General Discussion: 2018 Investor Roundtable

[Reciprocity]

If you are interested in Tesla Pickup's competitive landscape watch the short vid below.

Fish in a barrel. But, the Tesla truck isn't going to look like a traditional pickup. I don't know how they are going to do it, but it's like the semi. The semi looks nothing like a traditional semi because the cab can be so far forward because of the lack of an engine. Look at a traditional pickup with that long boxy front end. That's what people interpret as a truck. How will Tesla make it a Tesla. It's much harder then a car and it will be interesting. People don't care much what the semi looks like as long as it works good. They will be more discerning when it comes to a pickup. What ever they come up with, EVs should make great trucks because of all the torque and the can forward design should allow for more hauling. But can they make it look cool. I can't even imagine it. It's a challenge.

 

[Reciprocity]

Hvilken I-Pace utgave er mest for pengene? S, SE, HSE eller First Edition? has pictures of the english specs for the trims surrounded by viking language

Ok so the HSE mystery is solved. Fancier seats, lights, wheels, badging and auto pilot like features. My guess is that Lane keep assist is not auto steering but a warning because the HSE identifies it differently.

 

[kbM3]

Consumer Reports new video, 20 minutes, all on the Model 3,

Comments section again has plenty of level 10 attempts to say the car and Tesla are awful.

CR really liked how the car drives, but, they went kind of overboard on some criticisms, particularly the credit card size backup key... one of the three hosts concluded that, touching it to the door with the card to open it and touching a spot on the center console to turn the car on are so undesirable, that if you don't own a smart phone, you shouldn't buy this car. Granted he was probably kidding around, but, he said it, and it's quite silly... people can handle traditional physical keys, and the card is no more difficult- just toss out the car because of this? One of the other two hosts did push back on this some.

In a 20 minute Model 3 video they did not once mention an absolute killer exclusive feature. Teslas are the only vehicles that continuously improve after you buy them.

This was particularly striking because several of their complaints can and probably will be addressed by OTA updates. Including obviously, auto pilot.

I also really despised the snarky comment “so much for the $35,000 car”. It has always been known that Tesla was going to read to produce the more expensive vehicles first.

 

[RobStark]

Hvilken I-Pace utgave er mest for pengene? S, SE, HSE eller First Edition? has pictures of the english specs for the trims surrounded by viking language

Is that Icelandic?

 

[Cattledog]

Is that Icelandic?

The language belongs to Tesla's adopted home, Norway. Norwegian.

 

[RobStark]

Fish in a barrel. But, the Tesla truck isn't going to look like a traditional pickup.

Model S 1.0 looked a lot like a Maserati.

Semi buyers only care about TCO/Mile.

For retail premium pickup trucks looks matter.

If it looks like a hippie mobile for San Franciscans and Angelenos it won't sell.

Better to give it a traditional silhouette with a massive frunk

 

[RobStark]

The language belongs to Tesla's adopted home, Norway. Norwegian.

Jeg vet.


Íslenska er næst tungumálið sem víkingarnir tala um.

 

[Krugerrand]

To be fair, people talk of suspension break in on new cars. It also gives interiors a chance to loosen up to show buzz, squeak, and rattle issues.

Yeah, that’s what they meant.

 

[AudubonB]

A couple of observations on recent events:

First, the aluminum and steel tariffs, and their consequence for Tesla.

Yes, a 10% rise in the price of imported aluminum will affect Tesla. The tariffs represent a straight-out gift to domestic producers in that they can raise their own prices by approximately ten percent. Usually not exactly that because the importer can respond by dropping its price somewhat.

However -

First-Order effects:

with a Tesla and any other high-value-added product, the price of a "raw" base product is a small fraction of the entire manufactured good. Without performing the necessary math, the cost of the Al metal in a Model S, X or 3 is likely to be perhaps 3-5% of COGS. So a d10% means at most 0.5% change in the top line. Noticeable, but NOT a big deal.

The 25% steel tariff is even less of a direct factor, because of the limited amount of steel in a Tesla.

Second-Order effects:
Most of Tesla's immediate domestic competitors have a larger fraction of steel vs. aluminum in their goods, meaning that their competitive advantage re Tesla is a bit more harder hit.

Third-Order effects:
As has been noted elsewhere, China already is subject to "anti-dumping" (a convenient rubric; we needn't discuss the merits of that title) penalties with these commodities. Newly whacked by these tariffs, if let stand, include such Tesla markets as Korea, Japan, Germany, Mexico, Canada and the rest of the EU. Now, IF the retaliation that most or all of these countries will apply include not just the elsewhere-mentioned bourbon whiskey, Wisconsin cheese, but also US auto exports...or US EV exports...then, of course, Tesla will take it in the chin.

I, for one, am of the opinion Tesla likely will receive a carve-out from any such retaliatory punishment: mostly, because it is sui generis, but also because I believe there likely will be an attempt to create a so-called red-state/blue-state targeting by the affected countries of what to hit. We will see.

Second
dang. I spent too much time writing the first part I cannot remember the second point I was going to present. So maybe later....

 

[dha]

with a Tesla and any other high-value-added product, the price of a "raw" base product is a small fraction of the entire manufactured good. Without performing the necessary math, the cost of the Al metal in a Model S, X or 3 is likely to be perhaps 3-5% of COGS. So a d10% means at most 0.5% change in the top line. Noticeable, but NOT a big deal.

I did some REALLY crude back-of-the-envelope math and it does seem that a 10% cost increase in aluminum would have a negligible impact on margins. Basing figures on Q2 2017 report to ignore Model 3 impact:

* 410 lbs aluminum used in Model S body / chassis [1]. Quick googling shows that approx 5% of the battery is aluminum, plus the pack structure itself and "ballistic grade" aluminum armor plate. Let's be SUPER conservative and say there is 1,000 lbs of aluminum in the Model S.

* spot price around $1 / lb

* Model S non-GAAP gross margin about 25% on 80,000 ASP implies COGS of $64,000 [2]

* 10% tariff results in 1000 * $1 * .1 = $100 COGS increase

* Increasing COGS by $100 reduces gross margin by approximately 0.2%

[1] The Extraordinary Raw Materials in a Tesla Model S
[2] Tesla - Quarterly Report

A couple of observations on recent events:
The 25% steel tariff is even less of a direct factor, because of the limited amount of steel in a Tesla.

Steel is used extensively in the Model 3 from what I understand.

 

[Skryll]

The language belongs to Tesla's adopted home, Norway. Norwegian.

And teslabjorne likes to call norwegian viking language if I am not mistaken

 

[Skryll]

A couple of observations on recent events:

First, the aluminum and steel tariffs, and their consequence for Tesla.

[...]

The 25% steel tariff is even less of a direct factor, because of the limited amount of steel in a Tesla.

Wasn't Tesla rumored to be part of that american steel factory project called 'Project Tim' ? Maybe they are planning to produce and substitute foreign steel.

What is Project Tim? says clean energy and carbon capture are part of the plan

Analysts question viability of 'Project Tim' steel mill plan on the other hand links it to coal use, could be FUD tho

Tesla is reportedly linked to massive multibillion-dollar steel factory project in Michigan links project tim to tesla

The more I read into this sparse strange information the more it sounds like some trumpian scam rather than a real thing: http://www.durandmi.com/Project Tim Highlights.png

 

[RobStark]

 

[RobStark]

* spot price around $1 / lb

This is $1/lbs ?

Or is this $1/lbs ?

 

[ggr]

The 25% steel tariff is even less of a direct factor, because of the limited amount of steel in a Tesla.

I thought the Model 3 was steel, not Aluminium?

 

[30seconds]

I thought the Model 3 was steel, not Aluminium?

Its a mix. But this tariff will lead to domestic steel price increases as well (because if you were a domestic producer why wouldn't you) so the price increases will come for all cars.

 

[Waiting4M3]

Tesla is putting M3 in their Toronto and Vancouver stores, not sure why unless they will start selling in Canada soon...

Max Garvey on Twitter

 

[RobStark]

Its a mix. But this tariff will lead to domestic steel price increases as well (because if you were a domestic producer why wouldn't you) so the price increases will come for all cars.

The question isn't will material cost increase for Tesla but is it closer to 10% or 25%?

As Model 3 ramps it goes from very close to 10% towards 25%.

 

[pz1975]

Tesla is putting M3 in their Toronto and Vancouver stores, not sure why unless they will start selling in Canada soon...

Max Garvey on Twitter

My delivery estimate is mid-2018 (Canada).

 

[Waiting4M3]

The question isn't will material cost increase for Tesla but is it closer to 10% or 25%?

As Model 3 ramps it goes from very close to 10% towards 25%.

Steel costs $300 per metric ton for billets, the whole M3 weighs 1.7 metric ton, even if all of it is steel, 25% is still just a $127 increase, or 0.4% of the M3's base price $35K.