2017 Investor Roundtable:General Discussion

[Cosmacelf]

Incidentally, automotive frame dies are huge. Think a multi ton several cubic meter hunk of metal. Tooling (making) the die takes a lot of time, and getting a correct die takes even longer. Designing a die is an art. You have to know how the metal will respond to your particular shape with your particular starting point. There isn't a CAD program in the world that can design a die perfectly.

I believe alpha stage cars are made with non production dies that are made of a different, easier to work with material. Production dies are then made out of much harder material based on lessons learned from the prototype dies, but even those dies need to be tweaked.

 

[dennis]

Tesla has a fan base... those that own the car today spent a lot of money... and had a lot of money to spend... on what has thus far been a series of flagship models that are intended to lead to a truly mass market auto manufacturing company... that is profitable... under the same criteria that exists today with all the major auto manufacturers.

their business practices so far and the repeat customers they've had... will not scale... there are so many Tesla customers buying MS/MX for environmental reasons rather than simply because they need a car.

The model 3 needs to fit a reasonable customer price range without tax incentives... and be profitable... and provide people with a vehicle for use... not to save the planet... yes... obviously that's the point... but it must meet that need without relying on the madness that is you guys (i mean that kindly... many of you guys want the planet saved... noble)...

but regular consumers don't give a &*$#... they need a car... and can't afford to blow extreme cash on it... and if they happen to be saving the planet too... then they'll be even happier for it... but it's secondary to the monetary aspects of general consumers.

the referral program... the "i'll just keep replacing my 5 cars every year to save the planet more" customer... the lack of advertising... etc... will not scale... it's time to grow up and be a big auto company... and suffer the same problems they all have.

And in what category do you put those 373,000 people that put down a $1000 deposit for a Model 3 in response to a 30 minute webcast? Are they environmental greenies? Repeat customers? Or people who see the value of a $35K car that looks really cool and never needs gasoline?

 

[3Victoria]

Agree, EM wanted a compelling car. This includes quality, safety, performance, high-tech, and non-polluting. People buy them because they want them, for any of those reasons.

 

[racer26]

Agree, EM wanted a compelling car. This includes quality, safety, performance, high-tech, and non-polluting. People buy them because they want them, for any of those reasons.

Because they're compelling. Its right there in the word EM uses to describe his products.

Absolutely, TSLA needs to understand that servicing the user who depends on his car to get around is a bit different than servicing the halo supercar buyer, but people buy TSLA's products because they're compelling for a multitude of reasons that speak to different people.

 

[GBleck]

Now I am craving dark chocolate.

They can't validate the frame die till the production press is in place as I understand it?

Multi level marketing require multiple levels. Referral programs are just amplified word of mouth. Organic word of mouth is the best marketing money can't buy. Perhaps the problem we are having is one side is talking about marketing and the other is talking about customer acquisition cost?

 

[MitchJi]

It now says that first installations of the Powerwall 2 in Germany and rest of Europe will start in March whereas previously they stated February as the start of the first installations. For the US first installations will start in January which is unchanged. Could be simply that they want to deliver a lot of units to the US before expanding to Europe.

It sounds like (yay!) they are batching orders to maximize the Q1 financial numbers.

They wouldn't bother to do that unless they are planning to report a significant amount of income on their Q1 ER. Finally!

Two possible reasons:
1. They have an unexpected shortage (bad news).

2. Geographic batching. Really great news! They wouldn't do that unless the total amount sold for Q1 is going to be substantial.

 

[FredTMC]

Incidentally, automotive frame dies are huge. Think a multi ton several cubic meter hunk of metal. Tooling (making) the die takes a lot of time, and getting a correct die takes even longer. Designing a die is an art. You have to know how the metal will respond to your particular shape with your particular starting point. There isn't a CAD program in the world that can design a die perfectly.

I believe alpha stage cars are made with non production dies that are made of a different, easier to work with material. Production dies are then made out of much harder material based on lessons learned from the prototype dies, but even those dies need to be tweaked.

Thx! I think your assessment is probably accurate.

Still my thinking that Betas panels are made from production-based presses and then they are assembled without the use of the final assembly line.

Consider MX roll out... tesla was Stamping MX panels and assembling Pre-production cars with final assembly line running.

 

[Papafox]

...

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Someone call?

 

[Lessmog]

And in what category do you put those 373,000 people that put down a $1000 deposit for a Model 3 in response to a 30 minute webcast? Are they environmental greenies? Repeat customers? Or people who see the value of a $35K car that looks really cool and never needs gasoline?

Or, as in my case, even in advance of the webcast. (Don't bother responding to me, O Ghost; for I'll not see it. Consider this a rhetorical remark, for the benefit of others.)

 

[neroden]

Dan, that is a possibility but it seems a little odd to have two events on the Model 3 so close to one another. Why have a "Model 3 delivery event" a few months after a "Model 3 unveil/reveal"? If Tesla were planning a Q2 cap raise a March/April unveil would make some sense, but I still don't see why they'd have a second Model 3 event a few months later.

Delivery is going to be an event *no matter what*. Even if they try to do it under the radar, it'll be a huge media circus. So might as well make it an official event.

I don't think this really tells us whether there will be a "reveal" before the event.

And, who knows, Tesla might be planning a capital raise. I still don't think they're planning to dilute the equity at this point, but they could do with some bond refinancing if they can get good rates.

 

[neroden]

might want to target this in your Tesla schedule heads-up - March 22
Tesla to reveal more about its new Gigafactory battery cell production at trade show in March
"Kelty is one of Tesla’s top battery scientists...
Now Senior Director of Cell Supply Chain & Business Development, he will give a keynote presentation about “Gigafactory Material Sourcing and Cell Production” at the seminar on March 22....
'This presentation will examine the status on material sourcing and sustainable material sourcing for the Gigafactory. In addition, the production of cells for energy products manufactured at the Gigafactory including the Powerwall and Powerpack will be discussed.'

Kelty will be followed by his colleague Jeff Dahn. Tesla and Jeff Dahn’s battery-research group at Dalhousie University started a new partnership last year that transitioned the group from their 20-year research agreement with 3M to a new association with Tesla under the newly formed ‘NSERC/Tesla Canada Industrial Research’...
Dahn’s research focuses on increasing the energy density and lifetime of Li-ion batteries in order to drive down costs of Tesla’s automotive and grid energy storage products.

He works mostly with NMC Li-ion cells, Tesla’s preferred chemistry for battery cells, and his keynote address titled “Surprising Chemistry in Li-Ion Cells” will discuss how they could stop harmful reactions in those cells in order to increase their capacity:"

should be interesting and timely

There's some very interesting stuff in this. Dahn is specifically making a presentation about increasing the voltage of the individual cells while preventing various chemistry problems:

It is important to increase the operating voltage of NMC Li-ion cells to obtain higher energy density. However, the electrolyte reacts with the positive electrode at high voltage. Using simple experiments involving only pouch bags, we show that the products of these reactions are extremely harmful to the positive electrode. This talk demonstrates how these harmful reactions at the positive electrode can be virtually stopped, leading to superb NMC Li-ion cells that can operate at high potential.

People have been wondering how Tesla will get a high C-rate and charge in 15 minutes or less. Well, raise the voltage of the cells and you're probably done. If the voltage can be raised enough they can probably get that 5 minute charge.

 

[Ovulation]

Panasonics HUD looks promising, looks like you can make something very compelling out of it

 

[Yggdrasill]

Delivery is going to be an event *no matter what*. Even if they try to do it under the radar, it'll be a huge media circus. So might as well make it an official event.

I don't think this really tells us whether there will be a "reveal" before the event.

And, who knows, Tesla might be planning a capital raise. I still don't think they're planning to dilute the equity at this point, but they could do with some bond refinancing if they can get good rates.

I think the reasoning that the referral program extends too far out in time for the Model 3 reveal to be a possible prize is accurate. The referral program ends on March 15th. I expect the reveal before this.

Given that Tesla is planning to start mass production in early Q3 (where there'll be a delivery event), Tesla will need to launch the online configuration page at the latest towards the end of Q2. The online configurator won't have many secrets, so the natural thing is to have a reveal event before the online configurator is available. So, my timeline would be:

~March (most likely March 1-15th): Reveal event
~June: Online configurator
~July: First deliveries event

 

[T1989]

It now says that first installations of the Powerwall 2 in Germany and rest of Europe will start in March whereas previously they stated February as the start of the first installations. For the US first installations will start in January which is unchanged. Could be simply that they want to deliver a lot of units to the US before expanding to Europe.

This seems to be backed up by the fact that Eneco, a dutch energy utility company, is stating that the Powerwall 2 is available from March:

Eneco CrowdNett

It costs 7500 excluding Vat (VAT is refundable), and Eneco pays you 650 anually (for a period of 5 years) in exchange for letting them use some of the stored energy to "balance out" peaks on the electricity grid.

 

[googlepeakoil]

I see this as the only viable way to come to that conclusion - a vehicle on TN could quite conceivably need to charge at some point through the day.

Still doesn't change the required number of SC's to support that many cars charging.

There's also destination chargers - and if I read the site correctly - there's as MANY as there are SC's (though maybe not as heavily used) - and Telsa will see NO revenue from them. So "Trip" is also ignoring the fact that a lot of people will be using these, most will be home-charging and only a small percent will be S'C ing.

On a sidenote - with SC's they're probably on a X year lease (probably with a minimum year and penalty's for both sides for pulling out early).
If I'm right - Tesla mostly doesn't pay for the SC locations (probably doesn't own/buy the land). There's as MANY as there are SC's - and Telsa will see NO revenue from them. I imagine it's seen as a win-win to the land-owner (gets high value customers), and a fear of losing out to other locations - getting bypassed by somebody else (if you've seen the Pixar film Cars you know what I mean). Also - in many locations land is cheap and they're not losing parking spaces - just allowing Tesla to piggyback on their land - at the back of the carpark - which is normally empty.

 

[myusername]

And in what category do you put those 373,000 people that put down a $1000 deposit for a Model 3 in response to a 30 minute webcast? Are they environmental greenies? Repeat customers? Or people who see the value of a $35K car that looks really cool and never needs gasoline?

I'm not a fan of really big unverifiable numbers provided by a 100% bias source... i'm sure this topic was hashed out for a week about a year ago... but what I call it is approximately 250k "people" that clicked some buttons on a webpage and put a temporary $1k refundable hold on their credit card. I agree that Tesla is a known brand... but I see these reservation numbers... like the Powerwall reservation numbers for example... what were those again?... going on two years ago now?... being bantered around and jacking up the stock price... then long forgotten and never verified.

In short, I see it as propaganda... you are using it as such right now... and if you think (I'll assume harshly) otherwise... then tell me exactly how many MX reservations were made, how many were refunded and how many have been filled?

 

[Ovulation]

but what I call it is approximately 250k "people" that clicked some buttons on a webpage and put a temporary $1k refundable hold on their credit card.

So Tesla is basically like the reindeer with the blinking red nose who pops up in the porn videos and ask for your credit card number

 

[myusername]

So Tesla is basically like the reindeer with the blinking red nose who pops up in the porn videos and ask for your credit card number

this reads like it's from someone who's incredibly drunk... I love it!... and I've not seen this reindeer... is this what porn is like in northern Finland?

 

[Yggdrasill]

I'm not a fan of really big unverifiable numbers provided by a 100% bias source... i'm sure this topic was hashed out for a week about a year ago... but what I call it is approximately 250k "people" that clicked some buttons on a webpage and put a temporary $1k refundable hold on their credit card. I agree that Tesla is a known brand... but I see these reservation numbers... like the Powerwall reservation numbers for example... what were those again?... going on two years ago now?... being bantered around and jacking up the stock price... then long forgotten and never verified.

The original powerwall reservations had no reservation deposit. I don't think anyone expected a huge percentage of the reservations to translate to sales, but the interest indicated large demand. (And the demand is still there, Tesla just hasn't focused on taking advantage of it.)

The Model 3 reservations are real. This amount of reservations was predicted ahead of the Model 3 reveal, and you can see the money in the financials. And Musk would be facing prison time if he made it all up. There's also nothing to indicate there have been mass cancellations. No worrying news has come out concerning the Model 3, like delays or missed promises with regards to specs.

Of course, not every reservation will translate to a sale. The percentage might be 50%, or 75%, or 90%. Almost certainly, Tesla won't have to worry about demand until middle to late 2018 at the earliest.

In short, I see it as propaganda... you are using it as such right now... and if you think (I'll assume harshly) otherwise... then tell me exactly how many MX reservations were made, how many were refunded and how many have been filled?

Does it matter? Tesla doesn't seem to have any problem with Model X demand, so probably not.

If we had the data on Model X reservations, there are several reasons why the Model X should have seen substantial cancellations:

- It was two years late.
- It didn't have fold-flat 2nd row seats as promised.
- It was more expensive than indicated. (Especially here in Norway. I had two reservations that I cancelled. On the first, placed in 2012, I thought I would be able to get a 85D for 500k NOK. On the second, placed in 2015, I thought I would be able to get an 85D for 600k NOK. A 90D currently starts at 875k NOK.)

 

[myusername]

The original powerwall reservations had no reservation deposit. I don't think anyone expected a huge percentage of the reservations to translate to sales, but the interest indicated large demand. (And the demand is still there, Tesla just hasn't focused on taking advantage of it.)

The Model 3 reservations are real. This amount of reservations was predicted ahead of the Model 3 reveal, and you can see the money in the financials. And Musk would be facing prison time if he made it all up. There's also nothing to indicate there have been mass cancellations. No worrying news has come out concerning the Model 3, like delays or missed promises with regards to specs.

Of course, not every reservation will translate to a sale. The percentage might be 50%, or 75%, or 90%. Almost certainly, Tesla won't have to worry about demand until middle to late 2018 at the earliest.
Does it matter? Tesla doesn't seem to have any problem with Model X demand, so probably not.

If we had the data on Model X reservations, there are several reasons why the Model X should have seen substantial cancellations:

- It was two years late.
- It didn't have fold-flat 2nd row seats as promised.
- It was more expensive than indicated. (Especially here in Norway. I had two reservations that I cancelled. On the first, placed in 2012, I thought I would be able to get a 85D for 500k NOK. On the second, placed in 2015, I thought I would be able to get an 85D for 600k NOK. A 90D currently starts at 875k NOK.)

who here knows of anyone with an outstanding MX reservation that was made greater than 15 months ago?

there were approximately 25k MX delivered in 2016... do you think all of those were reservation holders?... so 35k in $5k reservations that kept being thrown around for 3 years... turned into what... 15k?... less?

how many people that made an M3 reservation read: "and you can buy one for $27k after federal credits and $22k after some state incentives!"?

these reservation numbers are used for propaganda... are unverifiable... and come from a 100% bias source... I don't understand why any intelligent person would use this as evidence of anything.