2017 Investor Roundtable:General Discussion

[dhrivnak]

I have a question. I'm not a physics expert by any measure, so this may sound stupid (ok... i know everyone's opinion already ...

why create a vacuum?... i get it's to reduce friction, etc. totally get that. but why not instead use the air within the sealed tube (or even not sealed) as propulsion with fans? how much energy does it take to create the vacuum?... why not make the back of the vehicle flat and anti-aerodynamic... then just push vehicles through the system? isn't this how those bank drive-thru tubes work?

A vacuum also allows one to go faster without having to worry about the sound barrier. The speed of sound increases in a vacuum but woul actually be lower If you used a pressurized fan.

 

[ValueAnalyst]

- expand production (they can do this anywhere)
- reduce transportation costs and time lag (how much reduction in transportation costs, some yes, but not by a game-changer percentage if parts are still shipped there, and I'm not sure if "time lag" matters)
- reduce production costs (agreed since labor is cheaper)
- retain all the profits
- not share technology with a Chinese partner

The potential downside is that they may still be subject to the 25% import duty (TBD).

See my comments in red, but if the bolded two are true, then yes, I agree with you.

My primary point was that, if Tesla has to share 50% of profits and share technology, then it may be better to take more time to negotiate since it will not be able to satisfy demand ex-China for years anyway.

 

[dennis]

See my comments in red, but if the bolded two are true, then yes, I agree with you.

My primary point was that, if Tesla has to share 50% of profits and share technology, then it may be better to take more time to negotiate since it will not be able to satisfy demand ex-China for years anyway.

Because they have already taken the time to negotiate Tesla will be the first automaker to set up a wholly owned factory in China.That is, if what the WSJ has published is true.

 

[Navin]

Tim Higgins probably added the part of the unlikely to get 25%. His own sauce to the article.

Make no mistake about it. This is huge

Could see a scenario tomorrow where market makers take tesla down premarket to spook retail investors and then adjust option positions at the open and then liftoff.

 

[Starno]

Based on the recent infos I guess we're getting closer to some self driving official news.

I'm fairly confident that the cross country FSD trip will be achieved before end of the year.
Some say that Tesla always miss dates, but it's different, this FSD trip is more like the " Model 3 official launch ", which was actually on date.

 

[dennis]

Tim Higgins probably added the part of the unlikely to get 25%. His own sauce to the article.

Most likely he was extrapolating from the fact that other companies that manufacture in the free trade zones are also subject to import duties for products made there and imported into China.

 

[geneclean55]

Tim Higgins probably added the part of the unlikely to get 25%. His own sauce to the article.

Make no mistake about it. This is huge

Could see a scenario tomorrow where market makers take tesla down premarket to spook retail investors and then adjust option positions at the open and then liftoff.

For reference, TSLA was up ~13 dollars premarket in June when the Shanghai free-trade zone factory news was reported.

 

[Starno]

Umm.. Like 50 times and another 1000 in a simulator. It's not something that can fail. At this point the software required to do should be running in a shadow mode and handling various situations required to make the trip. My guess is that it won't happen on time. Well because almost nothing with Tesla has happened on time and this is one that has to go off without error.

What seems to be glaringly missing at this point is high def maps. It is something that I think we would notice. Can't imagine the cross country trip would be the first real world use of high def maps. Would have guessed auto off ramp would happen publicly before. Maybe recognize stop lights/signs. I mean something more then nothing.

Agreed.
But I think this cross country trip will be on time. It's going to be like the official model 3 launch which was on time.
However where they might get delays is on the rollout of the SD software leading to this being possible for any Tesla with FSD features.

 

[vgrinshpun]

The 800lbs gorilla in the room is that having an agreement with Chinese government, first of a kind, to set the factory without JV partners gives Elon, who is brilliant and shrewd negotiator, upper hand in any negotiations with a JV partner, if he sees fit to have such an arrangement.

As far as limiting IP exposure goes, there are many ways to set a JV, **if needed** to get rid of 25% tariff. One way would be to manufacture batteries and drivetrains at the Nevada GF, and then partner with non-automotive company (Tencent for example) to do car body and final assembly at the factory in China.

 

[Navin]

For reference, TSLA was up ~13 dollars premarket in June when the Shanghai free-trade zone factory news was reported.

The 800lbs gorilla in the room is that having an agreement with Chinese government, first of a kind, to set the factory without JV partners gives Elon, who is brilliant and shrewd negotiator, upper hand in any negotiations with a JV partner, if he sees fit to have such an arrangement.

As far as limiting IP exposure goes, there are many ways to set a JV, **if needed** to get rid of 25% tariff. One way would be to manufacture batteries and drivetrains at the Nevada GF, and then partner with non-automotive company (Tencent for example) to do car body and final assembly at the factory in China.

Tencent is a big shareholder. Wink wink

 

[ValueAnalyst]

Well because almost nothing with Tesla has happened on time

1. Model 3 Delivery Event in July was ahead of the "Deliveries Start At The End of [2017]" put up on a big screen in March of 2016
2. Tesla is tracking months ahead of its Supercharger coverage guidance that it provided during the Model 3 reveal event
   
3. Tesla is years ahead of its original "35 GWh by 2020" guidance for Gigafactory 1

I can come up with more examples, but I think it's fair to say that (as I included in a recent articles):

Elon Musk & Team always shoot for the moon, and sometimes hit, but sometimes miss, but they always land among stars. No. They land on Mars. No. They travel to another universe through a black hole, which has never been attempted, then come back in one piece, before their competitors even get out of bed. On the wrong side, if I may add.

 

[Fallenone]

If without local partner in China story is true, prepare for huge CapEx and capital raise.

 

[Fallenone]

The 800lbs gorilla in the room is that having an agreement with Chinese government, first of a kind, to set the factory without JV partners gives Elon, who is brilliant and shrewd negotiator, upper hand in any negotiations with a JV partner, if he sees fit to have such an arrangement.

As far as limiting IP exposure goes, there are many ways to set a JV, **if needed** to get rid of 25% tariff. One way would be to manufacture batteries and drivetrains at the Nevada GF, and then partner with non-automotive company (Tencent for example) to do car body and final assembly at the factory in China.

Tencent is a horrible example. That's like asking Facebook to build cars. Both have 0 capacity and experience in hardware manufacturing. Arguably Facebook is slightly better since they have ocular.

 

[Runarbt]

Tencent is a horrible example. That's like asking Facebook to build cars. Both have 0 capacity and experience in hardware manufacturing. Arguably Facebook is slightly better since they have ocular.

I would think point is tesla brings know how and tencent bring cash?

 

[vgrinshpun]

Tencent is a horrible example. That's like asking Facebook to build cars. Both have 0 capacity and experience in hardware manufacturing. Arguably Facebook is slightly better since they have ocular.

You are missing the point. Cars will be built by Tesla. Tencent will be there to provide the capital and navigate local ligistics, and, perhaps, buy more stock.

Tencent is a perfect example.

 

[Fallenone]

I would think point is tesla brings know how and tencent bring cash?

Tesla isn't going to bring half of their US engineers to China so how are they going to bring the know how on a daily basis to diagnose and solve issues?

 

[Fallenone]

You are missing the point. Cars will be built by Tesla. Tencent will be there to provide the capital and navigate local ligistics, and, perhaps, buy more stock.

Tencent is a perfect example.

I don't think this was the message you originally conveyed, but anyway.

 

[geneclean55]

Tesla isn't going to bring half of their US engineers to China so how are they going to bring the know how on a daily basis to diagnose and solve issues?

By most accounts, Panasonic do not bring half of their Japanese engineers to the Gigafactory.

 

[Runarbt]

Tesla isn't going to bring half of their US engineers to China so how are they going to bring the know how on a daily basis to diagnose and solve issues?

Find their own chinese employees with correct education and experience? And a handfull american supervisors?

 

[vgrinshpun]

I don't think this was the message you originally conveyed, but anyway.

This is exactly what I had in mind and is totally obvious. The problem is not in what I wrote, but what you read into it.