2017 Investor Roundtable:General Discussion

[kbM3]

Yes - I was citing pack level output. Since I later divide it by pack-level battery size per car, isn't this the correct way to do it?

Yes. I just thought the initial paragraph was a little misleading and that it would commonly be interpreted as battery cell capacity, unless battery pack capacity is explicitly stated.

I have been assuming in 2020 they must plan on importing 45 GWh/yr of cells to make up the stated production difference (150 GWh/yr packs - 105 GWh/yr cells). Although now that I think about it, if they are producing 150 gWh/yr year of packs, where are the cells going to come from for tesla energy?

 

[ValueAnalyst]

Yes. I just thought the initial paragraph was a little misleading and that it would commonly be interpreted as battery cell capacity, unless battery pack capacity is explicitly stated.

I have been assuming in 2020 they must plan on importing 45 GWh/yr of cells to make up the stated production difference (150 GWh/yr packs - 105 GWh/yr cells). Although now that I think about it, if they are producing 150 gWh/yr year of packs, where are the cells going to come from for tesla energy?

Tbh, I'm not 100% sure on the difference between cell-level and pack-level energy levels. This is an item on my list of things to research/learn/understand, but until then, I'm sticking with pack-level numbers for my analysis.

If someone here can chime in and help us understand why pack-level energy output from gigafactory is higher than cell-level, that would be great and I would very much appreciate it.

 

[sub]

Unrelated (longtime lurker and avid reader of the forum, finally signed up). Are many folks taking advantage of the recent volatility? By selling a given lot, then waiting for a 1-2% drop and buying back in? I'm a fan of buy and hold, and am very long. But some days (not all days) it just feels obvious that one could capture a 2% increase in shares, particularly when a FUD storm approaches in the morning. The dip this morning seemed like an obvious choice, but I decided to stay steady and joined up here instead. Haha.

Works great until it doesn't.

 

[jhm]

as long as we're contemplating names for those shorting... big oil fanboys and big oil mercenaries

Sh*t Fan Boys?

 

[Jonathan Hewitt]

Tbh, I'm not 100% sure on the difference between cell-level and pack-level energy levels. This is an item on my list of things to research/learn/understand, but until then, I'm sticking with pack-level numbers for my analysis.

If someone here can chime in and help us understand why pack-level energy output from gigafactory is higher than cell-level, that would be great and I would very much appreciate it.

Pack production and cell production two totally separate processes. They import cells from Japan and have to assemble them into packs somewhere, might as well do it at the Gigafactory.

 

[ValueAnalyst]

Pack production and cell production two totally separate processes. They import cells from Japan and have to assemble them into packs somewhere, might as well do it at the Gigafactory.

Ok that makes sense now. I previously thought that cell production preceded packs and somehow pack design added more energy in the process, but I get it now.

So that means the number of all-electric cars needed to be produced to replace 1.0 mbd of oil is definitely way above 35 millions cars per year. Maybe even more than 50 million...

 

[neroden]

The car is permanently 60% more expensive in real terms for future buyers due to incentives gone. That means demand may never return to what used to be 'normal'.

People buying cars in this price bracket, even when the HK tax break was in place, are not very price sensitive. If they want a Tesla Model S they'll get a Tesla Model S. Seriously, what other high-performance electric sports car do you think they would get instead?

The dynamic is absolutely one of "pulling demand forward". We've seen it in country after country. The steady sales rate *does* return to what it started at. It takes a while though, because they just used up at least four (maybe five or six) months of demand at once.

 

[Mike Smith]

I find it really odd that in all the articles in the last day or two about the release of the first production Model 3 not a single one says anything even slightly complimentary about the car or Tesla (aside from Tesla promoting sites). Nothing about how fast it came to market or even that it looks nice.

 

[AlMc]

People buying cars in this price bracket, even when the HK tax break was in place, are not very price sensitive. If they want a Tesla Model S they'll get a Tesla Model S. Seriously, what other high-performance electric sports car do you think they would get instead?

The dynamic is absolutely one of "pulling demand forward". We've seen it in country after country. The steady sales rate *does* return to what it started at. It takes a while though, because they just used up at least four (maybe five or six) months of demand at once.

Agreed. The demand for the X and S will skyrocket in the last quarter before they lose( the credit declines) the $7,500 tax credit.
I suspect that is when Tesla produces model 3s only for non US customers and only S/X for US customers.

 

[sub]

I find it really odd that in all the articles in the last day or two about the release of the first production Model 3 not a single one says anything even slightly complimentary about the car or Tesla (aside from Tesla promoting sites). Nothing about how fast it came to market or even that it looks nice.

I don't read Tesla click bait articles anymore, you read one you've read them all. They are always low on information (none of which we don't already know here) with the most negative slant possible. Even the occasional positive article is all fluff. No SA for me either and a healthy ignore list on TMC.

 

[neroden]

I find it really odd that in all the articles in the last day or two about the release of the first production Model 3 not a single one says anything even slightly complimentary about the car or Tesla (aside from Tesla promoting sites). Nothing about how fast it came to market or even that it looks nice.

Well, the car magazines and websites haven't started reporting anything yet.

 

[neroden]

Agreed. The demand for the X and S will skyrocket in the last quarter before they lose( the credit declines) the $7,500 tax credit.
I suspect that is when Tesla produces model 3s only for non US customers and only S/X for US customers.

Ehhhh, I don't think so. Due to the way the credit phases out, I suspect Tesla will be both pushing as many Model 3 to the US as possible and simultaneously pushing as many Model S/X to the US as possible.

Unfortunately non-US customers may face a delivery shortage and increase in wait times for 2018 (with the first drop in the US credit probably being at the end of June 2018, and the second drop probably being at the end of December 2018.) If you're outside the US and want a Model S or X promptly, I would get it *this year*.

 

[ChrisA]

Anyone have a view as to why some Street analysts still have such a bearish view on Tesla's revenue outlook? For example, JP Morgan's Ryan Brinkman has Tesla's top line at $25 billion in 2020. Consensus Street is higher at $37 billion 2020. Nonetheless, I think there is a reasonable shot Tesla could hit $50+ in 2020. Put alternatively, I would be surprised at this point if Tesla were not at $50 billion+ in revenue by 2021. I've copied a very crude revenue forecast by segment below. For those on this forum that care to comment: what do you think would be the weakest/most unrealistic part of this forecast? Where's the greatest risk in terms of Tesla missing this growth trajectory? There are a lot of different facets to the Tesla investment case, but it's really interesting such different views on the top line alone.

 

[MitchJi]

fair enuf, apologies and will stop. will only talk investing 'n such.
'm guilty of over enthusiasm and desire for Tesla to succeed, esp the neural mesh
peace bro

Thank You!

I apologize because I should have asked more diplomatically.

But it's getting hard to keep with these two threads. Largely because there's already way to much attention given to trolls on this forum. We really don't need to be kept up to date about the idiots on seeking fud.

 

[Bgarret]

I find it really odd that in all the articles in the last day or two about the release of the first production Model 3 not a single one says anything even slightly complimentary about the car or Tesla (aside from Tesla promoting sites). Nothing about how fast it came to market or even that it looks nice.

It's actually a good bit worse than that....here is the "color" provided by FINSUM related to Model III release:

"The market has had a lot of anticipation about the release and production schedule of Tesla’s new model 3. Many are worried that Elon Musk’s company will not be able to meet its production quotas, leaving the company unable to meet the huge volume of pre-orders it received for the new model. The company has just months remaining to deliver around half a billion Dollars worth of refundable orders. It plans to double its production rate within six months, and then quintuple it by the end of next year. The rollout will be slower than previously as the company wants to avoid the debacle it faced with the release of faulty Model X’s when they debuted."

Not even going to parse all the gross misrepresentations or outright falsehoods and innuendo present in the description. Model III is being portrayed in the mainstream financial media as an unqualified disaster, with little or no balanced reporting on the risks and opportunities the Model III presents to the company or to the industry as a whole.

 

[kbM3]

Anyone have a view as to why some Street analysts still have such a bearish view on Tesla's revenue outlook? For example, JP Morgan's Ryan Brinkman has Tesla's top line at $25 billion in 2020. Consensus Street is higher at $37 billion 2020. Nonetheless, I think there is a reasonable shot Tesla could hit $50+ in 2020. Put alternatively, I would be surprised at this point if Tesla were not at $50 billion+ in revenue by 2021. I've copied a very crude revenue forecast by segment below. For those on this forum that care to comment: what do you think would be the weakest/most unrealistic part of this forecast? Where's the greatest risk in terms of Tesla missing this growth trajectory? There are a lot of different facets to the Tesla investment case, but it's really interesting such different views on the top line alone.

View attachment 235003

The most unrealistic part of your forecast is that you're including zero dollars for the semi and for Model Y in 2020

 

[larmor]

It's actually a good bit worse than that....here is the "color" provided by FINSUM related to Model III release:

"The market has had a lot of anticipation about the release and production schedule of Tesla’s new model 3. Many are worried that Elon Musk’s company will not be able to meet its production quotas, leaving the company unable to meet the huge volume of pre-orders it received for the new model. The company has just months remaining to deliver around half a billion Dollars worth of refundable orders. It plans to double its production rate within six months, and then quintuple it by the end of next year. The rollout will be slower than previously as the company wants to avoid the debacle it faced with the release of faulty Model X’s when they debuted."

Not even going to parse all the gross misrepresentations or outright falsehoods and innuendo present in the description. Model III is being portrayed in the mainstream financial media as an unqualified disaster, with little or no balanced reporting on the risks and opportunities the Model III presents to the company or to the industry as a whole.

I think the market wants to see how tesla ramps. They have guided for a logarithmic production ramp. It is a fair question since almost all auto manufacturing involves human intervention, which is the rate limiting step.

Far more compelling than 1, 30, or 100s of RC M3s would be one M3 produced on the line without human intervention. The improvement in line speed has been noted by tesla as an area for improvement. The day that is confirmed with a video or pics will mark the day it is too late to buy tsla...

 

[jbcarioca]

People buying cars in this price bracket, even when the HK tax break was in place, are not very price sensitive. If they want a Tesla Model S they'll get a Tesla Model S. Seriously, what other high-performance electric sports car do you think they would get instead?

The dynamic is absolutely one of "pulling demand forward". We've seen it in country after country. The steady sales rate *does* return to what it started at. It takes a while though, because they just used up at least four (maybe five or six) months of demand at once.

Not so extreme as the situation in Hong Kong but still instructive to your point is the US Sate of Georgia which eliminated BEV subsidies and replaced them with fees some months ago. All BEV sales dried up, the cheap ones did not recover but Tesla soon returned to traditional levels. The data is readily available, and was posted here somewhere, but I haven't time to find it now. I hope somebody does. It would be nice to have other examples too.

 

[jhm]

The most unrealistic part of your forecast is that you're including zero dollars for the semi and for Model Y in 2020

Shhh, we don't want to wake the bears.

 

[neroden]

Not so extreme as the situation in Hong Kong but still instructive to your point is the US Sate of Georgia which eliminated BEV subsidies and replaced them with fees some months ago. All BEV sales dried up, the cheap ones did not recover but Tesla soon returned to traditional levels. The data is readily available, and was posted here somewhere, but I haven't time to find it now. I hope somebody does. It would be nice to have other examples too.

Denmark's a good example. There were some others I've forgotten about...