2017 Investor Roundtable:General Discussion

[3Victoria]

Fair point, but I feel like that hire is too much of a coincidence. He could till contribute to fine tuning the design and to execution.

I think consensus here is that the S is due for an interior refresh. That and the Model 3 makes the timing of his hiring perfect.

 

[mrdoubleb]

Thank you for posting link to this!

Quotes of the day:

"Cell production for testing and validation began in December, but today's batteries are the first that will power Tesla products"

"The company fulfilled its promise to rapidly complete a massive battery storage project to back up the grid in California (confirmed by Bloomberg today)"

Come on @vgrinshpun, cut the nonsense! We all know that TE's value is ZERO!

 

[racer26]

My question is still - at what point do the shorts see the writing on the wall and start capitulating en masse?

Gigafactory is producing cells. That's another mark on the board that Model 3 will be at least reasonably close to on-time.

Demand is still growing, shoots their demand arguments even more full of holes than they already were.

SolarCity cashflows can be leveraged to provide whatever cash is needed up to around $5B.

What's left of their thesis?

 

[nagypite]

i wonder how many batteries he will sell to the US Army to energize Laser weapons, Railguns and Robots

 

[flamingoezz]

is there a stream of the Q&A somewhere?

 

[mrdoubleb]

My question is still - at what point do the shorts see the writing on the wall and start capitulating en masse?

Gigafactory is producing cells. That's another mark on the board that Model 3 will be at least reasonably close to on-time.

Demand is still growing, shoots their demand arguments even more full of holes than they already were.

SolarCity cashflows can be leveraged to provide whatever cash is needed up to around $5B.

What's left of their thesis?

While we will have many positive catalysts this year, I truly believe the mass exodus of shorts (a.k.a. Tsunami of Hurt Part 2) once volume deliveries of M3 start. I think most of them truly believe Tesla will not get M3 out the door in time or in quantity.

Now do I think we will hit Musk's upper ceiling of 200k M3 this year?! Hint: marijuana is not legal in my country, so no, I do not. But I think 90-100k S&X and 60-90k M3 is certainly possible. Even that will shock shorts immensely.

 

[Alketi]

My question is still - at what point do the shorts see the writing on the wall and start capitulating en masse?

Gigafactory is producing cells. That's another mark on the board that Model 3 will be at least reasonably close to on-time.

Demand is still growing, shoots their demand arguments even more full of holes than they already were.

SolarCity cashflows can be leveraged to provide whatever cash is needed up to around $5B.

What's left of their thesis?

Their thesis changes quarterly. But, their standby is that Tesla will run out of money and their current favorite is that Tesla can't make the Model 3 profitably at $35K.

 

[austinEV]

Does anyone have any insight into the 18650 agreement with Panasonic and how much longer Tesla needs to use that form factor for S/X?

I think Tesla has options on how to soak up those cells. I think they will regardless of whether they are committed or not. In a way, Tesla's mission statement could be interpreted as "deploy as many batteries in the world as possible." They can just keep making TE products that use ALL of Panasonics Japan capacity. So far we know:

18650 cells: Tesla S/X, power products version 1

2170 cells: Model 3, power products version 2

It would be a big pain to switch cars, but relatively easy to design storage products around whatever cell they can get. So I suspect they will use the TE products as the "flex" and design the cars around one cell or the other. The only thing I cannot figure out is if/when they will switch the model S/X to 2170's. If they are better, or have higher density and thus allow a 120-130kWh option then it pretty much has too. So this I think is the final configuration:

18650 cells: TE power products version 1

2170 cells: All cars, power products version 2.

 

[techmaven]

I think Tesla has options on how to soak up those cells. I think they will regardless of whether they are committed or not. In a way, Tesla's mission statement could be interpreted as "deploy as many batteries in the world as possible." They can just keep making TE products that use ALL of Panasonics Japan capacity. So far we know:

18650 cells: Tesla S/X, power products version 1

2170 cells: Model 3, power products version 2

It would be a big pain to switch cars, but relatively easy to design storage products around whatever cell they can get. So I suspect they will use the TE products as the "flex" and design the cars around one cell or the other. The only thing I cannot figure out is if/when they will switch the model S/X to 2170's. If they are better, or have higher density and thus allow a 120-130kWh option then it pretty much has too. So this I think is the final configuration:

18650 cells: TE power products version 1

2170 cells: All cars, power products version 2.

Another possibility is to cut over the Osaka plants to also build 2170's.

 

[NOLA_Mike]

18650 cells: TE power products version 1

2170 cells: All cars, power products version 2.

Also, it's not as if this is an adversarial breakup - Panasonic is deeply involved in making the 2170 cells as well so if some flexibility is needed in switching from one to the other I think it will happen without drama.

 

[Alketi]

It would be a big pain to switch cars, but relatively easy to design storage products around whatever cell they can get. So I suspect they will use the TE products as the "flex" and design the cars around one cell or the other. The only thing I cannot figure out is if/when they will switch the model S/X to 2170's. If they are better, or have higher density and thus allow a 120-130kWh option then it pretty much has too. So this I think is the final configuration:

We know Tesla believes the 2170s will drop the pack cost enough to make the Model 3 possible. They're also 30% more energy dense than the original 18650s. Both would be a boon for S/X, especially gross margins.

Yes, they would require a redesign of the pack, but Tesla knows how to do that. I do recall Elon saying this would happen at a "later" date -- but I was wondering if this was because of contractual arrangements, or the scarcity of the cells.

 

[austinEV]

Another possibility is to cut over the Osaka plants to also build 2170's.

Maaaybe. Easier/sufficient to just keep making TE V1. Depends on the cost/benefit of Pana changing over their form factor vs Tesla investing in more 18650 TE V1 gear.

Edit: If 2170's are just flat superior in every way, including density for TE products then Pana needs to change once they can. Universal 2170 is best for everyone involved.

 

[neroden]

My question is still - at what point do the shorts see the writing on the wall and start capitulating en masse?

I answered this months ago. When 100,000 (or even 80,000) Model 3 come off the production line in one quarter, are delivered, and the profits are booked on the quarterly report. That's it. Before then, the shorts can keep telling themselves stories. After that, I think it will be too hard for them to delude themselves.

 

[neroden]

We know Tesla believes the 2170s will drop the pack cost enough to make the Model 3 possible. They're also 30% more energy dense than the original 18650s. Both would be a boon for S/X, especially gross margins.

Yes, they would require a redesign of the pack, but Tesla knows how to do that. I do recall Elon saying this would happen at a "later" date -- but I was wondering if this was because of contractual arrangements, or the scarcity of the cells.

Both and engineering commitments. Tesla wants to use up the existing contracted supply of cells from Panasonic; they haven't managed to boost production of 21-70s to meet demand yet; and the pack designers are working full out on both Model 3 and Powerpack 2 (and 3?) and Powerwall 2 (and 3?). When the pack designers become idle and have nothing better to do they'll redesign the S/X packs, and the timing should line up nicely with the Gigafactory ramping up to produce more batteries than are needed for Model 3 and Powerpack/Powerwall production, and for the contracts with Panasonic to run out.

 

[larmor]

I answered this months ago. When 100,000 (or even 80,000) Model 3 come off the production line in one quarter, are delivered, and the profits are booked on the quarterly report. That's it. Before then, the shorts can keep telling themselves stories. After that, I think it will be too hard for them to delude themselves.

I think it comes sooner. When they can see that battery cost from volume production comes down, then the writing is on the wall. This will be before any model 3s are made. Have to capitulate before the ink dries.

Other industries looking closely at battery cost: all other car manufacturers, current utilities, manufacturers with factories, anyone hoping to sell oil.

 

[doctoxics]

Interesting article in Bloomberg today (Tesla Flips the Switch on the Gigafactory) on Gigafactory1 event announcing production of 2170 batteries. A quote from the article confirms (if accurate, source not given) that recently manufactured Tesla powerpacks contain imported 2170 cells:

"In September, the company announced a deal to supply a record 20 megawatts/80 megawatt-hours of energy storage to Southern California Edison as part of a wider effort to prevent blackouts, replacing fossil-fuel electricity generation with lithium-ion batteries.

The Powerpacks were assembled at the Gigafactory, using imported versions of the new 2170 cell format Panasonic designed with Tesla, and deployed in record time."

 

[mrdoubleb]

I answered this months ago. When 100,000 (or even 80,000) Model 3 come off the production line in one quarter, are delivered, and the profits are booked on the quarterly report. That's it. Before then, the shorts can keep telling themselves stories. After that, I think it will be too hard for them to delude themselves.

More importantly, the SP will force them to cover in masses.

 

[150 kWh]

OT Found this on stocktwits. Looks like Elon's new White House friends ...

 

[JRP3]

I think it comes sooner. When they can see that battery cost from volume production comes down, then the writing is on the wall. This will be before any model 3s are made. Have to capitulate before the ink dries.

You obviously haven't spent enough time engaging with the shorts. They'll hang on far longer than that, well into Model 3 production.

 

[Zhelko Dimic]

There's no way to know how TSLA would have moved in the past 18 months even if they had met all their goals. During the China stock market panic TSLA dropped substantially despite no direct impact on the company's financials. Even companies that return good results quarter after quarter do not rise in price predictably. MBLY has had consistently good earnings reports, but its shares remain mired at a price range somewhat above IPO.

As a general rule of thumb, I tell people not to plan or have expectations of a higher standard of living based on near-term stock price gains. Honestly, I do not think that betting on TSLA stock is a good idea to replace a car that is in desperate need of repair.

Perhaps I wasn't clear, I wasn't looking for personal advice, I feel I understand TSLA enough now. You've made a bunch of wrong assumptions about my situation, but this is not discussion about me.

It is the responsibility of investors to research the companies they invest in. If people are blindly buying shares just because they saw something on the news on Twitter, I can't help them. I bought shares knowing that Tesla had a substantial chance of going under, but it was money that I could afford to lose. Nobody should be buying individual shares of stock if they can't afford the risk! Some people I know have lost hundreds of thousands or even millions of dollars on companies that cratered unexpectedly. Most everyone should NOT be buying any individual shares at all. I actually discourage most people from buying any shares of TSLA because the average person cannot handle the price swings.

I'll respectfully (partially) disagree here. I have sunk my money into TSLA after probably 200 hours of research. Since then, I've done probably another 1000. Yet, my point is that TSLA behavior is so different than is norm, that I was blindsided repeatably. You can't learn TSLA just from the history, as it's one thing to learn facts, and another to learn facts as you observe all communication in the real-time. You have to observe Tesla for few quarters to understand it. I knew TSLA missed bunch in the past, but what do you do when there is a chance they'll miss, and company offers soothing commentary? As a newby, you tend to believe them. And if your bet and strategy is that they can't miss 3 times in a row (while still offering soothing commentary) guess what? They can and they've done it.

Again, this has no bearing for buy and hold (oblivious to market swings) investor, I actually believe TSLA is safe for such investor. Hence the paradox I've experienced. My research is telling me that as a long-term, passive bet, they're very safe, as market is a weighting machine. As a mid-term bet, where market is a sentiment machine, or any kind of active position that fluctuate over time, until you observe them awhile, they're ridiculously dangerous, as they routinely mismanage sentiment.

I'm sorry if I'm not clear, this is all the time I can spend on this discussion