2017 Investor Roundtable:General Discussion

[MitchJi]

Good god, I really hope Elon doesn't agree with you. AES and Samsung aren't standing still. They (and others) have more business with probably an inferior product (Powerpack 1 had a great price point and was well packaged as well). Large RFP proposal type business can succeed with an inferior product for a long time.

I believe that the problem with the TE V1 was production. Panasonic probably couldn't supply sufficient cells.

And they probably didn't want to ramp their Japanese cell production with the Gigafactory due to come online.

 

[MitchJi]

Very interesting transcript here as well. Once again I can understand the transcript much better than the audio on the video:
Tesla and Panasonic to Collaborate on Photovoltaic Cell and Module Production in Buffalo, New York • /r/teslamotors

Welcome everyone. So what you just walked through was the cathode mixing section. We're now in the coat-and-dry section.

We receive both our active anode and cathode material as dry powders, however to apply them to our substrates we need them to be liquids. So what we do is take a solvent and mix it with the material to turn it into a solid-liquid slurry. We take that slurry out of those vessels in that last room, pump them up and all the way down to the end, to the last chamber on the ground floor here. There we have this very large roll of aluminum foil that we unwind as we pull it through the oven section on the bottom floor here. We have a coating head, which is very similar to how ink is actually deposited on a piece of paper, and we use that to deposit a very thin layer of slurry onto this metal substrate.

As it comes towards us, we have several sections of air addition and removal. We use that air at very specific flow rates and temperatures to dry the solvent and evaporate [it] off of the substrate in a very prescribe
d fashion. By the time it gets to the end here, all the solvent has evaporated off, and we now have this dry solid layer of active material that is stuck onto our metal substrate.

We take that and we turn it vertical here, go up to our second coating booth. What was the bottom is now the top. We coat that new top section and run it back through the top of the oven in the same fashion. So when we get to the end, we have one very thin piece of metal substrate and active material stuck to both sides of it.

As the air enters each chamber, and as it leaves, it's picking up solvent from the liquid phase and into the vapor. As all the air leaves, instead of just venting it to the atmosphere carrying all this solvent with it, we combine all those outlet ducts together into one large duct, which you see at the very end of the room when it's horizontal there, which then goes through that wall up to our second floor. We have a solvent recovery system where we scrub that solvent back out of the air (to clean the air), and the air turns right around and comes back through another duct and back into the oven. So the air is in a closed loop and never leaves the building.

The solvent we just pulled into the liquid phase then comes out to our utility yard, where we treat and clean the solvent, and the solvent itself is sent right back into our mixing room too. So both the air and the solvent are closed loop, never leaving the building.

This single tool here, this large oven, used to be the largest power consumer in of any part of the factory. But over the past year, Tesla and Panasonic engineers have worked together, and we've been able to re-engineer how this oven operates and how the solvent recovery system operates, and in doing so we've been able to cut the power consumption of the system by about 80%.

So this is oven 1 of phase 1 of Gigafactory 1. And by investing these resources up-front to optimize these systems, all those savings then propogate to every other oven we have in the future. So this is oven 1 for the whole building, and right here in a few months will be oven 2.

And they are using solar panels and geothermal energy for the source, much cheaper than Japanese nuclear power.

 

[winfield100]

I stand corrected on that stat. Even at 60% electric (with Volt 1 mostly) and twice the mpg for the remaining 40% driving. it is 60%/0.25 + 0.5 * 40% = 260% more battery efficient than a Model S in cutting tailpipe emissions.
Many of the Volt buyers would never buy a full electric car for various reasons, like living in apartments or inability to charge at home. It is capturing a market segment that is not addressable with pure EVs. Think Chrysler Pacifica PHEV to clear your fog.

dude, i have a Volt. It was a serious mistake 40% electric, 60% fossil fuel driving. Crippled battery (10.2kWh usable out of 16kWh) and crippled charge rate 3kW MAX. excruciatingly slow if i charge on the road, so i dont.

As for your BMW's "electric's", they are solely for car pool lanes and status with 14 mile electric range.
They are basically "hoohah" at best

 

[neroden]

I think debugging is the path to ramping. Would be great if you are right, but big projects don't usually go that way. Disclosure: I've never been on a 2 billion dollar project to build the most automated assembly line in the world. Might be much faster than model X ramp, but expect some ramping and not a binary on off switch for the new line.

Well, many people are using a nice smooth curved model of a "ramp up".

I think a more lumpy model of short bursts of production followed by weeks of downtime is going to be more realistic.

 

[neroden]

If you haven't read the GF Q&A is it worth the time. Not only does Elon go into the design philosophy for the Model 3 ramp but also some great tidbits like having 2,000 cars waiting to dock in China at end of last year due to pollution level shutdown of the ports.

Transcript of the Gigafactory Q&A - Great stuff on GF1 • /r/teslamotors

THANK YOU. FINALLY. Been waiting for this for days. The gaps in the audio are still super irritating. I really think Elon said something interesting at the end there..

 

[tander]

I think because Elon has not confirmed 800,000 per year. He's said 400,000 per year for 2018.

Will they get to 800,000 per year eventually? Sure. In 2018 or 2019? Probably not, or they'd be talking about it (knowing Elon).

That makes me wonder if they are planning for substantial increases in public guidance. How many cars does 35gw of batteries equate to, isn't that the current battery guidance for 2017 or 18? It kind of seems like the market/analysts have been in believe when we see it mode so it wouldn't be very useful to up the guidance any more. But maybe after they've made ? m3 it will make sense to say oh by the way, we're adding 50 or 100k to 2017 or 2018, commence stock run and cap raise.

 

[drinkerofkoolaid]

Important article from a while ago and a brief quote that I suspect is very important today.



The Making Of Tesla: Invention, Betrayal, And The Birth Of The Roadster

Three very important articles:

GM to sell Chinese-built car in the United States for first time

The secret history of GM’s Chinese bailout

Edward Niedermeyer: Welcome to General Tso's Motors

Bump: As the last article I posted points out, GM is barely a US company.

Edward Niedermeyer: Welcome to General Tso's Motors

 

[MitchJi]

Fiat Chrysler shares plunge 13% after EPA accuses automaker of using deceptive software



Fiat Chrysler said Thursday it is "disappointed" the EPA has decided to issue a notice of violation, and said its engines are "equipped with state-of-the-art emission control systems hardware."


"FCA US intends to work with the incoming administration to present its case and resolve this matter fairly and equitably and to assure the EPA and FCA US customers that the company's diesel-powered vehicles meet all applicable regulatory requirements," the automaker said in a statement after the allegations.

"FCA US looks forward to the opportunity to meet with the EPA's enforcement division and representatives of the new administration to demonstrate that FCA US's emissions control strategies are properly justified and thus are not 'defeat devices' under applicable regulations and to resolve this matter expeditiously."

 

[Intl Professor]

BTW, I was less than impressed at the picture of the AES installation (first picture in the article) showing technicians actually wiring battery packs together. Looks like they are open to the environment too. Compare that to the fully sealed and temperature controlled Powerpacks. I'm not in this space, but gosh, the Tesla solution sure looks superior, yet AES won the big contract.

That is a weakness, but perhaps not because of environmental concerns. The batteries are to be within storage size beige vans, or some such. But...the TSLA solution with racks you can pull out and replace are surely more important than something you have to go into a storage van and actually physically remove each battery as it fails or needs maintenance.

Further, on the contract award, California government needs more than one supplier of battery backup and perhaps with the quickness. Consider this installation and Tesla's an experiment by the state which the feds are too short-sided to fund directly.

 

[stealthology]

I'll put my money on them being one one quarter off. I think it's more likely Tesla number 199,999 is delivered December 31st.

I'm thinking projected full year 2017 deliveries will be an important number when it comes out next month.

This should be pretty big, no? It should give us insight into how many M3's they plan to produce this year.

 

[Lump]

"Tripin" Trip "Chowder" Chowdery strikes again

Trip Chowdhry claims that by fiscal 2020, the SuperChargers will add $2.6 billion to revenue,

Tesla Motors: Supercharged?

 

[Cosmacelf]

I'll say one last thing about Tesla Energy. I know of a small electric co-op in California that has been looking at buying a battery system. Something on the order of 1 MWh. Tesla quotes this as costing $460K on their website. Tesla isn't even in the running since they don't have anyone actively selling it to this utility - neither Tesla directly nor through an installer/VAR. The Tesla system is almost certainly cheaper and better than what they will end up using, but that's irrelevant if no one is making the sale. You can criticize the utility, but frankly, I agree with them. If Tesla can't be bothered to actively sell the product, where are they going to be when it needs service? It isn't as if Tesla Energy has service centers or anything.

Note that it is up to Tesla to make these sales since it does not appear they are or want to work with resellers/installers - their web site is a direct sale web site with no mention of sales partners.

So I fully understand and agree with the analysts that aren't factoring in Tesla Energy. You can crow all you want about a great product, but until Tesla shows they can SELL these great products in some sustainable volume that moves the needle against car sales, then Tesla Energy is a non-entity. And as a final point - wasn't Tesla Energy supposed to show meaningful sales in 2015? Then in 2016? I know the excuses, everyone's got lots of excuses, it's the execution that matters.

 

[drinkerofkoolaid]

"Tripin" Trip "Chowder" Chowdery strikes again

Trip Chowdhry claims that by fiscal 2020, the SuperChargers will add $2.6 billion to revenue,

Tesla Motors: Supercharged?

Also, Superchargers = Assets, in most cases.

How much does each Supercharger cost?

What is the value of the land the Superchargers are? (Who owns the land?)

Even if the Superchargers don't produce a direct profit, the machines and land are worth billions. This doesn't take into account the value of the technology, the Grid Storage, or the Solar Panels that will be deployed at every Tesla station. Also, this doesn't take into account the value that will be created from the stored electricity being sold to utilities!

Thoughts?

 

[Zhelko Dimic]

I'm thinking projected full year 2017 deliveries will be an important number when it comes out next month.

This should be pretty big, no? It should give us insight into how many M3's they plan to produce this year.

I hope they offer no guidance at all.

Growth of S+X post 2016 levels is irrelevant to success of Tesla as a company, and M3 ramp is unpredictable.

If they said that, and say they'll be focusing on getting M3 out, but not sacrificing quality, tone of discussion may change.
Discussion may be around 'will they make it', and not about 'will they be late'. And that is discussion I'm comfortable Tesla will deliver on.

They need to change that discussion to something they can win.

Any number Tesla communicates is just something they may miss, while being irrelevant. If anyone at Tesla reads this, please consider it!

 

[Yggdrasill]

"Tripin" Trip "Chowder" Chowdery strikes again

Trip Chowdhry claims that by fiscal 2020, the SuperChargers will add $2.6 billion to revenue,

Tesla Motors: Supercharged?

Lunacy.

A reasonable estimate for income would be for maybe 10% of mileage to be paid for. This assumes a fair percentage of apartment dwellers using supercharging. At 1.5 million vehicles, 1300 miles per year, 300 miles/hour and $0.16/minute, that works out to a revenue of $62.4 million per year. That's a bit under $2.6 billion.

(I guess a wild card is the Tesla Network - it may add substantial revenue.)

 

[JGInnovation]

I'll say one last thing about Tesla Energy. I know of a small electric co-op in California that has been looking at buying a battery system. Something on the order of 1 MWh. Tesla quotes this as costing $460K on their website. Tesla isn't even in the running since they don't have anyone actively selling it to this utility - neither Tesla directly nor through an installer/VAR. The Tesla system is almost certainly cheaper and better than what they will end up using, but that's irrelevant if no one is making the sale. You can criticize the utility, but frankly, I agree with them. If Tesla can't be bothered to actively sell the product, where are they going to be when it needs service? It isn't as if Tesla Energy has service centers or anything.

Note that it is up to Tesla to make these sales since it does not appear they are or want to work with resellers/installers - their web site is a direct sale web site with no mention of sales partners.

So I fully understand and agree with the analysts that aren't factoring in Tesla Energy. You can crow all you want about a great product, but until Tesla shows they can SELL these great products in some sustainable volume that moves the needle against car sales, then Tesla Energy is a non-entity. And as a final point - wasn't Tesla Energy supposed to show meaningful sales in 2015? Then in 2016? I know the excuses, everyone's got lots of excuses, it's the execution that matters.

I'm not sure it matters yet. Installations should be done strategically at this point until they have lots of batteries being produced. The goal is to get producing batteries quickly and then consume them in the most logical way.

 

[Cattledog]

"Tripin" Trip "Chowder" Chowdery strikes again

Trip Chowdhry claims that by fiscal 2020, the SuperChargers will add $2.6 billion to revenue,

Tesla Motors: Supercharged?

Gotta love his enthusiasm. If he was right just this one time we'd all be multi-millionaires!

 

[Yggdrasill]

I hope they offer no guidance at all.

Growth of S+X post 2016 levels is irrelevant to success of Tesla as a company, and M3 ramp is unpredictable.

If they said that, and say they'll be focusing on getting M3 out, but not sacrificing quality, tone of discussion may change.
Discussion may be around 'will they make it', and not about 'will they be late'. And that is discussion I'm comfortable Tesla will deliver on.

They need to change that discussion to something they can win.

Any number Tesla communicates is just something they may miss, while being irrelevant. If anyone at Tesla reads this, please consider it!

I would prefer Tesla providing some guidance. It's fine if it's very conservative, but they should say something to avoid shorts using the silence to paint their own narrative, like: "Tesla doesn't even pretend that there's any more demand for the Model S or Model X."

If Tesla guides to 100k Model S/X deliveries, 25k Model 3 deliveries and 2.5 GWh worth of TE products, I'd be happy. It's conservative enough that Tesla should meet guidance without much issue, while still improving substantially on 2016.

 

[Yggdrasill]

If I know Tesla right though, they'll guide to 120k Model S/X, 100k Model 3, 8 GWh of TE products and 2 GW of solar roofing.

 

[RobStark]

If I know Tesla right though, they'll guide to 120k Model S/X, 100k Model 3, 8 GWh of TE products and 2 GW of solar roofing.

Then they actually deliver 60k Model S, 50k Model X and 23.333k Model 3 and I win the prediction contest.

Bears "Tesla is an abject failure"

Bulls " Shooting for the moon and grabbing a star is still a win"