

Heavy manufacturing is hard. And no, not anyone can design an equivalent to Lucid Air overnight. Lucid has all their ducks in a row in Arizona with the States backing, local permits etc. What they need is Capital, a Distribution Network, and a Charging Network.

Ford can provide the first two and Lucid can take advantage of Electrify America-VW Dieselgate charging Network to skip funding their own Network for at least a few years into production. Maybe by 2022 Electrify America and the small charging networks is a viable charging solution.

 

[Waiting4M3]

It's in the Master Plan! It's just area 12.

 

[Reciprocity]

Ford can provide the first two and Lucid can take advantage of Electrify America-VW Dieselgate charging Network to skip funding their own Network for at least a few years into production. Maybe by 2022 Electrify America and the small charging networks is a viable charging solution.

I cannot for the life of me figure out how they are going to charge for the usage. For example, I go to one of these new charging stations, do I pay cost or does VW mark it up? I doubt it will be free, but I would hope that VW is not going to profit in a meaningful way.

 

[RobStark]

That's an invalid assumption. Tesla stores don't make money by design. Their gross margin for service is around 0%, which leads to negative net profit because you need to pay staff and rent. Tesla stores are pure OpEx drains. That's the downside of not having dealership. You don't need to give away part of the profit, but you need to pay up for setting up the shops and what's not.

In fact, the Tesla stores is one of the major reason Tesla is losing money despite of 25% gross margin products.

If Tesla charges ~$500 per annual service visit how does Tesla lose money on Tesla service when just about every Service Center is backlogged. I know there is warranty work too. Presumably, the percentage of warranty work goes down as time goes on and the percentage of work being paid by the customer goes up as Tesla gains more manufacturing experience.

Maintenance Plans

And Obviously, Tesla Store margins are included included in car's overall margin.

And don't Tesla stores make mint selling Tesla branded clothing and accessories?

 

[22522]

The other part I forgot to mention is that the yard has its own rail spur line that crosses some of the area roads, and loading the trains is a ridiculously arduous operation, because loading those rail cars is done via the end of the car, .

A multi story building with short stories would let you side load with a relatively passive train/truck and the articulation in the building.

1. Cars drive accross pair of C-channel sticks, front wheels rest in one of the sticks rear wheels rest in the other.
2. Indexing machine pushes sticks with car onboard into the train car.
3. Train car locks them down. (Anchor chains can be on these same sticks or other sticks that index at the same time).

Cars can be side loaded off or driven off on the receiving end.

A turntable for the "container" would also work. Hydraulics would be ground mounted and work through an opening in the center of the train chassis.

Interesting problem. Would like to see what they choose.

 

[howardoark]

Battery supply may not be a constraint - Chart: China Leading the Charge for Lithium-Ion Megafactories

Musk has already said that he needs to build (and have someone else pay for - hence is meeting with the governors) more GFs since the current one can't make enough batteries for more than ~400,000 cars a year (34 GWh/75kWh minus something for the battery storage people). So this graphic probably understates the supply that will be available in 2020 if (big if) there is a demand for millions of BEVs.

I admire what Musk has accomplished. I admire what the VisiCalc people did. I have less admiration for the Lotus123 people since they essentially just stole VisiCalc's idea and put them out of business. And of course, I have no admiration whatsoever for Excel, except that's what I use every day. Being the first mover is frequently not helpful, specially if you run out of money. If Apple buys one of the BEV companies and says they're going to put $20 billion into it, that's a real problem for TSLA. And it would hardly be a black swan event since Apple's car project is the worst kept secret in corporate history.

Oh, and I just noticed the upload an Image/File button (I am new here, but not a troll, I swear; troll's never post on days when the stock they're trolling has a big up day), The screen shot below is my history of shorting TSLA. I own no car or oil companies, though I probably have some of both in mutual funds in retirement plans and I'm long Kinder Morgan (though that Tony Soebel video is making me rethink that).

I put in a stop loss on TSLA today at $345. So unless it gaps up $20 on an open one morning, I'm probably not going to lose money on the investment.

And one final thought - I get the feeling that some of the posters on this board would burn me at the stake as a heretic if they could. And it isn't a good sign that they start there posts, "I stopped reading as soon as he said he was short." There is a lot of money in Tesla from people with closed minds. That isn't necessarily the crowd you want to run with.

 

[mongo]

Just 2 weeks of battery packs would be ~15,000 packs. (10,000 for Model 3, 5,000 for S/X)

That would take up a lot of room. Not to mention the ~10,000 drive units. (Or ~20,000 drive units once they go to all-wheel drive.)

Well, when you put it like that...
Parts need to be unloaded, parts need to moved to the assembly line. Ideally one operation, but unloading space may be limited. So a huge FIFO system would make sense. Get rail car in, unload it, get it out. Decouple deliveries and build on the micro level. Still assumes you can unload at a significantly higher rate than you can use the parts. 7,500 a week is one every minute and 20 seconds (24/7). That's a lot of moving. Pre-palletized parts? Or, the low section may be a rail yard, back the rail car in and unload direct to the plant, more lines allow space for the different items.

Should this discussion move to a separate thread?

edit: moved first line to end to remove unintended context.

 

[RobStark]

I cannot for the life of me figure out how they are going to charge for the usage. For example, I go to one of these new charging stations, do I pay cost or does VW mark it up? I doubt it will be free, but I would hope that VW is not going to profit in a meaningful way.

VW is allowed to profit from Electrify America. They are not allowed to discriminate against non-VW group vehicles. Presumably they will all be CCS and CHAdeMO.

For the life of me I can't figure what why charging stations don't just use Credit Cards. Why have to go through App if I don't want too And stupid RFID cards. Just charge my CC and go.

My guess is they would charge between what Supercharger's charge and what private networks charge.

SC in CA will be 20 cents per kW. Private networks is usually 49 cents per kW. The basic rate in Los Angeles is 11 cents per kW.

 

[Yggdrasill]

Battery supply may not be a constraint - Chart: China Leading the Charge for Lithium-Ion Megafactories

Musk has already said that he needs to build (and have someone else pay for - hence is meeting with the governors) more GFs since the current one can't make enough batteries for more than ~400,000 cars a year (34 GWh/75kWh minus something for the battery storage people). So this graphic probably understates the supply that will be available in 2020 if (big if) there is a demand for millions of BEVs.

The updated plans for the Gigafactory is that it will make 105 GWh/year worth of cells and 150 GWh/year worth of packs, so the link is outdated. Say 75 GWh goes into cars and 75 GWh goes into stationary storage. That's 1 million cars and something like 15 billion USD of revenue on the Tesla Energy side from their current factory.

The next gigafactories will likely be funded with profits from Model 3, plus cooperation by Panasonic and loans.

 

[MP3Mike]

For the life of me I can't figure what why charging stations don't just use Credit Cards. Why have to go through App if I don't want too And stupid RFID cards. Just charge my CC and go.

They are trying to reduce fraud and the credit card processing fees by bundling charges. (At least that is what I am assuming they are doing, as well as not having to have magnetic card readers to deal with.)

 

[Reciprocity]

VW is allowed to profit from Electrify America. They are not allowed to discriminate against non-VW group vehicles. Presumably they will all be CCS and CHAdeMO.

For the life of me I can't figure what why charging stations don't just use Credit Cards. Why have to go through App if I don't want too And stupid RFID cards. Just charge my CC and go.

My guess is they would charge between what Supercharger's charge and what private networks charge.

SC in CA will be 20 cents per kW. Private networks is usually 49 cents per kW. The basic rate in Los Angeles is 11 cents per kW.

So they want to use the network, so that will protect the price gouging though they could still price gouge in areas where they are not selling cars. Not that I car as a Tesla owner, I just thought they would set a price range or something to keep them from gaming the system. Say 20% over cost as a maximum and never to exceed some specific amount per KWh.

 

[RobStark]

Battery supply may not be a constraint - Chart: China Leading the Charge for Lithium-Ion Megafactories

Tesla output will be 105 GWh cell/150 GWh pack in 2020 from GF1.

Chinese law stipulates 8% of cars sold in 2018 must be New Energy Vehicles. Those won't be Fuel Cell Electric Vehicles because they are too expensive. Some small percentage can be PHEV. Most will have to be BEV. Then the percentage goes up to 10% in 2019 and 12% in 2020.

176 GWh will not meet domestic demand in 2020. China will need at least double that for the auto market. Then mopeds and electronics is demand on top of that.

It is not enough to ship batteries to GM's US factories or VW's European factories.