2017 Investor Roundtable:General Discussion

[Reciprocity]

Tesla will announce battery GF 2,3, and possibly 4 this year.

Because even with GF1 at full production they can't meet demand for S3XY plus BES.

Therefore continuing to build batteries at old factories in Japan makes sense. Because even at higher cost it still makes money and furthers Tesla's mission to decarbonize the economy.

They may very well put GF machines in the old factories. After GF1 starts to ramp up .

I don't know how else to explain it to you.

Explain to be the business case of using 18650 when you have 2170 that is better and cheaper. Knowing that the contractual obligation to Panasonic as it relates to the 18650 ends at around 300,000 cars... estimated to hit that number by the end of 2017.

How could it make sense to pay 30% more when but contractually obligated. Panasonic selling those 18650 to other autos also helps the mission BTW. Elon wants completion because he knows without a shadow of a don't that he can't do it alone.

No one can answer the simple question if where the heck 20 cars coming in 2019-2020 are going to get their batteries when only Tesla send to have an actual plan. There will be a market for Panasonic's 18650 cells so we can all sleep soundly knowing they will be fine. And as you agreed, they could start to shift existing lines to 2170 for Tesla, though I don't know if they can sell those cells to other manufacturers (Japanese made cells only, not GF cells.)

I'm not trying to be combative really, just can't imagine Tesla paying $6500 per car more for no good reason. Best timing would be by mid 2018 when fed tax incentives run out so that hey can lower prices and not lose margin. That's half a billion dollars or more next year in most margin.

 

[ValueAnalyst]

Well, I realize I'm not going to convince some of you.

You're wrong, though. People won't accept a system which is worse than a human in any way, and they won't accept that first person going into the river in "self-driving" mode.

There's a reason Autopilot is what it is -- a driver assist system where the driver is supposed to be ready to take over in case of weirdness -- and there's a reason that such driver assist systems, constantly improving, but with the human always responsible, are what is going to happen.

Full "no human attention necessary" self-driving in the near future is a fantasy of people who haven't done their research. Attempting to do it with maps as the primary system is fatally flawed; you'll never manage it using maps, because maps are always behind reality. (Which is probably why Tesla is not doing that, and maps are entirely secondary for Tesla's system.)

It's become clear after getting some glimpses at the Tesla corporate culture that there are a lot of those 'did not do their research' people at Tesla with regard to any number of issues, including, sometimes, Elon Musk -- to be fair, he's an extremely busy man, he doesn't have time to research everything.

I didn't understand why they did some appallingly stupid *sugar* early on -- some of which they are still doing -- and it turns out they just didn't bother to do their research. Due diligence failures. It's a risk factor which I am substantially more aware of after visiting the factory. There's a certain sense in which the whole Tesla operation is unprofessional, and that creates certain serious risks, though I currently think those risks will not have a material effect on profitability even in the worst-case scenario.... until the day when all new cars are electric and they have to compete with operations which act professionally, which probably won't be until 2029 or so. They may fix these problems by then. They may not. But in investment terms it's a problem to worry about a decade from now.

ANY level of Autopilot will be accepted by SOME people. "People won't accept a system which is worse than a human in any way" Shows lack of appreciation for human diversity.

Regardless of how much research one does on any subject, one is likely to be less knowledgeable on the said subject than a team of 1,000+ engineers handpicked by the most capable company in the world and who work around the clock on the said subject, agreed?

As an investor, it is a waste of time for me to get into the weeds of a cutting-edge technology. Instead, I use game theory to understand what the likely outcome is, given the positioning of the players.

Everything I see and hear, from company management as well as outside parties over the last two years, tells me FSD will be here very soon.

 

[ValueAnalyst]

No one can answer the simple question if where the heck 20 cars coming in 2019-2020 are going to get their batteries when only Tesla send to have an actual plan.

Your assumption that the 20+ cars that are advertised to come to market in 2019/20 will actually come to market is incorrect.

 

[Reciprocity]

Your assumption that the 20+ cars that are advertised to come to market in 2019/20 will actually come to market is incorrect.

Hell vw alone has 20 models coming:

Volkswagen's CEO Matthias Mueller said in June that the automaker will deliver more than 30 electric plugin-in models by 2025. Previously, the company has said that it would deliver 20 electric vehicles by 2020.

19 long-range electric cars you'll be able to drive by 2021

So yeah, 20+ slated for the next 2.5 years.

 

[RobStark]

Explain to be the business case of using 18650 when you have 2170 that is better and cheaper. Knowing that the contractual obligation to Panasonic as it relates to the 18650 ends at around 300,000 cars... estimated to hit that number by the end of 2017.

We know of this one contract. We don't know about subsequent contracts. Doesn't mean there aren't any.

If Tesla makes 30% margins on the GF cell and have more demand than the GF can supply and make 5% margin on the Japanese cell then it is worth making products with that cell.

Without changing form factor or even machines they can use new chemistry in Japan. Those cells can also use raw materials purchased at greater economy of scale for the GF.

I do know Musk himself said when they announced the GF that Tesla would continue buying cells from Japan. That was part of a contract/understanding/agreement when Panasonic agreed to invest $2.5B in the Tesla GF in Nevada.

Do you not see how it makes no sense for Panasonic to invest in Reno if it kills all demand for its product from Japan?

 

[Reciprocity]

ANY level of Autopilot will be accepted by SOME people. "People won't accept a system which is worse than a human in any way" Shows lack of appreciation for human diversity.

Regardless of how much research one does on any subject, one is likely to be less knowledgeable on the said subject than a team of 1,000+ engineers handpicked by the most capable company in the world and who work around the clock on the said subject, agreed?

As an investor, it is a waste of time for me to get into the weeds of a cutting-edge technology. Instead, I use game theory to understand what the likely outcome is, given the positioning of the players.

Everything I see and hear, from company management as well as outside parties over the last two years, tells me FSD will be here very soon.

I have seen videos of people sleeping in stop and go traffic in an AP1 car. People are very quick to adapt and very maluable when it comes to creature comforts.

Here is a quote.. "no one is going to put that giant paper phablet up to their heads and use it as a phone," now every phone is phablet sized, much less people paying $700+ for a cell phone that they trade in every year which I am sure they swore they would never need or get because their flip phone was awesome.

Car ownership will seem so passe in 5-10 years. A thing that rich people have in they garages but can't drive because they are outlawed because they are to dangerous.

 

[Reciprocity]

Do you not see how it makes no sense for Panasonic to invest in Reno if it kills all demand for its product from Japan?

Why the funk do you think no one will buy Panasonic's cells? That makes no sense. Us the world moving to EVs or not? How the funk are they going to do that without batteries? If LG can supply cells to GM and Chrysler, then Panasonic can do the same. It really is a silly argument.

I am also pretty sure that Elon said S/X would be moving to 2170 by the end of this year. I would have to do some research to find the comment but it was much more recent then the original GF announcement. Here is one example:

Report: Tesla To Transition To 2170 Cell In Model S & X By End Of Year

 

[AlMc]

Car ownership will seem so passe in 5-10 years. A thing that rich people have in they garages but can't drive because they are outlawed because they are to dangerous.

Can't agree with you here. Too aggressive on your time frame. Also, I submit that you will be able to drive non AP cars for decades. The limiting factor to 'rich people' may be true in 20+ years as insuring a car without AP may become prohibitive unless you have considerable $.

 

[Reciprocity]

Can't agree with you here. Too aggressive on your time frame. Also, I submit that you will be able to drive non AP cars for decades. The limiting factor to 'rich people' may be true in 20+ years as insuring a car without AP may become prohibitive unless you have considerable $.

Haha, for one thing, poor people have iPhones. For another, one person or company will own the car, hundreds of people will is it. I am personally looking to buy atleast 4 HW2 cars in the next year for sharing alone.

 

[AlMc]

Tesla vs state of Michigan: disclosure of discussions with car dealer lobbyists would result in more lawsuits, state says

Interesting update on this lawsuit and the 'discovery' part of preparation for the suit.

 

[ValueAnalyst]

Hell vw alone has 20 models coming:

Volkswagen's CEO Matthias Mueller said in June that the automaker will deliver more than 30 electric plugin-in models by 2025. Previously, the company has said that it would deliver 20 electric vehicles by 2020.

19 long-range electric cars you'll be able to drive by 2021

So yeah, 20+ slated for the next 2.5 years.

I'm aware of the rhetoric. Reality will pan out differently.

 

[AlMc]

For what it is worth on triple witching day.

 

[PaulRocket]

Tesla vehicles arrive by the hundred in Dubai as the first store/service center is about to open

Hundreds of Teslas arriving in Dubai, looking good for Q2...

 

[ValueAnalyst]

Can't agree with you here. Too aggressive on your time frame. Also, I submit that you will be able to drive non AP cars for decades. The limiting factor to 'rich people' may be true in 20+ years as insuring a car without AP may become prohibitive unless you have considerable $.

Finally something on which I agree with @AIMc Car ownership will stick around for a long while.

Never underestimate humans' tendency to make irrational decisions.

This is why I believe it's crucial for investors to observe what people do instead of predict what they will do or dictate what they should do.

 

[ValueAnalyst]

Tesla Sees Unusually Large Options Volume (TSLA)

"insider Jeffrey B. Straubel sold 106,000 shares of the stock in a transaction that occurred on Monday, May 8th. The shares were sold at an average price of $307.44, for a total transaction of $32,588,640.00."



Insider sales are not often very meaningful, but they can be.

He must getting ready to buy a lot of Model 3's, I hope?

 

[T3slaTulips]

I said battery GF 2,3, and possibly 4.

Specifically to avoid correction

I think "Battery GF" is not going to be an appropriate designation going forward. Even GF 1 is now also working on drivetrain components. They may keep Generation GF's (solar) and Storage/Consumption GF's separate (cells,powerwall,packs,autos) but I'm not even certain of that.

 

[ValueAnalyst]

I think "Battery GF" is not going to be an appropriate designation going forward. Even GF 1 is now also working on drivetrain components. They may keep Generation GF's (solar) and Storage/Consumption GF's separate (cells,powerwall,packs,autos) but I'm not even certain of that.

I agree with this 110%. I expect next-gen Gigafactories to be fully integrated (i.e. materials in, final product out).

 

[scaesare]

Sucks for that first guy who drives into the river when the bridge is washed out and dies, but the car updates the maps so the next guy who drives there is OK?

Basically, no, this doesn't work as a primary sysem.

This, I agree with.

Hi-res maps can be an input, but the system needs real-time recognition/reaction capability to recognize and react to unique "first encounter" surroundings with ability on par of that of a human driver.

 

[vgrinshpun]

I think "Battery GF" is not going to be an appropriate designation going forward. Even GF 1 is now also working on drivetrain components. They may keep Generation GF's (solar) and Storage/Consumption GF's separate (cells,powerwall,packs,autos) but I'm not even certain of that.

Well, not to nitpick on Tesla, but technically, since it is heading to 100+ GWh, it should be called hecto-gigafactory...

 

[scaesare]

Somebody is always going to unfortunately die as *we learn*. That's a historical fact and no way around it. The idea is to keep the deaths to a minimum and make sure we don't make the same mistakes again.

Not as it's being addressed in the context of this discussion, however. The idea that the initial "first encounter" driver will be considered sacrificial for the sake of updating the maps/data for the rest of the fleet isn't good enough.

The system needs to be able to react to it's environment without any prior knowledge on a level at least commensurate with a human driver. If that initial encounter also then can update the fleet to better deal with subsequent encounters of that same situation, so much the better. This is the "washed out bridge" scenario mentioned earlier.

Certainly people will also die and, while unfortunate, those can also be fleet-learning events. However those fatal scenarios should also be those where there was no reasonable chance of either human or AI capability of preventing it. If a boulder tumbles on the road 10 feet in front of you while you are doing 60MPH with no possibility of swerving, physics dictate you will hit it regardless of who/what is piloting. This is outside the scope of what should be expected for a first-encounter reaction. But this sacrificial event may benefit the rest of the fleet.