General Discussion: 2018 Investor Roundtable

[Yggdrasill]

They signed supply contracts with CATL/Samsung and LG to deliver $25B worth of cells. How does this differ from Tesla signing a supply contract with Panasonic to deliver somewhere around $17B worth of cells?

It doesn't differ from the supply deals for the 18650-cells. The Gigafactory however is different. Tesla has a major stake in even cell production - if they can make the Gigafactory work well, they can profit in every step of the process.

But the primary issue I have with this deal is that it's not very big. As I said, it should cover supply for around 4 million 60 kWh vehicles, over an unknown number of years. In 2025, Tesla could be making 2 million EVs per year, likely not one of them with less than 60 kWh.

 

[mongo]

We also need solar-powered ships. I think those could become feasible before aircraft.

If you include battery powered ships that can be charged with renewable (solar) power. Those are happening.
A new all-electric cargo ship with a massive 2.4 MWh battery pack launches in China

 

[mutle]

If you include battery powered ships that can be charged with renewable (solar) power. Those are happening.
A new all-electric cargo ship with a massive 2.4 MWh battery pack launches in China

Norway also has some electric ferries. But hopefully at some point huge cargo ships can also be electrified.

 

[Mike Smith]

Looks like the end of quarter push in Norway has started - 37 registered yesterday and already 42 today.

 

[schonelucht]

It doesn't differ from the supply deals for the 18650-cells. The Gigafactory however is different. Tesla has a major stake in even cell production - if they can make the Gigafactory work well, they can profit in every step of the process.

How? The cell fabrication process is proprietary to Panasonic and off limits for Tesla employees. It's a supply contract for output from a co-located factory. Tesla participates in securing raw materials (see his recent visit to Chili). Volkswagen is too. Tesla is participating in research & development, Volkwagen is too (notably to reduce Cobalt content) I fail to see the dramatic difference. There is just one : Tesla does pack assembly themselves, Volkswagen is outsourcing that as well. Given how well pack assembly is going, I am not sure there are huge rewards to reap there.

But the primary issue I have with this deal is that it's not very big. As I said, it should cover supply for around 4 million 60 kWh vehicles, over an unknown number of years. In 2025, Tesla could be making 2 million EVs per year, likely not one of them with less than 60 kWh.

Those are just current purchase and supply agreements. As noted before, Tesla's entire supply contract and purchase obligations with Panasonic is for -at most- $17B. No one is seriously suggesting that this will somehow constrain Tesla to just 2 million cars total by 2022. Why would it be any different for VW?

 

[aubreymcfato]

Meanwhile, the GF1 is going solar pretty quickly:
Planet Explorer

 

[justvisiting]

It doesn't differ from the supply deals for the 18650-cells. The Gigafactory however is different. Tesla has a major stake in even cell production - if they can make the Gigafactory work well, they can profit in every step of the process.

But the primary issue I have with this deal is that it's not very big. As I said, it should cover supply for around 4 million 60 kWh vehicles, over an unknown number of years. In 2025, Tesla could be making 2 million EVs per year, likely not one of them with less than 60 kWh.

thats simply not true. for all we know, tesla has to purchase fixed quantities for fixed prices. i can see no competitive advantage here. care to explain your reasoning?

 

[Lessmog]

I actually wouldn't write off Norway for Q1. It's starting to pick up, and it's been brought to my attention that Tesla is planning a huge delivery event at Norges Varemesse, Norways largest convention venue (59,000 square meters/635,000 square feet). This should be starting up in "the second half of march", and they will be mass delivering cars right through Easter. (Easter is a major holiday here - most people take the whole week off work and go skiing.)

Some of the rumors are "thousands" of deliveries and a delivery every two minutes. If the last rumor is correct, that means 300 deliveries per day at Lillestrøm alone, assuming 10 hour days.

Given how Tesla is getting ready, I wouldn't rule out 2000+ deliveries this month.

Looks like the end of quarter push in Norway has started - 37 registered yesterday and already 42 today.

Yesterday on my way back from service center I passed a LT-reg Kässbohrer auto carrier with 5-6 Teslas, mostly X I think, on E6 going north from Gothenburg toward Oslo. Also met about 3 empty carriers going the other way. Looks like we are loading up before Easter and EoQ up there in Norway.

 

[schonelucht]

Not sure if this was corrected, but downtime was at both plants. Not to say Grohman systems were installed, but both plants were down.

GF1 wasn't down. In fact, it even seems there were more cars in the parking lot on Feb 21 then there were yesterday.

 

[Zaxxon]

GF1 wasn't down. In fact, it even seems there were more cars in the parking lot on Feb 21 then there were yesterday.

View attachment 286165

Thanks for pulling this. I was going to post that Tesla's statement definitely was not saying both plants were down (nor was it saying they weren't). It merely said that planned downtime at both locations is a thing. I kind of missed that part of the convo, though, and wasn't going to dredge it back up.

 

[j0hn]

For easy to compare imagery of tesla locations i'd suggest www.buildingtesla.com

It features the most important locations , drone video's and timelapses.

Generally updates with new images multiple times a week.

 

[elasalle]

Meanwhile, the GF1 is going solar pretty quickly:
Planet Explorer

Is it possible that GF1 is being provisioned with Solar Roofs from GF3(Buffalo) ? - there was news a while back saying GF3 started production. (while its also Solar tiles, my understanding was also solar panels)

lately there hasn't been any updates of customers getting products from Buffalo GF? So could be all going internal at first - will give more time to test and tune ?

 

[dc_h]

GF1 wasn't down. In fact, it even seems there were more cars in the parking lot on Feb 21 then there were yesterday.

View attachment 286165

Just basing on insideev's and bloomberg reporting, but the statement is ambiguous. Planned downtime is included for both FM and GF, but does not specifically say this was true for GF. So, there could have been some downtime at GF, but only for some specified line or process, while definitely true that Fremont was down. The lot at GF could have been full, with teams reassigned to other tasks, or training on new systems.

Tesla Model 3 Production Was Indeed Halted In February

“Our Model 3 production plan includes periods of planned downtime in both Fremont and Gigafactory 1. These periods are used to improve automation and systematically address bottlenecks in order to increase production rates. This is not unusual and is in fact common in production ramps like this.”

 

[avoigt]

How? The cell fabrication process is proprietary to Panasonic and off limits for Tesla employees. It's a supply contract for output from a co-located factory. Tesla participates in securing raw materials (see his recent visit to Chili). Volkswagen is too. Tesla is participating in research & development, Volkwagen is too (notably to reduce Cobalt content) I fail to see the dramatic difference. There is just one : Tesla does pack assembly themselves, Volkswagen is outsourcing that as well. Given how well pack assembly is going, I am not sure there are huge rewards to reap there.



Those are just current purchase and supply agreements. As noted before, Tesla's entire supply contract and purchase obligations with Panasonic is for -at most- $17B. No one is seriously suggesting that this will somehow constrain Tesla to just 2 million cars total by 2022. Why would it be any different for VW?

VW just made clear that they have no competence in batteries and even decided to lower spending in Development so they don't intend to build that competence in difference for instance to BMW. Tesla has likely the largest Battery development center in house globally testing and investing in every aspect and continue to find ways and technology to make the next improvement work.

So, yes on paper it looks like both outsource to Batterie producers but looking into details you realize that Tesla is the driving force in designing the Batterie technology as well as keeping the Batterie pack production in house.

IOW there is a large difference in how Tesla and VW approach the technology development and innovation. VW does consider the Batterie technology as not strategic and not as a IP they need to own as they do with the ICE drive train. Since years German automakers are stating that the Batterie technology is for every producer globally the same which is just not the reality.

If it is like that what they claim why haven't I see yet a VW EV with low price and range of 500km yet?

Just imagine a large European ICE producer is telling you the drive train of the vehicle is not their core competence and the will supply them from Asia. What kind of car would you expect from them?

"Development spending
Even with its push to ramp up electric-car production and avoid penalties from tighter environmental regulations, Volkswagen plans to rein in expenditures. Development spending declined 3.9% to about $16 billion in 2017, equivalent to 6.7% of sales. The company reiterated a target to lower that to 6% by 2020."

Volkswagen pours $25 billion into electric-car batteries, challenging Tesla

"Manufacturing the powerpacks themselves is not in the cards. “This is not one of our core competencies,” said Mueller, who has faced pressure from employee representatives to invest in battery-cell production. “Others can do it better than we can.”"

 

[hobbes]

Meanwhile, the GF1 is going solar pretty quickly:
Planet Explorer

More on teslarati including higher res pics:
Tesla’s solar rooftop array at Gigafactory 1 is starting to take shape

 

[AudubonB]

While very happy that TESLA made #3, perhaps I should get down to the earth's surface more often. There are two in the top ten that I have never heard of.

Even though you jest, you raise an important point, which is the inanity of this survey. Four of those ten are supermarkets - "When I am asked if a brand is something I recognize...I answer "oh, yes - that's where I shop."

And Apple dominates a certain portion of a consumer-specific product, and so forth. HOWEVER - just what fraction of US households possess a Tesla? I'm pretty sure it's less than, oh, ten percent . So the fact that this consumer product, in the hands of so few Americans, has so much clout as to sit in the #3 spot is truly staggering.

 

[ktrivedi70]

Volkswagen pours $25 billion into electric-car batteries, challenging Tesla

"Manufacturing the powerpacks themselves is not in the cards. “This is not one of our core competencies,” said Mueller, who has faced pressure from employee representatives to invest in battery-cell production. “Others can do it better than we can.”"[/QUOTE]


Shouldn't the headline read "Volkswagen preparing for $25 billion cash burn"? Or does investing in the future equate to 'cash burn' for only one company on Earth? I'm confused.

 

[EinSV]

They signed supply contracts with CATL/Samsung and LG to deliver $25B worth of cells. How does this differ from Tesla signing a supply contract with Panasonic to deliver somewhere around $17B worth of cells?

Among other differences, Tesla engineers and produces the battery packs. Without that expertise and the resulting performance innovations and cost advantages, I seriously doubt that the Semi would be viable, at least with its current specs and pricing. Tesla would be scratching its head like Daimler trying to figure out how to make a truck that’s useful for something other than short trips. The Roadster specs and pricing would also be impossible.

Producing the Model 3 at volumes targeted and with the current performance, efficiency and expected cost would not have been possible. And Tesla would likely not be the leader in storage pricing or battery cost generally.

It also is worth keeping in mind that Tesla initially decided to build the Gigafactory because there was no other way to secure a large enough battery supply fast enough to scale as quickly as it wanted to.

With the factory as a product concept, Tesla should be able to build on the knowledge learned with GF1 to scale even more rapidly with future Gigafactories, allowing it to take advantage of its leading position in the EV and storage markets.

IMO, Tesla’s battery pack engineering and production capabilities are key competitive advantages that crop up across Tesla’s automotive and storage products.

 

[schonelucht]

If it is like that what they claim why haven't I see yet a VW EV with low price and range of 500km yet?

Because they make more money with their ICEs. Gross profit doesn't count when you are playing in the big league. You need to generate cash.

Just imagine a large European ICE producer is telling you the drive train of the vehicle is not their core competence and the will supply them from Asia. What kind of car would you expect from them?

You are reaching. The statement you are quoting is about cell production. Not about the full drivetrain. It's an important part for sure, but one that all car manufacturers so far outsourced. Including Tesla.

Anyway. I note that the previous claim on this board that "They would never find the batteries" was proven false and is now downgraded to "They may have a smaller R&D budget on battery cells but we don't actually know"

 

[Waiting4M3]

Because they make more money with their ICEs. Gross profit doesn't count when you are playing in the big league. You need to generate cash.



You are reaching. The statement you are quoting is about cell production. Not about the full drivetrain. It's an important part for sure, but one that all car manufacturers so far outsourced. Including Tesla.

Anyway. I note that the previous claim on this board that "They would never find the batteries" was proven false and is now downgraded to "They may have a smaller R&D budget on battery cells but we don't actually know"

I think you're also reaching. I doubt someone like VW would ever outsource their engine R&D and design, which is equivalent to what they're doing here. They're leaving the functionality of the cell completely up to their suppliers.