2017 Investor Roundtable:General Discussion

[ValueAnalyst]

Has anyone calculated what "the exit rate of cells will be faster than bullets from a machine gun" really means?

Here's my open-minded-no-judgment-and-likely-way-off-but-still-better-than-nothing attempt. My primary goal is to learn something along the way.

Wikipedia points to a typical rate of "300 to 1800 rounds per minute." I will assume 1,000 per minute - round and down the middle.

These _ two posts make the argument that Model 3 will have ~2,750 cells vs. ~7,000 in Model S/X due to different size, chemistry, improvements higher yields etc. I do not have a background in chemistry or battery tech, but the arguments seem generally in-line with everything else I've come across on the topic as well as management commentary.

I will assume Gigafactory 1 will work around the clock with three shifts. If anyone has a different opinion, please let me know, as this is an important piece of the calculation.

365 days per year x 24 hours per day x 60 minutes per hour x 1,000 cells per minute / 2,750 cells per Model 3 = 200,000 cars/year approx

This seems way off, as I expected at the beginning. The weakest link in this calculation is likely the number of cells per minute. Please chime in if you have an informed opinion and can move the discussion forward. I just wanted to get the ball rolling.

 

[WhiskeySauer]

Note that model S achieved 35% market share in the niche US luxury sedan market, before this large price drop, before full autonomy (which I estimate will come in 4Q17), before Supercharger v3 which will cut down chargin time to 5min, with a lower number of service/sales centers and limited brand recognition. Model S/X market shares are set for a step change in 2H17 and 2018.

I've been thinking a lot more about what this will look like. I think it's going to be a steep climb but I don't think it's going to be a step change because I think Level 5 will happen incrementally. For example, Tesla mobility will only work in certain ge-fenced cities in California where they have the most HD mapping data collected. Then gradually, Tesla mobility will expand across the country from West to East, hitting cities first and gradually reaching the suburbs. Competing companies will do the same but gradually Tesla wins over majority market share because they can offer lower prices. It's certainly possible that Tesla Mobility is launched by 4Q17 but I expect its released to be limited at best. But as Model 3 production numbers start to climb exponentially while Tesla Mobility expands, Tesla's stock will show a steep rise as people become aware of Tesla's lead.

What's interesting about this is, Tesa's production numbers will only be important in so much as it helps them expand their real product, Tesla Mobility, faster. People will start caring less about production numbers and more about the number of autonomous miles purchased by mobility-as-a-service customers. Because the autonomous taxi market is much, much more valuable than the consumer-owned vehicle market, in my mind.

 

[sundaymorning]

No, they build ICEv that out range a Tesla. And that is what Tesla is up against to transition the world to sustainable transport. It is not beating gimped LEAFs.

Tesla doesn't build a safer car than than the Mercedes S Class. Except for a launch year, S Class sells in such few numbers in the USA that various crash test agencies don't bother to test it. They do in Germany though.

Fanbois can always say that their beloved brand's unique feature is the ones that are indispensable and other manufacture's unique features are gimmicks but that is not how the market see it. Globally, S Class outsells Model S. Largely because it trounces it in China.

I don't know where you're getting your facts from, and you may want to tone down on the name calling.

Here's some real true data for you to look at when comparing the MS and Merc, on a scale of 10 (which includes performance, interior, critic ratings) the Model S outscored the Mercedes 9.4 to 9.2, and that's not even including reliability and safety. No way the Benz with that chunk of V8 engine is safer than a Tesla. It's the crumble zone that gives the Tesla the advantage. The battery underneath and missing engine also prevents the car from spinning in a T-Bone accident (which causes whiplash and neck injuries). And oh, you must have missed the part where insurance companies actually have data that states you are least likely to experience bodily injuries in a Tesla than any other sedan. Click on the site and see what the pros have to say about the Tesla vs Mercedes, never mind us fanboys/ladies here.

Compare Tesla Model S vs. Mercedes-Benz S-Class vs. Porsche Panamera | U.S. News & World Report

 

[3Victoria]

@ValueAnalyst GF has multiple battery lines, so your estimate may be off by a factor of 2-4, so 500,000 is doable ... oh and this is in the present 1/3 of the final GF.

 

[geneclean55]

Has anyone calculated what "the exit rate of cells will be faster than bullets from a machine gun" really means?

Here's my open-minded-no-judgment-and-likely-way-off-but-still-better-than-nothing attempt. My primary goal is to learn something along the way.

Wikipedia points to a typical rate of "300 to 1800 rounds per minute." I will assume 1,000 per minute - round and down the middle.

These _ two posts make the argument that Model 3 will have ~2,750 cells vs. ~7,000 in Model S/X due to different size, chemistry, improvements higher yields etc. I do not have a background in chemistry or battery tech, but the arguments seem generally in-line with everything else I've come across on the topic as well as management commentary.

I will assume Gigafactory 1 will work around the clock with three shifts. If anyone has a different opinion, please let me know, as this is an important piece of the calculation.

365 days per year x 24 hours per day x 60 minutes per hour x 1,000 cells per minute / 2,750 cells per Model 3 = 200,000 cars/year approx

This seems way off, as I expected at the beginning. The weakest link in this calculation is likely the number of cells per minute. Please chime in if you have an informed opinion and can move the discussion forward. I just wanted to get the ball rolling.

Multiple lines, each spitting out cells faster than bullets?

 

[ValueAnalyst]

Multiple lines, each spitting out cells faster than bullets?

That would definitely explain why the calculation came out low. Does anyone know how many lines there will be in Gigafactory 1?

 

[WhiskeySauer]

That would definitely explain why the calculation came out low. Does anyone know how many lines there will be in Gigafactory 1?

I believe JB talked about how many lines there were going to be in the Q42016 call.

 

[MitchJi]

I just made the following update/correction to this thread:
Battery Pack Costs Plus Overlooked or Underappreciated Items from Q4 Call

These lines can be installed anywhere that Tesla needs a multiple of one or more of these lines. I believe that it will be possible for Panasonic to produce 2170 cells in Japan, at a similar cost to the cells produced at the GF by doing two things:
1. Using one or more units of the large scale manufacturing equipment they developed for use at the GF.
2. Vertically integrating that factory. Obviously converting their existing 18650 line to produce 2170's is relatively trivial. But getting the price down requires much more than that. It probably makes more sense to shift MS-MS 2170 cell production to the NV GF (to take advantage of colocation), and setup and use more efficient production lines in Asia for Asian TM and Asian TE.

Clarification:
Actually there are three major cost advantages of the GF, the third is the alien dreadnaught technology. Elon said that (paraphrasing) if your competitors require five factories to produce what you can produce with one that they aren't really competition. Can competitors compete on price if they need three GF's to produce what Tesla can produce using one GF?
Requires this correction?:

These lines can be installed anywhere that Tesla needs a multiple of one three or more of these lines. I believe that it will be possible for Panasonic to produce 2170 cells in Japan, at a similar cost to the cells produced at the GF by doing two things:

 

[ValueAnalyst]

I've been thinking a lot more about what this will look like. I think it's going to be a steep climb but I don't think it's going to be a step change because I think Level 5 will happen incrementally. For example, Tesla mobility will only work in certain ge-fenced cities in California where they have the most HD mapping data collected. Then gradually, Tesla mobility will expand across the country from West to East, hitting cities first and gradually reaching the suburbs. Competing companies will do the same but gradually Tesla wins over majority market share because they can offer lower prices. It's certainly possible that Tesla Mobility is launched by 4Q17 but I expect its released to be limited at best. But as Model 3 production numbers start to climb exponentially while Tesla Mobility expands, Tesla's stock will show a steep rise as people become aware of Tesla's lead.

What's interesting about this is, Tesa's production numbers will only be important in so much as it helps them expand their real product, Tesla Mobility, faster. People will start caring less about production numbers and more about the number of autonomous miles purchased by mobility-as-a-service customers. Because the autonomous taxi market is much, much more valuable than the consumer-owned vehicle market, in my mind.

Thank you for providing a different perspective and backing it up with your reasoning.

I generally agree with you that the potential of mobility-as-a-service is greatly underestimated. If Tesla can create an app ecosystem that riders can enjoy, this can serve as a major sustainable competitive advantage with software-type margins. Similar to what Apple has achieved on the iPhone. It's not easy to break into that type of lead as hard as Google tried with Android.

If Tesla can include some sort of high-quality VR experience and a supportive app ecosystem in its cars, even iPhone customers may choose to spend time on that ecosystem rather than on their phones. This explains why Apple is trying to create fully autonomous vehicle software. Tesla is in direct competition with Apple.

 

[RobStark]

I don't know where you're getting your facts from, and you may want to tone down on the name calling.

Here's some real true data for you to look at when comparing the MS and Merc, on a scale of 10 (which includes performance, interior, critic ratings) the Model S outscored the Mercedes 9.4 to 9.2, and that's not even including reliability and safety. No way the Benz with that chunk of V8 engine is safer than a Tesla. It's the crumble zone that gives the Tesla the advantage. The battery underneath and missing engine also prevents the car from spinning in a T-Bone accident (which causes whiplash and neck injuries). And oh, you must have missed the part where insurance companies actually have data that states you are least likely to experience bodily injuries in a Tesla than any other sedan. Click on the site and see what the pros have to say about the Tesla vs Mercedes, never mind us fanboys/ladies here.

Compare Tesla Model S vs. Mercedes-Benz S-Class vs. Porsche Panamera | U.S. News & World Report

I am not calling anyone in particular names.

Making a supposition. Did not know "fanboi" was a slur that could not be mentioned.

The link proves nothing. USN&WR is not an authoritative resource on automobiles. Your supposition that a car with a V8 can't be as safe as car without an ICEv means nothing. Leading ICEv design has the engine fall and slide underneath the vehicle compartment in a high speed crash.Stating that manufacturing such a design is harder to do it is a fair contention. Doesn't mean Mercedes hasn't accomplished it. Whiplash is caused by poor seat design.

"All other sedans" in the USA generally does not include S Class, 7 Series, or A8 because they generally don't sell in significant enough numbers in the USA to give scientifically accurate data.

IHS doesn't buy a dozen Maybacks or Rolls Royces every year to test crash.

 

[WhiskeySauer]

Thank you for providing a different perspective and backing it up with your reasoning.

I generally agree with you that the potential of mobility-as-a-service is greatly underestimated. If Tesla can create an app ecosystem that riders can enjoy, this can serve as a major sustainable competitive advantage with software-type margins. Similar to what Apple has achieved on the iPhone. It's not easy to break into that type of lead as hard as Google tried with Android.

If Tesla can include some sort of high-quality VR experience and a supportive app ecosystem in its cars, even iPhone customers may choose to spend time on that ecosystem rather than on their phones. This explains why Apple is trying to create fully autonomous vehicle software. Tesla is in direct competition with Apple.

Morgan Stanley's Adam Jonas is the only person I know who actually tried to place a value on the time spent inside autonomous taxis. I think it was around $4T. The more I think about it, the more I envision a future where, instead of spending Friday evening in your living room watching Netflix, you spend it in your autonomous car watching Netflix. Instead of sleeping in your bed, you sleep in your car. People can effortlessly take 1000 mile road trips across the country for a Saturday. And be back to work on Monday with very little hassle or expense. What's crazy to think about is this will not only disrupt the automobile/energy market. It will probably also disrupt home ownership, hotels, and airlines. And it will almost certainly start happening before 2030.

 

[ValueAnalyst]

Morgan Stanley's Adam Jonas is the only person I know who actually tried to place a value on the time spent inside autonomous taxis. I think it was around $4T. The more I think about it, the more I envision a future where, instead of spending Friday evening in your living room watching Netflix, you spend it in your autonomous car watching Netflix. Instead of sleeping in your bed, you sleep in your car. People can effortlessly take 1000 mile road trips across the country for a Saturday. And be back to work on Monday with very little hassle or expense. What's crazy to think about is this will not only disrupt the automobile/energy market. It will probably also disrupt home ownership, hotels, and airlines. And it will almost certainly start happening before 2030.

I agree with you that's the direction we are moving (pun intended; I don't know why people don't claim the puns they run into); however, I've come to learn that change in human behavior usually happens slower than simple extrapolation would dictate.

Home ownership is a cornerstone of the American dream, so I do not expect that to go away anytime soon. Same with car ownership. Note that a lot of the things we can be sharing right now (pretty much anything you can think of), we do not.

 

[WhiskeySauer]

I agree with you that's the direction we are moving (pun intended; I don't know why people don't claim the puns they run into); however, I've come to learn that change in human behavior usually happens slower than simple extrapolation would dictate.

Home ownership is a cornerstone of the American dream, so I do not expect that to go away anytime soon. Same with car ownership. Note that a lot of the things we can be sharing right now (pretty much anything you can think of), we do not.

Fair point. People still use landlines and newspapers and paper maps today. The change will be about as slow as it takes to raise the generation who had access to the technology since birth. So the generation of people born in the early 2020's will likely be the ones who adopt the tech

 

[dc_h]

In the TE related news, SDG&E News Release dated April 19 indicates that company signed contracts for 83.5MW/334MWh worth of BES projects, all subject to the approval by California Public Utility Commission (CPUC). The time frame for getting these projects on line is Between December 2019 and 2021:

• 40MW/160MWh - AES Energy - Facility to be owned and operated by SDG&E
• 30MW/120MWh - Renewable Energy Systems (RES) Americas - Facility to be owned and operated by SDG&E
• 9.5MW/38MWh - Enel Green Power North America - merchant BES facility
• 4MW/16MWh - Advanced Microgrid Solutions (AMS) - merchant BES facility

This is third announcement of large scale deployment of BES systems within a month. Two other announcements:

• 40MWh of BES by AMS for Wallmart
• 50MW of BES by AMS, financed by CIT Group. Given the revenue streams (storage for solar, PPA by the SCE, grid services, including reserve capacity and voltage management) and total cost of the project ($200M) leads me to conclude that combined energy rating of these systems is at least 200MWh.

So here is the TE scorecard within the last 30 days (Utility scale projects):

Total Energy Capacity: 334MWh + 40MWh + 200MWh = 574MWh
Energy Capacity by Tesla: 200MWh + 40MWh + 16MWh = 256MWh. Leader: 256MWh/574MWh = 44.6% of total
Energy Capacity by AES: 160MWh. Runer-up: 160MWh/574MWh = 27.9% of total
Energy Capacity by RES: 120MWh. Third place: 120MWH/574MWh = 20.9% of total
Energy Capacity by Enel: 38MWh. Fourth place: 38MWh/574MWh = 6.6% of total
​

View attachment 224027

​

Is AES reselling Tesla products?

 

[geneclean55]

Is AES reselling Tesla products?

LG Chem supplies AES with batteries, I believe.

 

[ValueAnalyst]

What am I missing with the following?

Gigafactory 1 is planned to ramp up to 150GWh/year by 2020.

Base Model 3 will likely have ~50kWh battery size.

So doesn't that mean 3 million Model 3's per year (with simplifying assumption that overwhelming majority of cars produced in Gigafactory 1 will be Model 3 base model).

So say 2 million Model 3's with the rest spared mostly for Powerpacks?

AND this is assuming no further increases in max capacity for Gigafactory 1 AND no further Gigafactories coming online by 2020, both of which will likely prove conservative.

 

[sundaymorning]

I am not calling anyone in particular names.

Making a supposition. Did not know "fanboi" was a slur that could not be mentioned.

Whiplash is caused by poor seat design.
.

Poor seat design isn't the only thing that causes whiplash. Tesla has one of the safest seat on the market, do you want to why? Because the design of the headrest, which is connected to the body lumbar part of the entire seat. Most car seats are designed with a separate headrest, which can snap off in a serious accident. Volvo was considered safe for a while because the design of its headrest, Tesla's design is the same as the old Volvo. Not to take anything away from the S class, but again, you're comparing two different beasts in different market segments. It's not by accident that the Tesla overtook the Merc S in the US market.

Whether the site is official or non official, this is purely based on "opinion", the idea that the Merc S is better than the Tesla is pure opinion. You'll find that many people feel otherwise and it shows here in the US.

And to get my point across, Tesla has the safest rating in a Tbone accident, this was reiterated during the Ron Barron interview. The 2016 MS safety rating took a hit bc of its seatbelt, which is an easy fix, in all likelihood, it's already been fixed..

Again I don't know where you are getting the side impact information from but I think you should watch Ron Barron's interview and Elon's explanation on side impact regarding transfer load, skip his discussion to 38 min, Elon's explanation is backed by real life data provided by insurance companies which claim the Tesla to have the lowest bodily injury rate in a serious accodent. Not some arbitrary dummy test:

I was involved in a very bad auto collision and chose the Model S over every other car not only because I am a fan, but it can potentially save my life. That single safety feature is worth more than anything Mercedes BM or Audi can provide momentarily. My priorities are where it should be, but if others like the lux leather that Merc has along with its interior neon lights, that's their progative. No comment there. And if Mercedes want to compete with Tesla and win me over, they'll have to figure out a way to evenly distribute the weight of their V8 engine below the car. Having a low center of gravity prevents rolling, turning and flipping in an accident.

 

[Lessmog]

Poor seat design isn't the only thing that causes whiplash. Tesla has one of the safest seat on the market, do you want to why? Because the design of the headrest, which is connected to the body lumbar part of the entire seat. Most car seats are designed with a separate headrest, which can snap off in a serious accident. Volvo was considered safe for a while because the design of its headrest, Tesla's design is the same as the old Volvo. Not to take anything away from the S class, but again, you're comparing two different beasts in different market segments. It's not by accident that the Tesla overtook the Merc S in the US market.

Whether the site is official or non official, this is purely based on "opinion", the idea that the Merc S is better than the Tesla is pure opinion. You'll find that many people feel otherwise and it shows here in the US.

And to get my point across, Tesla has the safest rating in a Tbone accident, this was reiterated during the Ron Barron interview. The 2016 MS safety rating took a hit bc of its seatbelt, which is an easy fix, in all likelihood, it's already been fixed..

Again I don't know where you are getting the side impact information from but I think you should watch Ron Barron's interview and Elon's explanation on side impact regarding transfer load, skip his discussion to 38 min, Elon's explanation is backed by real life data provided by insurance companies which claim the Tesla to have the lowest bodily injury rate in a serious accodent. Not some arbitrary dummy test:

I was involved in a very bad auto collision and chose the Model S over every other car not only because I am a fan, but it can potentially save my life. That single safety feature is worth more than anything Mercedes BM or Audi can provide momentarily. My priorities are where it should be, but if others like the lux leather that Merc has along with its interior neon lights, that's their progative. No comment there. And if Mercedes want to compete with Tesla and win me over, they'll have to figure out a way to evenly distribute the weight of their V8 engine below the car. Having a low center of gravity prevents rolling, turning and flipping in an accident.

Another anecdote: A relative was hit sidewise by a sturdy VW pickup in his little Renault 4, which after a 5 meter jump reduced it to scrap, wheels fell off etc. But he emerged pretty much unharmed although in need of new transport, so he researched the market for cars safer in a side collision and found only two (2) brands: Mercedes and Volvo. This was mid-70s. So he bought a new-ish second hand compact MB. To be on the safe side, he had it treated against rust. Unfortunately, that only served to conserve the rust already in place, so some years after I bought it from him on favourable terms every single piece of steel on that beautiful, lovely car was thoroughly corroded when I finally, reluctantly gave it up in 1998. (Next owner tried to park it into a standard freight container; not so good): Best car I ever drove (Saab 2-stroke, Renaults, Simca, Citroen, MB, Audi, Saab, besides rentals) before my MS.

Side impact protection is a very important aspect, perhaps even more so than mere mass. Also, roll-over protection, frontal collision crumple zone, active safety, etc Tech progress ftw! But don't overlook driver alertness ...

 

[SPadival]

OT public service announcement:

No Cookies | Gold Coast Bulletin

Welcome to Australia, Elon

Edit: Stupid paywall. Just Google the headlines and click on the search result to get around the paywall. Not that you will find any more information in article
"Billionaire Elon Musk is on the Gold Coast alongside actress Amber Heard"

 

[EinSV]

OT public service announcement:

No Cookies | Gold Coast Bulletin

Welcome to Australia, Elon

It seems to be behind a paywall. Can you summarize?