2017 Investor Roundtable:General Discussion

[mrdoubleb]

Interesting that I would rather watch Stage 2 head over Antarctica than anything else on TV,

I think prefer the SpaceX audio track vs. the usual Tesla techno wait music when Elon is late.

 

[vgrinshpun]

Possibly Tesla compared themselves to an industry average which includes many manufacturers with only very limited battery volume? I still think the two hardest data points are that a GM Bolt battery pack goes for $11,895 or well below $200/kWh (Battery | Genuine GM | 24285978 : GM Parts Direct: Your direct source for Genuine GM Parts) and that the Renault Zoe pack goes voor 7000 EUR (Renault ZOE: prijs & specs) also well below $200/kWh. Both are sales price and include various mark ups over production price. I really think battery prices are falling even faster than the most optimistic scenarios projected only a few years ago. Both Tesla and traditional manufacturers are reaping the benefits from it in lower cost prices.

I do not consider either of these being even remotely "hard" data points.

The Bolt EV has battery warranty of 8 years, 100,000 miles, and for the next few years the only packs that will be replaced outside of the warranty are due to collision repair. This pricing is a low cost PR stint by GM as the number does not make any sense.

The bolt MSRP is $37,495. Backing out the $11,895 yields price of Bolt without the cost of battery of $25,600. The starting price of the Chevy Sonic Hatchback is $18,455. So this would mean that Chevrolet is making a whopping $7,145 *more* in profit on the Bolt than on Sonic. This would be comparable to the profit on SUVs and pick-up trucks. Contrast this with the reports that Chevrolet is merely breaking even or even loosing money on the Bolt. This stuff does not add up, fishy does not even begin to describe it.

Regarding the Renault Zoe, we had discussion on the subject several months back. My opinion did not change - it is not a "hard" data point. One can just not derive any hard data on cost per kWh from this type of information:

Short-Term TSLA Price Movements - 2016
Short-Term TSLA Price Movements - 2016
Short-Term TSLA Price Movements - 2016

 

[vgrinshpun]

For the record, I don't care how old any if you are out what sec you are or what you are invested or how much. But I do appreciate all the info shared here. Learning a lot about many different subjects. I think it's refreshing to not really much about the people behind the info. I have come up with my own pictures in my mind got each of you based on the value of the content, which is mostly good. Apparently VA is a teenage girl who is always on her cell phone and walks into things, which makes a lot of sense based on the volume of posts.

If you don't care about all of this, you should not have made this post...

 

[22522]

Thank you for the videos. Battery chemistry/cost etc. are not my areas of expertise, so I rely on my reading of expert opinions

Ahh, that method works for 97% of the companies. But not for early Ford or current Musk companies.

Here is a set of information.

1. Ford's book "Today and Tomorrow" has a quote about experts that went something like this~ "Experts are people who are thoroughly familiar with the impossible. Whenever we have something important to do, we assign young people who have no concept of the impossible. Do they listen to experts? Yes, to know where to expect trouble, but in no way are they allowed to be limited by expert opinion." He then goes into how they revolutionized glass manufacturing.
2. Elon seems to follow this practice, and friction with experts is common - for obvious reasons. They stand in the way of progress - and success.
3. What expert would say you could land a spent booster on boat in a gale?

Expert advice does not work for Elon companies. But data is usually valid, and a good place to turn for understanding of today's process capability.

Besides Ford's book, take a look at this battery study to improve dexterity:

https://wiki.unece.org/download/attachments/29884985/EVE-18-04e.pdf?api=v2

By the way, I agree with your conclusions.

Today and Tomorrow - Special Edition of Ford's 1926 Classic: Henry Ford, James K. Bakken, Norman Bodek, Samuel Crowther: 9780915299362: Amazon.com: Books

 

[Waiting4M3]

It literally makes 100% sense.

How old you are,where you live and where you are from tells us about your experiences and colors your perspective.

A 70 year old New Yorker will likely have a different perspective than a Chinese millennial living in Tibet.

There are Chinese millennial? Isn't millennial a US-only term like baby boomers? And why do they live in Tibet? is it equivalent to Americans taking a year off in Europe after college? Personally I think we need to clarify all this to properly frame this entire discussion.

 

[RobStark]

There are Chinese millennial? Isn't millennial a US-only term like baby boomers? And why do they live in Tibet? is it equivalent to Americans taking a year off in Europe after college? Personally I think we need to clarify all this to properly frame this entire discussion.

Webster's dictionary definition for a millennial person is "a person born in the 1980s or 1990s —usually plural" It is not restricted to Americans.

Baby boomers does not have an exact definition but generally refers to people born roughly from 1946 to 1964. Even if born in China. And the term "baby boomers" in English is used throughout the English speaking world.

Here is a British newspaper referring to British baby boomers.

Middle-class baby boomers who 'wish they had grandkids' are taking up babysitting

Here is an Australian government website referring to baby boomers.

Baby boomers | australia.gov.au

 

[ValueAnalyst]

Ahh, that method works for 97% of the companies. But not for early Ford or current Musk companies.

Here is a set of information.

1. Ford's book "Today and Tomorrow" has a quote about experts that went something like this~ "Experts are people who are thoroughly familiar with the impossible. Whenever we have something important to do, we assign young people who have no concept of the impossible. Do they listen to experts? Yes, to know where to expect trouble, but in no way are they allowed to be limited by expert opinion." He then goes into how they revolutionized glass manufacturing.
2. Elon seems to follow this practice, and friction with experts is common - for obvious reasons. They stand in the way of progress - and success.
3. What expert would say you could land a spent booster on boat in a gale?

Expert advice does not work for Elon companies. But data is usually valid, and a good place to turn for understanding of today's process capability.

Besides Ford's book, take a look at this battery study to improve dexterity:

https://wiki.unece.org/download/attachments/29884985/EVE-18-04e.pdf?api=v2

By the way, I agree with your conclusions.

Today and Tomorrow - Special Edition of Ford's 1926 Classic: Henry Ford, James K. Bakken, Norman Bodek, Samuel Crowther: 9780915299362: Amazon.com: Books

Is it your informed opinion that li-ion pack cost can be lowered below $80/kWh ?

 

[MXWing]

I hate the iPhone and never really owned one, but love there business. I use a OnePlus and have since oneplus 1. I tend to buy them used on swappa or Amazon about a model behind the newest. I don't like wasting money. But I'm fine with 100 million other people wasting money and making a nice profit from that. As far as individual stocks, Tesla replaced Apple for me.

Apple is pretty low risk and something you can just own without much research and much worry of bankruptcy. However you won't be an optimized and well informed investor if you don't know the products well enough to bet on super cycles, their play into services, iOS moat etc

 

[hockeythug]

Industry news. Finally.

Takata, Unable to Overcome Airbag Crisis, Files for Bankruptcy Protection

 

[schonelucht]

The Bolt EV has battery warranty of 8 years, 100,000 miles, and for the next few years the only packs that will be replaced outside of the warranty are due to collision repair. This pricing is a low cost PR stint by GM as the number does not make any sense.

Not sure what your point is with warranty, but you claim GM is selling spare parts with a big loss on purpose? And that is's somehow a PR stint (really? a PR stint? then why the hell would they have an advice price with 40% dealer markup for the same part?)

The bolt MSRP is $37,495. Backing out the $11,895 yields price oft Bolt without the cost of battery of $25,600. The starting price of the Chevy Sonic Hatchback is $18,455. So this would mean that Chevrolet is making a whopping $7,145 *more* in profit on the Bolt than on Sonic. This would be comparable to the profit on SUVs and pick-up trucks. Contrast this with the reports that Chevrolet is merely breaking even or even loosing money on the Bolt. This stuff does not add up, fishy does not even begin to describe it.

Well the UBS report that you reference but don't cite pins the battery cost of the Bolt at $10 200. Surprise, that's close to the $11800 when you buy it as a spare part. Anyway, Things the Botl has but the Sonic in it is base configuration hasn't : SiriusFM Radio, Solar absorbing windshield, LED stop and tail lights, heated outside mirrors, 17"alu wheels, 6 speaker audio system, 6 way seat adjustements for driver and passenger, electronic cruise control, 8" screen, powered windows, OnStar Crisis Assist/Emergency/... OTA update capable, There is also nearly $7000 of R&D and depreciation baked in the Chevy's price which the Sonic obviously hasn't due to different product/life cycles. The Bolt has aluminium parts, the Sonic doesn't. It has a frame that must carry 30% more weight etc. Really you can't just claim that both must be the same cost to produce beyond the drivetrain.

Regarding the Renault Zoe, we had discussion on the subject several month back. My opinion did not change - it is not a "hard" data point. One can just not derive any hard data on cost per kWh from this type of information:

And I have told you before that, yes you can. The fiscal system in the Netherlands is such that -when leasing the battery- you must pay taxes as if you had bought the battery. For this reason, Renault has to disclose what the battery is worth so that the Dutch tax authorities can levy the right amount of income tax on individuals who have a Renault Zoe provided to them by their company. This is called 'de fiscale waarde'. Surprise, surprise, that value agrees perfectly. See here (it's in Dutch obviously) http://www.coppes.nl/uploads/images/prijslijsten/Zoe.pdf 7900 EUR. Back out the VAT and there you have it. Unless you are claiming that Renault is intentionally committing tax fraud in the Netherlands this is as definite as it gets.

Really, we have five data points. 1) Renault disclosing battery value per Dutch tax regulations 2) Chevrolet selling battery spare parts 3) Audi Exec being open about their battery costs 4) UBS analysts telling us Bolt battery cost 5) GM CEO being open about GM volume pricing on batteries . And all point to costs roughly in the same ballpark. You can't simply handwave all that away as 'fishy'. At some point, when it walks like a duck and quakes like a duck, it is a duck. Battery prices for large volume car manufacturers are simply cheaper than previously imagined.

 

[geometro]

Next few weeks we have:

1) vehicle deliveries; and
2) Model 3 reveal

Anything else on the docket for July?

 

[Ameliorate]

Next few weeks we have:

1) vehicle deliveries; and
2) Model 3 reveal

Anything else on the docket for July?

Invitations/date for Model 3 reveal (sounds dumb to include this but triggered a good run up to the previous m3 reveal)
Still awaiting Australia BES news
I wouldn't complain if they included a handful <50 of model 3's produced in June to end this quarter but I find it very unlikely given pricing/options etc are not released.
Tesla starts displaying new ‘Tesla Solar’ branded solar panels in store


"MAY 3

Tesla announces start of ‘solar roof tile’ production within next two months" aka june/july
-https://electrek.co/2017/05/03/tesla-solar-roof-tile-production-q2/

There's definitely more. Always so much going on with this company and I love it.

 

[Starno]

Next few weeks we have:

1) vehicle deliveries; and
2) Model 3 reveal

Anything else on the docket for July?

The rest of the year is going to be extremely exciting : the ramp of the M3 + MY and semi reveal in September.

But the ramp of M3 is going to be very exciting. I think by end of August we should be 90% sure how much M3 will be delivered by the end of the year. Because by end of August it should be clear if ramp is going perfect, good, average, bad.

 

[Reciprocity]

Not sure what your point is with warranty, but you claim GM is selling spare parts with a big loss on purpose? And that is's somehow a PR stint (really? a PR stint? then why the hell would they have an advice price with 40% dealer markup for the same part?)



Well the UBS report that you reference but don't cite pins the battery cost of the Bolt at $10 200. Surprise, that's close to the $11800 when you buy it as a spare part. Anyway, Things the Botl has but the Sonic in it is base configuration hasn't : SiriusFM Radio, Solar absorbing windshield, LED stop and tail lights, heated outside mirrors, 17"alu wheels, 6 speaker audio system, 6 way seat adjustements for driver and passenger, electronic cruise control, 8" screen, powered windows, OnStar Crisis Assist/Emergency/... OTA update capable, There is also nearly $7000 of R&D and depreciation baked in the Chevy's price which the Sonic obviously hasn't due to different product/life cycles. The Bolt has aluminium parts, the Sonic doesn't. It has a frame that must carry 30% more weight etc. Really you can't just claim that both must be the same cost to produce beyond the drivetrain.



And I have told you before that, yes you can. The fiscal system in the Netherlands is such that -when leasing the battery- you must pay taxes as if you had bought the battery. For this reason, Renault has to disclose what the battery is worth so that the Dutch tax authorities can levy the right amount of income tax on individuals who have a Renault Zoe provided to them by their company. This is called 'de fiscale waarde'. Surprise, surprise, that value agrees perfectly. See here (it's in Dutch obviously) http://www.coppes.nl/uploads/images/prijslijsten/Zoe.pdf 7900 EUR. Back out the VAT and there you have it. Unless you are claiming that Renault is intentionally committing tax fraud in the Netherlands this is as definite as it gets.

Really, we have five data points. 1) Renault disclosing battery value per Dutch tax regulations 2) Chevrolet selling battery spare parts 3) Audi Exec being open about their battery costs 4) UBS analysts telling us Bolt battery cost 5) GM CEO being open about GM volume pricing on batteries . And all point to costs roughly in the same ballpark. You can't simply handwave all that away as 'fishy'. At some point, when it walks like a duck and quakes like a duck, it is a duck. Battery prices for large volume car manufacturers are simply cheaper than previously imagined.

That's all great and very insightful. Who cares how much they cost when you can only get 20,000/year of them. We keep taking about how cheap they are, but the fact is they might as well not even exist at those supply levels. It's like a Mosquito farting compared to the gigafactory.

 

[SPadival]

Take the Tesla bear Bill Maurer who writes on SA as an example. Based on a review of his LinkedIn and age I have concluded with reasonable confidence that he lives with his mom and does not have the bankroll to take any Tesla short position worth mentioning.

OMG.. You are right!! I wonder how the University let him play with real money (as per his bio..i.e. unverified). I am horrified for all the TSLA shorts who rely on him.

https://www.linkedin.com/in/william-maurer-24912723/

It reminded me of these paragraphs from a Michael Lewis article.

On that night, Ireland’s financial regulator, a lifelong Central Bank bureaucrat in his 60s named Patrick Neary, came live on national television to be interviewed. The interviewer sounded as if he had just finished reading the collected works of Morgan Kelly. Neary, for his part, looked as if he had been dragged from a hole into which he badly wanted to return. He wore an insecure little mustache, stammered rote answers to questions he had not been asked, and ignored the ones he had been asked.

A banking system is an act of faith: it survives only for as long as people believe it will. Two weeks earlier the collapse of Lehman Brothers had cast doubt on banks everywhere. Ireland’s banks had not been managed to withstand doubt; they had been managed to exploit blind faith. Now the Irish people finally caught a glimpse of the guy meant to be safeguarding them: the crazy uncle had been sprung from the family cellar. Here he was, on their televisions, insisting that the Irish banks were “resilient” and “more than adequately capitalized” … when everyone in Ireland could see, in the vacant skyscrapers and empty housing developments around them, evidence of bank loans that were not merely bad but insane. “What happened was that everyone in Ireland had the idea that somewhere in Ireland there was a little wise old man who was in charge of the money, and this was the first time they’d ever seen this little man,” says McCarthy. “And then they saw him and said, Who the **** was that??? Is that the ****ing guy who is in charge of the money??? That’s when everyone panicked.”

 

[TradingInvest]

Next few weeks we have:

1) vehicle deliveries; and
2) Model 3 reveal

Anything else on the docket for July?

Last year Elon said Tesla will give more details about Tesla Network in July. I hope they delay it, wait until it's ready for service. Slow and steady is the best.

 

[22522]

Is it your informed opinion that li-ion pack cost can be lowered below $80/kWh ?

I am no expert.

A hazard guess is $64/kWh incremental cost NMC. Here is how I got that:

Some expert said $80/kWh. (Maybe a ULA like company).

Musk ought to be able to beat the expert opinion by 20%.

Incremental cost only happens when volume is so high that all the machinery is paid for. The cost to produce one more.

So the model 3 battery is about $5000.

Elon says a BEV that sells at $35K has way lower costs than an ICEV that sells at $35K.

The interior and air bag stuff are the same, as are the half shafts and suspension. Look at an Audi A4 front drive...

I am no expert, but that is what I think. Zero foundation past Musk quotes.

 

[vgrinshpun]

Not sure what your point is with warranty, but you claim GM is selling spare parts with a big loss on purpose? And that is's somehow a PR stint (really? a PR stint? then why the hell would they have an advice price with 40% dealer markup for the same part?)



Well the UBS report that you reference but don't cite pins the battery cost of the Bolt at $10 200. Surprise, that's close to the $11800 when you buy it as a spare part. Anyway, Things the Botl has but the Sonic in it is base configuration hasn't : SiriusFM Radio, Solar absorbing windshield, LED stop and tail lights, heated outside mirrors, 17"alu wheels, 6 speaker audio system, 6 way seat adjustements for driver and passenger, electronic cruise control, 8" screen, powered windows, OnStar Crisis Assist/Emergency/... OTA update capable, There is also nearly $7000 of R&D and depreciation baked in the Chevy's price which the Sonic obviously hasn't due to different product/life cycles. The Bolt has aluminium parts, the Sonic doesn't. It has a frame that must carry 30% more weight etc. Really you can't just claim that both must be the same cost to produce beyond the drivetrain.



And I have told you before that, yes you can. The fiscal system in the Netherlands is such that -when leasing the battery- you must pay taxes as if you had bought the battery. For this reason, Renault has to disclose what the battery is worth so that the Dutch tax authorities can levy the right amount of income tax on individuals who have a Renault Zoe provided to them by their company. This is called 'de fiscale waarde'. Surprise, surprise, that value agrees perfectly. See here (it's in Dutch obviously) http://www.coppes.nl/uploads/images/prijslijsten/Zoe.pdf 7900 EUR. Back out the VAT and there you have it. Unless you are claiming that Renault is intentionally committing tax fraud in the Netherlands this is as definite as it gets.

Really, we have five data points. 1) Renault disclosing battery value per Dutch tax regulations 2) Chevrolet selling battery spare parts 3) Audi Exec being open about their battery costs 4) UBS analysts telling us Bolt battery cost 5) GM CEO being open about GM volume pricing on batteries . And all point to costs roughly in the same ballpark. You can't simply handwave all that away as 'fishy'. At some point, when it walks like a duck and quakes like a duck, it is a duck. Battery prices for large volume car manufacturers are simply cheaper than previously imagined.

My point is very simple. If one takes an EV with MSRP of $X, and backs off the battery cost, the result should be in the ball park of the similar ICE vehicle MSRP. It is you who are waving this off based on proclamations of competitors who are dying to demonstrate that they are not behind Tesla, while being behind by many years.

If the cost of the battery for Bolt is, as you believe, around $11,895, the Bolt should have MSRP equal to the MSRP of comparable ICE car plus cost of the battery. So based on Chevy Sonic Hatchback the MSRP of Bolt should be $18,455 + $11,895 = 30,350, not 37,495. Put it the other way around, if MSRP of Bolt starts at $37,495, while Sonic Hatchback starts at $18,455, the implied approximate cost of the battery should be $37,495 - $18,455 = 19,040, or around $317/kWh

All of the above is super conservative, as ICE+emission control system+fuel system is certainly more expensive than the electric motor/VFD (controller).

One can do the same with Renault Zoe and Clio (similar ICE car) and arrive at the similar results.

It can't get simpler than this. Otherwise the stuff just does not add up, and my BS meter goes off the scale.

 

[Mike Smith]

OMG.. You are right!! I wonder how the University let him play with real money (as per his bio..i.e. unverified). I am horrified for all the TSLA shorts who rely on him.

https://www.linkedin.com/in/william-maurer-24912723/

It reminded me of these paragraphs from a Michael Lewis article.

Wow, according to his linkedin the only real job Bill Mauer has ever had was retail clerk at Staples. I always assumed by his name that he was an older guy with lots of experience.

 

[EinSV]

The South Australia storage project tender winner is expected to be announced this week according to reneweconomy.com.au, with the Victoria project winner due to be announced by late August. S.A. to announce storage winner, delays EST mechanism

Fingers crossed ....