General Discussion: 2018 Investor Roundtable

[WarpedOne]

So if you buy a $100k-$200k Mission E it will be a bad experience for long road trips if you pay the equivalent of gas?

No.
The problem is what Porsche is saying about SC being unsustainable holds 10x more about their gas-cost-equivalent chargers.
It is not about the cost of energy, it is all about the cost of property and maintenance. You need as much "foot-traffic" to recoupe those fixed cost. Charging to much will only reduce it.

Porsche is DOA.

 

[NicoV]

No.
The problem is what Porsche is saying about SC being unsustainable holds 10x more about their gas-cost-equivalent chargers.
It is not about the cost of energy, it is all about the cost of property and maintenance. You need as much "foot-traffic" to recoupe those fixed cost. Charging to much will only reduce it.

Porsche is DOA.

Fast chargers are expensive, the question is how do you recuperate the associated fixed cost. All commercial fast charge providers have chosen to bill at a significantly higher cost than home charging. Significantly means 2 to 3x the cost of home charging. This is an incentive for not using it, and only using in emergency situations. Tesla chose a different strategy: charge a price similar to home charging in order to make using a supercharger a no-brainer, which results in high usage. Recoup the supercharger fixed costs based on much cheaper industrial rates and economies of scale. This also is an incentive for higher car sales.
You don’t need to be a genius to realize which approach will lead to the biggest charging network.

 

[mongo]

Fast chargers are expensive, the question is how do you recuperate the associated fixed cost. All commercial fast charge providers have chosen to bill at a significantly higher cost than home charging. Significantly means 2 to 3x the cost of home charging. This is an incentive for not using it, and only using in emergency situations. Tesla chose a different strategy: charge a price similar to home charging in order to make using a supercharger a no-brainer, which results in high usage. Recoup the supercharger fixed costs based on much cheaper industrial rates and economies of scale. This also is an incentive for higher car sales.
You don’t need to be a genius to realize which approach will lead to the biggest charging network.

Yeah, as long as the rate generates a profit, the more hours of use the better. Tesla is also working on becoming their own electrical producer, so they will get better margins on the charging rate than the competition. Further, if Tesla provides energy to the grid, they will partially be profiting off of other company's chargers.

 

[Cobos]

Yeah, as long as the rate generates a profit, the more hours of use the better. Tesla is also working on becoming their own electrical producer, so they will get better margins on the charging rate than the competition. Further, if Tesla provides energy to the grid, they will partially be profiting off of other company's chargers.

Yes all of that is true, but I see the SC network almost entirely as a way to sell cars. The $2000 cost for old S60's for access to the network says how much they thought it would cost them for the life of the car. Though I'm pretty sure the changes in the program reflect Tesla's underestimation of how much people would use a free resource. Hence the required referal link and removing free charging on the M3. I'm guessing they initially thought on average they would break even on the SC or a minor $1000 loss for the life of the vehicles.

Cobos

 

[K_Dizzle]

Production ramp • r/teslamotors

Buckle up buckaroos

 

[Starno]

Production ramp • r/teslamotors

Buckle up buckaroos

Hopefully that's not end of quarter bust rate...

 

[ggies07]

Production ramp • r/teslamotors

Buckle up buckaroos

My arms are open and I'm ready to accept.

 

[jimmyjohn]

Production ramp • r/teslamotors

Buckle up buckaroos

"... my friend ..." ??? <<< from the Redit post.

Come on. "My Friend" is no data point.

 

[RobStark]

No.
The problem is what Porsche is saying about SC being unsustainable holds 10x more about their gas-cost-equivalent chargers.
It is not about the cost of energy, it is all about the cost of property and maintenance. You need as much "foot-traffic" to recoupe those fixed cost. Charging to much will only reduce it.

Porsche is DOA.

The Porsche Network will be small relative to Ionity,Fastned, E.On et al.

The Porsche Network will be very fast and almost always available. Because of the cost.

You discourage overuse, wealthy people trying to take advantage to save a few cents.

 

[ValueAnalyst]

How about this: Model 3 ASP in the second half of 2018 may be more than $60,000.

Since Standard Range is now a 2019 story, and P (10% take rate) and D (50%) are around the corner, as well as already popular EAP (80% take rate) and possible FSD-exclusive features in the coming months with the new-and-improved Karpathy-magic neural networks (50% take rate in 2H18 but possibly as high as 80% with a killer feature like even highway-only Level 3 at $3,000), including wheels and premium paint and delivery:

OPTIONS
Enhanced Autopilot: $5,000; 80% take rate
Full Self-Driving: $3,000; 80% take rate as exclusive features roll out
Premium Upgrades Package: $5,000; 50% take rate
Premium Wheels: $1,500 to $4,500; 50% take rate with $2,000 average
Paint: $1,000 to $1,500; 80% take rate with $1,200 average

MODELS
Long Range: $44,000 - 45%
Long Range with Dual: $49,000 - 45%
Performance with Dual: $75,000 - 10%

ASP without options: $49,350
ASP of options: $10,860
ASP: $60,210 excluding $1,000 delivery

Model 3 ASP may be more than $60,000 in 2H18.

Now consider that the ultra-bearish UBS analyst had estimated Model 3 breakeven (not COGS but EBIT-level so including R&D and SG&A expenses) at $41,000 (page 45 of 95) even using $160/kWh battery cost estimate, which is just dumb. His other dumb assumptions include D&A per unit and Warranty Provision per unit, which should be combined $3,000 per unit lower, but to be conservative, let's use his bear-level dumb assumptions.

$60,000 ASP in 2H18 - $41,000 COGS, R&D, SG&A = $19,000 EBIT per Model 3

31.66% EBIT margin in 2H18.

That's better than Apple.

 

[justvisiting]

How about this: Model 3 ASP in the second half of 2018 may be as high as $60,000 using conservative assumptions.

Since Standard Range is now a 2019 story, and P (10% take rate) and D (50%) are around the corner, as well as already popular EAP (80% take rate) and possible FSD-exclusive features in the coming months with the new-and-improved Karpathy-magic neural networks (50% take rate in 2H18 but possibly as high as 80% with a killer feature like even highway-only Level 3 at $3,000), including wheels and premium paint and delivery:

Model 3 ASP may be as high as $60,000 in 2H18.

Now consider that the ultra-bearish UBS analyst had estimated Model 3 breakeven EBIT (not COGS but EBIT so including R&D and SG&A expenses) at $41,000 (page 45 of 95) even using $160/kWh battery cost estimate, which is just dumb. His other dumb assumptions include D&A per unit and Warranty Provision per unit, which should be combined $3,000 per unit lower, but to be conservative, let's use his bear-level dumb assumptions.

$60,000 ASP in 2H18 - $41,000 COGS, R&D, SG&A = $19,000 EBIT per Model 3

31.66% EBIT margin in 2H18.

That's better than Apple.

well, back up the truck then if you really believe that :-D

 

[JRP3]

I wonder if Tesla will do a P Model 3. Might cut into Model S P sales if they enable the full potential of the 3.

 

[ValueAnalyst]

I wonder if Tesla will do a P Model 3. Might cut into Model S P sales if they enable the full potential of the 3.

Some people will always want a bigger car, more luxury, and more range. I expect MS' battery size (i.e. range and charge time per 100 miles) to be the primary distinguishing factor going forward, but there will be others. If Tesla can fit 200 kWh in a Roadster, then it can up MS' battery size beyond the current high of 100 kWh. I'm modeling 125 kWh avg battery size after the refresh as part of my sanity check for Gigafactory capacity needed by quarter for my Base and Conservative projections. Further, Model S is available now vs. significant wait time for Model 3, which will come into play in a major way once the news of 200,000th US delivery picks up.

Having said that, even if Tesla never introduced the P75D, Tesla's EBIT margin would still be better than Apple according to above math.

 

[schonelucht]

The following graph is based on the data submitted to the google spreadsheet. I seperated out VIN assignments from before the factory shutdown (blue) and after the factory shutdown (red). I took March 7th as the separation date. This is possibly a little arbitrary and I am open to rerun the data with a different date but I think it is a good fit. It's nearly two weeks after the shutdown to allow time for the production improvements to actually trickle down to VIN assignments. March 7 is also the first VIN assignment storm by Tesla. In addition to the two data sets, I also graphed the linear trendlines for both sets. Here is the result :

It's quite clear that there are two different trends. Production most certainly picked up. So far the good news. Now for the less good news : the slope of the two trendlines is the number of VINS assigned per day (assuming there are no gaps in the VIN assignment!) For the blue series this slope is 75 cars/day or 525 per week. The red slope is 135 cars/day or 945 per week. This is clearly much less than everyone is currently hoping (between 1000 and 1500; I've seen some here mentioning close to 2000/week after the NHTSA disclosures).

How is that possible? I think few here really realized how bad VIN progression actually was before the factory shutdown. Most still had that 1000/week from the end of year in mind, maybe discounted a little but certainly not by half. So even an almost doubling of the production rate still comes down to less than 1000 cars/week.

Note : I had to lightly edit the graph to crop the trendlines to just the data range that was relevant for each.

 

[Esme Es Mejor]

I wonder if Tesla will do a P Model 3. Might cut into Model S P sales if they enable the full potential of the 3.

Elon Musk on Twitter

 

[ValueAnalyst]

The following graph is based on the data submitted to the google spreadsheet. I seperated out VIN assignments from before the factory shutdown (blue) and after the factory shutdown (red). I took March 7th as the separation date. This is possibly a little arbitrary and I am open to rerun the data with a different date but I think it is a good fit. It's nearly two weeks after the shutdown to allow time for the production improvements to actually trickle down to VIN assignments. March 7 is also the first VIN assignment storm by Tesla. In addition to the two data sets, I also graphed the linear trendlines for both sets. Here is the result :

View attachment 288898

It's quite clear that there are two different trends. Production most certainly picked up. So far the good news. Now for the less good news : the slope of the two trendlines is the number of VINS assigned per day (assuming there are no gaps in the VIN assignment!) For the blue series this slope is 75 cars/day or 525 per week. The red slope is 135 cars/day or 945 per week. This is clearly much less than everyone is currently hoping (between 1000 and 1500; I've seen some here mentioning close to 2000/week after the NHTSA disclosures).

How is that possible? I think few here really realized how bad VIN progression actually was before the factory shutdown. Most still had that 1000/week from the end of year in mind, maybe discounted a little but certainly not by half. So even an almost doubling of the production rate still comes down to less than 1000 cars/week.

Note : I had to lightly edit the graph to crop the trendlines to just the data range that was relevant for each.

You may be right that early March build rate could be around 1,000/wk even following the downtime, but it may also be that the line is still ramping through March, and late March build rate will matter more to SP, and June build rate will matter 10x more to valuation. Let's give it another week.

Also, what happens if you exclude the QC-related outliers (say bottom 5%), which will improve going forward?

 

[Mike Smith]

The following graph is based on the data submitted to the google spreadsheet. I seperated out VIN assignments from before the factory shutdown (blue) and after the factory shutdown (red). I took March 7th as the separation date. This is possibly a little arbitrary and I am open to rerun the data with a different date but I think it is a good fit. It's nearly two weeks after the shutdown to allow time for the production improvements to actually trickle down to VIN assignments. March 7 is also the first VIN assignment storm by Tesla. In addition to the two data sets, I also graphed the linear trendlines for both sets. Here is the result :

View attachment 288898

It's quite clear that there are two different trends. Production most certainly picked up. So far the good news. Now for the less good news : the slope of the two trendlines is the number of VINS assigned per day (assuming there are no gaps in the VIN assignment!) For the blue series this slope is 75 cars/day or 525 per week. The red slope is 135 cars/day or 945 per week. This is clearly much less than everyone is currently hoping (between 1000 and 1500; I've seen some here mentioning close to 2000/week after the NHTSA disclosures).

How is that possible? I think few here really realized how bad VIN progression actually was before the factory shutdown. Most still had that 1000/week from the end of year in mind, maybe discounted a little but certainly not by half. So even an almost doubling of the production rate still comes down to less than 1000 cars/week.

Note : I had to lightly edit the graph to crop the trendlines to just the data range that was relevant for each.

Your blue line looks correct, but the red line should be split into two sections - it looks like pace quickened significantly starting March 19.

 

[Mike Smith]

Elon Musk on Twitter

Should probably mention that this tweet is from last summer. I freaked out a bit when I read that.

 

[schonelucht]

Your blue line looks correct, but the red line should be split into two sections - it looks like pace quickened significantly starting March 19.

Unfortunately due to the granularity of the data (rounded to 100 for most) and the short interval, there is no statistically relevant conclusion to be had either way. I will try to run the analysis again from that date next week.

You may be right that early March build rate could be around 1,000/wk even following the downtime, but it may also be that the line is still ramping through March, and late March build rate will matter more to SP, and June build rate will matter 10x more to valuation. Let's give it another week.

Also, what happens if you exclude the QC-related outliers (say bottom 5%), which will improve going forward?

Improvements in production rates are certainly possible in the next week or so (my range is indicative to let’s say 10 days ago). But in my experience they’ll be more incremental and not a step change. Unless a new line comes on stream at the gigafactory.

How would you define what is an outlier and what isn’t? Also, cars taking longer in QC is reality. Filtering them out may make the numbers look slightly better but don’t learn us anything about actual current capacity.

 

[gtrplyr1]

Just got this notification from CNBC:

Elon Musk directs Tesla to "slow down" on deliveries this quarter, citing local capacity issues


Not sure what to make of this ? Has the production ramped up so much that they can't "deliver" fast enough ??

Anyone want to shed some insight ?

EDIT: CNBC just revised the title to include deliveries "in Norway" ... so this obviously does not speak to Model 3 production. Story goes on to say Tesla is having trouble finding companies to safely deliver their vehicles ....

is it really that hard ??