Coronavirus

[davepsilon]

It is very hard to predict the course of this disease. Clearly some development paths lead to major impact in stock price. More seriously, others lead to major impact in Tesla’s cash burn. But others still lead to no effect. To say it is definitely going to be one path seems premature. I think the right framework for guessing is one of probabilities. As for assigning those probabilities I have very little confidence in my own numbers so I won’t give any.

 

[gary3411]

Humans don't grasp exponentials or S curves that well. I'll stop being worried when new cases in the developed world stop growing exponentially. Keep in mind the difference between us and Italy is 9 days; between us and Iran is 2 months (at current level of seriousness), between us and China pre-welding people into apartment buildings 3 months.

Don't you all remember how Tesla doubled it's entire fleet in one year after delivering cars for several years? Same thing will happen here in the US without severe and drastic containment measures, only the doubling time is measured in days without containment.

Humans in general do not grasp these concepts. I believe I do.

If you look at the active new cases charts, or the new deaths charts, it seems clear there is no pattern of exponential growth over any sustained period. There can be exponential growth for a few days in an isolated spot as testing ramps in that locale, but in reality the virus doubles it's infection rate each week with zero measures. With action, this rate then falls dramatically into a falling S.

 

[gary3411]

It is very hard to predict the course of this disease. Clearly some development paths lead to major impact in stock price. More seriously, others lead to major impact in Tesla’s cash burn. But others still lead to no effect. To say it is definitely going to be one path seems premature. I think the right framework for guessing is one of probabilities. As for assigning those probabilities I have very little confidence in my own numbers so I won’t give any.

Well ya. That is how any smart person thinks about the future anyway.

 

[avoigt]

The EZB in Europe just commented that they would support the markets if needed but don't see that and that the fear of the virus may have a more negative impact on economies that the virus itself.

Well said!

 

[KarenRei]

That graph showing cases per 1M is really unhelpful.
I don’t think it’s worth the bandwidth.

Do others agree? If so, I'll leave them off.

 

[KarenRei]

With regards to the US here is data any my thoughts.

12 new cases have been recorded and 77 total active cases with 2 deaths. To compare with Germany with 114 active cases and zero deaths.

I agree that the attitude to go to work even if people feel bad and issues with insurance costs coverage and health care, the risk is higher people not doing what they supposed to in particular as its a large country without borders between states where you could not control. China is a negative example in that respect and Europe has an advantage.

Despite the increasing numbers may sound worrisome for many its in the international context and growth we have seen in other countries still low growth therefore as of now the situation does not look out of control or to grow even exponentially. Jumps may happen but that can be controlled too if authorities follow the guidelines.

Also and very much underestimated is that this is an international effort to isolate the virus and the US does not have to go through learning curves alone like China who have been very much unprepared and in denial at start. In the US is a high alert level and thats a positive to get the virus under control early. Early is key and critical because you can handle smaller amounts of cases but if it gets out of hand like in China at start you have only the choice to isolate complete cities which I do not expect in the US to happen.

The US has also been severely undertesting, due to the test kit fiasco. I just can't have any optimism about what we're going to see in the US once they start testing as extensively as other countries. There's ample evidence that there's at least one undetected population circulating the disease in the US, and very possibly multiple.

 

[avoigt]

The US has also been severely undertesting, due to the test kit fiasco. I just can't have any optimism about what we're going to see in the US once they start testing as extensively as other countries. There's ample evidence that there's at least one undetected population circulating the disease in the US, and very possibly multiple.

Definitely a possibility and I have not enough data from the US to be able to validate. But it may help to understand the US is not different to other countries in that respect and we had a lot of undetected cluster in Germany, Italy and other countries too.

However whats of importance is to look at the ramp of recorded active cases after a few days in a country in comparison and regardless of how many testing kits are available and how many have been tested. If you have clusters of undetected cases its only a question of time until people get ill and are filed unless they run around infect others but those others are getting ill then sooner or later and are recorded and if they don't even better. Its just not happening that the amount of undetected cases is growing exponentially without seeing that happening with the detected cases too.

So what I am trying to say is that the data in the past did not support an exponential out of control growth in Europe and so far it did not happen. Right now we have 2 new cases in Italy today, 20 in Germany, 13 US and it will likely grow at least in Italy but thats not exponential growth.

As long as the measures work to isolate the virus be it sooner or later as long the likelihood numbers to get better and better is high.

Certainly a lot can still happen and there are many unknowns but in a negative scenario which did not happen, we would not be where we are today.

 

[Heimdallr]

The EZB in Europe just commented that they would support the markets if needed but don't see that and that the fear of the virus may have a more negative impact on economies that the virus itself.

Well said!

So the virus has a negative impact, fear of the virus has an even more negative impact on the economy but there is nothing to worry about? World economic growth was already looking weak before the virus.

 

[KarenRei]

Definitely a possibility and I have not enough data from the US to be able to validate. But it may help to understand the US is not different to other countries in that respect and we had a lot of undetected cluster in Germany, Italy and other countries too.

However whats of importance is to look at the ramp of recorded active cases after a few days in a country in comparison and regardless of how many testing kits are available and how many have been tested. If you have clusters of undetected cases its only a question of time until people get ill and are filed unless they run around infect others but those others are getting ill then sooner or later and are recorded and if they don't even better. Its just not happening that the amount of undetected cases is growing exponentially without seeing that happening with the detected cases too.

So what I am trying to say is that the data in the past did not support an exponential out of control growth in Europe and so far it did not happen. Right now we have 2 new cases in Italy today, 20 in Germany, 13 US and it will likely grow at least in Italy but thats not exponential growth.

As long as the measures work to isolate the virus be it sooner or later as long the likelihood numbers to get better and better is high.

Certainly a lot can still happen and there are many unknowns but in a negative scenario which did not happen, we would not be where we are today.

Part of the problem is that the disease isn't deadly enough to immediately stand out. If from a new disease 30% of infected patients die and 90% go to the ICU, it's pretty hard not to take notice. But 1% dying? That can pass as influenza, at least at first. So pockets of spread can go undetected for significant lengths of time.

On the other hand, I'm very happy that we're imposing these "you have to be mild to spread undetected" selective factors on it. Like the 2009 H1N1 avian flu pandemic, this might end up reducing to the point where the pathology is similar to that of a conventional seasonal flu, and people stop caring about it. Time will tell.

As for the rate of catching new cases, I'm generally in agreement with you, but with a caveat. The agreement side: so long as you're scaling the exponential rate at which you find new cases in an infected population faster than the disease's "effective" R0, then you're winning against that population; your slope will eventually intercept the growth rate and overcome it. And I write "effective" R0 because R0 is defined only for a population behaving normally, not a population taking enhanced vigilance measures out of fear of a disease (which can potentially reduce spread below the breakeven R1 on their own if strong enough)

The caveat however is that while cases remain undetected, they can seed new populations which go unnoticed for weeks or months. And then you have to start the fight over again. And if you seed on average new populations from each one you're fighting.... that's not a good trend. So while I fully agree that detected populations can be wiped out, the question is how the rate at which you're wiping them out compare to the rate at which new undetected ones can be seeded.

 

[avoigt]

So the virus has a negative impact, fear of the virus has an even more negative impact on the economy but there is nothing to worry about? World economic growth was already looking weak before the virus.

Germany has today 20 new cases, 134 active and 2 in the hospital - do you believe that will drive Germany into a recession?

Higest new cases are now in South Korea and Iran with 599 and 523 while China is down to 202 (-66%).

The EZB did analyze the situation and concluded there is not recession fear from the Virus itself and the impact is rather from people who are full of fear and stop spending money.

If the global economy is anyway due for a recession or not is a completely different discussion in my opinion but with that low numbers and death toll shrinking as well as global new active cases its hard to imagine who the impact of the virus can be named as a reason for recession.

 

[KarenRei]

Germany has today 20 new cases, 134 active and 2 in the hospital - do you believe that will drive Germany into a recession?

Higest new cases are now in South Korea and Iran with 599 and 523 while China is down to 202 (-66%).

The EZB did analyze the situation and concluded there is not recession fear from the Virus itself and the impact is rather from people who are full of fear and stop spending money.

If the global economy is anyway due for a recession or not is a completely different discussion in my opinion but with that low numbers and death toll shrinking as well as global new active cases its hard to imagine who the impact of the virus can be named as a reason for recession.

The main sector I see being affected is travel / tourism (which unfortunately is one of our main industries here :Þ ). Can't imagine auto sales being significantly affected unless there's a broader recession. Heck, without a broader recession, but people cancelling vacation plans, they might even have more money to spend on a new car...

Consumer staples sales seem to be being boosted by this, with everyone "stocking up". Part of that will be a temporary blip (compensated for by less buying later), but some of those goods will end up in long-term storage or go to waste, and thus translate to a real net increase in buying.

 

[Singer3000]

With regards to the US here is data any my thoughts.

12 new cases have been recorded and 77 total active cases with 2 deaths. To compare with Germany with 114 active cases and zero deaths.

I agree that the attitude to go to work even if people feel bad and issues with insurance costs coverage and health care, the risk is higher people not doing what they supposed to in particular as its a large country without borders between states where you could not control. China is a negative example in that respect and Europe has an advantage.

Despite the increasing numbers may sound worrisome for many its in the international context and growth we have seen in other countries still low growth therefore as of now the situation does not look out of control or to grow even exponentially. Jumps may happen but that can be controlled too if authorities follow the guidelines.

Also and very much underestimated is that this is an international effort to isolate the virus and the US does not have to go through learning curves alone like China who have been very much unprepared and in denial at start. In the US is a high alert level and thats a positive to get the virus under control early. Early is key and critical because you can handle smaller amounts of cases but if it gets out of hand like in China at start you have only the choice to isolate complete cities which I do not expect in the US to happen.

But the US seems to have learnt nothing from the experience in the rest of the world. That's what's so worrying. They'd tested less than 500 people total until yesterday and have seemingly allowed community transmission to go on unimpeded for weeks in numerous locations.

What's scaring me and many others is that the US may have been inadvertently incubating innumerable Lombardy's (or worse). But that you have not yet seen the strain on the health care system, because of the longish incubation period and progression period for serious cases. But exponential math works its relentless logic in the end.

See this Twitter thread, for example, by someone far better qualified than anyone on this forum.

Jeremy Konyndyk on Twitter

The horrible conclusion one starts to draw is that the virus is now out "there" and authorities will soon move on from a strategy of Containment to one of Delay and Mitigation.

 

[Singer3000]

The main sector I see being affected is travel / tourism (which unfortunately is one of our main industries here :Þ ). Can't imagine auto sales being significantly affected unless there's a broader recession. Heck, without a broader recession, but people cancelling vacation plans, they might even have more money to spend on a new car...

"There is sufficient uncertainty that I am going to cancel that Ryanair flight. Instead I'll buy a $40k car", said no one ever.

 

[avoigt]

But the US seems to have learnt nothing from the experience in the rest of the world. That's what's so worrying. They'd tested less than 500 people total until yesterday and have seemingly allowed community transmission to go on unimpeded for weeks in numerous locations.

What's scaring me and many others is that the US may have been inadvertently incubating innumerable Lombardy's (or worse). But that you have not yet seen the strain on the health care system, because of the longish incubation period and progression period for serious cases. But exponential math works its relentless logic in the end.

See this Twitter thread, for example, by someone far better qualified than anyone on this forum.

Jeremy Konyndyk on Twitter

The horrible conclusion one starts to draw is that the virus is now out "there" and authorities will soon move on from a strategy of Containment to one of Delay and Mitigation.

Other countries like Germany did not do any mass or large scale tests too.

So to conclude because the US does not its going to be more bad is not justified.

The length of the incubation period is everywhere the same and the virus is in Europe now longer than in the US active and the numbers are not growing exponentially.

There are additional risk factors in the US IMO but again this is not like one country fights alone but they learn from each other.

Italy can't be taken as an example because they did not know what it was when it was breaking out and made all the mistakes you do without knowing therefore the spread can be explained.

As of now at noon time Italy has just 3 new cases since yesterday but 1,580 active cases. Not bad.

 

[KarenRei]

"There is sufficient uncertainty that I am going to cancel that Ryanair flight. Instead I'll buy a $40k car", said no one ever.

A vacation is not "a Ryanair flight". A typical vacation is a family affair and costs thousands of dollars - tens of thousands on the higher-end. And one does not think about there being "a trade". But if one would like a new car, and they have more money in their bank account, what do you think happens to the odds of them buying a new car, vs. wanting a new car and not having extra money in their bank account?

To pick a couple random examples of "typical" vacations for your typical suburban family: for a family of four (2 adults, 2 kids), a six-day Disney Cruise is $7819. Not counting airfare and incidentals for four people to actually get to the port. An equivalent Disney World vacation for the family of 4 is $4563 - again, not counting airfare and incidentals for four. Airfare and incidentals bring these to $5-10k.

If you were already considering a car, having an extra $5-10k in your bank account is a big difference in the decision of whether to buy or not.

 

[Singer3000]

A vacation is not "a Ryanair flight". A typical vacation is a family affair and costs thousands of dollars - tens of thousands on the higher-end. And one does not think about there being "a trade". But if one would like a new car, and they have more money in their bank account, what do you think happens to the odds of them buying a new car, vs. wanting a new car and not having extra money in their bank account?

I think something has gone awry with your usually excellent logic if you think demand for Tesla’s products is not going to fall in the face of the economic disruption the world is facing.

 

[Singer3000]

Other countries like Germany did not do any mass or large scale tests too.

So to conclude because the US does not its going to be more bad is not justified.

The length of the incubation period is everywhere the same and the virus is in Europe now longer than in the US active and the numbers are not growing exponentially.

There are additional risk factors in the US IMO but again this is not like one country fights alone but they learn from each other.

Italy can't be taken as an example because they did not know what it was when it was breaking out and made all the mistakes you do without knowing therefore the spread can be explained.

As of now at noon time Italy has just 3 new cases since yesterday but 1,580 active cases. Not bad.

Hopefully you’re right mate. I just wish the experts had as much confidence as you.

 

[KarenRei]

I think something has gone awry with your usually excellent logic if you think demand for Tesla’s products is not going to fall in the face of the economic disruption the world is facing.

Ahem:

The main sector I see being affected is travel / tourism (which unfortunately is one of our main industries here :Þ ). Can't imagine auto sales being significantly affected unless there's a broader recession. Heck, without a broader recession, but people cancelling vacation plans, they might even have more money to spend on a new car...

 

[PhaseWhite]

I think something has gone awry with your usually excellent logic if you think demand for Tesla’s products is not going to fall in the face of the economic disruption the world is facing.

Note: There’s currently 2 threads in the model 3 ordering and delivery forum.

 

[JRP3]

And I can't get our prototypes and a lot of other stuff...China right now...Model 3 module boards and connectors for Model 3 batteries...I can't get 'em...for the foreseeable future..."

I haven't seen the video yet but that sounds as if he's talking about the custom boards he has manufactured for him and has nothing to do with Tesla Fremont production.