2017 Investor Roundtable:General Discussion

[AudubonB]

Weekend Moderator....

As yesterday was my birthday ("Happy Birthday, O Exalted Mild-Mannered Lord Vetinari", everyone. Thank you.), I took the day off.


Which means that a whole lot of unpleasantries remained to sully this thread until now. So if you're missing your snapping posts to and from each other, you'll find them in Snippyville. That was my birthday present to you: I didn't merely delete them.

AND that also means that some reasonably innocent babies went out with the bilgewater. Fairly warned: even if you post some material that is worthy of having been posted, don't expect to have it stay around if you're going to wrap it around trashtalk. Capisce? Good.

 

[Navin]

Lord of the unknown: can we go back to just one daily post. Having two is somewhat dumb.

From me or from mere mortals? Either way, "...back to..." doesn't cut it as that stricture never has been in place; it's only an idea that some have suggested from time to time. For the record: I'm all for it. For the record, 8-track, cassette, CD, USB stick and Cloud: Don't hold your breath.

 

[mmd]

Form the Tesla blog dated October 27, 2016:
"To date, nearly 300 MWh of Tesla batteries have been deployed in 18 countries, and we anticipate the impact and growth rate of energy products around the world to be far greater than that of electric vehicles alone."

On October 27, 2016 neither Kaui, nor Mira Loma BES were deployed, so go ahead and prove @MP3Mike being wrong by saying that "We don't hear about most of the in process projects." Please do so with links, because you did NOT so far, just by listing two projects. So list 300MWh worth of BES projects that Tesla deployed before October 27, 2016.

According to executive quoted by Electrek a while ago Tesla is in negotiation for several large scale projects each of which could more than double everything what they installed so far. So we are talking about several projects on the scale of 600MWh each. They also have close to 38,000 orders for power wall.

So in summary we do not know a lot about the TE pipeline at this time, but if history is a guide, it certainly does not look as ominous as one would conclude reading your posts.

Most of the 300 MWh came from the deal with AMS for 500 MWh. This was known since June 5, 2015, right after the Powerwall and Powerpack reveal. So, they were collectively known for a long time.
Tesla Bags 500 MWh Energy Storage Deal with AMS - Energy Manager Today

See this thread for details, how TE adds up to 600 MWh. The 38,000 Powerwall you refer to as 'orders' are just 'reservations'. If there were really so many orders, TE will be significant enough to be reported as a separate line item. Those projections from Tesla executive are very optimistic, similar to the '$2B TE revenue in 7 days' remarks back in June 2015.
TSLA BULL Echo Chamber
(From my post in that thread):
SCE 80 mwh
Kaua'i 52 mwh
Ta'u 6 mwh
Kruger 3.1 mwh
Marin college 3.2 mwh
Fiji 2 mwh
Stubhub 2 mwh
La crea brewery 1.2 mwh
Ocracoek island 1 mwh
Dent Island 0.5 mwh
Sierra nevada brewery 0.5 mwh
Brea Mall 0.5 mwh

Don't forget, AMS has a deal with Tesla for 500 mWh of batteries (for 125 million) which it is deploying/selling:

Irvine Company.............10 mW/ 60 mWh (not sure if this is 2015 or 2016)
California State U...........2 mW/ 12 mWh (3 campuses--Marin is not part of this)
Morgan Stanley..............0.5 mW/ 1 MWh (San Fran)
Inland Empire Utilities....3.5 mW/ 7 mWh
Irvine Water....................7mW/ 34 mWh

(These are Tesla batteries, noted on their website) == Total = 114 mWh

Also an agreement with Southern California Edison for 30 mW/ 200 mWh (I cannot confirm that these are Tesla batteries and not sure if the 80 mWh you had sited above is part of this).

AMS also has an agreement with Invesco for additional 1.5 to 2 mWh of batteries in 2017

There is another non-AMS contract in Sommerset England (Camborne Energy Storage?, from what I can garner, 5 mWh)

I will have to research more to see if the Vermont/Green mountain utility project is TE as well.

Clearly, for PowerPacks installed in Q4 and earlier, they could not have used Gigafactory production at all. We know that Powerpack 2 production installed through at least Q4 used 2170 cell production from Panasonic. Therefore, it is hard to look at previous installs in order to estimate the Gigafactory.

Let's put your 3.6 GWh number in context. That is about 50% more than LG Chem's total automotive cell sales in 2016 for all those automakers. It would represent about $1.25 billion in revenue, maybe $200 million in gross profit or $50 million a quarter at that scale after production ramp. The first phase is no longer roughly 7 GWh... the first line of the first phase is likely around 8-10 GWh. If the Gigafactory production is 50-50 auto and stationary storage, then we are looking at more like $2.7 to 3.4 billion in revenue, or $400 to $500 million in gross profit per quarter. Take a 50% discount for the first year ramp. And that is with a fraction of the capacity online.

That is exactly my point. I made a crazy optimistic assumption that all 600 MWh were produced in 2 months, and the total output still falls way short of the projected 35 GWh in 2014. My guess is, current cell output is 75-100 MWh a month. Since Tesla quoted cell production as the bottleneck for the reason why volume deliveries of Powerwalls is not happening, that is the GF line capacity. If that is the line capacity, there is a lot more to go to support 500k Model 3 a year. 500k M3 @ 60 KWh packs needs 30 GWh annually.

 

[Intl Professor]

OT for most, and clearly "fake science" for some, but useful for understanding the basics of the appeal for both Trump and, in my opinion, Bernie as well, although the author does not address the issue for the Dems. Pollsters might have benefitted from this article last March.

The Idiolect of Donald Trump

Don't be put off by the title. We are all idiots to each other. (My wife frequently drops the consonant at the end of an English word claiming they are unimportant to Thai, leading to some hilarious/horrendous confusions. Of course I wisely do not address my own idiocy leaving that to others, principally my wife.)

 

[racer26]

That is exactly my point. I made a crazy optimistic assumption that all 600 MWh were produced in 2 months, and the total output still falls way short of the projected 35 GWh in 2014. My guess is, current cell output is 75-100 MWh a month. Since Tesla quoted cell production as the bottleneck for the reason why volume deliveries of Powerwalls is not happening, that is the GF line capacity. If that is the line capacity, there is a lot more to go to support 500k Model 3 a year. 500k M3 @ 60 KWh packs needs 30 GWh annually.

Why are you still ignoring that this is explained simply by the fact that the first line fired up at GF was a TE line, and there are more lines scheduled to come online by 2Q17, and that GF was not supposed to reach 35GWh until 2020?

Yes, what GF is currently producing is both a small fraction of its design capacity, AND a small fraction of that which is required to make Model 3 in big quantities. That's because it just got started, is still ramping, and wasn't supposed to start doing either of those things yet.

 

[mmd]

Why are you still ignoring that this is explained simply by the fact that the first line fired up at GF was a TE line, and there are more lines scheduled to come online by 2Q17, and that GF was not supposed to reach 35GWh until 2020?

Yes, what GF is currently producing is both a small fraction of its design capacity, AND a small fraction of that which is required to make Model 3 in big quantities. That's because it just got started, is still ramping, and wasn't supposed to start doing either of those things yet.

When GF target (projected in 2014) was 35 GWh for 2020, 500k Model 3 plan was also for 2020. Last year, the 500k/yr Model 3 plan was brought forward by 2 years. So GF target of 35 GWh (or at least the 30 GWh for Model 3/S/X) needs to be advanced by 2 years too.

Just got started? GF opening party was back in June (or July). Was originally expected in April, IIRC.

So, is there only a single line operating at GF right now? Seems LG can produce 650 MWh/year with 2 lines operating 24 hours a day. If it's just 1 or 2 lines in GF, current max output is probably 325/650 MWh a year at GF, using same kind of output per line.

LG is adding production capacity at its battery factory for Chevy Volt, Bolt EV and Chrysler Pacifica

Last year, the plant had two of the three assembly lines operating 24 hours a day and a fourth line on the way. It had an annual production capacity of 650 MWh,

 

[geneclean55]

When GF target was 35 GWh for 2020, 500k Model 3 plan was also for 2020. Last year, the 500k/yr Model 3 plan was brought forward by 2 years. So GF target of 35 GWh (or at least the 30 GWh for Model 3/S/X) needs to be advanced by 2 years too.

Just got started? GF opening party was back in June (or July). Was originally expected in April, IIRC.
So, is there a single lineoperating at GF rightnow? Seems LG can produce 650 MWh/year with 2 lines operating 24 hours a day. If it's just 1 or 2 lines in GF, current output is probably 325/650 MWh a year at GF, using same kind of output per line.

LG is adding production capacity at its battery factory for Chevy Volt, Bolt EV and Chrysler Pacifica

Battery production, not pack assembly. But I have a feeling you already know this.

 

[racer26]

When GF target was 35 GWh for 2020, 500k Model 3 plan was also for 2020. Last year, the 500k/yr Model 3 plan was brought forward by 2 years. So GF target of 35 GWh (or at least the 30 GWh for Model 3/S/X) needs to be advanced by 2 years too.

Just got started? GF opening party was back in June (or July). Was originally expected in April, IIRC.

So, is there only a single line operating at GF right now? Seems LG can produce 650 MWh/year with 2 lines operating 24 hours a day. If it's just 1 or 2 lines in GF, current max output is probably 325/650 MWh a year at GF, using same kind of output per line.

LG is adding production capacity at its battery factory for Chevy Volt, Bolt EV and Chrysler Pacifica

Correct, and I suspect that GF will be approaching 35GWh by the end of 2018 in accordance with those goals being moved up.

GF "opened" back in July, but that was only assembly of TE products with cells from Japan. Cell production at GF only started Jan 4.

The lines to build batteries for Model 3 have not been started yet. I remember hearing someone on here saying that the Model 3 lines are both bigger, and greater in number, than the TE line currently operational.

The point is that the current state of GF is not even remotely useful as a measure of where it will be by the end of 2018. We know that a substantial portion of the building as it sits is the areas for production of Model 3 batteries, in varying states of readiness.

 

[techmaven]

When GF target (projected in 2014) was 35 GWh for 2020, 500k Model 3 plan was also for 2020. Last year, the 500k/yr Model 3 plan was brought forward by 2 years. So GF target of 35 GWh (or at least the 30 GWh for Model 3/S/X) needs to be advanced by 2 years too.

Just got started? GF opening party was back in June (or July). Was originally expected in April, IIRC.

So, is there only a single line operating at GF right now? Seems LG can produce 650 MWh/year with 2 lines operating 24 hours a day. If it's just 1 or 2 lines in GF, current max output is probably 325/650 MWh a year at GF, using same kind of output per line.

LG is adding production capacity at its battery factory for Chevy Volt, Bolt EV and Chrysler Pacifica

These lines do not have any standardized sizing, so you cannot cross compare in that manner. Not to mention that LG is making prismatics and Tesla/Panasonic is making cylindrical.

The first phase has two gigantic cathode ovens. We can see one installed during the summer Gigafactory tour. It is possible to build TE or TA cells on it. That's what I was calling the first line, even though after that point there are many steps for which there are many more parallel pieces of equipment. For example, we saw the slitting and roll up equipment and there was space for at least 4 in the room we were in. The original expectations for the Gigafactory as announced in 2014 was that it would be ready to produce cells sometime in 2017 in order to build the Model 3 due for late 2017. And that the first phase would likely be around 7 GWh. Now, we are looking at roughly 15-20 GWh for the first phase and cell production commenced during the first month of 2017. I don't see how that is late in any way.

The 2nd phase of the Gigafactory is already underway and they do expect 500,000 vehicle's worth of production to be online in 2018. So they are bringing it forward. Right now, I suspect TE is slated to have 3-4 GWh of cell production in 2017 and 8-12 GWh for 2018. That's why I cut the forecast down by 50% for ramp up, so these numbers take that into account.

Again, you and other bears have been trying to paint the Gigafactory as either late or inconsequentially small or both. Neither is true.

 

[MitchJi]

Tesla Model 3: How Many Will Be Delivered In 2017? -- The Motley Fool

Tesla Model 3: How Many Will Be Delivered In 2017?
This single figure could be the most important metric to look out for in Tesla's fourth-quarter update.
Going into electric-car maker Tesla's fourth-quarter earnings release, here's the biggest question: How many Model 3 vehicles will management say it expects to deliver during the year? After all, we already know Tesla has about 400,000 deposit-backed reservations for the $35,000 vehicles. But the big mystery is how Tesla's Model 3 production ramp-up will look -- and thus Model 3 deliveries.

While investors may not get a very specific answer, management's guidance range for total vehicle sales will likely provide some useful insight into Tesla's outlook for the highly anticipated, lower-cost vehicle.

Looking to guidance

If Tesla follows its usual practice, it will provide an outlook for expected full-year vehicle deliveries when it reports its fourth-quarter results on Feb. 22, but it won't break down this forecast by model. Still, investors can extrapolate from guidance for total deliveries to get an idea of what management might expect from Model 3.

Tesla CEO Elon Musk has long predicted it expects its late-2015 launched Model X to eventually rival Model S deliveries, bringing total Model S and Model X annual deliveries to about 100,000 units. With this context, any guidance beyond 100,000 units in 2017 could presumably represent expected Model 3 deliveries.

So, what sort of guidance range should investors expect from Tesla management? While this may not be the answer investors are hoping for, management will likely guide for a wide range of possible outcomes. There's simply significant uncertainty associated with forecasting a huge step change in vehicle manufacturing.

But Musk did provide some vision -- albeit very vague -- into Tesla's expectations for Model 3, saying he thinks it will be an "exciting 2017." Further, he said that Model 3 production will be very uncertain in Q3 but "gets pretty clear in Q4."

Why Tesla's guidance matters

Should investors even take Tesla's guidance seriously? I think so.

It's worth noting that, despite Tesla's well-documented tendency to miss targets, its recent misses are relatively small in relation to its rapidly growing targets. Even more, the percentage gap between Tesla's initial annual guidance in recent years and its actual deliveries isn't growing, despite extreme growth in its targets.
<Snip>
Sure, there will likely be more uncertainty associated with Tesla's guidance for 2017 deliveries than in previous years given the guesswork even management will need to employ to predict Model 3 deliveries. But Tesla's history of small misses on big growth targets gives investors good reason to at least expect its guidance to reflect a likely trajectory for actual vehicle deliveries in 2017.

Wait! What about those Model X delays?

When forecasting Tesla's Model 3 production ramp-up in 2017 and beyond, it's probably tempting for investors to look to Tesla's Model X delays and production challenges as a forewarning for Model 3 production troubles. But there are several issues with this reasoning.

First, unlike the Model X, the Model 3 was designed from the ground up for high-volume production. Second, the Model X is an insanely complex vehicle, featuring never-before-manufactured features like falcon wing doors, self-presenting front doors, the largest front windshield in any vehicle, and monopost seats.

Further, the Model X is the first fully-electric SUV ever built. Indeed, it's arguably a borderline miracle that Tesla was even able to achieve an annualized production run rate of 40,000 Model X units by the end of 2016.

In Tesla's third-quarter earnings call last year, Musk specifically warned investors not to look to Model X as an example of how Model 3 production could turn out:

It's always tempting for people to reason by analogy instead of first principles. And that would be the mistake of assuming that anything to do with the X production has bearing on the Model 3.

They are very different programs with completely different approaches. So I would not try to extrapolate from that, any more than it would've made sense to extrapolate from the Roadster when we were making 600 cars a year, to 20,000 cars a year with the Model S.

If you were to extrapolate from the Roadster experience, you would be completely wrong about the Model S outcome, and many people were. That's why I would say X is not relevant.

Interestingly, for the first full calendar year of Model S deliveries, Tesla actually exceeded its initial guidance for 20,000 vehicles, delivering 22,500 units. While achieving the same sort of surprising outcome at Tesla's higher-volume production today won't be easy, management is clearly confident in a very steep production ramp-up for Model 3.

Another year of 50% growth?

I'll be expecting Tesla to provide a guidance range of approximately 110,000 to 130,000 units, representing about 50% year-over-year growth in deliveries and around 10,000 to 30,000 Model 3 deliveries. However, since Tesla is expecting its annualized production to increase from a run rate of 100,000 units today to an incredible 500,000 units in 2018, only 110,000 to 130,000 deliveries in 2017 would mean Tesla's first and second quarter of 2018 will need to be characterized by the steep portion of the S-curve.

But this is how S-curves look. First, they're gradual; then, they suddenly rise.

I'm more optimistic about Tesla's EOY 2017 BOY 2018 production than the article (in other words no free chocolate for Dennis).

 

[-=buzz=-]

When GF target (projected in 2014) was 35 GWh for 2020, 500k Model 3 plan was also for 2020. Last year, the 500k/yr Model 3 plan was brought forward by 2 years. So GF target of 35 GWh (or at least the 30 GWh for Model 3/S/X) needs to be advanced by 2 years too.

Just got started? GF opening party was back in June (or July). Was originally expected in April, IIRC.

So, is there only a single line operating at GF right now? Seems LG can produce 650 MWh/year with 2 lines operating 24 hours a day. If it's just 1 or 2 lines in GF, current max output is probably 325/650 MWh a year at GF, using same kind of output per line.

LG is adding production capacity at its battery factory for Chevy Volt, Bolt EV and Chrysler Pacifica

Apparently the aging/formation process of li-ion cells takes up to 4 weeks. Which means whatever rate the GF is producing at has only become available for battery assembly within the last two weeks. Before that all TE cells had to be shipped in from Panasonic. This correlates nicely with the info of capacity *just* getting high enough for powerwall production.

Beside that it's reasonable assumption that the worlds biggest battery factory also uses the worlds biggest production lines. Therefore guessing line capacity from competitors is unlikely to be accurate.
Someone calculated the current minimal run-rate from the GF production start video showing cell processing/second assuming they showed the one line available. But i don't remember/find the number right now...

 

[SunCatcher]

Interview w/TSLA investor TrendTrader007

Thanks to Dave L.

 

[jhm]

Interview w/TSLA investor TrendTrader007

Thanks to Dave L.

Thanks, guys. Great to hear @TrendTrader007.

 

[mmd]

Apparently the aging/formation process of li-ion cells takes up to 4 weeks. Which means whatever rate the GF is producing at has only become available for battery assembly within the last two weeks. Before that all TE cells had to be shipped in from Panasonic. This correlates nicely with the info of capacity *just* getting high enough for powerwall production.

Beside that it's reasonable assumption that the worlds biggest battery factory also uses the worlds biggest production lines. Therefore guessing line capacity from competitors is unlikely to be accurate.
Someone calculated the current minimal run-rate from the GF production start video showing cell processing/second assuming they showed the one line available. But i don't remember/find the number right now...

I thought about the aging. But it doesn't quite make sense with the known timelines. Tesla claimed it started producing the 2170 cells for Powerpack 2 on Jan 4th.
Battery Cell Production Begins at the Gigafactory

Production of 2170 cells for qualification started in December and today, production begins on cells that will be used in Tesla’s Powerwall 2 and Powerpack 2 energy products. Model 3 cell production will follow in Q2 and by 2018, the Gigafactory will produce 35 GWh/year of lithium-ion battery cells, nearly as much as the rest of the entire world’s battery production combined.

By Feb 1, the SCE project of 80 MWh was complete, using Powerpack 2. May be, the TE cells don't need aging.
Tesla Completes 20-MW Energy Storage for Southern California Edison

 

[racer26]

I thought about the aging. But it doesn't quite make sense with the known timelines. Tesla claimed it started producing the 2170 cells for Powerpack 2 on Jan 4th.
Battery Cell Production Begins at the Gigafactory


By Feb 1, the SCE project of 80 MWh was complete, using Powerpack 2. May be, the TE cells don't need aging.
Tesla Completes 20-MW Energy Storage for Southern California Edison

We already speculated the much more plausible explanation that at least one of Panasonic's Osaka plants has been converted to produce 21-70s. This would make sense and give them the experience so that gigafactory can hit the ground running.

 

[JRP3]

Apparently the aging/formation process of li-ion cells takes up to 4 weeks.

As I remember from the GF tour video they said 2 weeks.

 

[Zhelko Dimic]

I thought about the aging. But it doesn't quite make sense with the known timelines. Tesla claimed it started producing the 2170 cells for Powerpack 2 on Jan 4th.
Battery Cell Production Begins at the Gigafactory


By Feb 1, the SCE project of 80 MWh was complete, using Powerpack 2. May be, the TE cells don't need aging.
Tesla Completes 20-MW Energy Storage for Southern California Edison

I thought that was PowerPack 1

 

[mrdoubleb]

So BTW we are in factory shutdown mode now, right? Will be interesting to see if they share anything on the work being done right now in the ER. If they were to crank out M3 betas early next week that would certainly be an important milestone.

 

[JBRR]

Talking Tesla podcast had some interesting rumors in their podcast. To be clear - this wasn't a rumor like the previous week where one of the hosts was 100% that factory was shutting down, and had it from a source.

The rumor this week is an email from someone, who knows someone working on the factory line, stating that tesla is on track to produce 72 units per hour by end of july.

It's as unconfirmed as it gets, but if that is even remotely accurate we can obviously all retire by the end of 2017.

Source:
Ep 73 - Tom's Leaving starting at 1:04:30.

 

[HeldDesTages]

When you hate someone really bad and he accidentally makes you look even more dumb.