2017 Investor Roundtable:General Discussion

[Reciprocity]

I'm working on a few articles right now, but after those, I wanna look into how Model X market share is evolving vs. Model S.

At first look, it seems to me that Model X is progressing even quicker than Model S, despite the six-month hell.

I agree that Model X is still production constrained, and will remain so for the foreseeable future.

The high price and the initial production problems I think have created some negative bias.

There is a great thread on TMC somewhere that is updated monthly with competitive numbers, that is what I am basing all of my opinions on. There are probably some better resources, but its a quick look at the competition that is updated every month.

 

[ValueAnalyst]

A Model S has roughly the same starting price as its direct competitors from BMW,AUDI and MB.

A Model X has a starting price roughly 60% higher than its direct competitors from the Germans.

I agree that price is the primary reason why Model X seems to have underwhelmed Model S growth, but this is temporary.

I believe Tesla priced Model X higher vs. competitors, because they learned from Model S experience that production constrain = missed profits.

I expect either significant Model X price drop later this year OR earlier-than-expected Model Y production start.

Most likely scenario: Drop Model X price by $5-7k by end-2017, then another $5-7k sometime in 2018, and produce Model Y in 2019.

 

[EnzoXYZ]

I agree, I thought it would command similar market share to Model S vs large luxury sedan. But, the X is not an Escalade with a football field sized interior. My neighbors just bought one and would never have contemplated the X because they want to be able to carry 8 people and luggage/gear for all 8 and tow a boat 600 miles between fills and they dont care about putting $100 a fill. It just doesnt fit into that group and its a large part of that segment. Compared with the Model S that dominates over 5/7 series E/S class in terms of pretty much every spec. with the exception of max range. I own an X and you cant really haul that much stuff in it. I think it competes more with the sporty X6 and MB GLX I believe which is a pretty big market. To me, the X should be outselling the S already on a consistent basis. It makes me think its still a bit supply constrained. Tesla has a problem production more then 2400 cars a week. It will be interesting to see how they address that with the Model 3 coming online, I think demand will only go up for S/X once people cannot buy a model 3 for 18 months.

If it does exceed the 30% market, that would be great. 40% would be absolutely amazing, but I just dont see how its going to displace so many of those giant luxoyatchs.

Definitely not anywhere close to 7/S class interior room. Maybe luggage capacity and that's it. And for sure not traditional luxury finishes which probably unnecessary but this market segment expects it. In terms of size the MS is like the 5/E.

Which SUV can seat 8 and tow a bloat for 600 miles?

 

[ValueAnalyst]

Sorry to be a bother, still not understanding your position completely. Do you think the first few thousands employee-only cars will have the software from the get go? And will first retail customer cars not have the software but get an update pushed by November to enable Level 4?

Again, this is completely based on speculation and piecing together non-conclusive information, but I expect Level 4 software to be pushed out to all (employee and retail) by November, and be the main topic of July's final reveal event.

 

[ValueAnalyst]

I dont believe the July date either, but you have to understand that EAP is not FSD. Meaning, they are not based on the same core set of functionality. EAP is just TACC with lane keeping. It sees cars in front of it and lane markings only. Even Level 3 FSD will use high def mapping and more vision to see things like signs and understand cars vs trucks.

EAP was a hack to replace Mobileye in a hurry. FSD is a whole different monster and requires a lot more time. The additional time is not so much developer time, but more machine learning time. The system needs to see billions of signs, cars, road markings and other images to learn what to look for. In addtion, high-def maps also need to built which requires all those same images as landmarks. Landmarks are used to take 1.5M-3M GPS to a 5-10cm accuracy. The system will rely less on seeing lane markings and more on paths in the high-def maps. If you know where the car is in the world down to 10cm, then you dont need to see the lanes, even in heavy snow. The vision system will be the backup to the high-def map in this scenario and will be used to find landmarks that help the system know exactly where you are in 3d space. The vision and radar will also be used to identify objects that are in your way like cars, or a child darting out into the street. Once those three things come together for the freeways, they can enable Level 3. Once proven out and more areas are mapped in more detail, then Level 4. Once Level 4 proves to be safe, it will be allowed in more and more places and situations like heavy snow and at some point, fully validated as 10x safer then humans. At that point then Level 5 would become available for regulatory approval, which I think will actually come fast. States and the fed are falling over themselves to be the first to approve autonomous driving to save 20k lives a year and I think they are already working on requirements.

My guess is Level 3 by Nov/Dec after the demo. Level 4 - 6 months later. Level 5 - 6 months to year after that in most parts of the US and Europe with other countries to follow as more data is gathered and incorporated.

Is it possible that Tesla may have already brought "those three things together" (see bolded sentence) in the last nine months since FSD-hardware have been installed on all cars?

This would accelerate the timeline you laid out in your last paragraph by 6-9 months, which would put your timeline in-line with mine.

 

[myusername]

Based on publicly available information, I expect Model 3 to be technically Level 4 autonomous from the get-go.

By technically, I mean both hardware and software capability installed in each Model 3 that rolls off the production line.

Autonomous car - Wikipedia

• Level 4 (”mind off”): As level 3, but no driver attention is ever required for safety, i.e. the driver may safely go to sleep or leave the driver's seat. Self driving is supported only in limited areas (geofenced) or under special circumstances, like traffic jams. Outside of these areas or circumstances, the vehicle must be able to safely abort the trip, i.e. park the car, if the driver does not retake control.

I believe this is the primary reason why Tesla has been so secretive about Model 3's interior.

"Based on publicly available information"

how about instead of just saying that... you provide the "publicly available information".

 

[Reciprocity]

Again, this is completely based on speculation and piecing together non-conclusive information, but I expect Level 4 software to be pushed out to all (employee and retail) by November, and be the main topic of July's final reveal event.

How much you wanna bet? I bet Level 3 by Nov-Dec, right after the coast to coast demo, Elon will announce something like "here is the demo and this update will be pushed to your cars over the next couple of weeks." Your bet is Level 4 with the same timing? Remember, Level 4 is basically level 5, but the drive might have to take over in certain situations like heavy foot traffic and densely populated areas like downtown NY or Chicago.

 

[ValueAnalyst]

How much you wanna bet? I bet Level 3 by Nov-Dec, right after the coast to coast demo, Elon will announce something like "here is the demo and this update will be pushed to your cars over the next couple of weeks." Your bet is Level 4 with the same timing? Remember, Level 4 is basically level 5, but the drive might have to take over in certain situations like heavy foot traffic and densely populated areas like downtown NY or Chicago.

According to the following definitions, the LA to NY ride is a Level 4 demo. Elon said "with no driver interaction whatsoever."

• Level 3 (”eyes off”): The driver can safely turn their attention away from the driving tasks, e.g. the driver can text or watch a movie. The vehicle will handle situations that call for an immediate response, like emergency braking. The driver must still be prepared to intervene within some limited time, specified by the manufacturer, when called upon by the vehicle to do so.
• Level 4 (”mind off”): As level 3, but no driver attention is ever required for safety, i.e. the driver may safely go to sleep or leave the driver's seat. Self driving is supported only in limited areas (geofenced) or under special circumstances, like traffic jams. Outside of these areas or circumstances, the vehicle must be able to safely abort the trip, i.e. park the car, if the driver does not retake control.

 

[myusername]

I did not say there is any conclusive publicly available information on this. I'm basing my projection on bits and pieces of publicly available information and piecing them together.

The basis of my prediction relies on Elon's repeated comments on the (at least Level 4 level) LA to NY demo ride later this year.

Secondly, why install FSD-capable hardware on all cars since October 2016 if the software were not to follow closely thereafter?

His comments around FSD being "closer than anyone expects."

The fact that Tesla almost fully replaced Mobileye tech in just six months speaks to their in-house capabilities.

The super secrecy around Model 3 interior and dashboard.

Elon's tweets on dashboard needing less and less controls and indicators as FSD capability increases.

All of these tell me FSD is senior management's top priority now that Model 3 ramp up is pretty much in autopilot and in employees' hands.

And this is as it should be, given FSD's tremendous implications.

what is your objective on this board?... who are you talking to while making up stories?... why do people post on this board daily trying to create obviously absurd speculations?

Elon Musk didn't know what Level 4 Automation was in Q2 2015... 2 weeks before Adam Jonas declared Tesla the "leader" in autonomous vehicles and that "in the spring of 2016" we should see huge leaps in ride sharing capabilities.

it's 2017... the only thing truly accomplished so far is the stock valuation... and a horde of followers that sit around all day and write the posts above.

 

[Reciprocity]

According to the following definitions, the LA to NY ride is a Level 4 demo. Elon said "with no driver interaction whatsoever."

• Level 3 (”eyes off”): The driver can safely turn their attention away from the driving tasks, e.g. the driver can text or watch a movie. The vehicle will handle situations that call for an immediate response, like emergency braking. The driver must still be prepared to intervene within some limited time, specified by the manufacturer, when called upon by the vehicle to do so.
• Level 4 (”mind off”): As level 3, but no driver attention is ever required for safety, i.e. the driver may safely go to sleep or leave the driver's seat. Self driving is supported only in limited areas (geofenced) or under special circumstances, like traffic jams. Outside of these areas or circumstances, the vehicle must be able to safely abort the trip, i.e. park the car, if the driver does not retake control.

My bet still stands. Level 4 still requires full autonomy, the driver is only there to handle non-geofenced areas.. This is basically Level 5 but not everywhere. It will not be ready by Dec 2017. I would bet pink slips, but you dont own a car!

 

[schonelucht]

I did not say there is any conclusive publicly available information on this. I'm basing my projection on bits and pieces of publicly available information and piecing them together.

The basis of my prediction relies on Elon's repeated comments on the (at least Level 4 level) LA to NY demo ride later this year.

If I remember correctly, his quote was 'by the end of next year'. How does that end up being 'July' in your original post? You stepped back from that after a brief exchange and now claim November which is certainly much more reasonable. But if that's the depth of the research that is underpinning your claims, how should we read the rest of them?

Secondly, why install FSD-capable hardware on all cars since October 2016 if the software were not to follow closely thereafter?

Because it sells cars (and options).

The fact that Tesla almost fully replaced Mobileye tech in just six months speaks to their in-house capabilities.

The super secrecy around Model 3 interior and dashboard.

Elon's tweets on dashboard needing less and less controls and indicators as FSD capability increases.

All of these tell me FSD is senior management's top priority now that Model 3 ramp up is pretty much in autopilot and in employees' hands.

And this is as it should be, given FSD's tremendous implications.

I think no one is seriously disputing all this (except that it took just 6 months, it's closer to a year ago that we learned Tesla was already transitioning to their own solution. Tesla Vision, the project, may have been underway even longer beforehand). Even then there is a huge leap to go from there to your earlier claims.

Honestly, and it probably shows in my last exchange here, I am quite annoyed with your continued insistance to play a very loose game with the facts as they are really publicly known and those who upvote them. Sometimes you have good insight but lately it's more tilting towards wild claims without any substance. I wish we'd get back to more fact based research instead of the wishfull thinking based one.

 

[ValueAnalyst]

My bet still stands. Level 4 still requires full autonomy, the driver is only there to handle non-geofenced areas.. This is basically Level 5 but not everywhere. It will not be ready by Dec 2017. I would bet pink slips, but you dont own a car!

Car ownership is not for me.

Model 3, however, I reserved two.

 

[Gerasimental]

Where are you seeing this difference between S and X. I have been expecting X to surpass S for a while now considering the large SUV market is bigger then the large sedan market. The problem is the X is not exactly competitive with all of those large SUVs, but it is really the only green choice as there really arnt even any hybrids. I still expected X to be 30% more then S by this point, it could still be that they cannot produce them at 30% higher rate then S due to additional complexity.

ASP would be higher, but I dont think margins would differ much. They base the selling price on how much it costs to make.

Sorry this was meant for the EU thread. On the european deliveries wiki, the numbers I posted are the delta between Jan+Feb and Apr+Jun, although some countires have not reported yet for June.

 

[brian45011]

I would be shocked if Tesla did not miss out on multiple projects one or two orders of magnitude larger than this in the next year. To be successful, they don't need to win every storage project, any more than they need to sell every premium car.

Could Younicos be sourcing their cells for the Y cubes from Panasonic?

Solar-plus-storage microgrid energizes Panasonic facility

 

[Reciprocity]

Sorry this was meant for the EU thread. On the european deliveries wiki, the numbers I posted are the delta between Jan+Feb and Apr+Jun, although some countires have not reported yet for June.

Hard to know what to make of it when you look at it that way. Tesla often shifts production to satisfy demand around the world based on expiring incentives or backlogs because they shifted to another region to maximize those incentives. Really need to look at global numbers to see product mix. I would be interesting if Tesla was able to beat on the production/sales numbers for 2Q2017 based on higher Model X sales. If would be overdue in my opinion.

 

[kenliles]

For those in NY- support the bill!
Tesla wants to expand in New York with 20 stores to support Model 3, pushes new direct sale bill

 

[Dagger]

Not sure if this has been posted before. Says that Tesla is one of five short-listed bidders on the project to build Australia’s biggest battery. Came from a pdf file on carnegiewave.com posted June 1, but since deleted. A cached version can be found on google.

Bidders listed for biggest battery

FIVE bidders have been shortlisted for the project to build Australia’s biggest battery as part of the State Government’s $550 million energy plan. Energy Minister Tom Koutsantonis told The Advertiser the short-listed bidders had received a request for proposal documents and responses were due in early June. “A final decision on the successful bidder will be made as soon as possible after responses are received, with the project expected to be completed by December 1,” he said.

It is understood the five short-listed bidders include Carnegie Clean Energy, backed by former AFL chairman Mike Fitzpatrick, and Tesla, whose billionaire chairman Elon Musk has offered to install the system within 100 days from contract signature or deliver it for free. They were among 20 submissions to the State Government’s call for companies to build the battery, which would be financed by a newly created $150 million Renewable Technology Fund. The battery must have a capacity of about 100MW and be operational in time for next summer. Mr Koutsantonis has signalled there might be as many as four winners in the race for the battery storage deal.

Carnegie, the nation’s largest designer and integrator of batteries, yesterday announced its wholly owned subsidiary, Energy Made Clean, had completed factory acceptance testing of Australia’s largest battery system and delivered components to the CSIRO’s Murchison radio-astronomy observatory, about 800km northeast of Perth.

 

[Jonathan Hewitt]

For those in NY- support the bill!
Tesla wants to expand in New York with 20 stores to support Model 3, pushes new direct sale bill

Yeah, Neroden needs his upstate Tesla presence so he can stop posting about it!

 

[EinSV]

One reason why short sellers may continue to hold on despite massive losses for many of them is that they are just as subject to the pitfalls of behavioral biases as other investors.

For example, the linked study concludes that even sophisticated institutional short sellers tend to hang on to losers too long and sell winners too quickly. https://www.federalreserve.gov/econresdata/ifdp/2015/files/ifdp1147.pdf.

I would speculate that this effect may be even more true with Tesla, where many shorts have been very "loud" about their position and could suffer significant reputational damage if they sell for a loss.

Here is the conclusion from the study:

7. Conclusion We study whether traders traditionally considered to be rational, sophisticated and better informed – the short sellers – suffer from behavioral biases and whether this affects the stock market. We focus on the disposition effect (Shefrin and Statman (1985)). Using a new dataset on stock lending for all U.S. stocks from 2004 to 2010, we are able to examine the closing of short positions. We show that short sellers exhibit the disposition effect – i.e. they hold on to their losing positions too long and close their winning positions too early. We establish this by demonstrating two facts: first, the closing of short sale positions is strongly related to a proxy of Short Sale Capital Gains Overhang (SCGO). Second, SCGO is negatively related to future stock returns, which implies that short sellers are losing money by conditioning their closing of short positions on SCGO. The negative relationship between SCGO and future stock returns is consistent with the model of Grinblatt and Han (2005) adapted to short sellers. It suggests that short sellers, rather than arbitraging away the mispricing induced by the disposition effect, are biased to trade in the same direction as long investors. In this sense, short sellers’ disposition effect can be thought of as a limit to arbitrage.​

 

[elasalle]

what is your objective on this board?... who are you talking to while making up stories?... why do people post on this board daily trying to create obviously absurd speculations?

Elon Musk didn't know what Level 4 Automation was in Q2 2015... 2 weeks before Adam Jonas declared Tesla the "leader" in autonomous vehicles and that "in the spring of 2016" we should see huge leaps in ride sharing capabilities.

it's 2017... the only thing truly accomplished so far is the stock valuation... and a horde of followers that sit around all day and write the posts above.

This board is soley for entertainment, the real action can be appreciated by following the ticker ..