2017 Investor Roundtable:General Discussion

[anticitizen13.7]

It's almost like they don't want them to sell, it's really odd. Is it really that hard to put an atheist skin on the car instead of draping then in a fresh coat of fugly.

Toyota, like Honda, is often accused of having boring designs. The companies occasionally overreact to the criticism and go crazy in their attempts to compensate.

On the Honda side, this phenomenon has resulted in debacles like the Accord Crosstour, 4th Generation Acura TL, and Acura ZDX. Acura TL sales plunged when the messy 4th Gen was released for 2010. The Crosstour and ZDX were failures too, and never sold in great numbers.

The new Camry design probably won't dissuade existing Toyota customers, but it'll be a largely ignored and irrelevant product as far as design trends.

 

[SteveG3]

Well if Elon has his way with Model Y, they will need less space for more output....so if that happens, the disruption will be quicker than you think....

Yes, Elon has given very suggestive language in recent weeks that GFs may produce roughly 1.25 to 1.5 million vehicles, and that Tesla is looking at 10 to 12 maybe 20 in the long term. He's also suggested this year that the factories will be all in one... batteries and cars. Now, these are not all explicit statements or public commitments... but if those three dots connect, that's bigger than Toyota annual production, possibly 2X to 3X. Maybe we'll get some analyst following up on this. Kinda miss Andrea J on those calls.

So faster it seems, I do agree with you... and, I remain very very confident that long range EV demand will outstrip supply at least through 2025, most likely beyond 2030. Big. Moat.

 

[Reciprocity]

There's a lot of money in creating a new market / creating such a compelling product that markets bend to fit your product in (as opposed to the other way around).

No doubt, but it's hard to do and really hard to do at the level that changes how people live. iPhone is a great example. People use the internet way differently today then they did only 10-15 years ago because of the smartphone. Many don't even have computers or landlines any more and use their smartphone for everything and can, without really sacrificing. That's like a good percent of your life concentrated into one device. Tesla will be similar with the fully autonomous car.

 

[anticitizen13.7]

I saw a rumor posted to Reddit /r/teslamotors (link to a China Daily article) that a China deal would be announced Thursday.

I'm skeptical given the long history of these rumors that never pan out, but it's something to look out for in the news. It's 9am right now on China's coast.

 

[Reciprocity]

Toyota, like Honda, is often accused of having boring designs. The companies occasionally overreact to the criticism and go crazy in their attempts to compensate.

On the Honda side, this phenomenon has resulted in debacles like the Accord Crosstour, 4th Generation Acura TL, and Acura ZDX. Acura TL sales plunged when the messy 4th Gen was released for 2010. The Crosstour and ZDX were failures too, and never sold in great numbers.

The new Camry design probably won't dissuade existing Toyota customers, but it'll be a largely ignored and irrelevant product as far as design trends.

Two words, Kia optima. Kia is a decent car company but no one would confuse it with a world class car company like Toyota or Honda, but I would argue that is one of the best looking mid sized sedans and if it had Toyota badging on it, they would sell millions of them every year. Ionic isn't bad looking either but still somewhat awkward looking. It just seems like they don't want those to sell either, is really odd.

 

[MitchJi]

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)

Unfortunately I only understood about 20 of JB's reply. Pretend that it's great, and he's 100% sure it's a huge advance, and they have negotiated the rights to use them he could not say that.

First imagine the fudstorm "tesla's failed gamble on conventional lithium-ion batteries".

Second consider the osborn impact for both cars and TE:
Lithium-Ion Battery Inventor Introduces New Technology for Fast-Charging, Noncombustible Batteries

<snip>
Goodenough’s latest breakthrough, completed with Cockrell School senior research fellow Maria Helena Braga, is a low-cost all-solid-state battery that is noncombustible and has a long cycle life (battery life) with a high volumetric energy density and fast rates of charge and discharge. The engineers describe their new technology in a recent paper published in the journal Energy & Environmental Science.
<snip>
The researchers demonstrated that their new battery cells have at least three times as much energy density as today’s lithium-ion batteries. A battery cell’s energy density gives an electric vehicle its driving range, so a higher energy density means that a car can drive more miles between charges. The UT Austin battery formulation also allows for a greater number of charging and discharging cycles, which equates to longer-lasting batteries, as well as a faster rate of recharge (minutes rather than hours).
<snip>

 

[Reciprocity]

I saw a rumor posted to Reddit /r/teslamotors (link to a China Daily article) that a China deal would be announced Thursday.

I'm skeptical given the long history of these rumors that never pan out, but it's something to look out for in the news. It's 9am right now on China's coast.

A deal will be done. The real question is what will it look like. Tesla isn't going 50/50 with anyone, they really don't have to. Countries are throwing themselves at Tesla like a drunken coed at a Beeber concert. Tesla can sell 10 million cars a year and never build one of them in China. China is choking to death and needs Tesla more then Tesla needs China.

 

[SteveG3]

I saw a rumor posted to Reddit /r/teslamotors (link to a China Daily article) that a China deal would be announced Thursday.

I'm skeptical given the long history of these rumors that never pan out, but it's something to look out for in the news. It's 9am right now on China's coast.

That got quite a bit of discussion today on the market action thread.

Side note- fwiw, my understanding is that it is 9am in all of China. One time zone, because that's the policy. Kind of place where EV sales could go from ~1% market share to 30% in something like 5 years.

 

[MitchJi]

I referred to the camera disruption you mentioned, but this is true in comparison to virtually all consumer products, reasoning by analogy with this disruption does not work. It's extraordinarily unlikely to happen over a year or two. Among other things, way too much capital, and the construction of about 100 factories as large as any other made in human history are needed for this disruption.

The construction of about 100 factories as large as any other made in human history are needed to complete this disruption.

 

[SteveG3]

The construction of about 100 factories as large as any other made in human history are needed and the construction of about 100 factories as large as any other made in human history are needed for this disruption. complete this disruption.

Racer26 already caught that error, and I agreed. A little hastey typing that post. It was a summary of the thread I linked. Thread does not have that error.

 

[Reciprocity]

Bjorn Nyland has recently posted a video on Model X P90D battery degradation in 130k kms. Actual mileage is 80k kms; but because of excessive towing, he thinks it is equivalent to 130k kms.
The degradation isn't too bad (~5%). But what surprises me is Tesla always choosing to replace the battery packs for these highly visible high mileage cars . Recall the Tesloop battery replacement? I am pretty sure Bjorn was aware of eventual battery range degradation for his second Tesla, that he got for free anyway through the referral program.

I wonder if Tesla is going to do that for all customers when they hit high mileages. Otherwise, it doesn't seem quite fair.
What better way to show long life of battery packs than to let these highly visible cars keep on driving on the original packs?

As a comp, here are the highest mileage Volt owners in US.
Volt Stats! Tracking real world usage of Chevy Volts in the wild...
View attachment 232235

This is like asking, "when did you stop beating your wife?"

As pointless as most of your posts are this one might be the most pointless. 5% degradation is inline with what an ice vehicle will degrade over that same miles. It's just harder for the I've owner to tell unless you track it. Let's not even talk about fuel cost or maintenance cost savings which magnify drastically over 100,000 miles.

 

[neroden]

To everyone who says I'm too optimistic:

Over the last year, I had to repeatedly adjust my assumptions upwards, and never once downwards.

With that backdrop: I value Tesla at $1T+

My top-down analysis, in another thread, based on the size of the world markets and reasonable guesses regarding Tesla's ability to capture marketshare long term, comes out out at $0.5T - $1.5T. Anything beyond that would assume either outlandish levels of marketshare which would likely cause antitrust investigations (if they could even get that high before Chinese competitors took market share), which seems unlikely; or moving in on a totally new business beyond energy generation, storage, and transporation, which seems too speculative.

 

[neroden]

None of these articles discuss HOW MANY & HOW MUCH?!

I know, right? I'm tired of hearing "we will produce an electric car" without saying *how many* or *at what price*.

 

[mmd]

It's almost like they don't want them to sell, it's really odd. Is it really that hard to put an atheist skin on the car instead of draping then in a fresh coat of fugly.

Yeah, right. The numbers say it all. Even with low gas prices and sliding sedan sales, both Accord and Camry are near the top.
Many people just like to blend in rather than be seen in a weird mobile.
Auto Sales - Markets Data Center - WSJ.com

 

[Reciprocity]

My top-down analysis, in another thread, based on the size of the world markets and reasonable guesses regarding Tesla's ability to capture marketshare long term, comes out out at $0.5T - $1.5T. Anything beyond that would assume either outlandish levels of marketshare which would likely cause antitrust investigations (if they could even get that high before Chinese competitors took market share), which seems unlikely; or moving in on a totally new business beyond energy generation, storage, and transporation, which seems too speculative.

Market share in this scale is less important then hoe profitable they can be, for example iPhone has only 34% of the market share but 90-104% of the profits. They don't need to make a low margin budget phone. Give me that all day long.

 

[neroden]

Just warning ValueAnalyst to watch for the limits to growth before she ups her target market cap to $10T.

 

[JRP3]

Is it really that hard to put an atheist skin on the car

As an atheist this concerns me...

 

[MitchJi]

He said that he is very confident that they will be able to produce between 12 and 24 cars per minute. 12 per minute x 12 hours x 300 days equals just under 2.6 million cars per year.

Yes, Elon has given very suggestive language in recent weeks that GFs may produce roughly 1.25 to 1.5 million vehicles, and that Tesla is looking at 10 to 12 maybe 20 in the long term. He's also suggested this year that the factories will be all in one... batteries and cars.

 

[JRP3]

Bjorn Nyland has recently posted a video on Model X P90D battery degradation in 130k kms. Actual mileage is 80k kms; but because of excessive towing, he thinks it is equivalent to 130k kms.
The degradation isn't too bad (~5%).

And in fact we don't know if it's actual degradation or simply calibration/balancing issues.

But what surprises me is Tesla always choosing to replace the battery packs for these highly visible high mileage cars . Recall the Tesloop battery replacement?

Always? You named one, and that was over 200K.

 

[mmd]

And in fact we don't know if it's actual degradation or simply calibration/balancing issues.

We don't. But Tesla does, as it has chosen to offer Nyland a new battery pack for free.

Always? You named one, and that was over 200K.

I named two that I know, and 2/2 is always. Can you show one as counter example? I'm not nitpicking. Really interested to see the degradation/range loss at very high miles. Is there a Tesla stats site like Volt stats? I wonder, if it shows the ranges too, if the cars are still on original battery packs.