2017 Investor Roundtable:General Discussion

[DurandalAI]

Add another executive threatened for his job by Elon & Team:

Elon Musk's hyperloop idea is not realistic 'right now,' says Amtrak's co-CEO

Step One: Denial.

Hyperloop will never be a competitor to Amtrak. It will be a competitor to regional air travel, as it will be fast and convenient, while Amtrak is neither of those things. (Especially if it's transporting your Tesla at high speeds. I can imagine an added bonus of a snake on the high speed skateboard that automatically charges your Tesla at L2 speeds while you're in transit, at the minimum to run your A/C and such without draining your battery.

 

[avoigt]

It's really 2016 once again. Tesla doesn't discount, until it does. And as soon as that information is distributed a bit more widely, it pulls back. This time they fired the sales advisor that send out an email about showroom incentives (Employee who sent $30,000 off email was FIRED!) Unfortunately for that guy, his mail got traction, ending up on Electrek. Elon likely blew a gasket and there he goes. Either way it shows how hard it is to walk a line with no discount while at the same time incentivizing your sales people based on their targets. These two policies are natural enemies and no wonder they get broken despite the big boss himself being very, very public about the issue.

Bad decision to not comply with Elons request.

BTW, here in Germany I received an Email from Tesla (am a M3 reservation holder) asking to look into the inventory for S and X in case I would like to use the 0.25% leasing offer that is valid until September 30th . So not further discount but pretty attractive conditions knowing that a consumer credit here is likely between 4 and 5% interest. Guess that will reduce the already limited listed of used cars further.

 

[AudubonB]

Moderator Note for both "General Discussion" and "Market Action" threads:

Back on track, all. Long weekend's over.
And it won't be me who moves many, many dozens of posts either to "SA" or other threads. If you're so enamored of your own writings that you absolutely have to have it in some other thread, write 'em again yourselves. It's far too much effort and otherwise time-waste to expect me to do it.

Besides, I'm still in awe of and trying to come to terms with IProf's "....threading water...". I've misappropriated that into my own phrase cache for decades to come. Thanks, Doc!

 

[Intl Professor]

Another day today where world markets are under pressure due to North Korea escalations.

And, apparently China isn't inclined to stop fuel oil to NOK. China is playing a different strategy towards NOK than what I hoped for

Apparently, it's basically "appease NOK forever" and allow NOK to be a nuclear state and not become a reunified Korea (western ally).

This appeasement outcome seems like the most probable long term outcome. World negotiates with NOK on a recurring basis.

The only other near term option is very dramatic: end the NOK regime and reunify Korea.

This solution is fraught with tremendous instability and risk but goes something like:

1). Evacuate Seoul. Yes, I'm not joking. 25m people. Provide temporary financial assistance to their disrupted economy. Consider this similar to evacuation due to hurricane.

2). Remove NOK govt. This is a huge military campaign. Hopefully backed by the majority of the world except China and Russia.

3). Reunify Korea and provide immediate aid to the people of NOK

Finally, I doubt China would quietly allow this solution to unfold.
Looks like it's appeasement forever.

In uncharacteristic self-restraint, when I have time I may respond on the "Solutions to the North Korean nuclear crisis." Even there the subject is slightly off topic.

Solutions to the North Korean nuclear crisis

 

[JBRR]

August EV Sales Higher For US, But You Ain't Seen Nothing Yet!

 

[Curt Renz]

Benzinga 10 minutes ago: Deutsche Bank: The Street Is Lowballing Tesla (NASDAQ: TSLA)'s Electric Truck

 

[Gerardf]

August EV Sales Higher For US, But You Ain't Seen Nothing Yet!

Quite shocking that GM managed to be only in the number 5 position in sales / deliveries with the Bolt after 8 month in 2017. They should have easily been in number 1 position by now, being the only one all that time to offer a long range EV in that price range. In December 2016 they already ramped production / deliveries to 500+/ month , so a slow ramp can not be the reason, neither are a large number of cars reserved for export. 11k cars in 8 months is a bad number.

Tesla should be able to deliver 10x that many in the first 8 months of 2018 with the Model-3. In the first 6 months already actually. (Anton W., I expect you to use that for article when that happens!)

 

[Reciprocity]

Quite shocking that GM managed to be only in the number 5 position in sales / deliveries with the Bolt after 8 month in 2017. They should have easily been in number 1 position by now, being the only one all that time to offer a long range EV in that price range. In December 2016 they already ramped production / deliveries to 500+/ month , so a slow ramp can not be the reason, neither are a large number of cars reserved for export. 11k cars in 8 months is a bad number.

Tesla should be able to deliver 10x that many in the first 8 months of 2018 with the Model-3. In the first 6 months already actually. (Anton W., I expect you to use that for article when that happens!)

For the Bolt, GM only has enough Packs/Drives for 20,000/Year increasing to 30,000/Year by the end of next year. GM is certainly on pace for that. What is more interesting is that they had 111 days of inventory recently. In this context, are deliveries to end consumer or to inventory? If there is any demand at all, why would there be almost 4 months of inventory?

This is where the coming Tesla killers fall on their faces. They do not have sufficient battery supplies and as far as I can tell, none are making any serious efforts to get this supply (outside of China, which I believe the vast majority will be kept in China for Chinese brands.) Everyone is 5 years behind Tesla on just battery supplies alone and it almost feels like the auto industry just expects some magical supplier to bail them out. There is some activity around that notion but not enough to supply everyone's 2019-2021 Tesla killers at more then 10K unites per year.

 

[Waiting4M3]

Benzinga 10 minutes ago: Deutsche Bank: The Street Is Lowballing Tesla (NASDAQ: TSLA)'s Electric Truck

“Our assumptions may prove conservative,” Lache said.

If Tesla achieves a 25-percent margin on the Model 3 against Deutsche’s estimate of a 20-percent margin by 2020, the bank will raise its target price to $400, he said.

We may not need to wait for long before seeing more upgrades. Deutsche may again be behind the market given their historical bear stance. So by the time they up the target to $400, The actual PPS could be well past $400. It could happen by May '18 after Q2'18 ER, or even earlier if Tesla gives detailed guidance on M3 margin before then.

 

[RobStark]

General Motors Can Make 50,000 Chevrolet Bolts Per Year

“Since last year rumors have perpetuated a notion that GM and supply partner LG Chem have production capacity of only 20,000-30,000 Bolt EVs per year, but this is not true, said Kevin Kelly, manager, Electrification and Fuel Cell Technology Communications.”

“There is nothing constraining us from doing that,” said Kelly when asked how Chevrolet might handle a potential deluge of 50,000 orders that would far surpass conservative analyst projections for the Bolt’s first year of sales.”

 

[racer26]

General Motors Can Make 50,000 Chevrolet Bolts Per Year

“Since last year rumors have perpetuated a notion that GM and supply partner LG Chem have production capacity of only 20,000-30,000 Bolt EVs per year, but this is not true, said Kevin Kelly, manager, Electrification and Fuel Cell Technology Communications.”

“There is nothing constraining us from doing that,” said Kelly when asked how Chevrolet might handle a potential deluge of 50,000 orders that would far surpass conservative analyst projections for the Bolt’s first year of sales.”

That article was posted 2 years ago.

Now that we're most of a year through the Bolt's production run, its pretty apparent that GM *is* in fact treating it like a compliance car, and that despite demand for it, its not selling them outside of ZEV states - and inside ZEV states it has already saturated what little demand there is, and that it won't get anywhere close to 50,000/yr.

Case in point: if I want one, I would have to order now, and wait, unable to test drive it, and I would get a 2018 model. Qualified dealers in my area were allotted 2-3 Bolts each to sell in 2017.

 

[RobStark]

That article was posted 2 years ago.

Now that we're most of a year through the Bolt's production run, its pretty apparent that GM *is* in fact treating it like a compliance car, and that despite demand for it, its not selling them outside of ZEV states - and inside ZEV states it has already saturated what little demand there is, and that it won't get anywhere close to 50,000/yr.

Case in point: if I want one, I would have to order now, and wait, unable to test drive it, and I would get a 2018 model. Qualified dealers in my area were allotted 2-3 Bolts each to sell in 2017.

In Jan 2016 GM said they had the capacity to build 50k Bolts per year.

My point is either the demand is not there or because GM has negative gross margins sales will be limited to what is required by law. Plus a few extra here and there for greenwashing purposes. Yes, a compliance car.

GM is on pace for 20k Bolt sales worldwide. Below Elon's estimate of 25k, which he believed is what GM needed for compliances purposes.

 

[kenliles]

General Motors Can Make 50,000 Chevrolet Bolts Per Year

“Since last year rumors have perpetuated a notion that GM and supply partner LG Chem have production capacity of only 20,000-30,000 Bolt EVs per year, but this is not true, said Kevin Kelly, manager, Electrification and Fuel Cell Technology Communications.”

“There is nothing constraining us from doing that,” said Kelly when asked how Chevrolet might handle a potential deluge of 50,000 orders that would far surpass conservative analyst projections for the Bolt’s first year of sales.”

So demand constrained then...?
Too much loss per car...?
hmmmm..
So confusing--
Maybe GM still figuring out the automotive business- that must be it

 

[kenliles]

Pretty much repeated by Toyota today:

Toyota chairman explains why they are falling behind with electric vehicles
"<
Takeshi Uchiyamada, Toyota’s Chairman, laid out why they are not making significant moves in the sector.

He told CNBC earlier today:
“I must say up front that we’re not against electric vehicles. But in order for electric vehicles to cover long distances, they currently need to be loaded with a lot of batteries that take a considerable amount of time to charge. There’s also the issue of battery life, But as laws and regulations (that encourage the development of electric vehicles) come into effect in places like China and the U.S., car makers will have no choice but to roll out electric vehicles or risk going out of business. Toyota is no exception, but we’re skeptical there would be a rapid shift to pure electric vehicles, given questions over user convenience.”

In other words, they don’t believe battery technology is where it needs to be to enable all-electric vehicles and they are waiting for regulations to become more demanding before they invest more heavily in the technology.
>"

Poor ICE-makers - just can't figure it out
wide open for those who can--

 

[techmaven]

Pretty much repeated by Toyota today:

Toyota chairman explains why they are falling behind with electric vehicles
"<
Takeshi Uchiyamada, Toyota’s Chairman, laid out why they are not making significant moves in the sector.

...

In other words, they don’t believe battery technology is where it needs to be to enable all-electric vehicles and they are waiting for regulations to become more demanding before they invest more heavily in the technology.
>"

Poor ICE-makers - just can't figure it out
wide open for those who can--

He is not wrong.

The vast majority of people are not yet willing to make the trade off, or at least, don't know enough yet to even start to consider the trade off. Therefore a company that needs to ship large quantities of vehicles and is relatively conservative will likely error on the side of waiting until the technology is sufficiently advanced. And Toyota builds some of the best hybrid and PHEV vehicles in the world, as long as appliance like transportation in large numbers and profits is the desired goal. So Toyota will wait for solid state or some other battery technology is sufficiently advanced... they know Tesla's technologies intimately and don't want to replicate that today.

The problem is that in the meantime, they have to sell what they have today and that means selling against BEVs. Personally, I think that does a lot of brand damage and that is the biggest risk of all... that by the time the battery technology is judged sufficiently advanced, the damage to the Toyota brand is far higher than they bargained for... it's a different trade off than VW's diesel gate, where they figured the brand damage and monetary damage from cheating was sufficiently low that cheating made sense.

 

[kenliles]

He is not wrong.

The vast majority of people are not yet willing to make the trade off, or at least, don't know enough yet to even start to consider the trade off. Therefore a company that needs to ship large quantities of vehicles and is relatively conservative will likely error on the side of waiting until the technology is sufficiently advanced. And Toyota builds some of the best hybrid and PHEV vehicles in the world, as long as appliance like transportation in large numbers and profits is the desired goal. So Toyota will wait for solid state or some other battery technology is sufficiently advanced... they know Tesla's technologies intimately and don't want to replicate that today.

The problem is that in the meantime, they have to sell what they have today and that means selling against BEVs. Personally, I think that does a lot of brand damage and that is the biggest risk of all... that by the time the battery technology is judged sufficiently advanced, the damage to the Toyota brand is far higher than they bargained for... it's a different trade off than VW's diesel gate, where they figured the brand damage and monetary damage from cheating was sufficiently low that cheating made sense.

Yep--

 

[Turing]

He is not wrong.

The vast majority of people are not yet willing to make the trade off, or at least, don't know enough yet to even start to consider the trade off. Therefore a company that needs to ship large quantities of vehicles and is relatively conservative will likely error on the side of waiting until the technology is sufficiently advanced. And Toyota builds some of the best hybrid and PHEV vehicles in the world, as long as appliance like transportation in large numbers and profits is the desired goal. So Toyota will wait for solid state or some other battery technology is sufficiently advanced... they know Tesla's technologies intimately and don't want to replicate that today.

The problem is that in the meantime, they have to sell what they have today and that means selling against BEVs. Personally, I think that does a lot of brand damage and that is the biggest risk of all... that by the time the battery technology is judged sufficiently advanced, the damage to the Toyota brand is far higher than they bargained for... it's a different trade off than VW's diesel gate, where they figured the brand damage and monetary damage from cheating was sufficiently low that cheating made sense.

This still doesn't explain why Toyota isn't taking a Nissan or GM approach of at least getting some experience and real world testing with a ev program like leaf or the bolt. Something like that wouldn't cost that much for the experience they would get in return, seems odd.

 

[RobStark]

He is not wrong.

And Toyota builds some of the best hybrid and PHEV vehicles in the world, as long as appliance like transportation in large numbers and profits is the desired goal.

1) He is wrong. At least 20% of his customers would be willing to make the tradeoff if they were properly informed of the tradeoffs instead of Toyota making anti-BEV propaganda. Toyota makes various niche powertrains including hydrogen fuel cells where the vast majority will not consider simply due to the fact they can't refuel where they drive.

Toyota, of all the legacy OEMs, has the customer base most willing to accept BEVs. Its large hybrid customer base that loves and trust Toyota reliability.

2) Toyota doesn't build some of the best PHEVs in the world. They do price them attractively in order to move large quantities(relative to other legacy OEMs). That is like saying Chinese OEMs make some of the best cars in the world.

 

[TMSE]

This still doesn't explain why Toyota isn't taking a Nissan or GM approach of at least getting some experience and real world testing with a ev program like leaf or the bolt. Something like that wouldn't cost that much for the experience they would get in return, seems odd.

Toyota is waiting for someone else to perfect the electric car, and then they can storm in taking over the market. A small problem though: Tesla is not pursuing just an electric car, but an intelligent supercomputer on wheels. It is the intelligent software in Tesla, that no one else can easily replicate.

Intelligent software, aka AI, is a tremendously tough problem to solve and no one can reach perfection, if there is such a thing. What it means is that the runway in the progress in AI is infinitely long. This means whoever starts early and run fast in this AI race will have tremendous lead against laggards and continue to increase that lead for several decades.

 

[kenliles]

He is wrong. At least 20% of his customers would be willing to make the tradeoff if they were properly informed of the tradeoffs instead of Toyota making anti-BEV propaganda

IMO
You're right he's wrong-
and he's right cause he knows he has little ability to properly inform anyone. Nor do his dealers. He's in the wrong business, he knows it, and his only option is to evolve into what others create... There is no other effective path for ICEers