General Discussion: 2018 Investor Roundtable

[SwTslaGrl]

Is Model 3 cell production limited until new capacity comes online? Panasonic seems to wait for positive result in current GF1 investments?

From October,
Panasonic plans to increase battery production at Tesla’s Gigafactory 1 and other plants, says report

 

[schonelucht]

Just a quick heads up. My model forecasts a $305M loss attributable to shareholders without taking into account likely ZEV credits of $100M.So possibly just a $205M loss. Automotive gross margin without ZE credits is 22%.

My major assumptions are -$5K revenue per S/X sold out of inventory. Model 3 ASP of $54. Marginal Model 3 cost of goods of $48.6 and an additional fixed Model 3 overal cost of goods of $150M. $45M extra revenue from the South Australia project with $50M as cost of goods for it. Finally a $20M decline to both revenue and cost of goods due to phase out of Grohmann external party contracts and a likewise addition to internal R&D. 10% increase of sales, general & administration but otherwise flat R&D.

If there is interest I can start a thread about Q4 results discussion. I plan to make a cash balance too. However there will be some major unknowns like increase in customer deposits, actual capex and increase/decrease in various inventories.

 

[CorneliusXX]

it's not a "thesis"... it's reality.

It's your interpretation of reality only. My interpretation is that there is an excellent business in the right industry with a great CEO, a huge fanbase, orders coming out the wazoo, and little competition - however they are taking slightly longer to meet their optimistic goals.

Who wouldn't want to buy in.

Because markets are forward looking, the only reason you would think the stock is overvalued is if you think they will never ramp. I think they are ramping well.

 

[RobStark]

VW CEO said one of their advantages over Tesla is that they can produce a million cars, no problem.

Seems they can't fill demand for the Golf GTE in the UK and have halted orders. That is a PHEV with an itty bitty battery. What happens when they try to fill demand for ID Cross and ID Buzz?

 

[mongo]

VW CEO said one of their advantages over Tesla is that they can produce a million cars, no problem.

Seems they can't fill demand for the Golf GTE in the UK and have halted orders. That is a PHEV with an itty bitty battery. What happens when they try to fill demand for ID Cross and ID Buzz?

*Batteries not included

We make cars, we are not an energy company -every other vehicle manufacturer ever

 

[sweter]

The factory was ~97% unstaffed Sunday December 31 afternoon; I don't know if they were even open Sunday morning. Either the "1,000 per week run rate in last few days" was during days they were open, or the factory for Model 3 runs with only 3% staffing.

They did say "working days" I think.

 

[Starno]

I wonder if actually Elon wanted to get to 5000/w by end of Q1 but got convinced by his colleagues that it would be better to emphasis quality and so slow a bit the ramp.

 

[sweter]

NO they did not push for a few days. Not even to appease investors.

They ran each section of the production line in burst to test if they could produce Model 3s at a rate of 1000 per week. Those test were successful.

Yes, but at the same time they DID NOT produce 1000 cars per week. That's still coming, so claiming they are producing that or over that number is just lies. The current rate of production is 793/week. Being able to and actually doing are two different things IMO.

 

[Starno]

Yes, but at the same time they DID NOT produce 1000 cars per week. That's still coming, so claiming they are producing that or over that number is just lies. The current rate of production is 793/week. Being able to and actually doing are two different things IMO.

Well that means they're on average building 113 cars per day, and have to increase to 142 a day to reach 1000 a week.
Not a huge deal imo.

 

[Todd Burch]

VW CEO said one of their advantages over Tesla is that they can produce a million cars, no problem.

Seems they can't fill demand for the Golf GTE in the UK and have halted orders. That is a PHEV with an itty bitty battery. What happens when they try to fill demand for ID Cross and ID Buzz?

Exactly. Making 1M gas cars is VERY different from and much easier than making 1M EVs because of the battery situation. Looks like they and many others are continuing to overlook that as well.

 

[AlMc]

Exactly. Making 1M gas cars is VERY different from and much easier than making 1M EVs because of the battery situation. Looks like they and many others are continuing to overlook that as well.

So we have multiple manufacturers that can produce cars, in volume, but not batteries, and Tesla which is having some growing pains making vehicles in massive volumes but has access to batteries. I will take the over (Tesla) on whom is in better shape right now in the production of volume EVs. May be different in a couple years but for right now Tesla has the edge.

 

[myusername]

here's a question... why are they working on efficiency and quality control AND also selling to customers. shouldn't these things have been a precursor to shipping cars?

 

[dc_h]

Seems like focus on production has been on how fast they can produce well. Few issues reported by new owners and issues resolved from alpha models in June. Seems like classic agile development. Unlike some companies with famous safety defects that are discovered and left in place, Tesla is always in continuous improvement mode.

 

[mongo]

It will be interesting to hear what the build rate is in a month when the Q4 report comes out and they give us an update.

 

[Buddyroe]

They are making cars at a rate of 1000 per week as of today, so 50,000 total Model 3s would imply and slowing down of production rate from where it is now, and maintain that slowdown for 362 more days. That is unlikely. I'm quite pessimistic lately and I'm not even seeing number that low. Perhaps they only do 100,000 or maybe 125,000...but it is absolutely certain to be higher than 50,000.

I just think Elon is overly optimistic. Like...EXTREMELY optimistic. Put everything into context. He says Mars by 2025...its his nature.

This is what we get. This is what we bought in to.

Unfortunately, there are very few investment opportunities out there like this. This is the game you sign up for with Elon.

I must have missed the 1000 per week number. That was announced yesterday?

 

[elasalle]

Yes, but at the same time they DID NOT produce 1000 cars per week. That's still coming, so claiming they are producing that or over that number is just lies. The current rate of production is 793/week. Being able to and actually doing are two different things IMO.

Not necessarily.

"In the last seven working days of the quarter, we made 793 Model 3's, and in the last few days, we hit a production rate on each of our manufacturing lines that extrapolates to over 1,000 Model 3's per week"

Just means that there was a ramp within a ramp in the same week. Started the week with rate less than 1K/week, ended with 1K/week.

Production rates are in a process of continuous improvement... So once 1K/week is achieved, they could have validated that the system can do 1K/week and start that as the baseline.


+Edit. Also remember that just few 2-3 mths back the rate was more like 50/week. so going from 793 ~~800 to 1K, shouldn't be something to really think impossible or too serious of an issue. But of course 1K is not the actual goal as well.

 

[dc_h]

I must have missed the 1000 per week number. That was announced yesterday?

Yeah, they said they have an extrapolated rate of 1000 per week, which apparently means each component of production has run at a rate of 1000 per week, or higher, but the whole system has not run simultaneously at that rate. From this, we have extrapolated that they ran about 750 a week. I'd guess they are in Toyota mode, any problems and anyone can stop the line, solve the issue, whether training, process or programming. This iterative process and stepwise process is what has changed the ramp from an S ramp to a more linear path.

 

[elasalle]

Just a quick heads up. My model forecasts a $305M loss attributable to shareholders without taking into account likely ZEV credits of $100M.So possibly just a $205M loss. Automotive gross margin without ZE credits is 22%.

My major assumptions are -$5K revenue per S/X sold out of inventory. Model 3 ASP of $54. Marginal Model 3 cost of goods of $48.6 and an additional fixed Model 3 overal cost of goods of $150M. $45M extra revenue from the South Australia project with $50M as cost of goods for it. Finally a $20M decline to both revenue and cost of goods due to phase out of Grohmann external party contracts and a likewise addition to internal R&D. 10% increase of sales, general & administration but otherwise flat R&D.

If there is interest I can start a thread about Q4 results discussion. I plan to make a cash balance too. However there will be some major unknowns like increase in customer deposits, actual capex and increase/decrease in various inventories.

the current 4Q EPS estimate is at -3.03. Are Actuals going to be better .. ?

 

[mongo]

Yeah, they said they have an extrapolated rate of 1000 per week, which apparently means each component of production has run at a rate of 1000 per week, or higher, but the whole system has not run simultaneously at that rate. From this, we have extrapolated that they ran about 750 a week. I'd guess they are in Toyota mode, any problems and anyone can stop the line, solve the issue, whether training, process or programming. This iterative process and stepwise process is what has changed the ramp from an S ramp to a more linear path.

It could also mean they had enough parts to run continuously for some number of days at a 1,000 /week rate. 200/day or 142/day depending...
Did not make 1k in a week, but could have (assuming all raw material movement operations also kept up)

 

[ZeApelido]

Yeah, they said they have an extrapolated rate of 1000 per week, which apparently means each component of production has run at a rate of 1000 per week, or higher, but the whole system has not run simultaneously at that rate. From this, we have extrapolated that they ran about 750 a week. I'd guess they are in Toyota mode, any problems and anyone can stop the line, solve the issue, whether training, process or programming. This iterative process and stepwise process is what has changed the ramp from an S ramp to a more linear path.

Exactly. They may be producing ~ 700 per week for maybe a few weeks. Perhaps get to 1000 by February. This is realistic based on what was actually said.