2017 Investor Roundtable:General Discussion

[jhm]

Bingo, I actually learned this from Rob and have seen it in writing in more in-depth articles since. I think the working hypothesis from manufacturers is that LG Chem, Samsung or some Chinese supplier is going to be making billions of cells for them at sub $100/KWh and flooding the market by 2020, so there is no need to bother with a supply of their own. Tesla would have loved to have some supplier able to do that, but they dont exist and wont in any real way for many years at a minimum because gigafactories take a long time and tons of cash to build. This is why so many think Tesla is losing money on every car. You would be losing money to if you had to spend $5B on factory to build battery cells before you could put them in a future car that doesnt exist yet (it does now of course, but is still low volume and ramping as I type.) Other manufactures have not taken those risks and thus they wont benefit from the rewards.

I also think its a bad idea to expect China to export large numbers of cells in next 5-10 years. They have legitimate issues with pollution that will severely stunt the growth of their country. As they become a bigger economy, people will start to demand breathable air, not to mention the lost of productivity from all the choking and dying and stuff. China needs every battery they can get. You could say they need every solar cell and wind turbine they can can make as well, but that the thing. They have a lot of that, but no way to store the energy for dark and windless hours of the day. They also have 24 million cars sold per year, about 7 more then here in the US. I would assume that not all 24M are highly efficient and clean. They have a real crisis on their hands and they will be using most of the batteries they make. I could be wrong, but I am high speculative that they will be exporting much. Now some Chinese companies might open manufacturing in other countries, but there becomes a huge issue of funding. Outside of China, they are not going to have the government to back them.

Now maybe im completely wrong and China does want to corner the market in batteries and thus dump as many as possible all over the world as possible. The problem with that theory is that you would see a lot of very large projects to build batteries in China. Like 20 gigafactory sized projects. I have not seen any real evidence of that as of yet, though I am not an analyst paid to look for this stuff. I do however follow very smart people on this forum and read just about everything so I feel pretty confident and this theory is not yet something I would agree with.

I would not be worried about a battery glut. At the right price, there is a bottomless pit of demand for batteries in the grid on the scale of TWh.

 

[scaesare]

Here is the evidence: Model 3 SR is essentially matching the weight of BMW with the same 0 to 60 time - 330i: 3549lbs for Model 3 vs 3541lbs for the BMW 330i.

I suspect the comparison might also need to accommodate range, as that's a significant factor in determining the overall weight of the pack.

The SR Model 3 is 220 miles vs. the BMW 330i's 427 miles: 330i economy specs

 

[vgrinshpun]

I suspect the comparison might also need to accommodate range, as that's a significant factor in determining the overall weight of the pack.

The SR Model 3 is 220 miles vs. the BMW 330i's 427 miles: 330i economy specs

Sure, and it did, as I specifically mentioned in my original post on this subject EV that has 200+ miles range. Range of ICE is irrelevant due to very low impact on weight (high energy density of gasoline).

Please read my previous and the following posts: the intent is ***not*** to make functional comparison of EV vs. similar class ICE based car, but rather to suggest a simple way to ascertain the state of battery technology.

 

[vgrinshpun]

This article in reneweconomy.com has a summary of the latest battery storage report from SunWhiz. Among the expected information about the battery storage in Australia (like confirmation that Tesla is a price leader, and that battery storage installations are experiencing explosive growth) the report included rather intriguingly worded sentence about Tesla:



This makes me wondering whether report authors know that other Tesla announcement(s) are coming. If true, and not just awkward wording in the report, I can't see a better time for the announcement than the end of September event in SA.

Another interesting tidbit is that among the large grid-scale installations in 2017 Tesla projected to take a whopping 83% of the market - 129MWh out of 156MWh projected to be installed in 2017.

This is getting interesting - another article in reneweconomy.com suggests that we might have new announcement from Tesla while Elon is supposed to be in the country for a space conference, and as speculation goes, will host the Hornsdale wind farm PowerPack event. Additionally reneweconomy.com ***speculates*** that Elon also might stop by in Victoria, where the results of their auction for another battery installation with the similar energy capacity (>100 MWh) is overdue. The implication is that Victoria battery auction has been won by Tesla.

Tesla founder and CEO Eon Musk will be in town to appear at the South Australian government’s international space conference being held next week, and so there is strong speculation – as yet unconfirmed – that he will host the Powerpack event.

RenewEconomy suspects the Powerpack celebration will be the formal announcement that a connection agreement has been reached for the project, and the clock on the “we will build it in 100 days or it’s free” promise starts counting down.

Of course, that deadline if really for marketing purposes only, because the contract with the South Australian government actually calls for the storage to be in place by December 1, in time for the start of summer, and possible heatwaves. There are now 70 days till December 1

But while construction of the South Australia big battery gets into full swing, there are questions about what has happened to the Victoria version of the big battery.

It had held an auction for two different battery storage installations – each of 20MW of power but with a combined total capacity of more than 100MWh. That compares to the Tesla installation in South Australia of 100MW/129MWh.

The results of the auction had been due to be released in late August. This week, the government has been busy getting its VRET (Victoria renewable energy target) through the lower house of parliament, but the talk is that it will be announced soon.

It will need to be, because the government wants them in place by January 1, also to help meet a hot summer, this time without the Hazelwood coal generator.

Which invites more speculation: What if the announcement was timed for Musk to drop into western Victoria on his way to South Australia?

We know Tesla has bid and may well have bid once again with Neoen, the French developers who own Hornsdale, partnered in the South Australia tender and who have won just about every tender they have entered – including wind, solar and battery storage.

 

[vgrinshpun]

For those curious about integration of the Tesla Energy sales into the Tesla Stores, here is the Tesla Energy Advisor advertisement on LinkedIn:

Description

Energy Advisors play a pivotal role in allowing Tesla to achieve our mission. Energy Advisors are an innovative, hybrid retail sales integration within Tesla. In this role, you will engage with potential customers in our sales locations, exciting them about learning and experiencing our innovative products and programs. During every interaction with a customer, you will strive to understand the customer’s needs, schedule an energy consultation and help them join the transition to sustainable energy. You will ultimately be measured and rewarded by your ability to close customers on installing solar systems, as well as driving powerwall sales.

You will work alongside our Customer Experience Specialists and Owner Advisors to provide exceptional customer service. Supporting your sales peers and prioritizing teamwork is essential to achieving the highest level of success.

Energy Advisors take a consultative approach to educate customers on the growing solar/clean energy industry. You will spend part of your time in our sales locations engaging with prospective customers, and part of your time visiting & consulting with prospective customers at their homes. You are also responsible for generating referrals and leads through events. You are the primary, external representatives of Tesla Energy sales. This position requires drive, self-motivation, desire to help customers and a high degree of professionalism to represent products that are truly changing the world.

Responsibilities

Meet or exceed monthly sales quotas

Drive a high level of self-generated pipeline activity through referrals, events and sales networking activities

Deliver exceptional customer service to provide the perfect experience throughout the sales & installation process, as well as continued support throughout ownership

Display creativity / ingenuity in presenting solutions (financial, technical, lifestyle, practical) to customers considering but uncertain about going solar

Represent Tesla in a professional and responsible manner

Welcome all walk in guests, answer questions pertaining to both energy and vehicle products and generally manage the customer’s Tesla experience in the most positive way

Minimum 15 to 20 hours spent in-store focusing on lead capture and building pipeline

Enthusiastically educate all customers and fans about the benefits of going solar and electric

Assist Owner Advisors in co-piloting test drives for Tesla enthusiasts and providing an experience that future customers would highly recommend to friends and family

Help Tesla maintain a healthy sales pipeline by collecting customer contact information and subscribing them to digital updates from the company

Your performance will be measured by your ability to engage with and sign up potential customers in the store, over the phone or in their home during a consultation for one of our products or programs

 

[D-egg-O]

For those curious about integration of the Tesla Energy sales into the Tesla Stores, here is the Tesla Energy Advisor advertisement on LinkedIn:

You're on a roll dude. Strong work.

 

[vgrinshpun]

Putting another estimate on the ***maximum*** Model 3 production that can be expected based on the graphic included on the Model 3 web page, the maximum total produced by the end of the year could be around 35k units. I would advocate halving this number for a realistic projection, which then will yield about 17.5K, which is in line with my long held belief that Tesla unlikely to deliver more than 20k of Model 3 this year.

Note that scaling the chart yields maximum of about 500 cars produced in September.

 

[Gerardf]

Norway still on 100 deliveries a day ! Yesterday 99, today 67 and counting.

For the month at 931 total MS/MX now, that is already 80 more than the strong June '17.
Source : Tesla Registration Stats

 

[Richgoogol]

Norway still on 100 deliveries a day ! Yesterday 99, today 67 and counting.

For the month at 931 total MS/MX now, that is already 80 more than the strong June '17.
Source : Tesla Registration Stats

how reliable is this source?

 

[ValueAnalyst]

375 close?

how reliable is this source?

Please keep in mind that the 80 car difference noted is less than 0.3% of expected deliveries. Not sure how valuable delivery tracking is.

 

[ValueAnalyst]

Putting another estimate on the ***maximum*** Model 3 production that can be expected based on the graphic included on the Model 3 web page, the maximum total produced by the end of the year could be around 35k units. I would advocate halving this number for a realistic projection, which then will yield about 17.5K, which is in line with my long held belief that Tesla unlikely to deliver more than 20k of Model 3 this year.

Note that scaling the chart yields maximum of about 500 cars produced in September.

View attachment 249085

Two things:

1. I think this graphic was meant to be a directional guidance, so I wouldn't read too much into inflection points, and
2. There is reason to believe that Elon's guidance has moved towards conservative this year on the conservative-delusional spectrum.

Please let me know if you'd like to make your "long held belief that Tesla is unlikely to deliver more than 20k of Model 3 this year" more interesting.

 

[dalalsid]

For those curious about integration of the Tesla Energy sales into the Tesla Stores, here is the Tesla Energy Advisor advertisement on LinkedIn:

Linkedin says Tesla is a computer software company!

 

[Reciprocity]

Not sure this has been shared yet:
Morgan Stanley Says EVs Will Reach Price Parity With ICE By 2025

Even though the title says price parity by 2025, they say that some vehicles are already in parity if you account of fuel and maintenance costs, but that consumers will not do that math. I agree they wouldnt do that math for a Nissan Leaf or a Chevy Bolt, because those cars does not inspire one to sit down with pencil and paper. Tesla purposely designed their vehicles to inspire people to dust off of the old Texas Instruments calculator. That is why the 3 looks like a Porsche in the front, Model X in the back and Model S in the middle. You already have proof of that with the Model S, where people will go the extra mile to justify the higher monthly payment. I would agree with the article that consumers would not do that for a lower class cars, meaning a car targeting the Corolla level consumer, but they will for a car that targets upper end of the Camry level. People wont actually have to do the math because it will be by others for them, but they have to be motivated enough to search out the information and want the car bad enough to believe it what they learn. No one needs a $1000 iphone when there are hundreds of brands that sell for under $500, yet they justify it because of the appeal of the brand.

 

[AlMc]

For those who follow and/or place short term option *bets* using MaxPain theory.

 

[ValueAnalyst]

Off Topic:

Does anyone know how Elon tracks his progress vs. goals? Spreadsheet? Sharing them with close friends? Twitter?

I was told by my advisors that tracking my goals more closely would help me improve focus. Looking for an effective method.

 

[AlMc]

Bernstein and Jeffries combine to thwart push of TSLA SP higher. Bernstein's take is that EM is great at marketing AP but that Tesla has been scrambling since the break up with Mobileye and still playing catch up. (my summary, Value Walk article with details below)



Tesla Inc (TSLA) Stock Rides On Its Tech, So What If Its Claims Are "Exaggerated"?

 

[scaesare]

Sure, and it did, as I specifically mentioned in my original post on this subject EV that has 200+ miles range.

But your complete sentence was:

Only Tesla is able to come up with an 200+ mile EV that can be competitive specifications and cost wise with an ICE's in the same class.

The point being that it's only competitive on one axis: acceleration. The SR model is not competitive in terms of range. As a matter of fact, the 310 mile-range LR only gets you half way to the range of the 330i, yet weighs an additional 265 pounds.

Given the difference in weight is attributed solely the longer range model (not trim options), if you extrapolate that out to match the 330i's 427 mules of range it would take over 600 lbs of pack weight to do so,

Range of ICE is irrelevant due to very low impact on weight (high energy density of gasoline).

But it's very relevant to BEV's. And that's what was being discussed, as you asserted:

No Tesla competitor ever have done this or even demonstrated willingness to do it. That is why their EVs hundreds of pounds heavier than comparable ICE's,

Well, 600 additional lbs. for Model 3 to have equivalent range specification is also "hundreds of pounds heavier", no?

Please read my previous and the following posts: the intent is ***not*** to make functional comparison of EV vs. similar class ICE based car, but rather to suggest a simple way to ascertain the state of battery technology.

I have read what you posted, and quoted it above. You clearly were attempting refute the idea that Tesla's EV's were heavier than an ICE of equivalent specifications, and then went on to cherry pick the specs to compare.

 

[Navin]

Good article in that it helps further the bear case which is based on fear, uncertainty and doubt.

Hard to look at tesla on an ebitda / enterprise value basis. Have to see it how people looked at Amazon a few years ago. Many analysts compared its PE to companies like Barnes and noble and borders but how flawed was that logic in retrospect??

 

[schonelucht]

how reliable is this source?

100% reliable. It's pulling straight out of the open registration data.

 

[Bobfitz1]

Bingo, I actually learned this from Rob and have seen it in writing in more in-depth articles since. I think the working hypothesis from manufacturers is that LG Chem, Samsung or some Chinese supplier is going to be making billions of cells for them at sub $100/KWh and flooding the market by 2020, so there is no need to bother with a supply of their own.

My hat is off to RobStark, Reciprocity and a few others who have dug down and found the German ICE industry EV plans are magical thinking. If Reciprocity is right about China needing all the cells they can ramp to produce over the coming 5 - 10 years, and it seems likely he is, then Daimler is screwed. The idea Daimler/MB would be hyping big investments in new battery factories (like the one in Kamenz, Germany - 500M Euros, Angela Merkel attending) but mean pack assembly factories sans cell production was so incredible I wanted to find another primary source to confirm that. I found one at Electronica blog. If accurate it shows that their stated EV mass production goals are even less achievable than we think. Battery cells “Made in Germany” - electronica Blog

The key bits for this discussion are:

"The newly founded company TerraE Holding GmbH, which is based in Frankfurt/Main, appears to have both. The plan is to build a large-scale production facility for lithium-ion cells in Germany based on the manufacturing concepts of GIGA-LIB. "

"Between now and 2028, production capacities are expected to increase gradually to 34 GWh/year. "

"TerraE will make various cell formats and address more than just the electromobility sector. After all, only a small portion of its batteries will end up there. The lion’s share will be used in garden equipment, drills, battery-operated screwdrivers and medical devices. Besides forklifts and delivery vehicles, it will also include hundreds of thousands of e-bikes."

So not only will it take TerraE ten years to reach 34 GWh/year of battery production (which GF1 will reach by end of next year), only a portion will be used for full range EVs! Seeing what MB is planning/risking makes me curious to learn if BMW and Volkswagen EV plans are likewise only Potemkin villages.