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China and Tesla

Discussion in 'TSLA Investor Discussions' started by Bgarret, Jan 18, 2017.

  1. Bgarret

    Bgarret Model S ownin' Michigan scofflaw

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    #1 Bgarret, Jan 18, 2017
    Last edited: Jan 18, 2017
    This thread could be characterized by "blue sky" or overly optimistic sentiment, or just a realization of a matchmaker that some couples "belong together".

    China just
    a) announce 360 Billion of spending in renewables in the next 3 years

    https://www.nytimes.com/2017/01/05/world/asia/china-renewable-energy-investment.html
    and

    b) ordered the cessation of construction of 103 new coal plants.

    Chinese government has ordered 103 planned coal plants to be canceled


    c). Is constructing both a smart grid and a trans continental DC grid for distribution for renewable energy sources (wind and solar) from long distances to population centers.

    For Tesla to THRIVE, they need to

    a) deliver on Tesla Energy.
    b) deliver on Model 3
    c) Continue to grow revenues at 50% per year.

    Partnering with China would accomplish all three. I understand the Intellectual Property risks and complexity of operating in China, but - in first principles or Occam's razor like approach - sell all Gigafactory 1 production in advance to China and have them fund Gigafactory 2, that would include production of Model III for Asia.

    That's it. Something very simple (yet fraught with danger and super complex) highly unlikely and would be fantastic.

    It would barely be a rounding error in $360 Billion.
     
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  2. RobStark

    RobStark Active Member

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    CATL is the Chinese National Champion in automotive and energy storage batteries.

    It looks like the Chinese National Government will cull all the battery makers save CATL and BYD.

    BYD being the subchampion and Chinese regulations eliminating the rest by require any battery maker to make at least 8 GWh per year. CATL and BYD will be the Chinese LG Chem and Samung SDI.

    CATL is planning on producing 50 GWh in 2020.

    BTW I wish people would specify Chinese Government or Chinese Companies or Regional Chinese government. "China" is not the Borg.
     
  3. dc_h

    dc_h Member

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    If anyone can figure out how to operate securely in china it would be Elon. I think financing to encourage a local plant is probable. I think they would sell everything they could make. I think they need a hard delivery date for model 3 before announcing GF2, but Elon is not taking my advise these days
     
  4. Bgarret

    Bgarret Model S ownin' Michigan scofflaw

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    My apologies, oh didactic one, I meant for Tesla to partner with the Chinese government. Although in China, as you intimate in your post, there is a blurring of lines between Chinese government, Chinese companies and Regional Chinese government. As the article I cited intimated that while the Chinese central government wants to close 103 (not 102 or 104) coal plants, there is resistance to this from Regional (and local) Chinese governments.

    When starting a thread with the premise that it is a reach or "blue sky" I'm sorry for my imprecision in the basic premise. As China approaches a Terrawatt of renewable energy production (China Leads The Way As Renewable Installed Capacity Eclipses 900 GW In 2015, )you may excuse me for being impressed by domestic production by CATL approaching 50GWh by 2020, much of the production slated for electric vehicles.

    My more focused Point was that with $360 Billion pledged by the Chinese CENTRAL GOVERNMENT over the next 3 years, that an intuitive investment of a portion of that $360 Billion would be a gigafactory or factories, a "machine that builds machines" for $8Billion (Tesla 30% margin) that produces 150 GW of storage and EV battery packs to mitigate the wicked, killer environmental destruction that industrialization and dependence on fossil fuels has reaped upon China ( the country, both federal, provincial and city and many of its corporations). This would be a welcome collaboration between the Chinese Central Government and Tesla.

    That is the value proposition that I hope both China (Central Government, Regional Government and Corperations( State Run or Subsidized) should embrace. Not a zero sum game of CATL vs. Tesla vs. Samsung vs BYD vs The Republican Party......ad infinitum. It's "blue sky", unlikely and much needed.

    That was my point.

    Yo, Eclectic....disagree with my post all you want, but either man or woman up and say why or don't restrict access to your profile.
     
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  5. RobStark

    RobStark Active Member

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    My point is that is not how the Chinese Communist Party thinks.

    They are really Mercantilist now.

    They do think it is a zero sum game.

    Foreign companies are allowed into China to teach Chinese companies or through competition to spur Chinese companies into greatness.

    If the Chinese Government is going to be investing in battery factories they will be CATL and BYD.

    They will split the fund two ways not three ways to include Tesla. Or Korean or Japanese companies.

    Regional Chinese governments will try to favor companies headquartered in their regions etc.
     
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  6. SwTslaGrl

    SwTslaGrl Member

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  7. JohnSnowNW

    JohnSnowNW Active Member

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    I can probably help with that. The guy is only this site to antagonize and drop hyperbole.

    Some people just don't have better things to do with their time.
     
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  8. kenliles

    kenliles Active Member

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    #8 kenliles, Jan 19, 2017
    Last edited: Jan 19, 2017
    @Bgarret - nice post. I like your Blue-Sky out of the box supposition.
    Although I suspect in the end, @RobStark's 'zero-sum-game' is the most likely behavior from China (The Collective - yes Rob the Borg Collective).

    From recent readings however, there are significant pressures from the populace regarding the effect of intense massive pollution on their children etc. That, I suspect, is partly what induces Bgarret's supposition of blue sky thinking (is the sky still blue)- That has the potential to alter the default behavior of the Collective, and I think it is an interesting exercise to consider- thank you for the supposition.
    I am Hugh (3rd of 1,385,570,611)
     
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