2017 Investor Roundtable:General Discussion

[Curt Renz]

For the last time, I am going to explain this very slowly for the benefit of those who don't understand Transportation Economics 101.

The reason cars are sitting around most of the time is that PEOPLE DO NOT WANT TO GO OUT AT 4 AM.
The reason cars will not be used more efficiently is that EVERYONE IS DRIVING FROM 8 AM TO 9 AM. To get to their JOBS. The only way to get the cars used more efficiently is to actually get the commuters out of their cars (onto bicycles or something).

This isn't going to change due to magical wishful thinking. Jobs aren't going to change their hours (this has been tried, once on a national scale by order in the USSR, and several times by various companies in the US, and it has never made any progress; people don't like it). People are still going to be asleep at 4 AM.

Now, I am really sick of explaining these basics. If you can't figure out why this makes most of these "more efficient car use" fantasies into FANTASIES, I am done with you.

I am not saying there won't be money made from a "Tesla Network". They have a decent chance of replacing Uber, Lyft, carshare, and taxis. It'll never get bigger than that; it can't.

+1

In addition, if there were a far lower number of cars but each operating 24/7, they would be quickly worn out and need to be far more frequently replaced by fresh production.

 

[Reciprocity]

For the last time, I am going to explain this very slowly for the benefit of those who don't understand Transportation Economics 101.

The reason cars are sitting around most of the time is that PEOPLE DO NOT WANT TO GO OUT AT 4 AM.
The reason cars will not be used more efficiently is that EVERYONE IS DRIVING FROM 8 AM TO 9 AM. To get to their JOBS. The only way to get the cars used more efficiently is to actually get the commuters out of their cars (onto bicycles or something).

This isn't going to change due to magical wishful thinking. Jobs aren't going to change their hours (this has been tried, once on a national scale by order in the USSR, and several times by various companies in the US, and it has never made any progress; people don't like it). People are still going to be asleep at 4 AM.

Now, I am really sick of explaining these basics. If you can't figure out why this makes most of these "more efficient car use" fantasies into FANTASIES, I am done with you.

I am not saying there won't be money made from a "Tesla Network". They have a decent chance of replacing Uber, Lyft, carshare, and taxis. It'll never get bigger than that; it can't.

I'm pretty sure a car sitting for 15 hours means that it's driving for 9 hours, not a 4 am or 12 am, you only 7 am to 6 pm. But I digress. People are maluable when it benefits then and not flexible when it doesn't. I'm not saying some large percent of Tesla owners will opt into the network. I'm saying that enough cars will be opted in and enough fleet owners, Tesla and others, to change the name use cars. It's already happened with Uber and Uber is really expensive compared to what's coming. It's like anything else, make something everyone uses 1/4th price and more people will use it. And if you think for a second someone won't provide it when people want to use it, you have completely lost your mind.

I'm not in the same camp as VA but I think that we may have already seen peak car because of the new sharing society and I see more of it in the future, not less. You should be happy, because one future EV will be able to displace up to 3 ICE cars. Most will buy cars and use them for their family only, but even that might lower the total number of cars needed by that family.

When I look at my situation, I commute 25 miles a day, 4 days a week. That's about 16 hours and 110 miles a month. Why the hell do I need a $1200/m car + $100 a month ins. And $50 a month in electricity. I only needed this because I can't get my wife to load up the kids in the mini van to take me to work and then pick me up at 5. That is one expensive wife.

I get your point. 6am - 9am and 5pm will be complicated. But people will adjust and someone will provide a solution. I think your other issue is what do all those autonomous cars so during off peak hours? How about deliveries? How about charging at peak solar times to help stabilize the grid? The price will be dictated by how efficient they system is and people will find uses.

 

[Reciprocity]

+1

In addition, if there were a far lower number of cars but each operating 24/7, they would be quickly worn out and need to be far more frequently replaced by fresh production.

Pretty sure I only said 9 hours not 24/7, but ok. 24 hours - 15 hours not driving = 9 hours. Aren't they working on million Mile drive trains?

 

[T3slaTulips]

Still don't know if the story is legit or not but the branding skill in their username selection tripped a FUD red flag for me.
UPDATE: My Tesla Model X 90D Driver side falcon door opened while driving on freeway with my 6 y.o. sitting next to it! • r/teslamotors

 

[ValueAnalyst]

For the last time, I am going to explain this very slowly for the benefit of those who don't understand Transportation Economics 101.

The reason cars are sitting around most of the time is that PEOPLE DO NOT WANT TO GO OUT AT 4 AM.
The reason cars will not be used more efficiently is that EVERYONE IS DRIVING FROM 8 AM TO 9 AM. To get to their JOBS. The only way to get the cars used more efficiently is to actually get the commuters out of their cars (onto bicycles or something).

This isn't going to change due to magical wishful thinking. Jobs aren't going to change their hours (this has been tried, once on a national scale by order in the USSR, and several times by various companies in the US, and it has never made any progress; people don't like it). People are still going to be asleep at 4 AM.

Now, I am really sick of explaining these basics. If you can't figure out why this makes most of these "more efficient car use" fantasies into FANTASIES, I am done with you.

I am not saying there won't be money made from a "Tesla Network". They have a decent chance of replacing Uber, Lyft, carshare, and taxis. It'll never get bigger than that; it can't.

It's assainie to say that no one takes Uber/lyft/taxi to work and that the number of people doing so will not multiply when the cost per mile drops to one-fifth.

Also, your 4 am example is way overused, especially since it's irrelevant. Even my original set of assumptions only included daylight hours.

More importantly, however, even if you're correct that participation rate will be as low as 25% and that number of rides per car will be as low as 10 per day (by the way, most "full-time" uber drivers do 20+ per day in 8 hours), then the avg price of a ride cannot decline significantly below its current rate of $10 per ride.

40m Tesla's x 25% participation (ridiculously low) x 10 rides per day (ridiculously low) x $7 per ride (30% drop from current rate) x 365 days x 25% rev share x 80% gross margin = $51 billion gross profit

Whether participation is high and brings avg fare down to one-fifth, or participation remains low while avg fare declines only 30%, makes no difference to the value of Tesla Network. $50 billion in run-rate annualized gross profit is reasonable by 4Q25.

 

[tander]

Still don't know if the story is legit or not but the branding skill in their username selection tripped a FUD red flag for me.
UPDATE: My Tesla Model X 90D Driver side falcon door opened while driving on freeway with my 6 y.o. sitting next to it! • r/teslamotors

I didn't read the article so I'm guessing there is more context to it, but from the title my first thought was my car will do that too if somebody opens the door. Was it spontaneous or that somebody open the door? From a stock perspective even if it is spontaneous it shouldn't be too big of a deal since nobody got hurt and it sounds like it's an isolated thing. hope the situation is remedied.

 

[T3slaTulips]

I didn't read the article so I'm guessing there is more context to it, but from the title my first thought was my car will do that too if somebody opens the door. Was it spontaneous or that somebody open the door? From a stock perspective even if it is spontaneous it shouldn't be too big of a deal since nobody got hurt and it sounds like it's an isolated thing. hope the situation is remedied.

I believe they have a link to their original posting in this post.

 

[MXWing]

Still don't know if the story is legit or not but the branding skill in their username selection tripped a FUD red flag for me.
UPDATE: My Tesla Model X 90D Driver side falcon door opened while driving on freeway with my 6 y.o. sitting next to it! • r/teslamotors

Love how they put their child in middle row seat closest to the FWD they allegedly had issues with.

Since I have two, I need to figure out which child is my least favorite so I can expose them to the most risk. (Though this changes depending on which one is the most difficult to put to bed)

Or maybe I'm not an idiot and decide to put my kids in the rear seat instead, or perhaps not drive if the door doesn't shut? Complicated decision matrix for sure.

Anyway, I'm sure we will hear from SA trolls regarding this "sensational" story.

In case I feel like shaking down Tesla in the future I better go reserve my reddit name now - "mysuperbadteslastory" just to one up the FUD factor.

 

[22522]

I think your other issue is what do all those autonomous cars do during off peak hours? How about deliveries? ...

The work end of long commutes is often commercially served better as people are concentrated toward cities.
A few years ago I proposed autonomous pick up during the late afternoon. The car/SUV goes to destinations and the shop scans a receipt bar code to open a locker (passenger specific) on the outside of the vehicle. On the return trip the locker alarms at that rider's drop off point to make sure they remember to bring it in to their family. It leverages the long leg of the commute to make your family's life better. You arrive with a treat, but you did not take time from work to procure it. The car made the rounds for everyone who shared the ride.

The green and red numbers 1, 2, 3, and 4 show lockers in the bulky front part of an SUV.

Other self driving stuff:

1. An easy to manufacture door that opens in platform and covers a never iced over step to get in the vehicle.
2. Head up display for every passenger.
3. A rear facing seat in the front row that can act as a storytelling stage.
4. Wheelchair ramp that lets you use a curb and sidewalk as a loading dock (super low load floor).
5. Split A-pillars with room for a radar at the top corner.

Yes, it is different than today's private automobile.

So, it does support a lot of different use models, and there is more than one crazy person here.

 

[dc_h]

For the last time, I am going to explain this very slowly for the benefit of those who don't understand Transportation Economics 101.

The reason cars are sitting around most of the time is that PEOPLE DO NOT WANT TO GO OUT AT 4 AM.
The reason cars will not be used more efficiently is that EVERYONE IS DRIVING FROM 8 AM TO 9 AM. To get to their JOBS. The only way to get the cars used more efficiently is to actually get the commuters out of their cars (onto bicycles or something).

This isn't going to change due to magical wishful thinking. Jobs aren't going to change their hours (this has been tried, once on a national scale by order in the USSR, and several times by various companies in the US, and it has never made any progress; people don't like it). People are still going to be asleep at 4 AM.

Now, I am really sick of explaining these basics. If you can't figure out why this makes most of these "more efficient car use" fantasies into FANTASIES, I am done with you.

I am not saying there won't be money made from a "Tesla Network". They have a decent chance of replacing Uber, Lyft, carshare, and taxis. It'll never get bigger than that; it can't.

My office is 12 feet from my bedroom. My wife works downstairs. My neighbors have one 100% home worker and one 50%. Vannevar Bush and Buckminster Fuller predicted remote work over 60 years ago. Most sales and an awful lot of technical people work at least partially from home.
No guarantee who wins, or that a winner will take all, in a vehicle as a service market. The economics of VAAS is huge in urban and dense suburban areas. Reducing the need for car ownership in cities like NY or chicago will allow for more density and less congestion.

 

[EinSV]

My office is 12 feet from my bedroom. My wife works downstairs. My neighbors have one 100% home worker and one 50%. Vannevar Bush and Buckminster Fuller predicted remote work over 60 years ago. Most sales and an awful lot of technical people work at least partially from home.
No guarantee who wins, or that a winner will take all, in a vehicle as a service market. The economics of VAAS is huge in urban and dense suburban areas. Reducing the need for car ownership in cities like NY or chicago will allow for more density and less congestion.

We don't really have a great way to quantify adoption of networked self-driving vehicles. So the tendency is to project our own biases/experience into the equation. People who live in NYC and take cabs and the subway, not surprisingly, think networked cars will take over the world. People who live in more rural locations or love to drive tend to have a hard time seeing that happening.

The truth is probably somewhere in the middle. Driving is a practical exercise -- getting from point A to B as cheaply, comfortably and efficiently as possible. But cars -- like clothes, houses, food, wine, jewelry, etc. -- are also an integral part of many people's enjoyment of life and a projection of who they are (or want to be).

The nice thing from the perspective of a Tesla investor is that Tesla is in a great position whichever way this goes. If autonomy were not on the horizon, Tesla would still be making the most compelling vehicles available. Fun to drive, awesome performance and incredibly efficient. And if there is a shift away from individual car ownership, Tesla is at the forefront both of autonomy and producing EVs, which are the only vehicles that make sense in an autonomous car network.

 

[jhm]

For all we know "the floor" could be the factory floor. But if the floor has a couple of release M3, the floor would look beautiful.

I think Musk is hinting at a new idea, floors that move. It sounds like the tunnels will have moving floor. And, yes, @neroden, Musk says he likes trains.

 

[Sancho]

EVERYONE IS DRIVING FROM 8 AM TO 9 AM.

There are about 250,000,000 vehicles in operation in the US. About 90,000,000 are used for daily commuting, and 20,000,000 of those are for commutes of less than 5 miles. And they are not all commuting at the same time. It probably wouldn't take more than 10% of the current vehicles in operation, if used in some kind of shared network, to give every commuter their own ride to work.

 

[Yggdrasill]

There are about 250,000,000 vehicles in operation in the US. About 90,000,000 are used for daily commuting, and 20,000,000 of those are for commutes of less than 5 miles. And they are not all commuting at the same time. It probably wouldn't take more than 10% of the current vehicles in operation, if used in some kind of shared network, to give every commuter their own ride to work.

Here are some graphs from different sources showing taffic by hour of the day:

They're pretty similar across the board, and this can be expected to be pretty close to the demand curve for the Tesla Network. Say you then have Tesla Network capacity for covering 5% of daily miles per hour (total capacity on the Tesla Network is then 120%), except 7-8 pm and 5-6 pm, when many people are using their cars and the capacity drops to 2%. For 1-5 pm, the market would be completely saturated, under one fifth of Tesla Network cars will be moving. While at 7-8 pm and 5-6 pm, only a quarter of the demand can be met.

This is a challenge. If you have a sufficient capacity in the Tesla Network to meet peak demand, you would need to be able to meet something like 25% of daily demand per hour. That means total capacity is 600% of daily demand. And each car on the Tesla Network is likely to be standing still for ~20 hours per day.

Edit: This may be a bit conservative, though. You will get some self-selection of participants, where people who work nights or work at home are more likely to participate, due to higher payoff. Say the Tesla Network is scaled to 400% of daily demand. At that point, each car will be participating on the Tesla Network for 6 hours per day. Revenue might be something like 20 mph (average) x 6 hours x 0.25 USD/mile = 30 USD/day. Revenue per year might be 11,000 USD. If Tesla takes a 10% cut, and has 2 million participating vehicles, that's an income of 2.2 billion USD per year.

 

[RobStark]

Pl WORLD______MAY_________ YTD_________ %______ '16Pl
1 Tesla_________6.713________35.663________10 _______2
2 BMW________7.242_________33.035________ 9________3
3 BAIC_________6.530________25.004________7_________5
4 Nissan_______3.981_________23.915________7________4
5 BYD__________8.651________23.548________7________1
6 Toyota________7.579_________20.877________6_______30
7 Chevrolet_____4.448_________18.339_________5_______8
8 Renault_______ 2.582________14.850_________4______10
9 Zhidou________4.471________14.004_________4_______14
10 Volkswagen__3.502_________13.064_________4_______6

EV Sales: World Top 10 May

 

[EinSV]

Should be a fun weekend!

 

[MXWing]

View attachment 233348

Should be a fun weekend!

Can we ask the CBOE to have special weekend hours?

For those who have insight into Musk psyche and tweeting patterns, is the track record leaning good or bad news?

Is it only good news telegraphed or bad news telegraphed as well?

He didn't say "news on Sunday - shortville is facked". Now that would make for an interesting Friday to say the least.

 

[erthquake]

Still don't know if the story is legit or not but the branding skill in their username selection tripped a FUD red flag for me.
UPDATE: My Tesla Model X 90D Driver side falcon door opened while driving on freeway with my 6 y.o. sitting next to it! • r/teslamotors

Couldn't agree more with you about the username. Whether or not it's true, it exudes someone trying to publically grind an ax verses getting a satisfactory resolution. They have no basis (yet) for suggesting it's a fleet wide safety issue based on one anecdotal experience.

 

[Yggdrasill]

View attachment 233348

Should be a fun weekend!

Wow, that's about 2 weeks earlier than expected for any news at all. I think we'll gap up.

Considering buying back some of what I sold a few days ago at open.

 

[mrdoubleb]

Wow. Ok... we should also get (excellent) Q2 delivery numbers in the same release or a day later.

The stock market will be open on Monday, right? With Tuesday being July 4th....