2017 Investor Roundtable:General Discussion

[Reciprocity]

This would require an unprecedented level of automation, and I'm skeptical that it will happen soon.

However, if Tesla could create a factory that produces cars as quickly and flawlessly as and Intel fab produces microprocessors, this would be a game changer. I'm of the "wait and see" mentality where the Alien Dreadnought is concerned.

Well yeah.. Tesla didn't buy grohmann because they have a cool name. They bought them because they help Intel make those chips. This is why they bought them instead of just hiring them. Tesla is are not an auto company. What they want to be is a manufacturing automation company that is heavily tech centric. Designed and simulated and then deployed. Lights out factories that build machines at such a high rate that humans can not get near then while they are running for fear if bodily harm. It's like they are designing the Y with grohmann oversight so they can be sure each aspect can be automated. You just can't do that unless you control them.

 

[myusername]

This is why I have been brought to the Darkside and think the MY might be under $30k, which will destroy a very broad spectrum of competitve vehicles. Being that the MY will be on a new platform designed purely for manufacturing efficiency and speed, I now think it will be the next step in global domination. If you recall Elon spoke about the S having 3km if wiring, the TM3 having 1.5km and the MY having 300m as an example of simplification. And that 300m could be installed by a machine where today wiring harnesses are mostly installed manually and are labor intensive. I was shocked to read that the Nissan rogue just passed the Camry as the most popular car in the US. That would be the target for the Y just as the F150 is the target for the Tesla pickup.

see @anticitizen13.7 ... this is what I'm talking about... this is the same hype that used to be talked about the M3... i've had a short stance on Tesla for years now and it's all boiled down to this. I've also tried to not be angry about what I've seen as years of irrational thinking and circular arguments... and appreciate the reasonable dialog today. but this is a perfect example of the reason why I've been short all this time. now let's see if the market agrees. my expectation is TSLA becomes a completely different stock starting in Aug.

 

[22522]

Should have reserved earlier. Plus people struggling to afford the base model might not qualify for the full tax rebate anyway.

I am starting to understand. Even though they have the base model sorted and will sell it to other people from January through May, they will not sell it to me until June through August of 2018.

I made the deposit in early May of 2016, mostly to give them even more supplier leverage and some small working capital for 2 years. As a goodwill gesture, about 40 days back.

I must admit the gesture has served its purpose. They have a good vehicle at a low cost.

I also understand the fairness of the process, in that the stagger of the availability of the $35K car is not linear with time (40 days back), but scaled based on the production ramp that first depositors see. Scaled more on order and production ramp. Not time. They need to expose everyone to that delay to be fair to people who are first in line.

It took a while for me to understand that.

 

[sundaymorning]

Favoritable reviews continue to pile up.

Here’s What Everyone Says About How The Tesla Model 3 Drives

 

[AlMc]

see @anticitizen13.7 ... this is what I'm talking about... this is the same hype that used to be talked about the M3... i've had a short stance on Tesla for years now and it's all boiled down to this. I've also tried to not be angry about what I've seen as years of irrational thinking and circular arguments... and appreciate the reasonable dialog today. but this is a perfect example of the reason why I've been short all this time. now let's see if the market agrees. my expectation is TSLA becomes a completely different stock starting in Aug.

What are your predictions/expectations for the SP
Pre ER, the Friday after ER and the last trading day of August.

Honestly, I have NO clue. I have tried to prepare for some downward movement but I will certainly have a better 'paper balance' with an SP of $380 vs $300

 

[Reciprocity]

see @anticitizen13.7 ... this is what I'm talking about... this is the same hype that used to be talked about the M3... i've had a short stance on Tesla for years now and it's all boiled down to this. I've also tried to not be angry about what I've seen as years of irrational thinking and circular arguments... and appreciate the reasonable dialog today. but this is a perfect example of the reason why I've been short all this time. now let's see if the market agrees. my expectation is TSLA becomes a completely different stock starting in Aug.

You have been wrong for 5 years, what makes you think you will be right in August. You're right about one thing, it won't be long now. If Tesla ramps model 3 to 5k with decent margins, shorts are toast. I just don't see why any longs would bail by August and shorts have no fire power to stop Tesla. You can't short a stock and make it go down, it just isn't possible. Shorts need negative events to push the price down. Wait August is in 2 days.. No amount of FUD is going to save shorts now. I'm going to say you have 7 months. You can come back on here and rant about some argument you had with me and claim the stock is just about to go down for real this time.

 

[sundaymorning]

All this complaining about the base model being delivered later got me thinking. When I stood in line before the reveal my understanding was the model 3 would be delivered in 2020. Correct me if I'm wrong? I can't remember exactly when Elon moved up the schedule but it was after I reserved.

So why are people complaining (other than that's what a large number of people just do)? The base model will still be delivered ~2 years earlier than what was expected when the reservation list was opened.

My only disappointment is I can't get a PLR3D until late 2018 since I'm not an owner. I can't wait that long so I'll "settle" for a fully optioned rwd. Im in California anyways, no real need for the P and AWD except to compensate for my deficiencies.

The more people complain about not being able to get their Model 3 in a timely manner the more my portfolios grow. Let the complaining continue

 

[geneclean55]

Reviews look great so far
Margins will be good
I don't care if reservations numbers move around in the short term, Tesla has enough orders to keep busy for the next year during which time M3 cars will hit the streets and orders will rise.
I just want some kind of irrational buying dip this week.

 

[vgrinshpun]

Wake me up when there is so much demand for the Bolt that it doesn't get discounted.

...and can outsell Honda Fit...

 

[anticitizen13.7]

see @anticitizen13.7 ... this is what I'm talking about... this is the same hype that used to be talked about the M3... i've had a short stance on Tesla for years now and it's all boiled down to this. I've also tried to not be angry about what I've seen as years of irrational thinking and circular arguments... and appreciate the reasonable dialog today. but this is a perfect example of the reason why I've been short all this time. now let's see if the market agrees. my expectation is TSLA becomes a completely different stock starting in Aug.

I ask myself 2 things about statements that seem hyped: (1) Is the assertion physically impossible? (2) What is the track record of the people who are said to be accomplishing the "hyped" potential result?

My knowledge and experience with software and robotics says that it is possible to push automation further than before. The advances in the past 10 years have been phenomenal.

Elon has a track record of getting things done. Sometimes he is late or even very late, but he is relentless. The accomplishments of SpaceX alone (in becoming a viable rocket company and pioneering reusable rockets) are evidence that Musk will do what he says he intends to do, no matter how difficult the goal.

Therefore, I do not dismiss the possibility that Tesla could develop a successful new manufacturing process that is much more automated than anything which exists today.

I suspect it will take time and continual revision to get to full potential if it could be made to work. I won't buy into the idea fully though until I see proof that the idea is beginning to be implemented successfully. The Model 3 production line is a benchmark to watch closely.

 

[ValueAnalyst]

What is our guess for the battery sizes? I think we settled on 55kWh and 75 kWh?

If the model 3 mix is 50-50 (so avg 65 kWh) and assuming Tesla will exceed the previous 50 GWh target for 2018 (see below section from 1Q17 transcript), so say 55 GWh capacity at the pack level, and 80% of pack capacity will be devoted to cars and 20% for Tesla energy, and Model S and X will need 10 GWh capacity to support 100-120k units in 2018, then Tesla will have enough batteries for more than 500k Model 3's in 2018.

(55 GWh x 80% - 10 GWh) / 65 kWh = 523k Model 3's ~$23B revenue

100k-120k Model S/X combined = $10-12B revenue

And ample of room for Powerpacks revenue growth with 11 GWh so ~$5 billion.


----------

Deepak Ahuja - Tesla Motors, Inc.

Yeah, with internal, right. Exactly. With our own resources and the cash that we generate in our business as we ramp up Model 3 volumes. And overall, and JB can speak up more to that in terms of the cell capacity. That's all lined up to come online just ahead of our needs on the vehicles side as well as on the energy storage side.

Jonathan McNeill - Tesla Motors, Inc.

And we initially forecast about 35 gigawatt hours of cell capacity, and 50 gigawatt hours of pack capacity, and we anticipate to surpass that cell capacity in 2018. So, that's going well, and with the increasing improvements in the production density and speed at the Gigafactory, we actually ultimately believe, and I think we've said this before, that we can fit substantially more capacity than 35 gigawatt hours at Gigafactory 1.

Would love to have some thoughtful feedback on this.

According to the logic above, it seems possible that Tesla can reach $35B-$40B revenue in 2018.

Cureent street expectation: $20B

 

[Snapdragon III]

See folks are getting it. Tesla's brilliance is that they are not making a least common denominator car. They are attacking the highest margins first then incrementally moving down market. Model 3 is the first move model Y is the second. For model Y, look at the Nissan rogue which is now the most popular car in the US beating out Camry. Like model 3,S,X the Y will appeal to a board market but could be the first truly mass market car that targets Toyota and Honda more so then BMW and Daimler.

This is about the 100th reference I have read to the "Nissan Rouge". I am not a huge car guy, but would say I could identify 80% of the vehicles on the road at 100 yards to at least the level of which company built them. After reading that the Nissan Rouge was the most popular car in the US, where I live, for the 100th time in your post, I realized I have no idea what it even looks like. I Googled it, and It is about exactly what I expected it to look like, but my response was not, "Oh that car that I see everywhere." If Nissan's super nondescript design that leaves so little impression that I don't recognize it, is the primary competition, I am very confident that Tesla can make a more compelling car in the model Y.

 

[Sancho]

Let's stop trying to define "mass market". The base car is 35K, which is affordable by a broad swath of the top 25% of earners in this country. It's not as huge a market as a 17k car, of course, but it is a helluva lot bigger than the Model S market.

While I do believe that most people are going to pay far more than the base price (which will be great for margins), the base car is still a GREAT car. To put that in perspective, compare it to my first generation Model S, which I love more than most members of my family:

My Model S has about the same range as the base Model 3, it has no autonomous driving, the same as the base model 3. It has no glass roof, the same as the base Model 3.

The only difference between my Model S and the base Model 3 is size, and frankly, I'm looking forward to a somewhat smaller car. Many of the reviews talk about how zippy the smaller Model 3 feels with all that power and performance.

The base Model 3 is an unbelievably great car at an unbelievable price (less than half what I paid for my Model S). For those who can't afford the higher end Model 3, it is a very compelling purchase.

 

[Sancho]

Folks, please stop debating the demand side. People who put $1,000 down on a car they've never seen, is unlike any car they've ever owned, and they won't get it for a year, are the very early adopters. There is a MUCH bigger wave of people about to come into the market for a Model 3 after it has launched.

BUT ONLY IF, of course, the reviews are good. And so far, they are spectacular. And I'm actually only interested in the reviews as the leading indicator of what word-of-mouth is going to be for this car. I am old enough to remember when Lexus first came on the market. The word-of-mouth was unbelievable. Everyone of a certain income bracket was talking about it.

The Model S and X also enjoyed good word-of-mouth, but at 100k, its only a small segment of the population that can really talk it up as a viable option. Now the word-of-mouth is going to spread to a MUCH larger segment. If all Model 3 owners talk glowingly about their car to all their friends, demand is going to explode faster than you can imagine.

 

[sundaymorning]

Facebook now understands the dangers of AI

Facebook Shut Down An Artificial Intelligence Program That Developed Its Own Language

 

[roblab]

I suspect it will take time and continual revision to get to full potential if it could be made to work. I won't buy into the idea fully though until I see proof that the idea is beginning to be implemented successfully. The Model 3 production line is a benchmark to watch closely.[/QUOTE]

That's why Elon is rich. He buys in on the belief that the idea is possible, not on the proof.

 

[dennis]

not if you told a billion people a year ago that you'd sell them the car for $35k and asked them to give you $1k up front... and then said... "yeah... i meant $50k"... i mean... who does that?... most of the "billion" you refer to are about to get totally pissed off.

Oh FFS a year ago they said you could get a car with at least 215 miles of range for $35K. And by November you will be able to get a car with 220 miles of range and a standard interior for $35K. So you are claiming that all of these people are going to get pissed off that they have to wait until November while other customers can get a 310 mile car with a premium interior for $49K in September or October? Go back under your bridge.

Model 3 Reservations FAQ

 

[GoTslaGo]

Facebook now understands the dangers of AI

Facebook Shut Down An Artificial Intelligence Program That Developed Its Own Language

A little more detailed article (within your article):

What an AI’s Non-Human Language Actually Looks Like

Quote:

Something unexpected happened recently at the Facebook Artificial Intelligence Research lab. Researchers who had been training bots to negotiate with one another realized that the bots, left to their own devices, started communicating in a non-human language.
.....

And also: What does this language actually look like? Here’s an example of one of the bot negotiations that Facebook observed:

Bob: i can i i everything else . . . . . . . . . . . . . .
Alice: balls have zero to me to me to me to me to me to me to me to me to
Bob: you i everything else . . . . . . . . . . . . . .
Alice: balls have a ball to me to me to me to me to me to me to me
Bob: i i can i i i everything else . . . . . . . . . . . . . .
Alice: balls have a ball to me to me to me to me to me to me to me
Bob: i . . . . . . . . . . . . . . . . . . .
Alice: balls have zero to me to me to me to me to me to me to me to me to
Bob: you i i i i i everything else . . . . . . . . . . . . . .
Alice: balls have 0 to me to me to me to me to me to me to me to me to
Bob: you i i i everything else . . . . . . . . . . . . . .
Alice: balls have zero to me to me to me to me to me to me to me to me to

Not only does this appear to be nonsense, but the bots don’t really seem to be getting anywhere in the negotiation. Alice isn’t budging from her original position, anyway. The weird thing is, Facebook’s data shows that conversations like this sometimes still led to successful negotiations between the bots in the end, a spokesperson from the AI lab told me. (In other cases, researchers adjusted their model and the bots would develop bad strategies for negotiating—even if their conversation remained interpretable by human standards.)
.......
Another recent preprint paper, from researchers at the Georgia Institute of Technology, Carnegie Mellon, and Virginia Tech, describes an experiment in which two bots invent their own communication protocol by discussing and assigning values to colors and shapes—in other words, the researchers write, they witnessed the “automatic emergence of grounded language and communication ... no human supervision!”

End quote.

Really suggest reading @sundaymorning's original article and the articles embedded within. Very interesting, especially since how MZ is such a proponent of AI.

 

[RobStark]

I have never subscribed to the theory that Tesla needed to "destroy" companies like Toyota and GM in order to succeed. Tesla was not founded for the purpose of doing this, nor does it pursue such goals!

Tesla doesn't need to destroy Toyota nor GM to succeed.

It doesn't pursue such goals.

It is just a byproduct of transitioning the world to sustainable transportation.

And GM and Toyota's refusal to join the 21st Century. Despite their best greenwashing efforts.

 

[Snapdragon III]

A couple of thoughts after reading the last few pages of comments.

Tesla does not need to crush it's competitors to do extremely well as an investment, and as a company. They are not fighting over who gets what slice of the auto market pie, they are baking their own pie! From the beginning, and continuing with the model 3, they have produced such a compelling product that they have created a market that never existed before. Personally I am very excited about getting a fully optioned Model 3 as soon as I can. I am not buying it because I need a car. I have a perfectly good Lexus that is paid for and runs and drives great, and I wouldn't even consider buying any other car unless my Lexus suddenly died, which I doubt will happen. It is not a matter of me picking between Lexus, BMW, or Tesla for a new car next year, it is a matter of me doing nothing, or buying a new Tesla. I suspect that many Tesla buyers, including the majority on this board that own S and X would have never considered a car in that price bracket prior to getting excited about Tesla, and most of them probably didn't really need a new car when they bought their Tesla's. This is very good for the company, and our investments in them. I see this as a similar phenomena to the iPhone. There was no such thing as a $700 phone, and Apple didn't take a bigger share of the existing phone market. The Phone market as a whole grew, but Apple and their supper compelling products created a huge segment at the top end that didn't exist prior. I believe Tesla is doing the same in the Auto market.

As a side note, I believe the money people spend on their iPhones, has changed peoples spending priorities and is at least as much of a factor in the problems of brick and mortar retail as Amazon is. The money relatively poor people are spending on Apple products is sucking the air out of retail discretionary spending. People paying way more for Tesla's than they normally would for a car will have the same effect, but automotive companies will not be the only ones to feel it.