2017 Investor Roundtable:General Discussion

[winfield100]

Sometimes I'm puzzled by the question: what is really Tesla doing for solar?

Solar is definitely a big piece of Tesla's mission: there is no "sustainable energy" without solar energy.
Solar needs to fill batteries to power homes and EVs.
But right now, the only innovation in that specific direction is "just" a premium roof for people who thinks PV are ugly. It's definitely nice, but it's not that big an innovation I expect from a guy who reuse rockets.
So; what am I missing? Is this a likely scenario?

try here
Solar Panels | Tesla
they are selling PV panels also, i was surprised to see and am chatting about a powerwall or 2 and a PV array, i think i could use an 8kw array when they move south from Tampa Florida and Orlando Florida. Tampa is about 200km north (120 miles)

 

[RobStark]

Original Ford Mustang sold 100 000 cars in the first three months and 418 000 in the first year

Ford Mustang - Wikipedia

Thanks, I was hoping someone knew that kind of information

So, with automation, population inflation and the name Tesla we are right on track for success

This was back in the day when a family of 4 might get a midsize two door car.

Nowadays a family of 3 thinks they need a 7 passenger CUV at least, if not a Chevy Suburban or Ford Expedition.

 

[Reciprocity]

Sometimes I'm puzzled by the question: what is really Tesla doing for solar?

Solar is definitely a big piece of Tesla's mission: there is no "sustainable energy" without solar energy.
Solar needs to fill batteries to power homes and EVs.
But right now, the only innovation in that specific direction is "just" a premium roof for people who thinks PV are ugly. It's definitely nice, but it's not that big an innovation I expect from a guy who reuse rockets.

One scenario I'm developing in my mind is this: Musk is not really interested in innovating solar, at least not at the moment. He's innovating batteries and EVs, products that weren't here before. PVs are not sexy enough, maybe, or worse: people are innovating solar cells and EVs faster than he can right now. China is slashing prices on solar energy, the growth is huge kinda everywhere. Maybe he understands that he can't do much better in also that industry, for the law of diminishing returns. He prefers to stick in highly innovable (?) verticals like EVs, batteries (and rockets and tunnels). Industries he can really disrupt.

So, basically, I think that in Musk's mind he thinks that, for Tesla mission to succeed, he needs to generate just demand, and he's doing exactly that.

Bears always say that Tesla is at disadvantage because utilities and the grid is not ready for mass adoption of EVs. And it's true.
And Musk, of course, knows it better than everyone: he is exactly pushing for mass adoption for EVs. He wants goverments and utilities and companies to *sugar* themselves about the surge of demand in electricity, and wants Tesla owners to understand they will save money if they can self-produce their own fuel. Just think about how much a semi will consume...

Tesla will sell good PVs, and solar roofs for premium customers, but above all batteries. Batteries for residential (PowerWalls) and batteries for companies and utilities (PowerPacks).

There will be solar and wind projects, and he will sell batteries to everyone. TE won't probably have a huge percentage of the solar market, but I'm sure that batteries will be at 90%...

Maybe, in a year or two, Musk will be "free" enough to innovate solar, and for example develop 2000$ kits for renters (see this proof-of-concept).

So; what am I missing? Is this a likely scenario?

I'm going to start by stating that I haven't a clue what the plan is. But, I have been thinking a lot about the Supercharging network and solar+battery. Tesla is already committed to spend a very large amount in terms of electricity use over the next 18 months with the model 3 release and existing unlimited supercharging for life vehicles. Including the infrastructure required for the semi which will only multiply the expense. If we are to assume that Tesla is right and that solar + battery it's a real solution for energy demand, then Tesla should leverage their own assets to build the biggest utility in the world to supply the supercharger network. Some have stated that Tesla money could be spent better elsewhere, but that makes no sense. Financing for utility grade solar+battery should be simple and If solar + batteries indeed are viable, Tesla should easily be able to justify a cross country microgrid build out to support the Supercharging network. In some more congested areas they would just built utility grade solutions to offset supply used for the metro area. Ideally they could find a way to partner with local businesses to place panels on their roofs and batteries in their basements around Superchargers, but this might but be feasible. Regardless, Tesla is quickly going to become one of the largest consumers of electricity in the world. For model 3 they would need to build out about 100GWh of solar alone over the next 18 months. Semi would require another 100GWh about a year later. This amount would double every year as production ramps across the enter product line. This doesn't even include the batteries required, but my guess would be in the 30GWh/year for like decades. Utilities are like cash registers, they generate cash like clockwork because people can't survive without electricity and neither can model 3 owners and Tesla semi owners.

In terms of what Tesla is planning for residential solar. It seems they will focused on beautiful products that can be installed on the front of houses and commercial buildings. Low profile panels with skirts and solar tiles. Both will be high margin with few real competitors.

For commercial, Tesla only needs one customer, Tesla. But otherwise, solar + battery seems a great solution for larger commercial buildings. Factories and commercial buildings use a ton of electricity and are perfect fits as business tend to think more strategically then consumers.

 

[GoTslaGo]

I'm going to start by stating that I haven't a clue what the plan is. But, I have been thinking a lot about the Supercharging network and solar+battery. Tesla is already committed to spend a very large amount in terms of electricity use over the next 18 months with the model 3 release and existing unlimited supercharging for life vehicles. Including the infrastructure required for the semi which will only multiply the expense. If we are to assume that Tesla is right and that solar + battery it's a real solution for energy demand, then Tesla should leverage their own assets to build the biggest utility in the world to supply the supercharger network. Some have stated that Tesla money could be spent better elsewhere, but that makes no sense. Financing for utility grade solar+battery should be simple and If solar + batteries indeed are viable, Tesla should easily be able to justify a cross country microgrid build out to support the Supercharging network. In some more congested areas they would just built utility grade solutions to offset supply used for the metro area. Ideally they could find a way to partner with local businesses to place panels on their roofs and batteries in their basements around Superchargers, but this might but be feasible. Regardless, Tesla is quickly going to become one of the largest consumers of electricity in the world. For model 3 they would need to build out about 100GWh of solar alone over the next 18 months. Semi would require another 100GWh about a year later. This amount would double every year as production ramps across the enter product line. This doesn't even include the batteries required, but my guess would be in the 30GWh/year for like decades. Utilities are like cash registers, they generate cash like clockwork because people can't survive without electricity and neither can model 3 owners and Tesla semi owners.

In terms of what Tesla is planning for residential solar. It seems they will focused on beautiful products that can be installed on the front of houses and commercial buildings. Low profile panels with skirts and solar tiles. Both will be high margin with few real competitors.

For commercial, Tesla only needs one customer, Tesla. But otherwise, solar + battery seems a great solution for larger commercial buildings. Factories and commercial buildings use a ton of electricity and are perfect fits as business tend to think more strategically then consumers.

To me, this is why the Solarcity/Tesla merger made sense. Just wish I bought more Solarcity on the cheap...

 

[neroden]

I wouldn't try to make a living based on being optimistic about the U.S. Political System. The strength and the problem with democracy is that you get what appeals to the majority. The opposite of the "philosopher king". It's an excellent method of avoiding despots, but a poor method for obtaining optimal solutions.

Look, there's a trajectory that these things take. First there's resistance. Then everyone is gung-ho about it to the point of legislative carelessness. *Then, with wild west lack of regulation, it kills someone* (which is probably inevitable) and there's a massive backlash and a bunch of bans. Then eventually it gets good enough to satisfy the new, stricter regulation.

I believe we want Tesla to be perceived as on the safe side, not the "wild west" side, and we want it to pass the stricter future regulation, not the "gung ho wild west" regulation.

 

[neroden]

He already went on record stating where efficiency improvements will come from and their magnitude. I'd link you the interview if I could remember which one it was, but that information is already out there.

Yeah. In fact, his claims as to where the efficiency improvements will come from are *why* I know this isn't going to work. He's *looking in the wrong place*. The real cost problems are not actually in the TBMs. I wish he'd look at the actual sources of high costs -- he probably could do something about them. But he's not looking at them yet.

And *that* is why this is not going to go anywhere anytime soon. Even if you are as quick at solving problems as Elon Musk is, you have to actually be looking at the right problem in order to solve it.

 

[neroden]

When I first read about Musk’s Boring hyperloop, I thought it was a step backwards. High speed trains and other mass transit is the future, not more car travel. But when I think about the combination of Boring with Tesla Network, things really start to make sense:

Trip from NY to DC using Uber and High Speed Train:
5 minute Uber ride from home to station + 20 minute transition from drop off at station to start of train ride + 30 minute trade ride + 10 minute transition from train to start of Uber ride + 5 minute Uber ride to destination = 70 minutes point-to-point

Trip from NY to DC using Tesla Network and Boring Hyperloop:
5 minutes on Tesla Network to get from home to hyperloop + 30 minutes on hyperloop + 5 minutes on TN to destination = 40 minutes point-to-point

You've left out transfer time. (For instance, the time waiting in the queue for the car elevator. Add 20 minute transition on the front end and 10 minutes on the back end == 70 minutes point to point)

And you have not thought about the cost. There's no way to recover the tunnel costs -- let alone the cost of operating the car elevators -- without very high ticket prices.

The number of cars you can run through the tunnels is... well... minimal. Running cars through a tunnel -- especially one at a time, which requires large separations between them for safety! -- is just inefficient. Running a train with 1000 people in it is efficient. The result is that ticket prices on a 1000-person train are going to be far, far lower than ticket prices for carrying a car.

Put it this way: you can probably carry about 40 people in cars on individual "pods" in the same space as you can carry 1000 people in a train. You may be willing to pay twice as much, but the ticket will actually cost 25 times as much.

If you instead load the cars onto proper trains, you can probably carry more like 300 people, so then the ticket would only cost a bit more than 3 times as much, but your loading delays will be longer.

You don't seem to understand how transportation economics works. I can explain it to you if you really want to know.

 

[neroden]

Ants don't have a lot of money.

This approach to development kind of works in the negative space. Excavation is the creative tool.

You only have to create one surface. This is half as expensive as creating a two surface self supporting structure.

Ummmm, I'm not sure what you're talking about.

Have you ever researched tunneling? One of the major problems with tunneling is that most forms of rock *don't* support themselves when you dig holes through them. Cave-ins are the standard problem.

"Hard rock tunnelling" was the easiest and arguably the oldest form of tunneling. If you've got nice hard Manhattan schist, tunneling is easy. (And if you want to know why the latest subway tunnel in NYC was so expensive... it really, *really* wasn't the tunneling. Contractor graft, mostly.) Soft rock required different techniques: reinforcing the tunnel is a pain in the neck and was a large portion of the R&D required. Tunnelling through mud and dirt was even worse and it was only in the last few decades that people figured out how to do it reliably.

 

[neroden]

I don't think people realize how much impact this DC-NY hyperloop news has made in the northeast. I'm yet to run into anyone who hasn't heard about it, and just a few months ago majority of these people hadn't even heard of Elon Musk...

What a great way to promote the brand going into July 28.

God, what a scam.

 

[neroden]

Has anyone noticed the word "leather" has been removed from the Tesla configurator ?

Are the only options now multi-pattern and leatherette?

Yep. The vegans are happy. I think it's a cost-cutting measure.

 

[neroden]

Sometimes I'm puzzled by the question: what is really Tesla doing for solar?

Solar is definitely a big piece of Tesla's mission: there is no "sustainable energy" without solar energy.
Solar needs to fill batteries to power homes and EVs.
But right now, the only innovation in that specific direction is "just" a premium roof for people who thinks PV are ugly. It's definitely nice, but it's not that big an innovation I expect from a guy who reuse rockets.

One scenario I'm developing in my mind is this: Musk is not really interested in innovating solar, at least not at the moment. He's innovating batteries and EVs, products that weren't here before. PVs are not sexy enough, maybe, or worse: people are innovating solar cells and EVs faster than he can right now. China is slashing prices on solar energy, the growth is huge kinda everywhere. Maybe he understands that he can't do much better in also that industry, for the law of diminishing returns. He prefers to stick in highly innovable (?) verticals like EVs, batteries (and rockets and tunnels). Industries he can really disrupt.

I think this is absolutely right. Remember he said he wasn't going to start an electric car company until AFTER GM crushed the EV-1? He's not moving in on any market segment which someone else is taking care of.

The Solar Roof is targeting a segment nobody else is taking care of (people who won't put solar panels on their roofs for aesthetic reasons). He's going to ignore any segment where someone else is already handling it.

Remember the mission: 100% renewable energy. If someone else is taking care of a segment, Tesla doesn't need to worry about it. Tesla is only working on segments which others are not working on or are making no progress on.

Hence the semi.

So, basically, I think that in Musk's mind he thinks that, for Tesla mission to succeed, he needs to generate just demand, and he's doing exactly that.

 

[RobStark]

Yep. The vegans are happy. I think it's a cost-cutting measure.

Or Amber Heard converted Elon to Hinduism ?

 

[neroden]

Financing for utility grade solar+battery should be simple

It's not.

That said, Tesla said the delay in making the Superchargers solar powered was related to serious hassle in getting building permits for the canopies. (!!!!) I can believe it.

 

[Reciprocity]

It's not.

That said, Tesla said the delay in making the Superchargers solar powered was related to serious hassle in getting building permits for the canopies. (!!!!) I can believe it.

I don't believe it because the canopies for 4 stalls would be half a football field. So I agree there that it's a rediculus reason for sure.

The math is fairly simple. 500,000 model 3s charging 50kwh a week on average at a chat to Tesla if 15c or more per KWh. That is money they will be sending in 18 months. That per KWh price drops to 4c if they have solar to offset. Ideally they console the solar directly, which would save transmission fees which can cost more then the electricity supply.

This is but an optional expenses for Tesla, it's an unavoidable fact. Now Tesla can recoop costs by charging customers, which is why I believe financing should be easy. It's easy money. Let me explain why... In 18 months there are going to be 500,000 cars on the road where the drivers used to spend hundreds on gas and now spend 1/4th of that on electricity. Let's say for simplicity sake those amounts are $400/m for had and $100/m for electricity. That's 50m per month in New electricity demand. That demand is guaranteed, is not optional. People won't cut back from $400 to $100 to $0. It just won't happen and won't be an issue unless there is another great depression. If that happens then we have bigger problems.

Just like when you or I go to get solar we take our electric bill and they calculate how much you will save and how much it will cost and long the payback. They then amortize the cost over 25-30 years to show how much you will save by paying 4c/KWh over that time period. In Tesla's case, that savings could be in the order of multiple billions of dollars over 25-30 years. Today, someone will finance this build out and Tesla can use excess margins from supercharging to grow the network. Tesla has no reason not to charge people less then they would pay at home to charge. So the margins on revenues from charging would be 70% or more. Today they are negative.

 

[Off Shore]

Look, there's a trajectory that these things take. First there's resistance. Then everyone is gung-ho about it to the point of legislative carelessness. *Then, with wild west lack of regulation, it kills someone* (which is probably inevitable) and there's a massive backlash and a bunch of bans. Then eventually it gets good enough to satisfy the new, stricter regulation.

I believe we want Tesla to be perceived as on the safe side, not the "wild west" side, and we want it to pass the stricter future regulation, not the "gung ho wild west" regulation.

We're presently killing more than 90 people a day on US roads. You think that if Autopilot can cut that number in half it won't be welcomed with open arms?

edit: grammer

 

[generalenthu]

You've left out transfer time. (For instance, the time waiting in the queue for the car elevator. Add 20 minute transition on the front end and 10 minutes on the back end == 70 minutes point to point)

And you have not thought about the cost. There's no way to recover the tunnel costs -- let alone the cost of operating the car elevators -- without very high ticket prices.

The number of cars you can run through the tunnels is... well... minimal. Running cars through a tunnel -- especially one at a time, which requires large separations between them for safety! -- is just inefficient. Running a train with 1000 people in it is efficient. The result is that ticket prices on a 1000-person train are going to be far, far lower than ticket prices for carrying a car.

Put it this way: you can probably carry about 40 people in cars on individual "pods" in the same space as you can carry 1000 people in a train. You may be willing to pay twice as much, but the ticket will actually cost 25 times as much.

If you instead load the cars onto proper trains, you can probably carry more like 300 people, so then the ticket would only cost a bit more than 3 times as much, but your loading delays will be longer.

You don't seem to understand how transportation economics works. I can explain it to you if you really want to know.

I considered your train-is-better argument for a while and figured you got atleast this part wrong. What matters is not the number of people.in one trip, but the throughput of the entire system.

So a ten car train leaving every 20 mins , would have the same throughput as one car every 2 minutes. Arguably the second option is better from a logistics / convenience perspective. And I am not pulling these numbers from thin air. The 2 minute number was quoted by Elon previously.

 

[Reciprocity]

The Solar Roof is targeting a segment nobody else is taking care of (people who won't put solar panels on their roofs for aesthetic reasons). He's going to ignore any segment where someone else is already handling it.

Exactly, like every house where the front faces South.

What makes Tesla different? I think about the Prius and bolt and solar and quite frankly it's all ugly. What makes Tesla different is ugly is not an option. It's absolutely by design. No one needs falcon wing friggin doors. Maybe James bond. The model S is beauty in motion in every way. No Prius has turned heads like a Tesla. Solar roofs and low profile panels are a very Tesla solution to an ugly problem. Tree huggers and climate alarmist don't care what the panels look like, everyone else, including your neighborhood association does care what they look like. Tesla is going to make solar sexy, I mean for non nerds.

People need to stop thinking about Tesla as some kind of saintly entity that is only about the good of all mankind at all costs. They are not. What they are, is brilliant. They know for a fact that they cannot save the world alone. So they chose instead to create massive demand that would be foolish to ignore. But don't expect Tesla to sell any product that are less then extremely profitable. They will leave the scraps for the survivors to fight over and take all margin at he top half of the curve. That's frankly the main reason I'm invested as I believe they have the ability to drive massive demand and margin. The follow on benefit is that they will drag others kicking and screening into the future.

I don't think Tesla is like Apple but I think Tesla products are like the iPhone and how it impacted the way people compute and they way they live, good and bad. I dismissed the iPhone and missed out on that, not making that mistake again.

 

[Reciprocity]

Or Amber Heard converted Elon to Hinduism ?

Cows exhale CO2 and crap methane thus they must not be raised for meat nor hides. I personally love steak, so thanks to all the vegans who help keep beef prices down. The more the better.

 

[Fallenone]

You've left out transfer time. (For instance, the time waiting in the queue for the car elevator. Add 20 minute transition on the front end and 10 minutes on the back end == 70 minutes point to point)

And you have not thought about the cost. There's no way to recover the tunnel costs -- let alone the cost of operating the car elevators -- without very high ticket prices.

The number of cars you can run through the tunnels is... well... minimal. Running cars through a tunnel -- especially one at a time, which requires large separations between them for safety! -- is just inefficient. Running a train with 1000 people in it is efficient. The result is that ticket prices on a 1000-person train are going to be far, far lower than ticket prices for carrying a car.

Put it this way: you can probably carry about 40 people in cars on individual "pods" in the same space as you can carry 1000 people in a train. You may be willing to pay twice as much, but the ticket will actually cost 25 times as much.

If you instead load the cars onto proper trains, you can probably carry more like 300 people, so then the ticket would only cost a bit more than 3 times as much, but your loading delays will be longer.

You don't seem to understand how transportation economics works. I can explain it to you if you really want to know.

On a different question, I'm not sure even the relatively mature high speed rail would work in US. Population density may not be high enough to recover the building cost in a reasonable time frame.

 

[Intl Professor]

as one ages, filters become fewer

In my 80s, to paraphrase Clark Gable, "frankly, my dear, I don't give a *sugar.*"