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2017 Investor Roundtable:General Discussion

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You make good points. However, I not sure that everyones whole approach to travel will not change when autonomous vehicles arrive. Are people not more likely to carpool? Carpooling is a bit onerous on the car owner, as they have to get up earlier and drive around picking up their colleagues. With autonomous, the car does that. Perhaps rush hour gets better. Perhaps the small autonomous cars drop you at the autonomous bus, and it brings in 12 people at once.

Ummm, someone must be writing their thesis on this.

Along the AP thoughts, I am not a big fan. I appreciate the technology and understand a compelling reason in reducing traffic fatalities, but the thought of most cars be driven automatically seems a little bit antiseptic and too Blade Runner/Jetson-esque. I drive a Tesla and love to drive it, not be driven by it. AP is here and is the future (being led by Tesla) and many, if not most, car manufacturers are following suit. I just hope the thrill of driving isn't replaced by being a passenger.
 
Along the AP thoughts, I am not a big fan. I appreciate the technology and understand a compelling reason in reducing traffic fatalities, but the thought of most cars be driven automatically seems a little bit antiseptic and too Blade Runner/Jetson-esque. I drive a Tesla and love to drive it, not be driven by it. AP is here and is the future (being led by Tesla) and many, if not most, car manufacturers are following suit. I just hope the thrill of driving isn't replaced by being a passenger.
Counterpoint: i really like AP. I use it in stop and go traffic all the time. I use it for daily work commutes which can be over 50+ miles each way, and allows me to see the road and see what is developing ahead. Really great for highway drives at night on long deserted highway stretches...
 
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On that train of thought: what's the next big business idea that will be able to use all those obsoleted gas stations and the little chunk of real estate they're on? Suspect someone will come up with an idea and be able to pick up lots of disused gas station properties for a song, because they're too small for many purposes
Once cars attain full autonomy, the space can be used for parking the cars in each neighborhood on stand-by
 
Nice article. Perhaps you could describe your network disruption theory. Is this based on how the value of a network grows with each new connection which can lead to an abrupt emergence of high value that was previously not envisioned? Thanks.
Sure, its a subset concept of disruption theory (but not limited to low cost entry). Basically you look at a future network change that is coming e.g. Charging vs. gas stations, packet switched data on mobile networks vs. circuit switched (circa 2002), High speed mobile data (3G) vs low speed mobile data (2G), High speed internet vs. low speed internet, cheap satellite launches vs. expensive satellite launches, autonomous cars, local power grid, cloud vs. local etc... Instead of waiting for the new network to be ready you build a business concept that can make some sense today but really makes sense when the new network becomes established. Thus giving you first mover advantage with all the right business values where the incumbents are stuck in the switch of networks with old values. BlackBerry did this in the early days (1999) by launching data only devices on outdated data networks which allowed it to compete later when the mobile networks added data capability, Nokia couldn't compete in this new space because they viewed the world as a phone, BlackBerry viewed it as data device. Then Apple did it to BlackBerry by launching a device that viewed the world as a high speed connected computer, the original iPhone was 2G and the apps like Browser and Maps only worked effectively when in WiFi. When mobile networks (3G) were like WiFi is when BlackBerry lost. Netflix did it with some luck, they leveraged the postal service and a subscription model and a recommendation engine which fit perfectly when they went to streaming. Tesla is doing it with Charging but they are generating their own demand as a reason to build a network.

Autonomous cars will disrupt alot of stuff, but one of the networks will be vehicles not designed for people at all - e.g. A pizza place could be located in a bad location and it is 100% delivery based with the pizza cooking while the autonomous car drives. Or a retail store on wheels without a physical location, it comes to you. The trick is starting the business now for this autonomous future in a way that can still work. Uber is doing a bit of this with things like UberEats.
 
My understanding is that they delayed the X to concentrate on S release and production. Do we know that batteries were a bottleneck?

They almost never say something is a problem until it is resolved.

It late 2015 Panasonic said battery cell capacity was running ahead of Tesla demand and that they were working hard so battery supply would never be a problem.
 
I can't claim to be an expert on it but I've heard and read that many times.
Here is an example article: What do Membership Fees Mean to Costco?
I can't comment on the accuracy of the article but their are many articles all saying the same thing about their business model. Its a differentiating approach that makes them difficult to compete against. Amazon is doing something similar with Prime, but I'm not sure if Prime fees track so closely to their profit. I would make a guess that Amazon is running a much more complex model.

This is like saying ZEV revenue is a key driver of Tesla profits.
 
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This is like saying ZEV revenue is a key driver of Tesla profits.
It's different because it is Costco's strategy. I doubt in Tesla strategy meetings they say lets breakeven and ZEV credits will be our profit. Costco chooses their markup on items, so they run lean and set there markup to closely match their overhead and then there profit tracks to their memberships. For growth they build new stores and generate new memberships. How do you compete against that? Once they run out of places to grow it will be interesting to see what they do - maybe just provide a dividend.
 
<snip>

My point is that autonomous cars aren't really going to reduce the number of cars much. <snip>

For a variety of reasons, I tend to agree with you that autonomous cars are not likely to reduce the number of cars significantly. But in this context that's not really the issue IMO.

For Tesla Network's contribution to accelerating sustainability the question is not how many ICE vehicles are replaced by the Tesla Network, but how many ICE vehicle miles are replaced by vehicle miles on the TN.

So someone might decide to keep their car, but may use it less often if they can just hail an inexpensive and convenient autonomous car for many or most purposes.

Here is s simple example. In 2020, let's assume Tesla is production constrained at 1,000,000 vehicles and the Tesla Network is up and running. Let's also assume for sake of illustration that only 1 out of 3 Tesla owners elects to put their car into the network and that each TN vehicle ends up with 4X the number of miles as a non-TN Tesla (the lower end of Sterling Anderson's range).

This would result in the same number of Tesla BEV vehicle miles as if Tesla had sold 2,000,000 vehicles, or twice as many as Tesla is able to produce. Most of these will replace ICE vehicle miles since ICE vehicles will still be the overwhelming majority of vehicles on the road in 2020.

Incidentally, all of the above is also true for profitability of the Tesla Network. For the TN to be profitable Tesla just needs people to use the network -- they don't have to ditch their cars.
 
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It's well known trade off between cell types. Hardly a show stopper or even a big deal. Pouch cells are subject to "puffing" which is why Volt and Leaf packs stack the cells between plates that are under compression. You could consider that an advantage for pouches because the housing of cylindrical cells probably weighs more because the anti puffing structure is repeated in every cell.

Thanks, but I'm betting on Elon to be much closer to what he says, rather than what you say.

Also the worst case projections other than Toyota are all about 2020-2021. So your projection is definitely an outlier, among experts.
I've been through AI projections by "experts" and companies before. They're always wrong; it always takes longer than they think. And this isn't just analogy; I actually do understand the technology.

Look, their concept of the specifications they're trying to meet isn't even right yet. Once they understand what the actual hard problems are (they're only just starting to get to them, in the last year) they can start working on them.

It's harder to specify the problem than it is to solve a well-specified problem. So-called "deep learning" does not get around this issue; you still have to be able to tell good driving behavior from bad, including in many many many many corner cases. They don't even know what the corner cases *are* yet, and they've made that VERY clear with many monumentally ignorant and arrogant public announcements.

Oh, they'll get it done. But not by 2020.

Elon Musk, the eternal optimist, is not even claiming that they will have full all-cases autonomy by then, at least not in any interview I've seen. He's been talking about "highway entrance to highway exit" autonomy in the next few months -- *that*, I believe they can do.
 
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Along the AP thoughts, I am not a big fan. I appreciate the technology and understand a compelling reason in reducing traffic fatalities, but the thought of most cars be driven automatically seems a little bit antiseptic and too Blade Runner/Jetson-esque. I drive a Tesla and love to drive it, not be driven by it. AP is here and is the future (being led by Tesla) and many, if not most, car manufacturers are following suit. I just hope the thrill of driving isn't replaced by being a passenger.

You'll probably still be able to drive on private property. Of course on a racetrack. When escaping the police after robbing a bank. Times like that. ;)

Weirdly enough, this week's Bull episode was about an autonomous car killing one of its creators. Was not a Model S or X so TSLA SP probably won't be affected.
 
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Eventually government funding (EPA) will be needed to remediate the land so that it can be returned to productive use.


Post trump there might not be an EPA.
Not a chance. It's actually an astoundingly popular agency, since most of its work consists of cleaning up toxic waste, and *nobody likes toxic waste*. Not even most Republicans!

Every state and locality, no exceptions, campaigns to get EPA funds to clean up toxic sites. Even private companies try to do so. Not cleaning the sites up... means people avoid them -- people don't hide them or ignore them any more the way people did before Love Canal. So failure to clean up depresses property values, and landlords want the government to pay for cleanup instead of paying for it themselves. It's the sort of bailout that a fellow like Trump might appreciate.

Weakening certain regulations (likely) is not the same as dismantling the EPA. I would say there's no chance of dismantling Superfund. They've tried to weaken it a couple of times without much success.

The degree to which EPA regulations were made under duress under court order after lawsuits from states is also not widely understood. Even under Democratic Presidents the EPA often tried to make the weakest regulations possible and ended up making stronger regulations after getting sued.
 
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Not a chance. It's actually an astoundingly popular agency, since most of its work consists of cleaning up toxic waste, and *nobody likes toxic waste*. Not even most Republicans!
Is toxic waste one of the externalities that corps don't factor in, and amount to subsidies? Are these companies actually viable, or only because they don't pay their way.
 
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Along the AP thoughts, I am not a big fan. I appreciate the technology and understand a compelling reason in reducing traffic fatalities, but the thought of most cars be driven automatically seems a little bit antiseptic and too Blade Runner/Jetson-esque. I drive a Tesla and love to drive it, not be driven by it. AP is here and is the future (being led by Tesla) and many, if not most, car manufacturers are following suit. I just hope the thrill of driving isn't replaced by being a passenger.

Seems like I've heard a similar argument.

Why would ANY pleasure-seeking man ever want to give up the steed of flesh and blood for a mere machine?

The Age of the Horseless Carriage
 
Is toxic waste one of the externalities that corps don't factor in, and amount to subsidies? Are these companies actually viable, or only because they don't pay their way.
*cough* basically, yeah.

The fight over toxic waste is usually over whether the company will pay for it, or whether the government will pay for it, or whether they can dump it in some community (used to typically be Native American, now could be anyone) where nobody important will care. The third option has become much less viable in recent years, so the fight's mostly over the money now...
 
Counterpoint: i really like AP. I use it in stop and go traffic all the time. I use it for daily work commutes which can be over 50+ miles each way, and allows me to see the road and see what is developing ahead. Really great for highway drives at night on long deserted highway stretches...

Last I heard, you only use AP when you pull the lever. So people who like it can use it, those that don't aren't being forced. Those drivers that like to "drive" never know if the car next to them is driving on AP or not, except if not, the non AP car tends to drift and weave. I don't see any problem.
 
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