2017 Investor Roundtable:General Discussion

[Starno]

Chinese Tesla rival is planning to launch a $7,800 ‘ultra-compact’ electric car in 2018 with changeable batteries

so what will save the planet "more"... a company making a cheap practical car that hundreds of millions of people can afford and use?... or Tesla... a company that created an image by producing a luxury car and then made a car that hundreds of thousands of people can afford and use?

this has been my beef with this thing the whole time. to date... there has been no earth saving... and when Tesla hits its 20th birthday... there will still have been no earth saving... not on a scale that makes an impact... only ideas.

and this company comes along and says... "let's solve a real problem... hundreds of millions of people driving scooters that want to drive a car... but that'd be insane... so let's make a car for them that won't be insane."

Then why don't you cover all your short position on Tesla and invest the money back in this company

 

[22522]

I think it's a bit if a balancing act. Tesla's mission statement pretty much requires competition to achieve the goals. While too much competition would be bad, not enough hurts the mission.

Elon might be convinced of their incompetence (foot dragging), or lack of good faith (VW).

And have figured, that as long as he can raise money, he can do it faster and better.

What have they done that shows they can be trusted with the franchise?

 

[Krugerrand]

Elon might be convinced of their incompetence (foot dragging), or lack of good faith (VW).

And have figured, that as long as he can raise money, he can do it faster and better.

What have they done that shows they can be trusted with the franchise?

Two? years back (in Europe - Norway? or Netherlands?) he came right out and said he thought that other OEMs would have picked up the ball and run with it, but they hadn't. He expressed great disappointed and then basically went on to say he'd make them pick up the ball or they'd die.

 

[MitchJi]

That switchover article you link is not a definitive statement from elon. Not to be combative, but is there another source on that?

Clearly switching to 100% 2170's is *good*. It simplifies everything and lowers the cost per car and increases the energy density of packs. Switching is best for the consumer and for Tesla. But there is a cost/benefit in investing for Panasonic. They can change their existing lines or invest in Nevada. It is simpler and *less risky* to keep the existing lines going as they are and push the new capacity investment in Nevada, where presumably each dollar spent returns more output capacity. If it doesn't, the gigafactory doesn't make sense.

I am not sure why this has become so religious. There seems to be a contingent of people who just need to think that Panasonic will switch to all 2170's. It isn't essential that they do so, and isn't essential to Tesla.

It's has almost nothing to do with the format of the cells. It's the cost reduction obtained from the advancements that they've made at the GF1.

Also what gives me nightmares is how everyone loves the 2170's so much but they have no track record. Would it not make sense to keep the old cells going as is while the 2710's get on the road an get proven out? 18650's are ancient and proven.

It's just that the format is slightly different. In terms of producing reliable cells, mouse nuts.

My guess is this... Tesla is already embroiled in a bet-the-company extremely complicated manufacturing ramp of a new product. It has to formgo right. All hands on deck to make it so. If that ramp goes really, really, really well, then they can devote some energy to the S/X battery architecture. Presumably the redesign with the 100 kWh battery pack was done in a way that they know what they have to do to accommodate 2170's. At least, that's what I would do. But there is no pressure to switch until the 3 ramp is good. If the battery chemistry is proven to be good and it is an easy incorporation into the 18650 lines in Osaka, then they might bump the battery chemistry and that gives us most of the win anyways.

Most of the win would be the 30-50% cost reductions, plus the ~7% (not including the chemistry, probably another 5-10%) capacity increases. What they need to do to the factories in Japan to obtain most of the Gigafactory cost reductions is to install the newly designed cell manufacturing equipment and increase the colocation. I think that the decision will come down to mainly how quickly Panasonic can ramp the manufacturing of the new cell production equipment.

 

[MitchJi]

I'm going - I'll probably try to record it, or at very least take some notes.

Please record it. I'll happily pay for part of your ticket, assuming the quality is decent.

I've got some experience recording audio of conferences. Let me know via pm if you want some advice in order to assure decent quality.

 

[MitchJi]

Small nit: I believe powerwall and powerpack have the same chemistries, with the powerwall simply housing one of the powerpack modules.

I believe that they discontinued this, but when they were introduced TE had two different cell chemistries.

 

[neroden]

(quoting a fellow most of you have blocked about a company trying to make cheap electric cars)

Chinese Tesla rival is planning to launch a $7,800 ‘ultra-compact’ electric car in 2018 with changeable batteries

I wish them good luck. Their business model is broken: they will not make enough money per car to cover their R&D and capital expenditures, so they will most likely go bankrupt. Maybe Chinese government money or stupid investors will cover the costs and they will survive, but the investors won't see much payback.

 

[neroden]

1. And semi's.

I've been discussing this with some people and it looks like Tesla could take over the semi market very, very fast and make really high profit margins. I hope the semi factory gets built ASAP.

Tesla has been almost completely silent about their plans for introducing 2170's into the MS-MX. That means IMO that it's either not happening soon, or it is coming soon and they don't want to Osborn MS-MX sales. I think it's the latter.

The contract for the existing batteries runs through the end of 2017. I don't think there's any reason for Tesla to discuss the changeover before then, but they've had a lot of time to plan for it it; I expect it to happen sometime shortly after that, possibly even exactly at January 2018.

 

[neroden]

Two? years back (in Europe - Norway? or Netherlands?) he came right out and said he thought that other OEMs would have picked up the ball and run with it, but they hadn't. He expressed great disappointed and then basically went on to say he'd make them pick up the ball or they'd die.

The funny thing here is that we, and Elon, are making huge amounts of money because Tesla has failed at its goal -- which was to get everyone else to make electric cars.

 

[Reciprocity]

Chinese Tesla rival is planning to launch a $7,800 ‘ultra-compact’ electric car in 2018 with changeable batteries

so what will save the planet "more"... a company making a cheap practical car that hundreds of millions of people can afford and use?... or Tesla... a company that created an image by producing a luxury car and then made a car that hundreds of thousands of people can afford and use?

this has been my beef with this thing the whole time. to date... there has been no earth saving... and when Tesla hits its 20th birthday... there will still have been no earth saving... not on a scale that makes an impact... only ideas.

and this company comes along and says... "let's solve a real problem... hundreds of millions of people driving scooters that want to drive a car... but that'd be insane... so let's make a car for them that won't be insane."

Finally some good FUD. Tesla has about $25,000 in gross margin on every car it's sells. They could actually buy 2 of these cars for ever Tesla sold today and give them away and still have more margin per car then any competitor.

 

[GoTslaGo]

(quoting a fellow most of you have blocked about a company trying to make cheap electric cars)

I wish them good luck. Their business model is broken: they will not make enough money per car to cover their R&D and capital expenditures, so they will most likely go bankrupt. Maybe Chinese government money or stupid investors will cover the costs and they will survive, but the investors won't see much payback.

A quote from the article:

"Chinese start-up CHJ Automotive is the latest player looking to come to market. The company is currently developing two vehicles – an "ultra-compact" electric car, and a hybrid SUV."

So I suspect they may be talking small, but their real money-making plan will be the SUV (I'm guessing).

 

[Reciprocity]

(quoting a fellow most of you have blocked about a company trying to make cheap electric cars)

I wish them good luck. Their business model is broken: they will not make enough money per car to cover their R&D and capital expenditures, so they will most likely go bankrupt. Maybe Chinese government money or stupid investors will cover the costs and they will survive, but the investors won't see much payback.

I'm never blocking that guy, he is pure entertainment. Model 3 will have more gross margin then the entire cost of that car, its not really competition. It's more like a disposable camera vs a digital camera. I have no don't millions of those types of cars scooter like vehicles will be sold, but no one will make any significant money doing it.

 

[AlMc]

Arizona judge gets it right!

Tesla gets dealer license in legal victory - Rose Law Group Reporter

Now we just need Michigan judge to put a dagger in the 'laws' indicating restraint of trade

 

[Ameliorate]

Making cheap EV's is great (I wonder what company influenced them to do so?) but it feels akin to smart cars, sure they have a purpose and may work for some people but is it enough to convince the rest of the auto industry to build EV's? No. Elon is proving electric vehicles are better in every way and there is absolutely no reason to buy or produce ICE's. This is forcing the auto industry into electric whether they like it or not. This business model makes sense, expensive at first, mass production later. If Tesla's were just 8,000$ cars there would be no hype, brand loyalty, no hope for a future. I know one person who owns a smart car, they don't brag about it very often.
Initial production may have been higher but with lower revenues I'm not sure they'd have been able to scale up to even 100,000 as fast. Revenue from 100,000 $100,000 cars seems a lot more promising for future expansion than revenue from 100,000 $8,000 cars.

Spent an evening walking around Vancouver on Thursday, felt like a glimpse into the future. I say that because it's a very expensive city to live in with an average house at $1.3M. I noticed the majority of the vehicles on the road were luxury >75k. A lot of people looked as if they did not own vehicles taking either public transit or rideshare / car2go. Quite a few of these car2go things parked all over (membership - you scan your card and take the vehicle and get charged per minute/hour/day)
Also 8 Tesla's drivin' around.
Wages have not been following the cost of living and it felt like Vancouver was an example of what that will look like for the rest of us in a few years. Autonomous shared vehicles would be in High demand. Does not shift the wealth back to the average person but it does make living a little more affordable. The money just goes from the cab companies and the dealerships to the Tesla owners.
Will be reserving my 2nd M3 this week along with a solar roof. By the time these come up for production my shares should allow me to build a house and there should be some solid info on the tesla network and autonomy if not already in place and thriving.

 

[zdriver]

Please record it. I'll happily pay for part of your ticket, assuming the quality is decent.

I've got some experience recording audio of conferences. Let me know via pm if you want some advice in order to assure decent quality.

Just saw this after getting back. They wouldn't allow private recording, so I just took an audio recording on my phone. Sounds like it's from a potato, but it's clear enough to understand most of it. I'll shoot you a PM tonight or tomorrow with a download link.
Anyone else here that wants a copy and is a well known user, PM me.

Great! Even though presentations at such events rarely contain completely new information I personally find them interesting and educating nevertheless.

Would be great if JB takes some questions. He is very guarded and probably would not answer any specific questions about TE, but one question I would ask is about his pojections on global growth of battery energy storage market, by end of 2017, 2018, 2020...

Overall a good talk. A bit of history, plans for Tesla, what's going on now, etc. Stuff most of us here already know.
That said, one new thing that struck me (or maybe I just missed it earlier), was confirmation that Model 3 cell production is currently underway at the Gigafactory.
Short Q&A, only a few people got to ask questions (from a line of 20+), one question asked about the new solid state lithium cell announced by John Goodenough, for which JB seemed careful to avoid giving an opinion on one way or another (instead praising Goodenough for his original work on the lithium ion battery), but confirmed Tesla has been in contact with some of the startups working on the tech. Difficult to say, but I got the feeling he wasn't convinced on the tech, however was still following developments. (disclaimer, that might be my own skepticism leaking out, fwiw)

Please forgive the few potato pics, DSLRs were frowned upon, so these came from a cell phone.

JB's early days of working with lithium ion


Early Model S design work, done "in a tent about the size of this one".


Final slide, got a standing ovation at the end of his talk.

 

[CorneliusXX]

There is no patent protection on cell sizes or external formats. However, chemistries, internal construction, connectors, cell-level protections, balancing, equalization are examples of things that can be and are the subjects of patent protection. So, your question whether Panasonic can sell the same cells to other manufacturers [of anything at all] is certainly part of commercial agreement with Tesla.

In short, ignore the 2170 cell format, that is not significant. Tesla has multiple, as in more than one, 2170 chemistries now in production. Powerwall, Powerpack and Model 3 have different chemistries. Tesla Semi may have chemistry different than Model 3. Powerpack also may have different chemistries depending on whether they are deployed for standby emergency power, peaker, or off-grid deployment with photovoltaics or wind power.

So far we do not know the precise commercial details between Tesla and Panasonic. Both of them benefit from Panasonic continuing to be a major global battery supplier.

We do need to be aware that the Jeff Dahn relationships with Tesla, not Panasonic even though Dahn continues other relationships too.
Jeff Dahn

By virtue of that relationship and tesl's own work in battery management systems, charging technology and renewables integration we can also assume that Panasonic will benefit from those developments also. Many such developments so far seem to be the subject of Tesla-owned patents. There are dozens of those, in aggregate they present the story of continuing innovation although individually nobody knows what might be commercialized when. There are numerous threads here and elsewhere about the state of such innovation.

From the perspective of an investor in TSLA I think we can be assured that Tesla is well ahead of any other industry participant today, but there is probably enough evidence to suggest that BYD is the cheapest producer today, partly because they do not optimize for weight, power density or energy density, but do optimize on price and accessibility of raw materials. So, Tesla continues well ahead of anybody else due to their obsessive attention to BMS, cell-level-metrics and life-cycle-manageemnt.

Some observers suggest LG may be ahead, but that seems to be an evidence-free assertion. It is possible that LG has some huge unknown advantage but I doubt it. Still, LG has some major players including GM, Hyundai and Renault.
FWIW, Nissan joined with NEC to produce batteries for the Leaf.
Automotive Energy Supply Corporation
Nissan has explored selling their participation including to LG or Panasonic. Crucially, LG is the supplier for Renault for their entire range of BEV's. Quite obviously AESC has not exactly been a stellar innovator in BMS and automotive li-ion, despite their early lead with the Leaf.

Again, from the TSLA investor perspective it will be critically important to monitor energy storage advances from wherever they come. We may be assured that Bosch, Siemens, SAFT and others are not giving up without a fight. Neither will LG, a current dominant player, nor NEC. We clearly need to understand this industry if we are to honestly evaluate Tesla's lead or lack thereof.

Sometimes I just have to write a little note to thank people for the well reasoned and civil comments on this board when the little thumbs up button doesn't do it justice. High five JB.

 

[scaesare]

I believe that they discontinued this, but when they were introduced TE had two different cell chemistries.

They did indeed talk about separate stationary energy chemistries for specific usages in the Q1 '15 earning call (transcript HERE).

I remember getting in to an argument discussion about it earlier in this thread, and had culled out a few pertinent passages, amongst them was this one:

Yeah, there is two applications which are quite different, one is backup power or peak up (15:59), sort of the equivalent, the only utility scale is like peaker plant, which is a high-energy application and then there's the daily cycler application. There are different chemistries depending upon which one you have. So the backup power chemistry is quite similar to the car, which is like nickel-cobalt-aluminum-cathode, the daily cycling control constituent is nickel-manganese-cobalt, so there's quite a lot of manganese in there and one is meant for call it, maybe, 60 or 70 cycles per year, and the other one is meant for daily deep cycling, so it's 365 cycles a year.

So have they publicly addressed this no longer being the case anywhere? Perhaps at the time the came out with v2 of the product and the revised chemistry?

(I do note that they refer to the backup power chemistry being similar to that of the car, so it's possible that even though they refer to two stationary product chemistries, they may not have had three separate chemistries in production.)

 

[Navin]

Nice piece here from someone obsessed with m3

July Surprise

 

[SBenson]

Nice piece here from someone obsessed with m3

July Surprise

Whoa!!

Shorts on crosses is a real thing then!!!

 

[AlMc]

Nice piece here from someone obsessed with m3

July Surprise

As a 'bull' I want to believe this. Guess I have been around Tesla too long as my past experience makes me skeptical of this.

Time will tell. I am not changing my TSLA positioning based on this