First of the 'FANG' stocks report AH today. Will be interesting to see how tech reacts tomorrow.
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ValueAnalyst
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So just to confirm: you do NOT expect any further improvement than 1.5m/year battery pack production per Gigafactory with "Gigafactories 3, 4, and possibly 5." Is this correct?
MitchJi
Trying to learn kindness, patience & forgiveness
Correct except for minor tweaks plus the improvements due to chemistry improvements.
mmd
Active Member
I don't know what you are saying here. Model S & X use 18650 cells from Japan. How did the GF lower the battery costs for Model S & X?
Taking advantage of lower costs will be to keep the selling price same and boost profits, if there is no demand issue. But that's not what we see here.
racer26
Active Member
Tesla buying more cells from Panasonic = volume discounts?
I'm not saying that's necessarily the case, but its not that much of a stretch.
DurandalAI
Member
I'm just going to leave this here.
Upgrade from Model S 60kWh to 75kWh is now priced at $2,000.
$2,000 / 15kWh = $133.33/kWh
If Gigafactory can make cells at a 30% reduction in price compared to the old cells, then we're down to the magical $100/kWh.
Upgrade from Model S 60kWh to 75kWh is now priced at $2,000.
$2,000 / 15kWh = $133.33/kWh
If Gigafactory can make cells at a 30% reduction in price compared to the old cells, then we're down to the magical $100/kWh.
Grohmann Automation: Someone in the German forum posted and article from a German newspaper, which consists mostly of the content of a interview with a employee that has worked there for 30 years.
It pretty much confirms what I expected. Many are unhappy that Tesla is dropping other clients and it came as a shock for them "We were always proud to work for BMW, Daimler, Bosch and Intel". They fear that the know-how will go to the US (Americans doing the maintenance) and what will happen to them if Tesla no longer needs them. Some don't really see a concrete future or how he is quoted in the end "it's all empty chatter" and the work council says "how trust someone who already lied once?" Also mentions how he doesn't think that is what Klaus Grohmann wanted.
Another interesting bit of information is that apparently several employees have received offers from former clients. Work council says they (former clients) are trying to recruit key employees. (My opinion: Not that easy in Germany as people aren't quick to jump, see 30 year employee, but obviously still not what you want to happen when you want to keep young employees and attract new talent)
It pretty much confirms what I expected. Many are unhappy that Tesla is dropping other clients and it came as a shock for them "We were always proud to work for BMW, Daimler, Bosch and Intel". They fear that the know-how will go to the US (Americans doing the maintenance) and what will happen to them if Tesla no longer needs them. Some don't really see a concrete future or how he is quoted in the end "it's all empty chatter" and the work council says "how trust someone who already lied once?" Also mentions how he doesn't think that is what Klaus Grohmann wanted.
Another interesting bit of information is that apparently several employees have received offers from former clients. Work council says they (former clients) are trying to recruit key employees. (My opinion: Not that easy in Germany as people aren't quick to jump, see 30 year employee, but obviously still not what you want to happen when you want to keep young employees and attract new talent)
Waiting4M3
Active Member
or $133/$190 = 0.7, so this is the post-30% reduction price?
racer26
Active Member
I still think this is all noise.
Sure, Tesla bought Grohmann for a reason, but they did so for around $150M, and only about 7 months ago. Anything bad happening there simply cannot have a very large impact on the overall company.
There is also a big short-term impact of S&P inclusion: a lot of index and mutual funds suddenly have to buy a lot of stock. If the level of shorting is still high, price will go through the roof.
DurandalAI
Member
Unless I'm reading your post incorrectly, no? Gigafactory cells are not being used in the Model S and X yet.
A couple of thoughts after being away for the weekend, and catching up on this thread.
1. After the S75 price drop, I bet there was a lot of bad words used in German board rooms today during emergency meetings to discuss the future of their various "Tesla Killers," that they are going to bring out in 2020 to crush Tesla. I pity the executive that has to plan a product that will crush what Tesla will be offering 3-5 years from now. Where would you even start?
2. It seems like the speculation has been that they are production constrained, and could sell more X and S if they could make them. With the guidance that they have given for the first half, is seems unlikely they are going to increase production by too much this quarter. I like the idea that the glass roof will lead to more automation, but it seems like it probably hasn't happened yet. It seems like a strange time to lower the price that much if they truly could sell all the cars they can make, at the old higher price.
3. I think Tesla's biggest, and most under appreciated moat is how fast they can pivot and change the plan. By the time the competition responds to a product, they will be two cycles down the road, from the product they were targeting when they started their program years earlier. The annual shareholder meeting last year really brought this home for me, when they went through the history of the company. They admitted that almost everything they thought and tried early on did not work, and they had no idea what they were doing. (Contract manufacturing, AC propulsion tech, etc.) The fact that they were able to change directions fast enough to survive, is truly amazing.
4. On the 1-4 million cars produced by 2020 debate, I don' have any projections of my own, except that I feel even most Tesla fans are totally underestimating Elon's ambition and thinking big. I believe, that when he talks about exponential growth, he is not talking about the next two years, then it will level off. He is talking about until he is shipping cars to Mars. I predict that he will keep Tesla on the ragged edge of financial disaster for at least a decade with unimaginably aggressive goals that seem impossible. It wouldn't surprise me at all if we are reading the same stories 5 years from now that we are today, because they are making some new insane investment that is 100 times the size of the Model 3 ramp up, and the shorts think they are doomed! Hopefully it will work out and we will all get very rich. If not, easy come, easy go.
1. After the S75 price drop, I bet there was a lot of bad words used in German board rooms today during emergency meetings to discuss the future of their various "Tesla Killers," that they are going to bring out in 2020 to crush Tesla. I pity the executive that has to plan a product that will crush what Tesla will be offering 3-5 years from now. Where would you even start?
2. It seems like the speculation has been that they are production constrained, and could sell more X and S if they could make them. With the guidance that they have given for the first half, is seems unlikely they are going to increase production by too much this quarter. I like the idea that the glass roof will lead to more automation, but it seems like it probably hasn't happened yet. It seems like a strange time to lower the price that much if they truly could sell all the cars they can make, at the old higher price.
3. I think Tesla's biggest, and most under appreciated moat is how fast they can pivot and change the plan. By the time the competition responds to a product, they will be two cycles down the road, from the product they were targeting when they started their program years earlier. The annual shareholder meeting last year really brought this home for me, when they went through the history of the company. They admitted that almost everything they thought and tried early on did not work, and they had no idea what they were doing. (Contract manufacturing, AC propulsion tech, etc.) The fact that they were able to change directions fast enough to survive, is truly amazing.
4. On the 1-4 million cars produced by 2020 debate, I don' have any projections of my own, except that I feel even most Tesla fans are totally underestimating Elon's ambition and thinking big. I believe, that when he talks about exponential growth, he is not talking about the next two years, then it will level off. He is talking about until he is shipping cars to Mars. I predict that he will keep Tesla on the ragged edge of financial disaster for at least a decade with unimaginably aggressive goals that seem impossible. It wouldn't surprise me at all if we are reading the same stories 5 years from now that we are today, because they are making some new insane investment that is 100 times the size of the Model 3 ramp up, and the shorts think they are doomed! Hopefully it will work out and we will all get very rich. If not, easy come, easy go.
I think you are approaching this with an incorrect viewpoint. Remember that the 60 was already a 75 "under the covers". The actual upgrade costs Tesla virtually nothing (a database entry and pushing an update). So the cost of the upgrade becomes an optimization problem: the cost of the upgrade influences how many people take it. Decreasing the cost might mean more people take it, which might mean more profit overall. Cell cost doesn't come into it, since they were already paid for.
Really the only way to figure out the cell cost reduction is the drop in price of the 75, divided by the battery component of that (which I don't think we actually know) then less gross margin.
Waiting4M3
Active Member
So basically the Grohmann employees who used to work on non-Tesla projects are resistant to being transferred to the Tesla project, and they might have offers from former clients to force Tesla to match. That paints a much different picture vs the under-paid workers demanding a fair wage scenario. Tesla's focus on automation clearly raised the demand for the skillset, to the point where former Grohmann clients are desparate enough to spend money to try to poach people so their own projects don't get killed, so raises for some key employees seems reasonable to me.
racer26
Active Member
I don't think it strange at all.
2Q17 is when we would expect to begin seeing the 3 seriously restrict demand for S/X. People who want a Tesla are now thinking 'that 3 coming out in a few months is half the price, why should I buy an S?' Tesla is trying to make sure the reduced demand for S does not fall below their production capacity at any point.
i posted my full model over in the 2017 q1 thread just now. looking forward to your comments over there.
i'm expecting $1.11 non-gaap eps and $0.61 gaap eps on 2.7-2.9 billion in revenue. even my lower side model would get to positive non-gaap eps.
i think smarter money had their models aligned to figure this out the day tesla reported deliveries. i am doubtful now of a dip even to low 290s ahead of the eps which are only about 8 sessions away.
i'm expecting $1.11 non-gaap eps and $0.61 gaap eps on 2.7-2.9 billion in revenue. even my lower side model would get to positive non-gaap eps.
i think smarter money had their models aligned to figure this out the day tesla reported deliveries. i am doubtful now of a dip even to low 290s ahead of the eps which are only about 8 sessions away.
This is a good thing. As good as loyalty and tenure is, the human brain will bog after continued years working on the same thing. Tesla requires innovation, which is optimized by moving away form the whole "did this for this long why change?" mentality.
Waiting4M3
Active Member
If by GGF cells you mean 2170 cells, how would you set the baseline price prior to the 30% price reduction? And why
True that the 2170 cells are not being used in MS/X, but my understanding is that the 18650 cells are still being assembled into packs at GGF, and used in MS/X. So I'm guessing that the 18650 pack price has come down since GGF ramped up.
Also if we look at 2170 cells/packs, it's not clear if there was any baseline pricing to base this 30% reduction on. The only place they have been used in was Powerpacks (and now starting in Powerwall), so there is no different kwh tiers such as in the MS/X that we can use to try to break down the cell pricing vs pack/housing/inverters, et. in the Powerpacks.
a blip i came across (google translate from Chinese may be "funky" impling permanent magnet motors instead of AC Induction rotating magnetic fields motor,
SA trolls are drooling buckets.and an article is expected implying imminant death, crash, etc
中科三环称特斯拉量产对公司有积极影响_产业在线
cannot copy/paste as it only will do chinese characters (i think)
{edit: also to the reasonably paranoid, keep your malware definitions up to date and re-scan after looking}
SA trolls are drooling buckets.and an article is expected implying imminant death, crash, etc
中科三环称特斯拉量产对公司有积极影响_产业在线
cannot copy/paste as it only will do chinese characters (i think)
{edit: also to the reasonably paranoid, keep your malware definitions up to date and re-scan after looking}
RobStark
Well-Known Member
6 months ago the base price of a Model S was $68k.
2 months ago it was $74.5k
Today it is $69.5k. Right around the historic average of $70k.
I don't see prices decreases but increases in content.
Base prices go up and down as Tesla transitions hardware content to prevent very angry customers that just missed an upgrade by a day or a month. But base prices stick around $70k in the US. Forex can make foreign prices a little wonky.
2 months ago it was $74.5k
Today it is $69.5k. Right around the historic average of $70k.
I don't see prices decreases but increases in content.
Base prices go up and down as Tesla transitions hardware content to prevent very angry customers that just missed an upgrade by a day or a month. But base prices stick around $70k in the US. Forex can make foreign prices a little wonky.
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