2017 Investor Roundtable:General Discussion

[Waiting4M3]

Old news Tesla’s giant new Powerpack project in Australia will use battery cells made by Samsung

So why are you asking the question if you already know it's Samsung 2170?

 

[schonelucht]

Look at the two bold'ed sentences, they seem to contradict each other. Which way is it?

I am guessing the misunderstanding is in the term AP which is both used for the hardware platform (as I did in my original mail) and of the software that implements the functionality provided by the first generation. Some people (and I believe @Reciprocity too) think that FSD and EAP will be implemented by different software code base that has not yet been released/put in action on customer cars. In that way it is not a contradiction to say that AP2.x the hardware platform may need some tweaks to support EAP/FSD code base but that those are not needed for the 'finished' implementation of first generation functionality on second generation hardware.

Yeah it's confusing.

 

[schonelucht]

I was commenting on form factor. Not old - current news.

Ok. Still remains the question which supplier is used for current PW2.

 

[schonelucht]

So why are you asking the question if you already know it's Samsung 2170?

That article is PP. I was asking for PW.

 

[luvb2b]

not sure if it has been mentioned already - i was reviewing the jeffries report for why they would be so negative. the main thing i see is that the unit volume for model 3 in 2019 seems quite low. it appears to me from his market share forecasts that the analyst expects meaningful competition to make model 3 sales demand constrained. i believe tesla will remain supply constrained for the 3 throughout 2019. and so the unit numbers are off by 100k per year there.

i think generally it seems to be misunderstood that competition will hurt tesla. i think competition will increase the total addressable market in the near term by exposing more people to ex's. and tesla will be in a leadership position for that growing market. @techmaven may have more detail / color to add.

 

[Reciprocity]

Look at the two bold'ed sentences, they seem to contradict each other. Which way is it?

huh... there are no absolutes in life expect death and taxes. The point is that AP2 is not FSD1.0. The reason is that the amount of shared functionality is very small if you look at a Venn diagram, they would have a very tiny overlap and the AP2 circle would be very small and the FSD circle would be very large. AP is basically TACC with the ability to use Vision to see the lane lines and road edges (which is a tiny overlap with FSD). FSD will use HD3D maps more then lane lines, but uses lane lines as a backup or to confirm the HD maps. Imagine you are on a train and you are firmly on the tracks, that is HD maps. But you confirm that fact by looking with your eyes at the tracks as they stretch out in front of you (small overlap). HD maps will including things like stop signs, stop lights and exits where AP2 has no clue about any of those things and often darts into and out of exit lanes for no apparent reason. This is one way you will know when HD maps are being used as it will stop doing that in places that it has done it a million times. I know for me, I have a few roads I drive on where I can predict it will momentarily dart into a turn lane. No matter how many updates we have, this is a constant.

Is there some poor sap working on rain sensing? Maybe. I dont really care. Wasting anymore tech capital on that abomination is futile and I am all but certain Tesla has moved on.

 

[Alketi]

i was reviewing the jeffries report for why they would be so negative. the main thing i see is that the unit volume for model 3 in 2019 seems quite low.

What did Jeffries predict as their 2019 Model 3 unit volume?

 

[techmaven]

So yeah, more on the Jeffries report.

I'm only about 2/3rds of the way through looking at it, but the sales volumes projection by model chart is really, really off.

They have 91k S+X for 2017. With 47k delivered thus far, they are thinking 44k for the rest of the year, or 22k per quarter. Yeah, that's likely to be debunked pretty soon. The low-ish S+X estimates goes all the way through 2021, with 94k in 2018, and 107k in 2019... this seemingly smallish miss is a big deal because of the gross margin. They are actually pretty bullish on Model 3 numbers for 2017... 45,000. A higher M3 versus S+X mix impacts overall gross margins in their model. For FY18, they have 300,000 Model 3's. That's not a bad conservative estimate of 6,200 to 6,500 a week. Could be low by 10%. The big issue is FY2019. They have only 380,000. Even if the entire year was 10% less than the guided 10k/week for exiting 2018, the number would be 432,000. At guidance with no additional expansion for the year, that would be 100,000 low. 100k! They do have some Model Y's and maybe they think that it would impact Fremont production, but I would expect Model Y to be on a new production line somewhere. In addition, I expect changes to the Model X as well as production to increase that significantly. Beyond 2019, they have basically tepid growth. Have they met Mr. Musk?

The report actually has quite a bit that is bullish. But they fall down on a very key parts, and one fixes those, the report would be extremely bullish. The upside case in their report is $525. Thus far, here are the key misses:

* low S+X, falling into the trap of over-extending Q1/Q2 2017 figures as a trend
* low 2018 sales, but really low 2019 numbers.
* very low growth past 2019
* still thinks 35 GWh is the cell production capacity of the Gigafactory 1. Really? Really? Are these people that incompetent?
* estimate of $175/kWh pack costs is high for Model 3 at volume in 2017

 

[racer26]

So yeah, more on the Jeffries report.

I'm only about 2/3rds of the way through looking at it, but the sales volumes projection by model chart is really, really off.

They have 91k S+X for 2017. With 47k delivered thus far, they are thinking 44k for the rest of the year, or 22k per quarter. Yeah, that's likely to be debunked pretty soon. The low-ish S+X estimates goes all the way through 2021, with 94k in 2018, and 107k in 2019... this seemingly smallish miss is a big deal because of the gross margin. They are actually pretty bullish on Model 3 numbers for 2017... 45,000. A higher M3 versus S+X mix impacts overall gross margins in their model. For FY18, they have 300,000 Model 3's. That's not a bad conservative estimate of 6,200 to 6,500 a week. Could be low by 10%. The big issue is FY2019. They have only 380,000. Even if the entire year was 10% less than the guided 10k/week for exiting 2018, the number would be 432,000. At guidance with no additional expansion for the year, that would be 100,000 low. 100k! They do have some Model Y's and maybe they think that it would impact Fremont production, but I would expect Model Y to be on a new production line somewhere. In addition, I expect changes to the Model X as well as production to increase that significantly. Beyond 2019, they have basically tepid growth. Have they met Mr. Musk?

The report actually has quite a bit that is bullish. But they fall down on a very key parts, and one fixes those, the report would be extremely bullish. The upside case in their report is $525. Thus far, here are the key misses:

* low S+X, falling into the trap of over-extending Q1/Q2 2017 figures as a trend
* low 2018 sales, but really low 2019 numbers.
* very low growth past 2019
* still thinks 35 GWh is the cell production capacity of the Gigafactory 1. Really? Really? Are these people that incompetent?
* estimate of $175/kWh pack costs is high for Model 3 at volume in 2017

Much as I applaud the effort, you're talking about an analyst that revised his PT by $40 the day after his initial report, because he'd made an error on the SHARE COUNT.

That these "analysts" are permitted to keep their jobs when they make glaring errors like that and make calls that return -47% annually is amazing to me.

 

[Reciprocity]

So yeah, more on the Jeffries report.

I'm only about 2/3rds of the way through looking at it, but the sales volumes projection by model chart is really, really off.

They have 91k S+X for 2017. With 47k delivered thus far, they are thinking 44k for the rest of the year, or 22k per quarter. Yeah, that's likely to be debunked pretty soon. The low-ish S+X estimates goes all the way through 2021, with 94k in 2018, and 107k in 2019... this seemingly smallish miss is a big deal because of the gross margin. They are actually pretty bullish on Model 3 numbers for 2017... 45,000. A higher M3 versus S+X mix impacts overall gross margins in their model. For FY18, they have 300,000 Model 3's. That's not a bad conservative estimate of 6,200 to 6,500 a week. Could be low by 10%. The big issue is FY2019. They have only 380,000. Even if the entire year was 10% less than the guided 10k/week for exiting 2018, the number would be 432,000. At guidance with no additional expansion for the year, that would be 100,000 low. 100k! They do have some Model Y's and maybe they think that it would impact Fremont production, but I would expect Model Y to be on a new production line somewhere. In addition, I expect changes to the Model X as well as production to increase that significantly. Beyond 2019, they have basically tepid growth. Have they met Mr. Musk?

The report actually has quite a bit that is bullish. But they fall down on a very key parts, and one fixes those, the report would be extremely bullish. The upside case in their report is $525. Thus far, here are the key misses:

* low S+X, falling into the trap of over-extending Q1/Q2 2017 figures as a trend
* low 2018 sales, but really low 2019 numbers.
* very low growth past 2019
* still thinks 35 GWh is the cell production capacity of the Gigafactory 1. Really? Really? Are these people that incompetent?
* estimate of $175/kWh pack costs is high for Model 3 at volume in 2017

* low 2018 sales, but really low 2019 numbers.
* very low growth past 2019

Agree 100% on TM3, demand is likely nearly a million cars when these things hit the road in mass and the lesser informed get an idea of what it is. Maybe this is because they think demand will go down with no tax incentives in the US for 19 and a likely phase out in the middle of 2018. based on that alone, 2018 should be higher then 2017. In terms of TM3, its still very competitive without tax incentives and can appeal to a very broad set of car buyers.

* low S+X, falling into the trap of over-extending Q1/Q2 2017 figures as a trend

After tax credits phase out, they will have to do something to spruce things up to keep demand high for 2019 and beyond. One thing to look at for 2019 and beyond is cars that are 2-5 years old being upgraded will contribute much more then in the past. Its hard to estimate but most that track customer loyalty say that 90+% will buy another Tesla.

* still thinks 35 GWh is the cell production capacity of the Gigafactory 1. Really? Really? Are these people that incompetent?

They really cannot say it has more capacity if they say Tesla will only sell 300,000 - 380,000 model 3s because they would only require ~23GWh so the rest they assume is TE? Do they even show any TE revenue?

 

[vgrinshpun]

Much as I applaud the effort, you're talking about an analyst that revised his PT by $40 the day after his initial report, because he'd made an error on the SHARE COUNT.

That these "analysts" are permitted to keep their jobs when they make glaring errors like that and make calls that return -47% annually is amazing to me.

The share count mistake is actually pretty understandable. He was under enormous pressure to issue it before TSLA rockets pass the ATH. At that point the attempt at "double top" narrative would not have worked. I am ususally not a fan of conspiracy theories but this report screams manipulation to me. The tell all sign is the acidic tone of the narrative. If they were just looking at the numbers conservatively and did not have any agenda, such a tone would not have been used.

 

[kbM3]

So yeah, more on the Jeffries report.

I'm only about 2/3rds of the way through looking at it, but the sales volumes projection by model chart is really, really off.

They have 91k S+X for 2017. With 47k delivered thus far, they are thinking 44k for the rest of the year, or 22k per quarter. Yeah, that's likely to be debunked pretty soon. The low-ish S+X estimates goes all the way through 2021, with 94k in 2018, and 107k in 2019... this seemingly smallish miss is a big deal because of the gross margin. They are actually pretty bullish on Model 3 numbers for 2017... 45,000. A higher M3 versus S+X mix impacts overall gross margins in their model. For FY18, they have 300,000 Model 3's. That's not a bad conservative estimate of 6,200 to 6,500 a week. Could be low by 10%. The big issue is FY2019. They have only 380,000. Even if the entire year was 10% less than the guided 10k/week for exiting 2018, the number would be 432,000. At guidance with no additional expansion for the year, that would be 100,000 low. 100k! They do have some Model Y's and maybe they think that it would impact Fremont production, but I would expect Model Y to be on a new production line somewhere. In addition, I expect changes to the Model X as well as production to increase that significantly. Beyond 2019, they have basically tepid growth. Have they met Mr. Musk?

The report actually has quite a bit that is bullish. But they fall down on a very key parts, and one fixes those, the report would be extremely bullish. The upside case in their report is $525. Thus far, here are the key misses:

* low S+X, falling into the trap of over-extending Q1/Q2 2017 figures as a trend
* low 2018 sales, but really low 2019 numbers.
* very low growth past 2019
* still thinks 35 GWh is the cell production capacity of the Gigafactory 1. Really? Really? Are these people that incompetent?
* estimate of $175/kWh pack costs is high for Model 3 at volume in 2017

I thought Elon said that 100k was the production capability combined for S & X? That from this point forward, they were just trying to increase gross margin.

 

[SBenson]

huh... there are no absolutes in life expect death and taxes. The point is that AP2 is not FSD1.0. The reason is that the amount of shared functionality is very small if you look at a Venn diagram, they would have a very tiny overlap and the AP2 circle would be very small and the FSD circle would be very large. AP is basically TACC with the ability to use Vision to see the lane lines and road edges (which is a tiny overlap with FSD). FSD will use HD3D maps more then lane lines, but uses lane lines as a backup or to confirm the HD maps. Imagine you are on a train and you are firmly on the tracks, that is HD maps. But you confirm that fact by looking with your eyes at the tracks as they stretch out in front of you (small overlap). HD maps will including things like stop signs, stop lights and exits where AP2 has no clue about any of those things and often darts into and out of exit lanes for no apparent reason. This is one way you will know when HD maps are being used as it will stop doing that in places that it has done it a million times. I know for me, I have a few roads I drive on where I can predict it will momentarily dart into a turn lane. No matter how many updates we have, this is a constant.

Is there some poor sap working on rain sensing? Maybe. I dont really care. Wasting anymore tech capital on that abomination is futile and I am all but certain Tesla has moved on.

Like @schonelucht pointed out, you seem to be mixing up software with hardware. Being a software engineer, I am finding what you are saying *very* confusing.

For instance you say: "HD maps will including things like stop signs, stop lights and exits where AP2 has no clue about any of those things and often darts into and out of exit lanes for no apparent reason. "

In this sentence, is "HD maps" a software element or hardware? Is "AP2" as referenced by you hardware or software? To me that whole sentence is talking about software/data, which can be downloaded/uploaded.

AP2 as understood by most people is strictly hardware. So I really don't understand how you are saying AP2 is done. Maybe it will be if Tesla figures out that the prior AP 2.0 (or even current AP2.5) hardware is no where enough and the architecture fundamentally is not upgradeable to what is ultimately needed. I think we are quite far away from that decision/realization point (if at all).

 

[TradingInvest]

So yeah, more on the Jeffries report.

I'm only about 2/3rds of the way through looking at it, but the sales volumes projection by model chart is really, really off.

They have 91k S+X for 2017. With 47k delivered thus far, they are thinking 44k for the rest of the year, or 22k per quarter. Yeah, that's likely to be debunked pretty soon. The low-ish S+X estimates goes all the way through 2021, with 94k in 2018, and 107k in 2019... this seemingly smallish miss is a big deal because of the gross margin. They are actually pretty bullish on Model 3 numbers for 2017... 45,000. A higher M3 versus S+X mix impacts overall gross margins in their model. For FY18, they have 300,000 Model 3's. That's not a bad conservative estimate of 6,200 to 6,500 a week. Could be low by 10%. The big issue is FY2019. They have only 380,000. Even if the entire year was 10% less than the guided 10k/week for exiting 2018, the number would be 432,000. At guidance with no additional expansion for the year, that would be 100,000 low. 100k! They do have some Model Y's and maybe they think that it would impact Fremont production, but I would expect Model Y to be on a new production line somewhere. In addition, I expect changes to the Model X as well as production to increase that significantly. Beyond 2019, they have basically tepid growth. Have they met Mr. Musk?

The report actually has quite a bit that is bullish. But they fall down on a very key parts, and one fixes those, the report would be extremely bullish. The upside case in their report is $525. Thus far, here are the key misses:

* low S+X, falling into the trap of over-extending Q1/Q2 2017 figures as a trend
* low 2018 sales, but really low 2019 numbers.
* very low growth past 2019
* still thinks 35 GWh is the cell production capacity of the Gigafactory 1. Really? Really? Are these people that incompetent?
* estimate of $175/kWh pack costs is high for Model 3 at volume in 2017

The biggest issue with these bear analysts is that they can't see very far. They are used to linear extrapolation on ordinary companies. So they just can't imagine how can Tesla make a lot of money in 2025. He was trying to do DFC, without proper future cashflow, how can he come to the proper stock price?

On top of that, I do believe stock manipulation is part of the intent.

 

[esk8mw]

The share count mistake is actually pretty understandable. He was under enormous pressure to issue it before TSLA rockets pass the ATH. At that point the attempt at "double top" narrative would not have worked. I am ususally not a fan of conspiracy theories but this report screams manipulation to me. The tell sighn is the acidic tone of the narative. If they were just looking at the numbers conservatively and did not have any agenda, such a tone would not have been used.

Agreed. The timing is all too obvious.

Also, the immediate reaction I had to the "update" was that this was intentionally done to keep the negative narrative going and trigger more algobots for an additional day. All algos see is another downgrade/PT reduction.

Trading is a super dirty game. I hope one of the more egregious offenders gets popped by the SEC sometime to maybe make these frauds think twice...for a little bit at least. The manipulation grows more blatant by the day. These days, I'm really cutting back on short term trading TSLA and just holding long because of it.

 

[Reciprocity]

I thought Elon said that 100k was the production capability combined for S & X? That from this point forward, they were just trying to increase gross margin.

Sure, until they are not. For example, imagine if they simplified the S/X with what they have learned from Model3 in terms of the wiring harness and single screen. Adding the model 3 dash and a HUD should save them both margin and time. 100k is about the max but they also said that at one point they got to 2400 in a single week, cannot remember the earnings call but I believe it was in the 4th quarter of 2016. That would be 120,000 S/X with 2 weeks of down time. I believe they where also on 2 shifts at that time and have moved to 3, which really only means that workers that where working 12 hours now only work 8, but they will be better rested.

 

[doctoxics]

Just read two articles, one from Electrek (https://electrek.co/2017/09/20/tesla-china-ev-sales/)and one from Bloomberg (China's Electric Switch), on Tesla sales and prospects in China. According to the Bloomberg article, China electric car sales for 2017 are estimated to be 378,000 electric cars, with Tesla accounting for 8.6 % of the sales of battery electric cars. If these numbers reflect just 100 % electric cars, this would indicate Tesla sales for 2017 are projected to be about 32,500 cars, almost three times the sales in 2016! The article says sales, so I assume cars and not cash (Tesla cars in China cost ~5 times domestic electric cars). Not clear if the 378,000 electric cars is just 100 % electric cars. Could be including plug-in hybrids. If the 378,000 electric car sales number reflects only 100 % electric cars (not stated clearly in either article), Tesla sales in China have gone through the roof.

 

[Reciprocity]

In this sentence, is "HD maps" a software element or hardware? Is "AP2" as referenced by you hardware or software? To me that whole sentence is talking about software/data, which can be downloaded/uploaded.

I hope you are kidding. Do think the system has paper maps? Very confused. Are you even old enough to know what maps look like on paper? I guess im am having troubles knowing what a hardware map is if not for paper. So, yes, I am referring to software. You might be confusing AP2 with HW2. HW2 is hardware, AP2 is software. 3D maps are .... uhm.. software. Or possible tiny people with paper maps.

Ahhh yes.. there it is.. Sorry for the confusion. I assumed everyone knew the HW2 was the hardware part.

Like @schonelucht
AP2 as understood by most people is strictly hardware. So I really don't understand how you are saying AP2 is done. Maybe it will be if Tesla figures out that the prior AP 2.0 (or even current AP2.5) hardware is no where enough and the architecture fundamentally is not upgradeable to what is ultimately needed. I think we are quite far away from that decision/realization point (if at all).

 

[AlMc]

huh... there are no absolutes in life expect death and taxes. The point is that AP2 is not FSD1.0. The reason is that the amount of shared functionality is very small if you look at a Venn diagram, they would have a very tiny overlap and the AP2 circle would be very small and the FSD circle would be very large. AP is basically TACC with the ability to use Vision to see the lane lines and road edges (which is a tiny overlap with FSD). FSD will use HD3D maps more then lane lines, but uses lane lines as a backup or to confirm the HD maps. Imagine you are on a train and you are firmly on the tracks, that is HD maps. But you confirm that fact by looking with your eyes at the tracks as they stretch out in front of you (small overlap). HD maps will including things like stop signs, stop lights and exits where AP2 has no clue about any of those things and often darts into and out of exit lanes for no apparent reason. This is one way you will know when HD maps are being used as it will stop doing that in places that it has done it a million times. I know for me, I have a few roads I drive on where I can predict it will momentarily dart into a turn lane. No matter how many updates we have, this is a constant.

Is there some poor sap working on rain sensing? Maybe. I dont really care. Wasting anymore tech capital on that abomination is futile and I am all but certain Tesla has moved on.

The 'vision' part of Mobileye (2+years ago) and the current hardware in the Tesla AP 2.0/2.5 is perfectly capable of reading stop signs/other traffic signs/stop lights. Just not implemented currently.

Pull up the Mobileye 'Roadshow' for their IPO. Clearly they could do it, just cautious to actually implement it.

Part of the reason for the Mobileye/Tesla split was because EM wanted to push the envelop faster than Mobileye was comfortable doing.

 

[EinSV]

I hope you are kidding. Do think the system has paper maps? Very confused. Are you even old enough to know what maps look like on paper? I guess im am having troubles knowing what a hardware map is if not for paper. So, yes, I am referring to software. You might be confusing AP2 with HW2. HW2 is hardware, AP2 is software. 3D maps are .... uhm.. software. Or possible tiny people with paper maps.

Ahhh yes.. there it is.. Sorry for the confusion. I assumed everyone knew the HW2 was the hardware part.

Just a suggestion: I think your points would be clearer if you used EAP and FSD to refer to the software, not AP2.

Both FSD and EAP use AP2/AP2.5 hardware, which is the source of the confusion.