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2017 Investor Roundtable:General Discussion

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That tweet should be taken with a huge grain of salt. Elon replying "Yes" to the question of "hardware upgrading 2013 S60 to S75 for $2k" is really puzzling. Forget about the cost of the new 75 kWh battery. $2k barely covers just the labor charges.
Let's wait and see what the catch is here. Like, making the upgrade cost $2k for 15 seconds technically makes the reply correct. Then, the cost of upgrade jumps to $20K and dances between $15K to $20k.

I agree unless they found some easy way to add the missing cells in the 60 modules. (Since I don't think even adding two extra modules would do what is necessary.)

The only other thing I can think of is that they want a lot a older packs to feed through the new cell recycling machine they are working on to see how well it works.
 
That tweet should be taken with a huge grain of salt. Elon replying "Yes" to the question of "hardware upgrading 2013 S60 to S75 for $2k" is really puzzling. Forget about the cost of the new 75 kWh battery. $2k barely covers just the labor charges.

You're saying it's $2000 in labor to swap a battery? It's routinely done at service centers and the Harris Ranch battery swap was about $80.
 

I'm sorry but you didn't include a lot of meaty argumentation.

Incidentally, NFLX and TSLA are my two biggest positions. I have consistently been against anyone buying Netflix, but they have never had the fundamental WALL of capital need that Tesla has. The difference between the two is that Netflix should be able to scale up nicely to a 50B$ a year type business on their own, which is large (like Disney sized large) but not earth shaking. Tesla on the other hand could go anywhere between 20B$ and 1T$ and a large chunk of what determines that is being able to achieve scale in the face of daunting risk in a reasonable timeframe. Apple needs to absorb more risk (and risk at significant scale) because they have been riding on momentum for a long time now. It certainly helps that they both are located near each other, have overlapping design and premium product ambitions, etc.

I would agree that ego is in practice a big motivator and don't really know how Musk/Cook would sort itself out. Maybe Cook is ready to play catcher again.
 
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You're saying it's $2000 in labor to swap a battery? It's routinely done at service centers and the Harris Ranch battery swap was about $80.

The battery swap program was discontinued quickly. It's unclear how much the cost of a swap was for Tesla. Besides, battery swap used some automation that won't be available at the local service centers.
If someone has done a battery replacement for Model S, I'll be curious how many hours of labor was in their invoice. $2000 may be too much; but minimum $500 for labor should be normal.

Tesla Roadster upgrade is priced at $29K. So, $2k for an old S60 pack to a new S75 pack seems too good to be true.
Tesla — Roadster 3.0 Battery Upgrade
The price of the battery upgrade is $29,000, including all labor and logistics, which is equal to Tesla's expected cost. It is not our intention to make a profit on the battery pack. The reason the cost per kWh is higher than a Model S battery is due to the almost entirely hand-built, low-volume (only 2 or 3 per week) nature of Roadster battery packs. It also includes additional work to remove, upgrade, and reinstall the power electronics module (PEM.)
 
I would agree that ego is in practice a big motivator and don't really know how Musk/Cook would sort itself out. Maybe Cook is ready to play catcher again.

For this reason alone Cook won't approve the deal. Why would he want to play second fiddle to Musk? He's already making huge sums of money and at the pinnacle of his career.

Musk has already outshined Cook as an Engineer and CEO, would Cook want to invite such a threat into his universe? My bet is no. However, I do think either Apple or Google will partner with Tesla for another GF.
 
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KOLO8 on Twitter

#BREAKING: Hazmat crews responding to chemical spill at @TeslaMotors Gigafactory

Update:
Storey County Sheriff Gerald Antinoro confirms a hazardous materials crew is dealing with a reported chemical spill Monday afternoon at the Tesla Gigafactory at the Tahoe Reno Industrial Center.

Joe Curtis with the county says the spill is connected to the HVAC system. Several people have reported feeling sick, but it's not clear whether anyone has to be taken to a hospital, though there are ambulances on scene.

One portion of the factory has been evacuated as a precaution.



Edit: A disagree? Really?

The chemical spill was in a 55 gallon bucket, which is the equivalent of your trash basket that waste management picks up from your home once a week. A non-issue.

1 hospitalized in Nevada chemical spill, evacuation at Tesla | Charlotte Observer

The chemical was also a cleaning agent. Maybe something similar to the cleaning power of what restaurants use to clean their kitchen from oil clogs at the end of the day.
 
At mark 21:30 Elon says "the transition to electric vehicle will happen over 30 or 40 years."

I'm having difficulty understanding this, and maybe someone here can help.

If Tesla is announcing locations for "Gigafactories 3, 4, and possibly 5" later this year, that means they will likely come online by 2020, which is in-line with 3 years from Nevada location selection to achieving initial production target at run-rate for Gigafactory 1. At 1m/year/Gigafactory capacity, that means 4m cars/year by 2020. 4 million cars would produce ~$50 billion in gross profits, so even excluding contribution from Tesla Energy or Tesla Solar Roof, Tesla should be able to fund at least 5 gigafactories per year starting 2020, and this number should increase as Tesla's revenue/profit grows. At this pace, Tesla can have 50+ Gigafactories by 2030. That would be enough to convert the whole global car fleet to all-electric by 2035. So that's less than 20 years, half of Elon's estimate. That's assuming production rate per Gigafactory does not increase from 1m/year, no other company builds Gigafactories, Tesla Energy does not contribute any gross profit, etc. which are all very conservative. Why is he being conservative with his "30-40 year" estimate?
 
For this reason alone Cook won't approve the deal. Why would he want to play second fiddle to Musk? He's already making huge sums of money and at the pinnacle of his career.

Musk has already outshined Cook as an Engineer and CEO, would Cook want to invite such a threat into his universe? My bet is no. However, I do think either Apple or Google will partner with Tesla for another GF.

I agree the Cook-Musk thing is a big question mark.

What is this arrangement you expect with the GF? What is the upside to Apple/Google?
 
Regardless, the stock is currently priced for 500,000 cars in 2020, so even if I'm wrong by 6x, the stock is undervalued.

Agreed. And trust me I would LOVE to be proven wrong but I just want to temper my expectations accordingly.
I recommend you check out download the white paper given by ARK invest. Her argument is essentially that TSLA is severely undervalued right now, not because of production rates but because of how valuable the autonomous car market is.

Mobility-As-A-Service: Why Self-Driving Cars Could Change Everything
 
I agree the Cook-Musk thing is a big question mark.

What is this arrangement you expect with the GF? What is the upside to Apple/Google?

Both Apple and Google produces phones, which uses lithium. They are also working on autonomous driving.

Tesla will likely vertically integrate their business into mining (thinking first principles here..), which means cheaper batteries. Somewhere down this rabbit hole things just makes a lot of sense for all parties involved. Besides, Google has a pretty good relationship with Elon, they were early investors in SCTY. Samsung already owns battery plants, which can help their phone prices stay competitive *wink* if Apple is to remain competitively priced, this would make sense in the long haul.

Lastly, Elon owns SpaceX, which I imagine launches satellites for many tech companies like Apple/Google, etc. I'm sure they'll be contacting each other when M3 launch is successful.
 
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I'm sorry but you didn't include a lot of meaty argumentation.

Incidentally, NFLX and TSLA are my two biggest positions. I have consistently been against anyone buying Netflix, but they have never had the fundamental WALL of capital need that Tesla has. The difference between the two is that Netflix should be able to scale up nicely to a 50B$ a year type business on their own, which is large (like Disney sized large) but not earth shaking. Tesla on the other hand could go anywhere between 20B$ and 1T$ and a large chunk of what determines that is being able to achieve scale in the face of daunting risk in a reasonable timeframe. Apple needs to absorb more risk (and risk at significant scale) because they have been riding on momentum for a long time now. It certainly helps that they both are located near each other, have overlapping design and premium product ambitions, etc.

I would agree that ego is in practice a big motivator and don't really know how Musk/Cook would sort itself out. Maybe Cook is ready to play catcher again.

Having spent a decade in M&A (both sell-side and buy-side), I may have a deeper insight into a potential marriage between companies than someone without that experience. Location and design are not determinant factors. Mission (or ambition as you put it) overlap helps, but have you ever heard anyone from Apple define their mission as anything close to "accelerate the advent of sustainable transport" at any point? So even that doesn't work in this case.

In addition, size matters in corporate marriages. Apple has never made an acquisition bigger than $2 billion, and that is usually a limit set by senior management and doesn't just change on a whim. There has to be an extremely compelling reason for a team of senior management of a large corporation to step out of their comfort zone. Apple is not the Apple of 15 years ago; unfortunately, it is now a slow moving very large corporation.

Apple might have had a chance to acquire Tesla before, say, 2010. I believe they even tried in 2014, but clearly they, or their investment bankers or their in-house M&A people, did not do a good job of convincing Elon Musk to join efforts with Apple. If I'm Elon Musk, and Apple came to me and said, "we share your goal of accelerating advent of sustainable transport, and we want to help you achieve it earlier than you would on your own, and here is how we can help you," then of course, I would listen and join forces if it's a credible plan. My guess, however, is Apple likely came to the table with hubris having just created the greatest consumer device ever, and treated Tesla as a much smaller company that must have Apple's support to succeed. This is the wrong way to approach a marriage.

I don't know if this is what happened. But the fact that a deal did not happen tells me Elon did not believe it would be a successful marriage. I can't see Elon turning down Apple just based on price offered.

Hope this helps.
 
Agreed. And trust me I would LOVE to be proven wrong but I just want to temper my expectations accordingly.
I recommend you check out download the white paper given by ARK invest. Her argument is essentially that TSLA is severely undervalued right now, not because of production rates but because of how valuable the autonomous car market is.

Mobility-As-A-Service: Why Self-Driving Cars Could Change Everything

Thanks for forwarding this link. I heard about it on one of DaveT's hangouts, but hadn't gotten a chance to look for it.
 
Tesla Roadster upgrade is priced at $29K. So, $2k for an old S60 pack to a new S75 pack seems too good to be true.
The Roadster upgrade includes a lot of hand labor for removal and disassembly of the old pack and hand building and installing the new pack. Completely different animal. Removing a S/X pack should be very quick even without the special machine if you have a lift and hydraulic cart, I'd guess less than half an hour, possibly as little as 10 minutes.
 
Even one would give them the ability to regen to a stop more easily, and would give them a efficiency boost.

I don't think regen would be a realistic factor to change motor formats and though it's often stated that PM motors are more efficient it's not necessarily the case. Induction Versus DC Brushless Motors

This means that the peak point energy efficiency for a DC brushless drive will typically be a few percentage points higher than for an induction drive.

In an ideal brushless drive, the strength of the magnetic field produced by the permanent magnets would be adjustable. When maximum torque is required, especially at low speeds, the magnetic field strength (B) should be maximum – so that inverter and motor currents are maintained at their lowest possible values. This minimizes the I² R (current² resistance) losses and thereby optimizes efficiency. Likewise, when torque levels are low, the B field should be reduced such that eddy and hysteresis losses due to B are also reduced. Ideally, B should be adjusted such that the sum of the eddy, hysteresis, and I² losses is minimized. Unfortunately, there is no easy way of changing B with permanent magnets.

In contrast, induction machines have no magnets and B fields are “adjustable,” since B is proportionate to V/f (voltage to frequency). This means that at light loads the inverter can reduce voltage such that magnetic losses are reduced and efficiency is maximized. Thus, the induction machine when operated with a smart inverter has an advantage over a DC brushless machine – magnetic and conduction losses can be traded such that efficiency is optimized. This advantage becomes increasingly important as performance is increased. With DC brushless, as machine size grows, the magnetic losses increase proportionately and part load efficiency drops. With induction, as machine size grows, losses do not necessarily grow. Thus, induction drives may be the favored approach where high-performance is desired; peak efficiency will be a little less than with DC brushless, but average efficiency may actually be better.
 
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