2017 Investor Roundtable:General Discussion

[RABaby]

I don't know if someone has corrected my earlier post. I was wrong about the video and production speed. The video was played at normal speed. Which means that's how the robots are moving at the moment. Once it's confirmed working fine, it will work 10 times faster.

Also if a particular step is done by manual work, the whole production line can still achieve 10,000 cars per week, as long as that step can finish in 1 minute. Or if it takes 5 minutes to finish that step, they can have 5 sets of manual workers to do that step. Anyway, I wouldn't be concerned if there are some manual work in the line.

Turning from 5,000 per week to 10,000 per week will not need to duplicate the production line. They just need to double part of the line. Any robots/stages that can finish their work in 1 minute don't need to be doubled.

There will be no humans doing work in or for the model 3 line to slow it down. When it is up to speed, Musk has said the humans will be banned. It wouldn't be safe for those fragile life forms.

There could be manual work being done now, but the line is not running at speed. Once it does, human involvement would mean failure.

 

[StapleGun]

Apparently Solar Roof installations have begun. Instagram post by luke murry • Oct 6, 2017 at 1:57am UTC

 

[schonelucht]

Also if a particular step is done by manual work, the whole production line can still achieve 10,000 cars per week, as long as that step can finish in 1 minute. Or if it takes 5 minutes to finish that step, they can have 5 sets of manual workers to do that step. Anyway, I wouldn't be concerned if there are some manual work in the line.

It's generally not that easy. Remember there is equipment all around : you can't simply pull of a car at any point in the line and then put it back on. Worse still if some parts of the line are still running automated because anything within reach of a robot is out of reach for a human and vice versa. Nearly every time you have a way to bypass a station, that bypass was planned right from the start. This is not an endorsement of the WSJ piece, but it is much more believable that you'd have a worker dangle somewhere in the air on a safety harness to have them do something manual than that there is an easy way of pulling a car from the line at any point, the space to deduplicate that part of the line 5 times and then again an easy way to put the car back on the line, all without having planned it right from the start.

 

[TradingInvest]

There will be no humans doing work in or for the model 3 line to slow it down. When it is up to speed, Musk has said the humans will be banned. It wouldn't be safe for those fragile life forms.

There could be manual work being done now, but the line is not running at speed. Once it does, human involvement would mean failure.

You are talking about the future dreadnought, which I agree will be fully automated. Model 3 and Model Y lines will not be dreadnought yet.

 

[mongo]

This is not an endorsement of the WSJ piece, but it is much more believable that you'd have a worker dangle somewhere in the air on a safety harness

Headline : "Tesla hires Ethan Hunt for impossible mission to build Model 3s"

 

[schonelucht]

So to summarize, if I may, Tesla reaching 5k/week run rate some time in Q1 would be a major achievement worthy of automotive automation hall of fame.

5k sustained run rate somewhere in Q1 would be a very proud achievement indeed.

It would be interesting to see the reaction of OEMs if this comes true.

I think most of them (at least the technical folks) have been in production hell themselves enough time to refrain from commenting either way....

On a side note, there are no any changes to the VINs registered in NHTSA data base after initial 1100 were discovered registered with NHTSA (as of late yesterday night).

This is consistent with Tesla running the line in September as well as they could just to have something to show for and now taking a larger break to address some fundamental issues.

 

[TradingInvest]

It's generally not that easy. Remember there is equipment all around : you can't simply pull of a car at any point in the line and then put it back on. Worse still if some parts of the line are still running automated because anything within reach of a robot is out of reach for a human and vice versa. Nearly every time you have a way to bypass a station, that bypass was planned right from the start. This is not an endorsement of the WSJ piece, but it is much more believable that you'd have a worker dangle somewhere in the air on a safety harness to have them do something manual than that there is an easy way of pulling a car from the line at any point, the space to deduplicate that part of the line 5 times and then again an easy way to put the car back on the line, all without having planned it right from the start.

Of course the layout has to be planned before hand.

 

[kenliles]

 

[avoigt]

New white paper from Sam Korus (ARK) on EVs and trucks..

Electric Vehicles | The Future of the Automotive Industry — ARK Invest White Paper

That video below relates to the WP.

People will say in the years to come: "Why didn't I see it coming ?" All facts are lined out today....

The Electric Car Transition Likely To Parallel Model T

 

[kenliles]

E.P.A. Announces Repeal of Major Obama-Era Carbon Emissions Rule

"<
WASHINGTON — The Trump administration announced Monday that it would take formal steps to repeal President Barack Obama’s signature policy to curb greenhouse gas emissions from power plants, setting up a bitter fight over the future of America’s efforts to tackle global warming.

At an event in eastern Kentucky, Scott Pruitt, the head of the Environmental Protection Agency, said that his predecessors had departed from regulatory norms in crafting the Clean Power Plan, which was finalized in 2015 and would have pushed states to move away from coal in favor of sources of electricity that produce fewer carbon emissions.

“The war on coal is over,” Mr. Pruitt said. “Tomorrow in Washington D.C., I will be signing a proposed rule to roll back the Clean Power Plan. No better place to make that announcement than Hazard, Kentucky.”
>"

Got the Hazard part right

 

[TradingInvest]

Seems to me shorts are looking for trouble, as they did in the past.

 

[Mkorpal]

E.P.A. Announces Repeal of Major Obama-Era Carbon Emissions Rule

"<
WASHINGTON — The Trump administration announced Monday that it would take formal steps to repeal President Barack Obama’s signature policy to curb greenhouse gas emissions from power plants, setting up a bitter fight over the future of America’s efforts to tackle global warming.

At an event in eastern Kentucky, Scott Pruitt, the head of the Environmental Protection Agency, said that his predecessors had departed from regulatory norms in crafting the Clean Power Plan, which was finalized in 2015 and would have pushed states to move away from coal in favor of sources of electricity that produce fewer carbon emissions.

“The war on coal is over,” Mr. Pruitt said. “Tomorrow in Washington D.C., I will be signing a proposed rule to roll back the Clean Power Plan. No better place to make that announcement than Hazard, Kentucky.”
>"

Got the Hazard part right

Well, the war on coal is over, he is correct on that one.

 

[ValueAnalyst]

Apparently Solar Roof installations have begun. Instagram post by luke murry • Oct 6, 2017 at 1:57am UTC

Could you please explain what this post showed? The post seems to have been removed.

Here's the Electrek article: Tesla starts installing more solar roof systems

 

[ValueAnalyst]

GM doubles down on LIDAR:

GM Advances Self-Driving Vehicle Deployment With Acquisition of LIDAR Developer

"Strobe’s LIDAR technology will significantly improve the cost and capabilities of our vehicles so that we can more quickly accomplish our mission to deploy driverless vehicles at scale," says Cruise Automation CEO Kyle Vogt.

 

[Turing]

Good interview article of Google CEO Sundar Pichai:
(I thought this quote was insightful and could be applied to the Tesla vs Big Auto debate)

When I ask how it feels to be in charge of Google, Pichai pauses and looks determinedly at the floor, then out of the window. “History shows that the opposite of what people were worrying about is typically true. Go back 10 years and look at the largest market cap companies: the bigger you are, the more you may be at a disadvantage.” He talks of the importance of creating small teams with limited resources, even within a company with 66,000 employees and a market value of $642bn. “As a big company, you are constantly trying to foolproof yourself against being big, because you see the advantage of being small, nimble and entrepreneurial. Pretty much every great thing gets started by a small team.”

It’s not lost on him that Google’s greatest threat could be its own success. And it is also revealing to have it confirmed that when you reach the top the biggest thing you worry about is sliding back down again. “You always think there is someone in the Valley, working on something in a garage – something that will be better.”

 

[SBenson]

I am a bit concerned about GigaFactory's ability to produce cells and packs in time. Here are the various data points that sum up to my anxiety:

- TE took an awfully long time to ramp up. Powerwall 2 was introduced in Oct 2016. But it took about an year to ramp up production as per this Electrek article. Even now it is not clear what the rate of production/deliveries is.

- The flagship Australian project is executed using Samsung cells.

- Tesla had production difficulties on the 100kWh packs. IIRC for about 3 months or more.

- Battery VP left in Dec 16. My guess is this person is fired. I don't think many people would leave Tesla on their own at a juncture like this. A massive windfall of success is right around the corner with Model 3 (iPhone moment). Why would anyone voluntarily leave ahead of that.

- SpaceX was doing a dual launch within the same weekend, which is a record. But Elon chose to be at GF instead.

- Here is the language from the Q2 shareholder letter:

"Model 3 drive units as well as battery packs made with our proprietary 2170 form factor cells are being built on new lines
at Gigafactory 1. We are now fine-tuning these manufacturing lines to significantly increase the production rate."

Adjusting this with typical Tesla-language-to-reality factor, this most likely means yield issues, especially given that the battery lines were supposed to be fully automated. I wonder if they are in a situation similar to that of the auto-line in Fremont that @schonelucht gave some insight into with posts above.

What are your thoughts?

 

[EinSV]

I am a bit concerned about GigaFactory's ability to produce cells and packs in time. Here are the various data points that sum up to my anxiety:

- TE took an awfully long time to ramp up. Powerwall 2 was introduced in Oct 2016. But it took about an year to ramp up production as per this Electrek article. Even now it is not clear what the rate of production/deliveries is.

- The flagship Australian project is executed using Samsung cells.

- Tesla had production difficulties on the 100kWh packs. IIRC for about 3 months or more.

- Battery VP left in Dec 16. My guess is this person is fired. I don't think many people would leave Tesla on their own at a juncture like this. A massive windfall of success is right around the corner with Model 3 (iPhone moment). Why would anyone voluntarily leave ahead of that.

- SpaceX was doing a dual launch within the same weekend, which is a record. But Elon chose to be at GF instead.

- Here is the language from the Q2 shareholder letter:

"Model 3 drive units as well as battery packs made with our proprietary 2170 form factor cells are being built on new lines
at Gigafactory 1. We are now fine-tuning these manufacturing lines to significantly increase the production rate."

Adjusting this with typical Tesla-language-to-reality factor, this most likely means yield issues, especially given that the battery lines were supposed to be fully automated. I wonder if they are in a situation similar to that of the auto-line in Fremont that @schonelucht gave some insight into with posts above.

What are your thoughts?

One thought that occurred to me is that since they apparently were able to quickly produce battery packs for South Australia using Samsung cells, the rate-limiting step (bottleneck) at the GF for combined TE/TA at this juncture may be Panasonic's production of cells, not pack production. An alternative explanation is that Tesla wants to maintain Samsung as a second source of cells.

 

[Alketi]

Adjusting this with typical Tesla-language-to-reality factor, this most likely means yield issues, especially given that the battery lines were supposed to be fully automated. I wonder if they are in a situation similar to that of the auto-line in Fremont that @schonelucht gave some insight into with posts above.

What are your thoughts?

Totally agree with your post.

There are either yield problems or manufacturing limitations of the end product --- or there is a shortage of raw materials. The latter would also explain some of the behavior we've seen regarding backorders. No idea why analysts aren't asking better questions in this regard.

 

[SwTslaGrl]

I think the production lines at Fremont and GF1 needs to increase at the same time to avoid large/costly? buffer storage.

 

[TMSE]

I am a bit concerned about GigaFactory's ability to produce cells and packs in time. Here are the various data points that sum up to my anxiety:

- TE took an awfully long time to ramp up. Powerwall 2 was introduced in Oct 2016. But it took about an year to ramp up production as per this Electrek article. Even now it is not clear what the rate of production/deliveries is.

- The flagship Australian project is executed using Samsung cells.

- Tesla had production difficulties on the 100kWh packs. IIRC for about 3 months or more.

- Battery VP left in Dec 16. My guess is this person is fired. I don't think many people would leave Tesla on their own at a juncture like this. A massive windfall of success is right around the corner with Model 3 (iPhone moment). Why would anyone voluntarily leave ahead of that.

- SpaceX was doing a dual launch within the same weekend, which is a record. But Elon chose to be at GF instead.

- Here is the language from the Q2 shareholder letter:

"Model 3 drive units as well as battery packs made with our proprietary 2170 form factor cells are being built on new lines
at Gigafactory 1. We are now fine-tuning these manufacturing lines to significantly increase the production rate."

Adjusting this with typical Tesla-language-to-reality factor, this most likely means yield issues, especially given that the battery lines were supposed to be fully automated. I wonder if they are in a situation similar to that of the auto-line in Fremont that @schonelucht gave some insight into with posts above.

What are your thoughts?

Cell manufacturing is done by Panasonic who has been doing this for a long time. There will definitely be low yields during ramp up, but it is the expected outcome.

Any possible slow ramp is most likely due to CAPEX decisions.