-
Want to remove ads? Register an account and login to see fewer ads, and become a Supporting Member to remove almost all ads.
- Status
I don't think these are HUGE issues. Remember we are talking about capitalism here, if there is money to be made, supply will come. In fact this was precisely the argument (we bulls made) in favor of Tesla when bears kept saying where will Tesla get money to build all these things.
Remember GM has $150 Billion revenue+. Their R&D expense alone last year was a whopping $7.5 Billion. If GM sees enough money to be made in EVs, why would they not commit more capital or partner up with LG Chem?
I also not sure i agree with Dave's point of analysts penalizing Tesla because the auto industry might enter long term decline. Wont many analysts also break down the trend of ICE auto sector in long term decline while the EV market is set to see decades of significant worldwide growth?
Yes - there might be a smaller pie but Tesla's slice will soon be (much) larger.
Panasonic just recently announced it is worried about being supply constrained because of Tesla demand and that is with the gigafactory. Is Panasonic concurrently building a gigafactory for other autos I'm not aware of?
This whole 'other battery producers aren't far behind' line of reasoning I still don't see. Panasonic has already built the foundation to bring 10+ GWh a year of cell capacity online each year for the next several years, and Panasonic is saying it is still concerned it wont be able to meet demand. So if other autos are going to compete with tesla soon where are their 10+ GWh of additional production capacity being set up to come online annually in the next 1-5 years? I asked Dave this and he linked me to some articles about LG and others setting up plans to expand some of their current factories essentially in smaller 1 GWh increments at this or that plant over the next few years. It just seems like a totally different ballpark. Maybe all these up and coming EV competition will be like the bolt. As in -- The bolt is set to take on and compete with the model 3*.
*Max output of 30k cars a year.
It seems like the other big autos want to enter EV volume gradually. So even if the bolt is a huge hit in 2017 they only sell 30k, in 18' maybe they aim for 50k, if it is still in further demand maybe they up it another 20k in 19'. The problem is what happens if the model 3 is a huge hit cranking out 100's of thousands?
*Max output of 30k cars a year.
It seems like the other big autos want to enter EV volume gradually. So even if the bolt is a huge hit in 2017 they only sell 30k, in 18' maybe they aim for 50k, if it is still in further demand maybe they up it another 20k in 19'. The problem is what happens if the model 3 is a huge hit cranking out 100's of thousands?
Last edited:
That's on the 2170 form factor. Elon basically tripled capacity expectations on those overnight. For the 18650 form factor lines Panasonic will have a lot of spare capacity soon. And it is in the process of buying Nissans battery production plant IIRC.
Can Panasonic sell 2170 to other customers? Or, is it prohibited because of joint development with Tesla?
No idea. But I know of no auto manufacturer who has indicated they will move to the 2170. If it happens to be the best format, I am sure it will eventually happen. But with the glacial pace all non-Tesla manufacturers move on the EV front, Panasonic should have enough time to anticipate the market.
So you think MS/MX are going 2170 soon? Have other autos shown interest in using 18650s? In the past we have seen comments from other autos sort of disparaging the use of 1000's of 18650s per pack.
First and foremost, thank you very much for trying to bringing a structure to this discussion. It is very much needed.
In regard to Trump, there are two distinct but somewhat overlapping things. One is personality, the other is, as you put it, "guiding value" or "philosophy".
Unfortunately much of the media and pundits have focused on the personality but not so much on Trump's value system. So many people are left with the egomaniac impression (including myself). But far too people seem to fully comprehend his value system.
From my initial research, if we were to summarize his entire value system in ONE word, it would be - NATIONALISM.
In Trump's view, consistently over 4 decades, he firmly believed that America has been doing bad deals every which way. He waited for far too long to see some competent leaders in Washington to rise up and fix this. But disappointingly no one did. Neither democrats did nor republicans did. Ultimately he had to take matters into his hand (or at-least give the cause enough of a voice).
Trump's nationalism or his frustration with Washington politicians is hard to fully present in a few sentences or paragraphs. Maybe I can drive home the point through a metaphor.
Lets imagine America to be an individual, as opposed to a country. Now there are 195 such individuals. All the individuals live in a club doing numerous deals all the time. The individual-named-America is very hard working and high achieving. Nevertheless he has this issue of always doing poor deals, always getting the short end of the stick. All the others are outright duping this guy constantly. All these poor deals are adding up. The net result is showing up in ever increasing debt.
Now imagine if this individual is your son. A guy with 195 other guys in a club. Working very hard and making money. But always getting duped and outright cheated in the club. The guy’s debt is ever growing to a point it's not sustainable. Maybe he will end up declaring bankruptcy soon.
Being a father how would you feel? Infuriated? Have a strong urge to do something about it?
That is exactly how Trump feels.
If you think in terms of a country or national debt or such, everything becomes abstract. But think of it as individuals. Maybe you will get a sense of it.
Trump has issues with many of these other nations. In his mind:
- China dupes America through currency manipulation
- Japan dupes America by dumping all sorts of their exports, cars, electronics etc. Yet while making it very difficult for Americans to do business in Japan.
- Mexico dupes America by dumping all their people in American borders illegally
- NATO members dupe America into spending for their security but not pay for it
- Individuals under ISIS or Radical Islam try to outright murder our people
There are many such bad nations that are abusing America.
No Washington politician did anything about it. All the politicians cared about was for their lobbyists. Who in turn cared for their sponsors. Who in turn only cared about their narrow self-interests... No one cared about the country or it's direction. All the while the national debt, the best barometer, is showing unsustainably high, outright suicidal numbers.
He ran to be the president to fix this. Even if he didn't believe he would win, this cause would get enough attention was his hope. If he were to win and drive the country out of all these horrific deals, the overall country will prosper, the economy will be stimulated from within, ALL americans will prosper. Such is his thinking.
PS: I was very anti-Trump until I started trying to find an answer to your question by the way.
PPS: If you believe I arrived at the right answer, I would love to know your next question.
Last edited:
As far as I know, you are spot on. Trump has been remarkably consistent. See footage from 1987 at 59:00 in the following film...
The Choice 2016
The film seemed woefully biased against Trump, but they had some great research. Here is another video from 1988 on Oprah. Basically, the 2016 stump speech.
Last edited:
I found some time this afternoon so I'm going back to reply to some of the posts in this thread. I'm encouraged by the quality of discussion! Hope we can keep it up.
@viKtor slamet I largely agree with your assessment about Tesla's ability to move fast. I think this is related to what I mentioned earlier about complex coordination... Tesla is able to move fast and innovate across multiple areas. And I think this is probably one of the most solid parts of the bull argument for TSLA. However, on the other hand, moving fast is good but it still doesn't preclude another company from moving as fast. Further, in the world of auto manufacturing sometimes moving fast isn't good (increases liability) and sometimes it might be ok to move a bit slow (ie., Toyota is slow getting into EVs but still they're doing fine). The transition to EVs appears like it's going to time (ie., meaning it's not going happen all in a few years), so other companies still have time. For example, just because Toyota has been slow to the EV party doesn't mean that I'm counting out Toyota and expect them to go bankrupt any time soon. They still have ample opportunity to catch the EV growth phase and implement their own EV program that can be successful.
But all that said, yes I think it's going to be difficult for other companies to catch Tesla. That's a big reason I'm long. But, I also realize that Tesla needs to materialize this into more concrete competitive advantages or truly defensible moats. Just having scale in producing batteries... I'm not sure if that's really a defensible moat. Even autonomous driving, I'm not sure if that's going to be a true moat or not. It could be, but I'm not convinced of it right now. I think probably the most defensible moat might be a true breakthrough in energy storage. I know JB and Elon talk often how a breakthrough in energy storage isn't required, but that doesn't mean that they're not interested in it. Remember, Elon's Ph.D was supposed to be in supercapacitors, and he's even talked bullishly about the possibility and potential of supercapacitors after he started Tesla. But again, this is a long-term issue in many ways. However, Tesla could start making some headway into this with the Gigafactory if they can implement the latest battery tech innovation as quickly as possible. But the key to a defensible moat is that Tesla needs to have something that's not easily copied. At this moment, a lot of what Tesla has can be copied.
Another possible competitive advantage (and possibly defensible moat) is brand. Tesla has captured the imagination and fascination of a lot of young people (as evidenced by Model 3 reservations). However, I think we're likely to see demand for Tesla products even higher than most realize or expect, because I think Tesla has made a lot of smart moves to create a brand that people admire, respect and want to be part of. I can go more into this later, if folks want to hear.
Lastly, regarding your iPhone comment... actually Apple has a really unique approach to manufacturing the iPhone and their products. It's not simply an outsourcing path. Rather, Apple is deeply and intimately involved in the manufacturing, so much to the point that some/many suppliers of Apple act almost like a subsidiary of Apple in some ways. Apple might even invest money into key suppliers to lock up supply and they make sure they have strict milestones and guidelines... almost to the point where Apple is overseeing a lot of the manufacturing very up close.
Same is true with Apple iPhone. Apple simply outsourced all their stuff. Every year we hear iPhone killers but never really happen.
Tesla competitive advantage is simply they move fast:
- Autopilot fatality led them to Tesla Vision
- Long distance travels issue led them to Supercharger Program
- First EV to have over 300 miles EPA
- Fastest production car you can buy P100D
- Factory production bottleneck leads them to Alien Dreadnought program
- and many more... you get the point.
- and yes to your point, once they reach battery bottleneck, they will probably come up with something better like.. supercapacitors.
Sure everything can be copied, but Tesla moves fast, they have a product-focused CEO. Co-founders Ewon and JB still very much involved. I think that's tesla competitive advantage.
Here is another thing. If Tesla failed, Ewon can kiss goodbye to his Mars dream. He said it himself that he is accumulating assets for Mars dream, and you can imply he meant Tesla. So he will definitely fight for Tesla.
Plus they got an Academy Award Best Actor Leo to help evangelize the importance of sustainable energy future
@viKtor slamet I largely agree with your assessment about Tesla's ability to move fast. I think this is related to what I mentioned earlier about complex coordination... Tesla is able to move fast and innovate across multiple areas. And I think this is probably one of the most solid parts of the bull argument for TSLA. However, on the other hand, moving fast is good but it still doesn't preclude another company from moving as fast. Further, in the world of auto manufacturing sometimes moving fast isn't good (increases liability) and sometimes it might be ok to move a bit slow (ie., Toyota is slow getting into EVs but still they're doing fine). The transition to EVs appears like it's going to time (ie., meaning it's not going happen all in a few years), so other companies still have time. For example, just because Toyota has been slow to the EV party doesn't mean that I'm counting out Toyota and expect them to go bankrupt any time soon. They still have ample opportunity to catch the EV growth phase and implement their own EV program that can be successful.
But all that said, yes I think it's going to be difficult for other companies to catch Tesla. That's a big reason I'm long. But, I also realize that Tesla needs to materialize this into more concrete competitive advantages or truly defensible moats. Just having scale in producing batteries... I'm not sure if that's really a defensible moat. Even autonomous driving, I'm not sure if that's going to be a true moat or not. It could be, but I'm not convinced of it right now. I think probably the most defensible moat might be a true breakthrough in energy storage. I know JB and Elon talk often how a breakthrough in energy storage isn't required, but that doesn't mean that they're not interested in it. Remember, Elon's Ph.D was supposed to be in supercapacitors, and he's even talked bullishly about the possibility and potential of supercapacitors after he started Tesla. But again, this is a long-term issue in many ways. However, Tesla could start making some headway into this with the Gigafactory if they can implement the latest battery tech innovation as quickly as possible. But the key to a defensible moat is that Tesla needs to have something that's not easily copied. At this moment, a lot of what Tesla has can be copied.
Another possible competitive advantage (and possibly defensible moat) is brand. Tesla has captured the imagination and fascination of a lot of young people (as evidenced by Model 3 reservations). However, I think we're likely to see demand for Tesla products even higher than most realize or expect, because I think Tesla has made a lot of smart moves to create a brand that people admire, respect and want to be part of. I can go more into this later, if folks want to hear.
Lastly, regarding your iPhone comment... actually Apple has a really unique approach to manufacturing the iPhone and their products. It's not simply an outsourcing path. Rather, Apple is deeply and intimately involved in the manufacturing, so much to the point that some/many suppliers of Apple act almost like a subsidiary of Apple in some ways. Apple might even invest money into key suppliers to lock up supply and they make sure they have strict milestones and guidelines... almost to the point where Apple is overseeing a lot of the manufacturing very up close.
@Fallenone Yes, I definitely agree with your point about Tesla leading in many areas and that being an advantage. My hope and expectation is for Tesla to increase their lead in some of these areas as to make a few of these areas into true defensible moats. I think battery tech and innovation would be where I'd guess it happens. It also could happen with the "machine that builds the machine".
Regarding supercapacitors, if Tesla can get a breakthrough with this I foresee them slowly implementing a combo of battery + supercapacitor. For example, initially it's a 100kWh battery but extra supercapacitor that can be charged in 2-3 minutes but get you 15 miles of range. Then, incrementally Tesla can increase the capacity of the supercapacitors. Personally, I think having supercapacitors (in addition to a big battery) that can give 50 miles of range with a 2 minute charge would solve a lot of the long-distance challenges that EVs currently face.
@adiggs I definitely agree that real competitive advantage comes from the culture of innovation, etc... and that it must improve the product and technology. I also think though there are certain times when your company/culture/team/people are able to invent something truly revolutionary and that product becomes a moat in itself. One example is SpaceX's vertical take-off and landing rockets. Before that, yes SpaceX had a competitive advantage of sorts due to their efficiency and costs (which were driven through constant and ruthless innovation). However, after SpaceX was able to land their boosters, that became a true step-change for the rocket industry and separated SpaceX even further.
I think with Tesla I see a lot of competitive advantages of sorts, but I'm still looking for that step-change sort of defensible moat in terms of product. My guess/expectation is that we will see it and it could be a combination a multiple things put together or it could be something more singular.
Regarding Über vs Tesla, I'm starting to think more and more that both will likely find a way to co-exist. Perhaps Uber is #1 and Tesla #2. Or Tesla #1 and Uber #2. And it might look very different according to country and region. I think autonomous driving might provide a way "in" for Tesla to acquire market share and establish their network. But Tesla won't have a monopoly on autonomous driving tech (at least not for very long), and I see transportation as a service for people to be a market that probably will trend toward commoditization. But since the market is so vast and huge, it still will be lucrative for the top players.
I'm no electrical engineer so I don't know how feasible (cost, overall performance, maintenance, etc.) of doing a combo of battery and supercapacitor will be. I think in theory it is a good idea and I think Tesla is doing something like this. Not supercapacitor but using more graphene in some of the battery. This type of battery has shorter life in terms of recharging but higher energy density. They could be used as reserve for the last 50 miles, which would be rather rarely used normally and spared from the frequent recharging. I think I read somewhere JB confirming the use of graphene but not 100% sure.
@RationalOptimist I think you've got some really great points here and good food for thought. I wonder though if "network effects" is the right concept or not. To me, network effects is when adding an additional user adds value to the whole network. I can understand this with Ebay (increase a buyer or seller, and the whole network benefits). However, with Tesla I'm not sure if it's that clear when one more person buys a Tesla that the whole network benefits (as in right away). I think it's more indirect in the sense that if one more person buys a Tesla, then Tesla has more money to invest into charging tech and infrastructure, R&D, updates, refinements, etc.
But I think the crux of your point (and correct me if I'm wrong) is that with more people buying Teslas this will improve the overall Tesla experience, because with increased scale (from buyers) Tesla will be able to improve on all faucets of the customer experience (vehicle, AP, charging, service, costs, etc). So, what we see of Tesla right now will only improve as Tesla grows and has more money to spend. I can go along with this argument. If Tesla has achieved such great cars, great service and charging network with this many buyers, imagine what Tesla will be able to achieve when they have 10x the buyers and 5x the revenue. Yes, it's definitely bullish.
Wrt LG plant in Poland, it is often hard to cut through the various vague capacity references. What exactly is 100,000 EVs of 200 mile range? After following quite a few LG news stories and press releases, cross indexing the various capacities, I'm thinking this:
Poland is basically a replica of Ochang, SK. That was nominally 3.2 GWh, but with cell density improvements, somewhere around 4GWh.
The #1 customer of the Polish plant is Renault with the new 40 kWh Zoe. The new plant starts to provide cells and battery packs in 2019. It is not clear at all that the $339.4 million investment is all that is necessary to achieve the top line capacity statement. There's a lot of room in the way the various statements are given. Note that LG's Michigan plant cost $300 million for about 0.8 GWh of cell production. Panasonic spent $1.1 billion for 7 GWh of production in Osaka.
That gives LG basically in 2019, 4 GWH in Ochang, SK, reaching for 1.5-2 GWh in Holland, MI, between 2 and 4 GWh in Nanjing, depending on timing of stretch goals, and 4 GWh in Poland. So the 2019 capacity given the plants as planned thus far stretching to 14 GWh. That's less the the first phase of the Tesla Gigafactory. By 2019, Tesla likely will have at least two phases complete if not 3... so 40-60 GWh of capacity.
The problem for GM is that the output of the Polish plant is likely already spoken for by VW + Group and Renault. The Nanjing plant's output is also likely completely spoken for by Chinese manufacturers. It's down to Ochang and Holland. In the near term, that's about 4 GWh total. But that includes cells for the Hyundia Ioniq and various hybrids, all of Ford's EVs, the new FCA PHEV minivan, the Chevy Volt, and the Bolt. 30,000 Bolts = 1.8 GWh. I can see them hitting 40-50,000. Beyond that... they'll have commission a new plant. That will take 2-3 years.
Poland is basically a replica of Ochang, SK. That was nominally 3.2 GWh, but with cell density improvements, somewhere around 4GWh.
The #1 customer of the Polish plant is Renault with the new 40 kWh Zoe. The new plant starts to provide cells and battery packs in 2019. It is not clear at all that the $339.4 million investment is all that is necessary to achieve the top line capacity statement. There's a lot of room in the way the various statements are given. Note that LG's Michigan plant cost $300 million for about 0.8 GWh of cell production. Panasonic spent $1.1 billion for 7 GWh of production in Osaka.
That gives LG basically in 2019, 4 GWH in Ochang, SK, reaching for 1.5-2 GWh in Holland, MI, between 2 and 4 GWh in Nanjing, depending on timing of stretch goals, and 4 GWh in Poland. So the 2019 capacity given the plants as planned thus far stretching to 14 GWh. That's less the the first phase of the Tesla Gigafactory. By 2019, Tesla likely will have at least two phases complete if not 3... so 40-60 GWh of capacity.
The problem for GM is that the output of the Polish plant is likely already spoken for by VW + Group and Renault. The Nanjing plant's output is also likely completely spoken for by Chinese manufacturers. It's down to Ochang and Holland. In the near term, that's about 4 GWh total. But that includes cells for the Hyundia Ioniq and various hybrids, all of Ford's EVs, the new FCA PHEV minivan, the Chevy Volt, and the Bolt. 30,000 Bolts = 1.8 GWh. I can see them hitting 40-50,000. Beyond that... they'll have commission a new plant. That will take 2-3 years.
@GoTslaGo I was originally just focusing on Tesla auto manufacturing just so that it's isolated for a better valuation approach. But with SCTY, I think it's probably best to value it along with Tesla Energy. Meaning, I think over time the profits from Tesla Energy (ie., storage) will offset any potential negative financial impact from SCTY. However, I do think the acquisition will pose some challenges next year as the two companies merge. Elon is being optimistic is some of his projections, it seems, and if you lower your expectations some then it's possible SCTY is somewhat of a cash drain (and also focus drain) for Tesla and Elon next year. But, next year is when Tesla Energy starts to ramp due to Gigafactory production starting soon. So, as long as Tesla energy storage can ramp aggressively I think it can distract investors from the complications of the merger that Tesla might face.
Overall though, to give an estimated valuation on Tesla Energy in 2020, I'd have to look at the numbers more in detail. But you could do that. Just take Tesla's energy storage projections (adjust for Tesla time) and forecast what Tesla's revenue for energy storage might be in 2020. I'd then take a 10% net profit margin number and multiply that with 2020 revenue. You'll get net profit. And then you'll need to assign a P/E multiple to that. To be conservative, I'd give it a 10 P/E multiple. Of course you could try to give it a higher number (i.e, 15 or maybe even 20, but that might be pushing it considering batteries are a fairly low-tech, low-margin, commodity business). A lot of what the actual multiple turns out to be will be determined on market sentiment at that time.
- Status
Similar threads
- Locked
