2017 Investor Roundtable:General Discussion

[adiggs]

I was surprised when Tesla didn't significantly increase service center coverage for the past two years.

I will now be pleasantly surprised if they actually get the coverage they need.


Obviously not.


Ill-will. People assume that Tesla is providing some way to get their car repaired at reasonable cost. It's a reasonable assumption. When they find out that Tesla hasn't, people are reasonably sympathetic to the complaint. And it feeds into a narrative of "Eh, Tesla is only good for people in big cities".

I've been telling people where I live not to buy Teslas for the last year. Because of the service center problem. And you know I love Tesla. But if they keep this up for a couple of years they're going to be throwing away huge markets.

The interesting problem here is how this impacts Model 3 sales. Here's what I mean...

No service center in one of these areas will clearly lower the sales rate to more "committed" customers (call them innovators / early adopters from the adoption cycle, as they will put up with stuff that the early majority won't put up with). These early adopters are also a small sliver of the potential market.

So I clearly see short term delay in purchases by people that want to purchase.


The bigger question to me, and I don't have an answer for it, is whether the potential purchasers become disenchanted with Tesla enough to decide not to buy at all, or do they just delay for another year or 3 while the service network is built out into their area?

My guess at the answer to this, is that Tesla has a solid year and probably 2 from when Model 3 starts shipping. Partly by concentrating sales into areas / addresses that are near an existing SC, and partly by ramping up the SC network (even via 3rd parties), over that time. I also think Tesla can earn some important brownie points by making an effort to interact with anybody ordering a car whose address is around an hour or 90 minutes+ from a SC, and making sure they understand the current state of service in their area. It seems like a simple information system to me to offer these people an option to get an email / mail when Tesla's SC network builds out within an hour of them, so they can buy their car when the network arrives.

I DO see a potential problem arising if Tesla is making large numbers of sales to Early Majority type customers, who also (it turns our), are not close to service. I know I never thought about where I get my car serviced in the previous ~25 years of car ownership, for the simple reason that car service is available all around me in lots of forms and options.

 

[kenliles]

Interesting note:

Warren Buffett just identified autonomous driving as a significant threat to both Geico (insurance) and BNSF (railroad business).

Warren Buffett and Elon Musk face each other in at least three major industries: insurance, transportation of goods, and utilities.

This will be extremely interesting to watch.

Warren Buffett regretting he missed GOOG, AMZN at his 2017 investor meeting. I wonder at which year's meeting he will be admitting he missed TSLA.

I would rather not have Warren Buffett investing in TSLA. After watching this NatGeo episode, it is pretty clear that he does not believe in the TSLA mission statement.

Warren Buffett says he's got a 'big appetite' for a solar or wind project

"
Warren Buffett is looking for investment opportunities in renewable energy.

"We have got a big appetite for wind or solar," Buffett said Saturday at Berkshire Hathaway's annual shareholders meeting.

"If someone walks in with a solar project tomorrow and it takes a billion dollars or three billion dollars, we're ready to do it," he said. "The more there is the better."

Buffett said Berkshire is in a good position to compete with electric utilties companies since the conglomerate can take better advantage of tax incentives for alternative energy projects.
"

Try a little something in Arizona...

 

[tinm]

Bluntly, it is quite possible to have Model 3 production delays which are not discovered by Tesla until the *week before they intend to start production*. I believe this is why they are refusing to give guidance. I think they'll tell us if there are actual known delays which exceed contingency time, but this threshhold is likely to be crossed at the last minute (maybe the last week in July, we'd find out that the car won't come out until August)

If a competitive auto manufacturer, an auto dealers association, the network of anti-alternative-energy orgs backed by Koch Bros, or some combination of the three, wanted to hit Tesla where it hurt, they'd find one (or several) of the hundreds? (thousands?) of supply-chain parts makers on which the Model 3's project milestones, and Tesla as a company, depend, and then find a way to disrupt that or those makers to hurt Tesla. I truly hope it does not happen but I would not be surprised at all if it does. And IF it does we will prolly never know the real story.

Hopefully Tesla has lined up a massive list of nimble alternative suppliers, or is ready to build parts in-house quickly, to mitigate any shenanigans or sabotage from outside forces.

 

[Reciprocity]

This I don't understand. Safer "drivers" and vehicles should benefit insurance companies by reducing payouts.

You must have not had the pleasure of dealing with an insurance claim. Insurance companies thrive off of charging to much and trying to screw claimants as much as possible. If accidents go down they can't justify charging so much and lose a huge pool of people to screw over. I think I have paid for insurance for over 30 years with nearly 0 claims. Then I get rear-ended and the other drivers insurance company wants to screw me.

Needless to say I sued then even though I had no intentions of doing so until almost a year after the accident. They just couldn't help themselves, they had to be a holes for a year.

But I digress. Lower premiums are bad for insurance companies even if payouts go lower because they are not that efficient. Could be room for a new kind of insurance company that only works with autonomous cars and is fully automated with no agents. Costs and payouts would be automated and dynamically change based on the ever improving autonomous tech.

 

[Reciprocity]

Warren Buffett regretting he missed GOOG, AMZN at his 2017 investor meeting. I wonder at which year's meeting he will be admitting he missed TSLA.

Buffett Says His IBM Thesis Was Flawed, He Blew It on Google

It's odd because Buffett is known to be invested in BYD and is about as liberal as they come. He has to understand that you have to spend money to make money. Would expect him to be a big backer if Tesla though I know he is not.

 

[geneclean55]

If a competitive auto manufacturer, an auto dealers association, the network of anti-alternative-energy orgs backed by Koch Bros, or some combination of the three, wanted to hit Tesla where it hurt, they'd find one (or several) of the hundreds? (thousands?) of supply-chain parts makers on which the Model 3's project milestones, and Tesla as a company, depend, and then find a way to disrupt that or those makers to hurt Tesla. I truly hope it does not happen but I would not be surprised at all if it does. And IF it does we will prolly never know the real story.

Hopefully Tesla has lined up a massive list of nimble alternative suppliers, or is ready to build parts in-house quickly, to mitigate any shenanigans or sabotage from outside forces.

Hasn't Tesla been touting the tier 1 status of suppliers for the model 3? I assume the scenarios you mention would have been more feasibly applied to MS or MX?

 

[Reciprocity]

If a competitive auto manufacturer, an auto dealers association, the network of anti-alternative-energy orgs backed by Koch Bros, or some combination of the three, wanted to hit Tesla where it hurt, they'd find one (or several) of the hundreds? (thousands?) of supply-chain parts makers on which the Model 3's project milestones, and Tesla as a company, depend, and then find a way to disrupt that or those makers to hurt Tesla. I truly hope it does not happen but I would not be surprised at all if it does. And IF it does we will prolly never know the real story.

Hopefully Tesla has lined up a massive list of nimble alternative suppliers, or is ready to build parts in-house quickly, to mitigate any shenanigans or sabotage from outside forces.

I get your point, I really do. But you are looking at it from a point of view of knowing it's over for fossil fuels. People don't typically put these things under the microscope that we all have. The whole point is that they just don't get it. They really don't see it as a threat and won't until it's too late. 100,000 EVs a year is a joke and so is solar in general, until it's not. That point is very close, 6-18 months for a million cars and another 18 months for 3 million cars a year, semis, pickups. In an autonomous world you don't need a billion cars. My car sits parked 23 hours a day. 15 of those hours are good times for sharing. Leaving 8 hours for over night. You will only need a fraction of the cars. Most people will not be able to justify owning a car, because the cost for sharing will be cheaper then payment + fuel + maint. Also, autonomous without EV is pointless because of sharing, ice cannot complete.

Tesla won't be the only company filling this demand, but the w world of auto manufactures is going to change radically and most will not survive. Could see allot of consolidation, maybe only VW left in Germany because they are forced to change because if the scandel, a couple of Chinese auto makers, maybe Toyota and Honda merge to survive.

5 - 10 years is all it will take. Ice cars will be around a lot longer, but won't be something that is thought of as anything more then legacy crap to be replaced. I mean people still use Amigas and there will always be hot rods and classic cars. Honestly home charging and the ubiquitous availability of electricity make it possible. Also, it might only be possible because of solar as demand for electricity will skyrocket. Good thing it's pretty much everywhere and you can bolt panels to everything.

 

[AlMc]

You must have not had the pleasure of dealing with an insurance claim. Insurance companies thrive off of charging to much and trying to screw claimants as much as possible. If accidents go down they can't justify charging so much and lose a huge pool of people to screw over. I think I have paid for insurance for over 30 years with nearly 0 claims. Then I get rear-ended and the other drivers insurance company wants to screw me.

Needless to say I sued then even though I had no intentions of doing so until almost a year after the accident. They just couldn't help themselves, they had to be a holes for a year.

But I digress. Lower premiums are bad for insurance companies even if payouts go lower because they are not that efficient. Could be room for a new kind of insurance company that only works with autonomous cars and is fully automated with no agents. Costs and payouts would be automated and dynamically change based on the ever improving autonomous tech.

Well, Tesla may get further involved by being an 'insurer'.

Yes, just what we need. Another target on our backs.

Oil, iCE manufacturers, ICE dealers,
Power suppliers, the UAW, and now the insurance industry

 

[neroden]

The bigger question to me, and I don't have an answer for it, is whether the potential purchasers become disenchanted with Tesla enough to decide not to buy at all, or do they just delay for another year or 3 while the service network is built out into their area?

My guess at the answer to this, is that Tesla has a solid year and probably 2 from when Model 3 starts shipping.

I'd say 2 years is about right. However, on historical evidence, *that's often how long it takes them to build out a new service center* from announcement to opening. Which means they really don't have much of a window to get started.

Partly by concentrating sales into areas / addresses that are near an existing SC, and partly by ramping up the SC network (even via 3rd parties), over that time. I also think Tesla can earn some important brownie points by making an effort to interact with anybody ordering a car whose address is around an hour or 90 minutes+ from a SC, and making sure they understand the current state of service in their area.

That would earn them massive goodwill -- anti-selling to anyone who's too far from a service center. They're not doing it AFAICT.

It seems like a simple information system to me to offer these people an option to get an email / mail when Tesla's SC network builds out within an hour of them, so they can buy their car when the network arrives.

I DO see a potential problem arising if Tesla is making large numbers of sales to Early Majority type customers, who also (it turns our), are not close to service.

Bingo, that's what they're doing right now. Let me know if they change their policy. Let me know if there's any way to get this concept through the heads of management.

(Who are acting like larger service centers will be sufficient -- which they won't -- and are acting like they can do annual service without taking the wheels off -- which they can't -- I have a dispute in with my service center right now about this, since they overlooked a broken part which should be covered under warranty which they would have seen if they'd bothered to take the wheels off and stare for a minute)

I know I never thought about where I get my car serviced in the previous ~25 years of car ownership, for the simple reason that car service is available all around me in lots of forms and options.

Yep.

 

[RobStark]

weekend OT

Made Sandefjordsmør tonight.

It was as if I was driving a P100DL between Trondheim and Oslo.

 

[RobStark]

Mexican engineers flood Tesla hiring event in Monterrey • The Foreign Desk

Despite being turned away at the Monterrey event, most of the engineers, some with 20 years of experience under their belts, other fresh out of college, remained optimistic about their prospects.

By evening the lobby of the Grand Fiesta Americana hotel in the northern city was abuzz with prospective candidates cradling beige folders holding their resumes.

Word spread quickly after a recruiting poster was published on LinkedIn by Tesla's senior technical recruiter, David Johnson, listing 15 types of engineers the company would be seeking at the event in Monterrey. The post was picked up by foreign and Mexican media and also redistributed by local government on social media.

One mechanical engineer, who boasted of several years of research and development work at a foreign automaker in Mexico, made the 1,000 kilometer journey from near Mexico City, one of many who traveled from afar in the hopes of securing an interview.

"Tesla is an innovative company, it's offering the future of mobility," said the engineer, who like almost all those consulted by Reuters asked not to be named so as to not jeopardize their chances with the prospective employer.

For the emerging talent, the lure of Tesla was undisputed.

"It's a project that has a big future, these are the cars of the new era," said Nadia Marrufo, a 22-year-old chemical engineer specializing in industrial processes.

 

[EinSV]

Interesting article in today's NY Times about a draft plan in India recommending a "dramatic shift" toward EVs, including lowering taxes and interest on electric vehicle loans and shifting to requiring all electric vehicles by 2032. Especially given speculation about India as a possible GF location may be worth keeping an eye on this to see how it develops, although it is unclear to me whether this would immediately affect Tesla or be more geared toward lower priced vehicles.

https://www.nytimes.com/reuters/201...s-india-autos-policy-exclusive.html?src=busln

 

[larmor]

It's odd because Buffett is known to be invested in BYD and is about as liberal as they come. He has to understand that you have to spend money to make money. Would expect him to be a big backer if Tesla though I know he is not.

If Tesla is able to do fsdc then auto insurance companies would have to pivot shift their business model. And Buffett has a lot invested in insurance companies. Thoughts?

 

[Reciprocity]

If Tesla is able to do fsdc then auto insurance companies would have to pivot shift their business model. And Buffett has a lot invested in insurance companies. Thoughts?

Some companies can pivot and some cannot. Probably easier for an insurance company then an automaker. The problem is more seeing the need to pivot and having a plan that works. It's hard in the insurance industry because they need data to determine costs and it won't come fast enough for them to adjust if someone comes in to disrupt that business. It's almost like to need a new way to charge for insurance. If no one comes in to disrupt, the insurance companies won't change, they will charge a lot and payout little. With autonomous cars they will just blame the automakers.

Buffett can sell his stakes in companies, he is not running any insurance companies and is not like an activist investor where he is making day to day decisions.

 

[Reciprocity]

Well, Tesla may get further involved by being an 'insurer'.

Yes, just what we need. Another target on our backs.

Oil, iCE manufacturers, ICE dealers,
Power suppliers, the UAW, and now the insurance industry

They do provide some insurance in China I believe. This does make some sense with Tesla also saying they are building body shops. If not directly insuring, they can help reduce insurance costs by lowering the costs of repairs and turning that into a profit center that helps pay for more service centers, body shops and charging as there are usually chargers at service centers.

They could build ERs too, but the cars will be so safe that maybe no one needs the emergency room. Though if ludicrous gets any more acceleration they might need Tesla chiropractors on staff near superchargers for convenience.

 

[Drax7]

Bonnie's tweets:
Rain, fog, pooled water, semis, dark night ... AP2.0 for 230+ miles - it could see the road far better under the conditions. @elonmusk

And:
I kept my hands resting on the wheel - used AP2 for lane changing, too. Super bad conditions, was glad to have the assist tbh.

Sounds like Elon is correct (not a surprise!) when he said that cameras and vision are all that you need for AP.

When the word gets out this should be good for a nice SP bump.

because Amnon Shashua from Mobileye said it , not because Elon said it.

 

[larmor]

They do provide some insurance in China I believe. This does make some sense with Tesla also saying they are building body shops. If not directly insuring, they can help reduce insurance costs by lowering the costs of repairs and turning that into a profit center that helps pay for more service centers, body shops and charging as there are usually chargers at service centers.

They could build ERs too, but the cars will be so safe that maybe no one needs the emergency room. Though if ludicrous gets any more acceleration they might need Tesla chiropractors on staff near superchargers for convenience.

IF the car gets any faster, they might want to throw in a carotid ultrasound prior to purchase or to unlock launch use... In the past, there was a selection bias for people who drove race cars and super fast production cars, and now that barrier is lifting.

 

[Starno]

Would be cool one day to get a Tesla that beats the Bugatti top speed.

Though there might be more chances we see that happens (EV beating a Bugatti), with a company such as Faraday than Tesla.

 

[larmor]

SpaceX to set up and launch own satellite internet service (disregard if all ready posted)
SpaceX's Plan to Build a $30 Billion Satellite Internet Business

 

[Curt Renz]

Interesting article in today's NY Times about a draft plan in India recommending a "dramatic shift" toward EVs, including lowering taxes and interest on electric vehicle loans and shifting to requiring all electric vehicles by 2032. Especially given speculation about India as a possible GF location may be worth keeping an eye on this to see how it develops, although it is unclear to me whether this would immediately affect Tesla or be more geared toward lower priced vehicles.

https://www.nytimes.com/reuters/201...s-india-autos-policy-exclusive.html?src=busln

This could be huge. India might be following China in the push toward nothing but purely plug-in electric vehicles. It may lead to virtually all countries eventually following suit.

Here's the original Reuters version: Exclusive: India's green car plan prioritizes electric vehicles over hybrids