2017 Investor Roundtable:General Discussion

[Reciprocity]

My point for being in India is this, you're not in there to sell cars to that country. The demand for Tesla's around the world is much higher than what they can produce. What you're in India for is to exploit the fundamentals of capitalism-cheap labor and friendly market political conditions. Make it there, and ship it out.

As far as Mercedes and other legacy auto manufactors being in India or China? The reason why they are in there and willing take a hit on profits by partnering with the Chinese is because the Chinese market is vast, and it ignites an instnaeous spark to their stalling sales numbers. Tesla doesn't have this problem, hence, they don't need China momentarily bc the demand is much higher than what they can produce.

Companies in China are willing to trade off IP for instant sales. Tesla's problem is production, not sales.

Your missing the actual point. Yes, Tesla would want to be there with the right incentives. India won't want to incentivize Tesla enough for them to choose India over another location because Tesla doesn't yet make a sub $10000 car, which India will need to outlaw icev. If you are going to choose between China and India, China is the bigger market for everything.

 

[kenliles]

I am groot.

We are Groot

 

[Reciprocity]

???
They own Geico and have large reinsurance business and some life insurance etc...

I guess what I meant is managing the company. If the future started to sour for the insurance business, I don't believe Buffett would just ride it to the basement out of some love for the insurance business. Again, I think shorter term, say next 5-10 years will actually be better for insurance companies because accident rates will go down faster with FSD then insurance premiums will come down. Unless someone comes along and disrupts the industry for FSD cars.

 

[Ovulation]

We are Groot

I had to google this, I'm 29 and already completely out of popculture, were will this end.

 

[dmckinstry]

I am groot.

Groot's last words: "We are Groot."

 

[sundaymorning]

Your missing the actual point. Yes, Tesla would want to be there with the right incentives. India won't want to incentivize Tesla enough for them to choose India over another location because Tesla doesn't yet make a sub $10000 car, which India will need to outlaw icev. If you are going to choose between China and India, China is the bigger market for everything.

You do realize what Tesla will need to give up to be in that market right? That's hard earned profits that could be put towards growth.

 

[tinm]

Actor/comedian/Spinal Tap member/Voice of many chacters in the Simpsons, Harry Shearer announced on his Le Show radio show/podcast today at the top of the show that he bought an EV. He was too cool to mention the brand but it was obviously a Tesla. He raved about the customer service.

 

[jhm]

Groot's last words: "We are Groot."

Baby Groot has to learn, vol. 2.

 

[Reciprocity]

You do realize what Tesla will need to give up to be in that market right? That's hard earned profits that could be put towards growth.

No why don't you enlighten me and the others on this forum? Did you attend the meeting between Elon on the vice primere of China?

 

[RobStark]

1)China does not require a Chinese JV partner to make battery cells or battery packs(including software) in China.

And the Chinese government is in the process of removing the JV requirement to make the actual cars or gliders. The Chinese auto companies are fighting this but the Chinese government has bigger fish to fry. National energy independence, reducing their energy bill from OPEC, and preventing a revolution from an angry population fed up with unbreathable air and undrinkable water.

2) No country in Asia is going to accept massive auto exports from India.

C) Alien dreadnaughts don't require cheap labor. Tesla is hiring Mexican engineers to bring to Fremont not moving to Mexico.

 

[sundaymorning]

No why don't you enlighten me and the others on this forum? Did you attend the meeting between Elon on the vice primere of China?

No did you? If you have inside information as to what kind of deal China plans to have for EVs please put it here.

Yes, China plans to ease rules on the car market. Which still comes at a cost to Tesla, the Chinese will get something out of this deal. Even if China eases 100% in favor of Tesla it will still puts the company at risk for losing some IP to knockoffs. There's a reason why every knockoff imaginable is made in China. Do you really want to play that game in China with the Chinese? A ton of software and hardware related IP will eventually be at risk in the worlds biggest knockoff market.

There's a time and place for that kind of risk,I wouldn't take it as of now. The Chinese understands what Elon is worth, which is why they're willing to bend the rules a little bit, just ask yourself why?

@RobStark, really, we're talking alien dreadnaught for M3? Countries will accept imports from India the same way they accept them from the US. Put duties on the product and problem solved. The Chinese will pay.

 

[jhm]

1)China does not require a Chinese JV partner to make battery cells or battery packs(including software) in China.

And the Chinese government is in the process of removing the JV requirement to make the actual cars or gliders. The Chinese auto companies are fighting this but the Chinese government has bigger fish to fry. National energy independence, reducing their energy bill from OPEC, and preventing a revolution from an angry population fed up with unbreathable air and undrinkable water.

2) No country in Asia is going to accept massive auto exports from India.

C) Alien dreadnaughts don't require cheap labor. Tesla is hiring Mexican engineers to bring to Fremont not moving to Mexico.

If China wants to be a serious EV exporting country, they need strong domestic competition. Forcing domestic EV makers to compete directly with Tesla without special privileges will only make them stronger. Protecting domestic producers from foreign competition leaves them weak and dependent on protection.

 

[RobStark]

@RobStark, really, we're talking alien dreadnaught for M3? Countries will accept imports from India the same way they accept them from the US. Put duties on the product and problem solved. The Chinese will pay.

The problem is the import duty and shipping. Problem not solved. That is the whole point of foreign factories.

Shipping plus duties is not that big a deal in the premium end of the segment.

It is a competitive killer in the mass market/entry luxury level end of the market.

That is why Elon met with the Chinese Vice Premier and Tesla is scouting locations in Europe.

 

[sundaymorning]

If China wants to be a serious EV exporting country, they need strong domestic competition. Forcing domestic EV makers to compete directly with Tesla without special privileges will only make them stronger. Protecting domestic producers from foreign competition leaves them weak and dependent on protection.

Precisely. The problem with China is that they cannot innovate. The old mandarin Confucius philosophy still holds some weight in that country. They can copy and replicate but cannot innovate products, which is why they are luring Tesla so that their own companies can gain some IP.

Some added context: Faraday Future, who is backed by? Chinese investors...How about Lucid, also Chinese investors... Remember Fisker Karma? Who bought them out after bankruptcy? Yup, it's Chinese investors again.. and going back to my point about innovation, guess what they named Fisker after buying them out? "New Fisker"... can't even innovate their own name..yup that's China.

And remember A123? An American company heavily subsidized by US of A? Guess who wants to buy them out.. and now China is bending its rules for Tesla? C'mon.. let's be real, they have their eye on the prize.

 

[sundaymorning]

The problem is the import duty and shipping. Problem not solved. That is the whole point of foreign factories.

Shipping plus duties is not that big a deal in the premium end of the segment.

It is a competitive killer in the mass market/entry luxury level end of the market.

That is why Elon met with the Chinese Vice Premier and Tesla is scouting locations in Europe.

Look, it's a given that Tesla is going to be in China, just how big of a factory they are putting in that country remains at question. I would rather India get the better deal from Tesla for reasons which are obvious to me.

There isn't enough lithium production for anyone else to provide China with the amount of demand M3 production will require. If this is the case, as I don't see any Gf being built by competitors, this means that anyone who wants a Tesla will pay import duties. Otherwise, BYD & Bolts are your choices.

Out of all the GF that will be announce at the end of this year, wherever Elon plans to put them, I hope China is the last country to receive one.

 

[Reciprocity]

time and place for that kind of risk,I wouldn't take it as of now. The Chinese understands what Elon is worth, which is why they're willing to bend the rules a little bit, just ask yourself why?

Because they are literally dying for clean air. Tesla had already made many battery patents open source. Chinese are great at making things with there care hands and lots of manual labor, they need Tesla to help them accelerate there move from dirty to clean energy. Both sides benefit greatly from a good/fare relationship.

How many CEOs are meeting with the second in command of all of China and from my understanding has a background in auto manufacturing?

There leverage is not as great as it is with others seeking access to China as they really need to be able to breath, like really. If they can't get a handle on the issue, they risk revolution or at the very least long term health issues that could severely impact the work force.

 

[sundaymorning]

Because they are literally dying for clean air. Tesla had already made many battery patents open source. Chinese are great at making things with there care hands and lots of manual labor, they need Tesla to help them accelerate there move from dirty to clean energy. Both sides benefit greatly from a good/fare relationship.

How many CEOs are meeting with the second in command of all of China and from my understanding has a background in auto manufacturing?

There leverage is not as great as it is with others seeking access to China as they really need to be able to breath, like really. If they can't get a handle on the issue, they risk revolution or at the very least long term health issues that could severely impact the work force.

I'll give you the "clean air argument" as being a part of the Chinese motivation. They can easily promote their own companies BYD, KNDI, etc., but are instead courting Tesla, why is that I wonder? With the billions of $$$ the Chinese government have on hand, they're still stifled with the same problem--innovation. They need Tesla in their country to show them how to build it. Once they learn the methodologies, watch out! My prediction for EVs is that Tesla's main competition won't come from Germany, Japan or the US legacy manufacturers, it'll likely come from a Chinese competitor.

 

[JRP3]

My prediction for EVs is that Tesla's main competition won't come from Germany, Japan or the US legacy manufacturers, it'll likely come from a Chinese competitor.

Do you mean outside of China? Because I'm not aware of them being the main competition for other ICE manufacturers.

 

[sundaymorning]

Do you mean outside of China? Because I'm not aware of them being the main competition for other ICE manufacturers.

Yes, outside and inside of China as well, but this will likely develop within 5-10 years from now. The EV battleground has barely been tapped by legacy auto manufacturers and the Chinese are starting to realize they have a legitimate chance of cementing their own companies. They have the money, manpower, cheap laborers but lack that innovative leadership. This is where Tesla comes in... and it's the reason why I believe China is actually the one courting Elon, not the other way around.

Here's a glimpse of the Chinese workforce, this is why manufacturing jobs aren't coming back to the US:

 

[EnzoXYZ]

Mercedes has a factory in India. Annual capacity is 20k units. Mercedes is the number one brand for premium cars in India. Last year they sold ~13k units. Last year total units for the premium segment was about 35k.

You need to get a car with a base price below $20k USD in India to have any kind of volume.

More like eMopeds/ ebikes/ eScooters same goes for china. When the average ANNUAL income is like 1/6+ of of a car there is no sense trying to sell the average person a car. A car is a luxury. Heck most use public transportation for a reason. I get only 1% of the country needs to buy to make it worthwhile buy you all talking about an average Joe.