2017 Investor Roundtable:General Discussion

[tander]

I've always been long and will continue to be. But, the "we're on the verge of great things" story is really getting old.

I still stand by my assertion that Musk's single biggest mistake since starting Tesla was the X (the doors and other complexities). I wondered 2 years ago if Tesla could actually recover from that mistake and given how rosey things looked going into this ER, I thought they had. But, the truth is, it's just more of the same. How in the world does a luxury SUV not outsell your luxury sedan? Every other company's SUVs are crushing the sedan market (in ALL classes). And sadly, not only is the X not outselling the S, it's now losing sales year over year (based on the projected April sales). Thank God the Model S is carrying the company. But sadly, one great product simply does NOT make a great company. I SO wish we could go back in time and get the 2 extra years and a few hundred million bucks back that Tesla spent on designing, engineering, and producing the X. The company would probably have $500M more in cash (think cost of design, engineering, production nightmare, and most importantly, the warranty costs since the X's release), the X would have started in production 2 years earlier, it would be selling twice as many, and the M3 would be on the street right now - IF ONLY MUSK HAD LISTENED AND NIXED THE DAMN FALCON DOORS!!! GRRRRRRRR!

How much goodwill has Tesla lost because people can't get a damn appointment to get that crappy car fixed? Go read the X and S forum. People can't even get the service centers to call them back. The SCs are overloaded with those Xs.

You can look at all the charts and read all the ERs you want. But when a company's reputation for being great is lost, it's DAMN hard to get it back. And almost always, the end will come. God I hate that damn X.

As someone (Davet maybe?) reminded me a while back, the x was pretty designed almost as much if not more for the Chinese market, so until Tesla has proper distribution there it's too early to judge its success. And another big reason for the x was just to bridge to gap betweem the s and 3 to let batteries develop and multiply(gigafactory), so in that vein it has already served its purpose well, keeping the free tesla hype and hate going until the model 3 arrives. I had an x reservation but cancelled because I felt the doors were just too much bling for me, and was very surprised they weren't an option (soccer moms like bling but not always that much). Being reminded that it was for China made them make a lot more sense to me.

 

[SteveG3]

I almost agree except for the fact that the future is the only way you make valuations. A companies value is determined by its valuation and current promised/proven profit margins as a whole.

In other words....GM as a company isn't viewed from investors as having a profit margin for its Chevy Impala and a separate on for its Buick Lacrosse and a separate on for the Cadillac XTS.

GM the company has a single valuation and profit margin as Tesla has the same.

Yes, in things like financial news coverage of an earnings report, they will refer to a profit margin of the company as a whole. However, when analysts create models to project future earnings and from their determine a valuation and price target for the company they go vehicle by vehicle into those details. None of these analysts are going to be caught by surprise that the Model 3 will not have the exact same margins as the S or X.

 

[SteveG3]

My generous offer is still on the table.

VA, pay no mind to "front runner" Mitch. Your offer was made directly to me, and we've still got a deal.

 

[Garlan Garner]

My generous offer is still on the table.



Obviously!

My point is that designing and building EV's solely to make a profit on tax credits is extremely short sighted.

The only problem here is that GM didn't make the Chevy Bolt to make money.

All car companies are under a regulation by our government to have their entire car line average 26mpg. The Chevy Bolt is officially listed as 100mpg. Why? Because the new Corvette Z06 ( 15mpg ) would drop the average below 23mpg for the entire fleet. They had to build the bolt in order to build another sub 20mpg car..... or else the EPA part our government wouldn't allow the new performance line to get built.

In other words.....GM's bottom line profit margin was improved because of the huge profit margins of their performance lines. They could have cared less if they sold hardly any bolts. There was actually a small/undetectable profit margin loss on the bolt.

GM builds 27 different car models. The Chevy Performance line contributes to 77% of their overall profit margins. Building 1 more EV model to save those profit margins was a no brainer....even if it didn't sell.

 

[Garlan Garner]

Yes, in things like financial news coverage of an earnings report, they will refer to a profit margin of the company as a whole. However, when analysts create models to project future earnings and from their determine a valuation and price target for the company they go vehicle by vehicle into those details. None of these analysts are going to be caught by surprise that the Model 3 will not have the exact same margins as the S or X.

I understand what you are saying, but investors don't do that with GM and their 27 different models that they sell...nor the 31 different models that Ford sells. They never have.

 

[SteveG3]

I understand what you are saying, but investors don't do that with GM and their 27 different models that they sell...nor the 31 different models that Ford sells. They never have.

Perhaps. They do it with Tesla though.

 

[Intl Professor]

10 minute ramble going on now. I love Elon and all, but sometimes he sounds like an old dude at a bar talking about nothing to nobody.

I resemble that plus 50 minute sentences!

 

[Garlan Garner]

Perhaps. They do it with Tesla though.

If they do....then that's not right/fair. I totally understand what you are saying.

I'm going to have to do some homework on this one.

 

[MitchJi]

Looking stormy in Longsville. And no offense. I'm super long...

I was clearly incorrect in my understanding of the meaning of Elon"s tweet, and @anticitizen13.7 was correct!

 

[Buddyroe]

As someone (Davet maybe?) reminded me a while back, the x was pretty designed almost as much if not more for the Chinese market, so until Tesla has proper distribution there it's too early to judge its success. And another big reason for the x was just to bridge to gap betweem the s and 3 to let batteries develop and multiply(gigafactory), so in that vein it has already served its purpose well, keeping the free tesla hype and hate going until the model 3 arrives. I had an x reservation but cancelled because I felt the doors were just too much bling for me, and was very surprised they weren't an option (soccer moms like bling but not always that much). Being reminded that it was for China made them make a lot more sense to me.

I'm not saying they shouldn't have built the X - just that they should have built it with regular doors and no HEPA filter. And as you JUST stated, Tesla lost your purchase due to what? The damn doors! But, I appreciate that you admitted that. Most people continue to defend those things and the hundreds of millions they have cost Tesla (along with goodwill).

 

[aronth5]

I've always been long and will continue to be. But, the "we're on the verge of great things" story is really getting old.

I still stand by my assertion that Musk's single biggest mistake since starting Tesla was the X (the doors and other complexities). I wondered 2 years ago if Tesla could actually recover from that mistake and given how rosey things looked going into this ER, I thought they had. But, the truth is, it's just more of the same. How in the world does a luxury SUV not outsell your luxury sedan? Every other company's SUVs are crushing the sedan market (in ALL classes)..

Because the Model S is not a true sedan. It is a liftback and that makes a significant difference to many buyers. There are other reasons but you cannot treat the Model S as you would other car companies luxury sedans. In time I suspect the Model X will begin to outsell the S.

 

[Garlan Garner]

I'm not saying they shouldn't have built the X - just that they should have built it with regular doors and no HEPA filter. And as you JUST stated, Tesla lost your purchase due to what? The damn doors! But, I appreciate that you admitted that. Most people continue to defend those things and the hundreds of millions they have cost Tesla (along with goodwill).

I look at it this way.

Elon/Tesla built the Model S.
Tons of hurdles - They got over all of them.
Financial Woes.
Worker Woes
Pushback and discouragement.

Now the X.
Same struggles.
Dreams.
Concepts.
Falcon Wing Doors? Insurmountable? We have overcome so much.....what in the world is the problem. We are pushing forward just like we did with everything else. More Money, More Time. We have to pass crash test like we did with the model S ( Actually the Model X didn't and hasn't to this day had to participate in a crash test - story for a different thread).

Hindsight? Falcon Wing Doors could have waited. <-- Quote from Elon

1 outright roadblock out of 9000 successes isn't bad. Just my opinion.

 

[JRP3]

I don't think its so much what the voltage is as much as it is the opportunity to use voltage from the onboard power batteries.

The problem has been that Tesla has needed to use all of the propulsion batteries for propulsion.

The main pack has always provided power for the 12V systems through the DC/DC converter. How do you think the 12V battery got its charge?

 

[EnzoXYZ]

How the S/X can have already plateaued? I live in Paris and I haven't seen a handful of Teslas in the past few months. Actually, the ones I notice are the same ones that were already in the streets over a year ago (half of them are taxis).

Haven't seen an X in France yet (saw one in Brussels last weekend, finally). I thought the demand for high-end SUV was much bigger than for the sedans. Yet, I rarely see one when I drive across the country . IIRC, France is the #1 European market for EV. Something's not right.

It hasn't. Anyone saying it has have no idea how much bigger the market really is.

 

[Garlan Garner]

The main pack has always provided power for the 12V systems through the DC/DC converter. How do you think the 12V battery got its charge?

I understand. Yes the wipers and accessories used the 12V battery, however Elon has always stated that the only reason that 12V lead acid ( supper heavy ) battery is there is because their vendors only made accessories that require that battery. He wanted vendors to make a 480V wiper so that he could power them right off the propulsion batteries once the density ( 2170 ) of the batteries became sufficient to not need all of the physical real estate required. That's one reason why I believe that Elon has capped of the S/X distance at 300 or so miles with the current batteries. He keeps stating that he is going to use the new batteries in the Model S without increasing the distance....so then what's the extra density going to do? Power accessories? Wipers? AC units? Less Wiring? Better profit margins? Won't have to buy 25K 12V batteries each quarter?

 

[JRP3]

Most people continue to defend those things and the hundreds of millions they have cost Tesla (along with goodwill)

And you continuously ignore the positive value of those same doors, such as the free advertising they provide every time they open in public. They actually draw people to the vehicle. Ignore that reality if you will but you can't make it go away. You also keep ignoring the huge expense and delay it would have cost to redesign the vehicle for conventional doors.

 

[JRP3]

I understand. Yes the wipers and accessories used the 12V battery, however Elon has always stated that the only reason that 12V lead acid ( supper heavy ) battery is there is because their vendors only made accessories that require that battery. He wanted vendors to make a 480V wiper so that he could power them right off the propulsion batteries once the density ( 2170 ) of the batteries became sufficient to not need all of the physical real estate required.

The pack peaks out around 400V so I doubt he wanted a 480V wiper motor, not to mention there are real difficulties with safety bringing that voltage into the passenger compartment. Unless you meant 48V? But that doesn't really solve the issues you raise. I also don't know what you meant about "physical real estate required". No real estate is freed up by changing the accessory voltages.

That's one reason why I believe that Elon has capped of the S/X distance at 300 or so miles with the current batteries. He keeps stating that he is going to use the new batteries in the Model S without increasing the distance....so then what's the extra density going to do? Power accessories? Wipers? AC units? Less Wiring? Better profit margins? Won't have to buy 25K 12V batteries each quarter?

Again, that makes no sense, power for accessories always comes from the pack no matter what voltage they run at. Higher density batteries won't change that.

 

[mongo]

More like 5V, 3.3V and 1.8V. These are the voltages used to power electronics / chips.

48V is great if you want to power something like an electric supercharger (which is basically an electric motor) or cut cost on your 1 km long electric harnesses (you can use thinner cables). None of this will apply to Model Y.

Back a ways in time, 48v was looked at for stop/start applications (alternator/ starter) along with electric steering pumps. The problem (one at least) was that all the accessories and bulbs were still 12V. So you have a 48v battery and a 12V with some variety of DC-DC converter.

With LED lighting, all the high output lights have DC-DC converters integrated (LEDs like a constant current supply). So minimal impact to change the supply voltage.

In general, going with a higher vehicle voltage cuts the current, which cuts the wire gauge needed (3 units of AWG is double the cross section). For the same voltage drop, double the voltage cuts wire size/ weight in half (and event with the smaller cable, transmission loss is cut in half). Alternatively, you can supply twice the power with the same wire.

Most vehicles have centralized fuse boxes and body control modules which then have individual circuits to each light or switch (smart box/ dumb loads). But now, if each light or group of lights has a converter anyway, it's a very small step to use a microcontroller to provide the power regulation and on/off control.

Taken to the extreme, all that is needed is one power wire and a pair of wires for networking (vehicle body is the return path). Realistically, fault tolerance is a good thing, so split out loads on a few power cables.

Speaking of those power feeds, remember that fuse box(es)? If the power feeds are DC-DC generated, the converter can provide the current limiting and fault reporting, no need for branch fuses (pre-converter current limiting devices are still reasonable for hardware failures).

As for 5, 3.3, and 1.8, while they will end up being generated for the logic circuits, their regulation requirements do not allow for long wiring runs.

 

[Garlan Garner]

The pack peaks out around 400V so I doubt he wanted a 480V wiper motor, not to mention there are real difficulties with safety bringing that voltage into the passenger compartment. Unless you meant 48V? But that doesn't really solve the issues you raise. I also don't know what you meant about "physical real estate required". No real estate is freed up by changing the accessory voltages.



Again, that makes no sense, power for accessories always comes from the pack no matter what voltage they run at. Higher density batteries won't change that.

That's what Elon said.....so You aren't disagreeing with me concerning his desire to have accessories run directly from the propulsion pack. I didn't say it.

Elon also said that the density of the propulsion batteries is increasing. However the range of the car isn't . He said he wanted ot use the extra density to power accessories at a non 12V level to get rid of that 12 V battery.

Call Elon. Tell that genius he doesn't make any sense. I didn't make these statements.

 

[KLC13]

Here is our favorite bear back at CNBC:

Tesla adj. loss ($1.33) vs. ($0.81) est.