General Discussion: 2018 Investor Roundtable

[avoigt]

The EU commission did invite yesterday 40 OEMs and suppliers in Brussels in an attempt to convince them to invest €20bn for 10 GF in order to produce 100 Gwh of Batteries in Europe to assure supply, independence and technology leadership. They offered substantial budgets and urged them to make sure this key technology is developed in Europe to secure the industry and market.

That attempt has clearly failed as the industry in Europe is reluctant to invest that amount given what they call very high costs and uncertainty about demand......

The plan from the industry now is to test and investigate first (Daimler, VW, BMW) in order to make more educated decisions. IOW they delay their decision and plan to supply from Asia first while learning about Batteries in the meantime.

With that very clear decision from the large European auto makers and the still very small order of magnitude of investment in EVs in Europe Tesla is in my opinion about to be a decade ahead now.

All people who followed the discussion in this thread in the days after er and the so called delays from Tesla should take that information as a frame to asses and evaluate the market and who is really ahead and delayed. A year or two don't matter here as being ahead a little now is worth a lot more in 2-5 years from now. Needless to say that Tesla is much more ahead than a little today .....

Für Elektroautos: EU-Kommission: Wir brauchen 10 Riesen-Batteriefabriken

 

[SteveG3]

The EU commission did invite yesterday 40 OEMs and suppliers in Brussels in an attempt to convince them to invest €20bn for 10 GF in order to produce 100 Gwh of Batteries in Europe to assure supply, independence and technology leadership. They offered substantial budgets and urged them to make sure this key technology is developed in Europe to secure the industry and market.

That attempt has clearly failed as the industry in Europe is reluctant to invest that amount given what they call very high costs and uncertainty about demand......

The plan from the industry now is to test and investigate first (Daimler, VW, BMW) in order to make more educated decisions. IOW they delay their decision and plan to supply from Asia first while learning about Batteries in the meantime.

With that very clear decision from the large European auto makers and the still very small order of magnitude of investment in EVs in Europe Tesla is in my opinion about to be a decade ahead now.

All people who followed the discussion in this thread in the days after er and the so called delays from Tesla should take that information as a frame to asses and evaluate the market and who is really ahead and delayed. A year or two don't matter here as being ahead a little now is worth a lot more in 2-5 years from now. Needless to say that Tesla is much more ahead than a little today .....

Für Elektroautos: EU-Kommission: Wir brauchen 10 Riesen-Batteriefabriken

Thanks for sharing this. By the bolded part, do you mean the EU or individual countries offered some sort of funding or tax savings inducements? If so, what was the scale of money being offered (I struggled to get much out of the article via google translate)?

Worth noting, the target of 100 GWh these automakers seem to be trying to divert to "more study," would only allow for 1 million 50 kWh, i.e., 200 miles of range, vehicles by the 2025 target date. Only looking at the German automakers, that's quite a small fraction of roughly 15+ million in annual vehicle production around the globe by German owned companies. They will have access to supply from Asia, as well, but, still, this seems like a very modest proposal, and it apparently is still getting, the "well, we'll have to look at that and get back to you" response.

 

[avoigt]

Thanks for sharing this. By the bolded part, do you mean the EU or individual countries offered some sort of funding or tax savings inducements? If so, what was the scale of money being offered (I struggled to get much out of the article via google translate)?

Worth noting, the target of 100 GWh these automakers seem to be trying to divert to "more study," would only allow for 1 million 50 kWh, i.e., 200 miles of range, vehicles by the 2025 target date. Only looking at the German automakers, that's quite a small fraction of roughly 15+ million in annual vehicle production around the globe by German owned companies. They will have access to supply from Asia, as well, but, still, this seems like a very modest proposal, and it apparently is still getting, the "well, we'll have to look at that and get back to you" response.

My pleasure.

Its the EU commission itself that does offer incentives (just 20 Mio) but its a known fact that the countries and local governments would help funding as well. Although this may help, the vast majority of the budget would come anyway from the industry and they shy back from this rather large and in their opinion risky investments.

In my eyes this is a huge strategic miscalculation and mistake as they limit their ability to build a moat and create any kind of competitive edge. Somehow they came to the completely wrong conclusion that batteries are just a commodity and as prices will fall its all about securing supply from Asia.

I have no doubt that the German OEMs will develop nice and attractive EVs but I do have doubts that they profoundly understand where in the Tesla vehicles the competitive edge is to be found. The Battery is just one of it but important and the fact that nobody so far can compete with the Semi or Roadster range as well as loading speed to name just 2 should them make scratch their heads....

Agree to your point about volume.

 

[Lessmog]

The EU commission did invite yesterday 40 OEMs and suppliers in Brussels in an attempt to convince them to invest €20bn for 10 GF in order to produce 100 Gwh of Batteries in Europe to assure supply, independence and technology leadership. They offered substantial budgets and urged them to make sure this key technology is developed in Europe to secure the industry and market.

That attempt has clearly failed as the industry in Europe is reluctant to invest that amount given what they call very high costs and uncertainty about demand......

The plan from the industry now is to test and investigate first (Daimler, VW, BMW) in order to make more educated decisions. IOW they delay their decision and plan to supply from Asia first while learning about Batteries in the meantime.

With that very clear decision from the large European auto makers and the still very small order of magnitude of investment in EVs in Europe Tesla is in my opinion about to be a decade ahead now.

All people who followed the discussion in this thread in the days after er and the so called delays from Tesla should take that information as a frame to asses and evaluate the market and who is really ahead and delayed. A year or two don't matter here as being ahead a little now is worth a lot more in 2-5 years from now. Needless to say that Tesla is much more ahead than a little today .....

Für Elektroautos: EU-Kommission: Wir brauchen 10 Riesen-Batteriefabriken

Thanks for sharing this. By the bolded part, do you mean the EU or individual countries offered some sort of funding or tax savings inducements? If so, what was the scale of money being offered (I struggled to get much out of the article via google translate)?

Worth noting, the target of 100 GWh these automakers seem to be trying to divert to "more study," would only allow for 1 million 50 kWh, i.e., 200 miles of range, vehicles by the 2025 target date. Only looking at the German automakers, that's quite a small fraction of roughly 15+ million in annual vehicle production around the globe by German owned companies. They will have access to supply from Asia, as well, but, still, this seems like a very modest proposal, and it apparently is still getting, the "well, we'll have to look at that and get back to you" response.

My pleasure.

Its the EU commission itself that does offer incentives (just 20 Mio) but its a known fact that the countries and local governments would help funding as well. Although this may help, the vast majority of the budget would come anyway from the industry and they shy back from this rather large and in their opinion risky investments.

In my eyes this is a huge strategic miscalculation and mistake as they limit their ability to build a moat and create any kind of competitive edge. Somehow they came to the completely wrong conclusion that batteries are just a commodity and as prices will fall its all about securing supply from Asia.

I have no doubt that the German OEMs will develop nice and attractive EVs but I do have doubts that they profoundly understand where in the Tesla vehicles the competitive edge is to be found. The Battery is just one of it but important and the fact that nobody so far can compete with the Semi or Roadster range as well as loading speed to name just 2 should them make scratch their heads....

Agree to your point about volume.

Great news! (Too little, too late but still.)
Just another little titbit: Northvolt is being granted a €52.5M credit from the European Investment Bank EIB for the demo factory in Västerås, report Swedish media today.
Klart: Northvolt beviljas lån på drygt en halv miljard kronor
Jätteinjektion till Northvolt – EIB skjuter till 517 miljoner kronor

 

[RobStark]

Teslas Are Finally Replacing Porsches on the Autobahn

 

[mongo]

Teslas Are Finally Replacing Porsches on the Autobahn

Last line in article:

“It’s well known that at higher discharging rates, the performance of the battery decreases,” BNEF analyst James Frith said.

Sure, if you are talking about lead acid batteries, lithium ion are mostly outside the dominion of Peukert’s Law.
Which is not to say there is not voltage sag/ power loss at high discharge rates, but a lithium-ion loses only 8-12% apparent capacity for a 20x increase in discharge current v.s. 40% loss for a lead-acid type (resistive losses increase by 400x in comparison). Thermal issues likely kick in long before the effective power capactity shift becomes an issue.
Will be interesting to get numbers from the 2020 Roadster.

 

[Starno]

NDA/ employment contract? Only top peeps get to chirp.

This is weird though, here's what Yann Lecun (Head of Facebook AI) has to say about Apple secretive culture (maybe similar to Tesla concerning software and AI?):

" Apple is not a player in the AI research circuit because they have a very secretive culture. You simply cannot do leading-edge research in secret. If you can’t publish, it’s not research. At best, it’s technology development. "

 

[ValueAnalyst]

The Battery is just one of it but important and the fact that nobody so far can compete with the Semi or Roadster range as well as loading speed to name just 2 should them make scratch their heads....

When do you expect Tesla to build the Semi in volume?

 

[mongo]

This is weird though, here's what Yann Lecun (Head of Facebook AI) has to say about Apple secretive culture (maybe similar to Tesla concerning software and AI?):

" Apple is not a player in the AI research circuit because they have a very secretive culture. You simply cannot do leading-edge research in secret. If you can’t publish, it’s not research. At best, it’s technology development. "

Seems reasonable. In the academic world, publishing is a key performance metric. No papers, no job. Tesla is concerned with application of the technology. In so far as research furthers that, they do research, but not 'pure' research (if that is even a term). Anything they develop would become a trade secret so I would not expect to see them adding to the general pool of knowledge. Employee's of Tesla likely have an easier life if they don't mention what it is they work on.

That said, I went through Karpathy's on-line Stanford AI course notes. It was a great primer for many questions I had.

 

[Ulmo]

Last line in article:


Sure, if you are talking about lead acid batteries, lithium ion are mostly outside the dominion of Peukert’s Law.
Which is not to say there is not voltage sag/ power loss at high discharge rates, but a lithium-ion loses only 8-12% apparent capacity for a 20x increase in discharge current v.s. 40% loss for a lead-acid type (resistive losses increase by 400x in comparison). Thermal issues likely kick in long before the effective power capactity shift becomes an issue.
Will be interesting to get numbers from the 2020 Roadster.

Actual driving experience in my Tesla Model S showed it could only put forth high highway speeds for about 1 to 5 minutes at a time, which it very reluctantly did, exerted effort trying to coax it, and I had to have the pedal all the way down (no cruise control allowed), distracting from navigation (making it unsafe), but in my Mercedes, it did those (even faster) high highway speeds effortlessly forever, cruise control all the way to the top, and the car wanted to do more, no exerted control effort on my part (all my attention on the road and environs), smoother, steadier, surer, much nicer ride, and one eighth the price.

Autobahn has been hard on Tesla. I think it’s an engineering issue. If Tesla engineers Autobahn into its cars, it can and will work, otherwise, it won’t.

(I sold my Tesla before the software upgrades to release a bit more power, so I have no idea how it behaved after that. Although I’m sure I would have noticed the difference, I think it was probably slight and I doubt it would have materially affected the comparison to Autobahn driving.)

 

[Krugerrand]

When do you expect Tesla to build the Semi in volume?

Define volume.

 

[ValueAnalyst]

Define volume.

100,000 run-rate that Elon noted on the call.

 

[CorneliusXX]

When do you expect Tesla to build the Semi in volume?

I'd expect them to hit their 100k target 18-24 months after their current forecast. So mid-end 2024. However we should get a better understanding once new factories are announced

 

[ValueAnalyst]

I'd expect them to hit their 100k target 18-24 months after their current forecast. So mid-end 2024. However we should get a better understanding once new factories are announced

There is no "current forecast," so could you please provide support for to whatever you added 18-24 months? All we have is "2019," and a lot of talk about how Semi leverages the same components as Model 3:

Elon Reeve Musk - Tesla Motors, Inc.

No, we'll manufacture that ourselves, and most of that semi is actually made out of Model 3 parts, by the way. It's actually using a bunch of Model 3 motors without revealing too much about the future of it, so we're able to use a very high volume vehicle, and then combine several motors to have -- I think it's actually going to have a very good gross margin like – that's just not something that the other -- it's like you can't do that with a traditional truck. So effectively that was just a very compelling product that has low unit cost.

Someone else:

Yeah. The incremental complexity of building that is much less than it might seem.

---

Does everyone expect Tesla to take five years to go from initial production to volume for a product with little incremental complexity?

 

[Krugerrand]

100,000 run-rate that Elon noted on the call.

2022

 

[ValueAnalyst]

2022

Agreed.

 

[wnorris]

Seems reasonable. In the academic world, publishing is a key performance metric. No papers, no job. Tesla is concerned with application of the technology. In so far as research furthers that, they do research, but not 'pure' research (if that is even a term). Anything they develop would become a trade secret so I would not expect to see them adding to the general pool of knowledge. Employee's of Tesla likely have an easier life if they don't mention what it is they work on.

That said, I went through Karpathy's on-line Stanford AI course notes. It was a great primer for many questions I had.

When you are talking about AI and Tesla you should not discount the close tie-in with OpenAI. I certainly hope that Tesla personnel are loosely engaged with what is happening with that group.

Karpathy came to Tesla from there so I would assume Tesla's AI group is not nearly at the Apple level of secrecy.

 

[bdy0627]

Agreed.

I think 2022 sounds reasonable for volume production of the Semi, but the production amount of 100,000 annually seems aspirational at this point. I don't think I would expect that level of production.

 

[AudubonB]

So we learn today in Bloomberg - Fed Rate Hikes Are Squeezing Even the Hottest Automaker in the U.S. - that

"Subaru Corp., [is] the only carmaker to boost U.S. sales every year in the last decade".

'Zzat so? Inquiring minds would like to know.

 

[Curt Renz]

Barron's - 6 minutes ago: Tesla: Here’s The Long-Term Case for the Model 3

..."Demand for the Model 3 could be underestimated,” Baird wrote, and “could accelerate with further positive reviews from early customers."...

...Baird believes that Tesla could eventually sell more than 500,000 Model 3s annually. That would put it squarely among the nation’s top-selling vehicles...

...Baird also believes the company will be able to post substantial margins on the Model 3 over time...

...Baird reiterated an “outperform” rating on the shares. It has a $411 price target on the shares...