General Discussion: 2018 Investor Roundtable

[dc_h]

Correct for Q2, but Q3 looks like it's back to the old ways again with a significant smaller number of deliveries early in the quarter. Expect seeking alpha authors to make a lot of hay about 'falling deliveries' like they did in the first quarter based on the same pattern.

But in this instance they just pushed more deliveries to international and never rushed to the US market. Q3 and 4 seem like they’ll both be a bit of rush to maximize US deliveries. Will Europe and China be reduced in Q4 and focus on US and then a big push to international after incentives are reduced?

 

[jbih]

Elon might be discussing a Tesla energy storage project in Beijing

 

[jbih]

Something I found odd: Panasonic said they'd like to add funding to Nevada if requested by Tesla. They also said that maybe they'll work together with Tesla in China. Isn't that a little too vague? I'd expect them to discuss this directly with Tesla first. Could it be that Tesla will work without Panasonic in the future?

Tesla partner Panasonic will add funding to Gigafactory if needed, says exec
Japan's Panasonic says it could make batteries with Tesla in China

 

[dc_h]

Something I found odd: Panasonic said they'd like to add funding to Nevada if requested by Tesla. They also said that maybe they'll work together with Tesla in China. Isn't that a little too vague? I'd expect them to discuss this directly with Tesla first. Could it be that Tesla will work without Panasonic in the future?

Tesla partner Panasonic will add funding to Gigafactory if needed, says exec
Japan's Panasonic says it could make batteries with Tesla in China

They can’t do the reveal, have to wait for Elon to announce.

 

[elasalle]

Electrek - 9 minutes ago: Tesla makes Gigafactory 3 in China official, plans to start production in 2 years

While massive/ large scale production could take two years, what are the chances of trying to produce low volume(in Tent mode) or do some assembly (like in Tillsburg ) and immediately work around tariffs? A tariff work around would have immediate impact ...??

 

[mongo]

While massive/ large scale production could take two years, what are the chances of trying to produce low volume(in Tent mode) or do some assembly (like in Tillsburg ) and immediately work around tariffs? A tariff work around would have immediate impact ...??

Low... They need stamping press set up or else ship frames/ raw panels to assemble. Need to ramp all suppliers also. No excess capacity at Fremont, all 3 volume is directed to US due the tax credit, and lack of homologation.

 

[Esme Es Mejor]

If our argument is that the legacy autos' baggage is one of their primary problems, then I'm not sure how buying one other than for factory space is all that great of an idea.

I certainly agree that legacy automakers are doomed by their baggage. The question is how much of this baggage is inherently bad, and how much is only bad because the leadership team doesn’t realize that ICE is an obsolete technology.

For example, Paccar, which builds Kenworth and Peterbilt trucks in the US, and DAF trucks in Europe. Their biggest weaknesses are susceptibility to a recession & losing market share to electric trucks. Tesla could use their existing assembly lines to bring the Semi to market. And, when demand for diesel trucks diminishes, more lines could be converted to electric Semi lines, rather than being idled as they would under Paccar ownership.

I think similar arguments could be made for both Ford and FCA, with their SUV & pickup truck lines. In those cases, they have more substantial risk due to legacy costs & financing arms, but they also have substantial cash hordes that could be very useful in accelerating the transition to sustainable transportation.

 

[Dwdnjck]

Question: which legacy automaker should Tesla buy, if any?

Delorean

 

[BioSehnsucht]

Delorean

I can just see Chanos and co foaming at the mouth now.

 

[BioSehnsucht]

Something I found odd: Panasonic said they'd like to add funding to Nevada if requested by Tesla. They also said that maybe they'll work together with Tesla in China. Isn't that a little too vague? I'd expect them to discuss this directly with Tesla first. Could it be that Tesla will work without Panasonic in the future?

Tesla partner Panasonic will add funding to Gigafactory if needed, says exec
Japan's Panasonic says it could make batteries with Tesla in China

I feel like Tesla probably wanted originally to have multiple suppliers (not just Panasonic) in every GF, so that they would be immune to the fluctuations of individual companies fortunes. But then the ramp didn't go as planned (pulled in too far, pushed back out again, ... being both ahead and behind schedule kinda makes supplier negotiations ... interesting). There was that brief usage of Samsung cells reportedly for the Australian wind farm battery IIRC, and I remember hearing that they were evaluating Samsung cells, but I don't recall if anything further ever came of it.

I don't think they'd use Panasonic in one factory and Samsung (or whomever) in another, but perhaps that will happen. If they end up with multiple supplies I'd imagine they'd rather have all in all locations ... in any case, to do so they'd have to do some kind of cross licensing deal unless each supplier was product limited (i.e. all model 3's are Panasonic, all TE powerwall/packs are Samsung) so that you don't have a variance in cell performance between different modules/packs in a product line... which might end up having been the real deal breaker for having multiple suppliers.

 

[skitown]

I certainly agree that legacy automakers are doomed by their baggage. The question is how much of this baggage is inherently bad, and how much is only bad because the leadership team doesn’t realize that ICE is an obsolete technology.

For example, Paccar, which builds Kenworth and Peterbilt trucks in the US, and DAF trucks in Europe. Their biggest weaknesses are susceptibility to a recession & losing market share to electric trucks. Tesla could use their existing assembly lines to bring the Semi to market. And, when demand for diesel trucks diminishes, more lines could be converted to electric Semi lines, rather than being idled as they would under Paccar ownership.

I think similar arguments could be made for both Ford and FCA, with their SUV & pickup truck lines. In those cases, they have more substantial risk due to legacy costs & financing arms, but they also have substantial cash hordes that could be very useful in accelerating the transition to sustainable transportation.

W/Ford, and FCA, I just have a hard time thinking all the cons are worth the pros. I know far less about semi companies. Seems they couldn't have any more baggage than Ford or FCA though, so perhaps a more interesting option. But again, thinking about purchasing any legacy manufacturer, if the debt, leadership, unions, IP, etc., are a bad fit, it seems a stretch to me that Tesla would want to sign up for an actual purchase vs. hoping to simply purchase a factory and rehiring laid off workers.

 

[generalenthu]

I am consuming too much Tesla news. I thought a bunch of environmentalists were protesting here, but no.

McKinsey Ends Work With ICE

 

[schonelucht]

But in this instance they just pushed more deliveries to international and never rushed to the US market. Q3 and 4 seem like they’ll both be a bit of rush to maximize US deliveries. Will Europe and China be reduced in Q4 and focus on US and then a big push to international after incentives are reduced?

It's certainly possible that Europe should see a small drop due to a focus on the US. But it won't be that big (remember that there was a large surplus S/X production in Q1 and Q2 that serves as a cushion + there will be some osborning due to the upselling for the Model 3P in the states). But the drop we're seeing in Norway for July is minus 80%. That's really because deliveries are prioritized to the end of quarter. There is a healthy number of Norwegians waiting for a car delivery in August and September.

 

[schonelucht]

While massive/ large scale production could take two years, what are the chances of trying to produce low volume(in Tent mode) or do some assembly (like in Tillsburg ) and immediately work around tariffs? A tariff work around would have immediate impact ...??

Read the article. Initial (low volume) production in two years after construction start. Massive scale production is for two to three years AFTER that.

 

[Boomer19]

They can’t do the reveal, have to wait for Elon to announce.

i just think they’re using media as a tool to show willingness. they definitely talk privately about it. it’s a negotiation tactic.
just like when a coach kinda mentions one players name in the media but doesn’t really call him out. its an indirect message

or it’s just them answering a journalists question without divulging private information. as in yes we’re willing to invest more and extend partnership with tesla, even though we already negotiated terms, or are in negotiations, so they don’t look like they dodged/averted a question.

 

[Boomer19]

I feel like Tesla probably wanted originally to have multiple suppliers (not just Panasonic) in every GF, so that they would be immune to the fluctuations of individual companies fortunes.

and this is also a good point. diversify

 

[RobStark]

I think similar arguments could be made for both Ford and FCA, with their SUV & pickup truck lines. In those cases, they have more substantial risk due to legacy costs & financing arms, but they also have substantial cash hordes that could be very useful in accelerating the transition to sustainable transportation.

I don't know much about the Semi manufactures.

But legacy automakers with their Union and Franchised dealer contracts/obligations are a big NO.

The only thing I would want from either Ford or FCA is their brands and maybe a few select factories but not all of them.

Ford Brand,Model E, F-150,F Series, Explorer, Navigator? Yes.

Jeep,Ram, Grand Cherokee, Wrangler, Grand Wagoneer, Maserati, Alfa Romeo? Yes.

 

[mongo]

I feel like Tesla probably wanted originally to have multiple suppliers (not just Panasonic) in every GF, so that they would be immune to the fluctuations of individual companies fortunes.

For the GF setup, does that matter? Tesla isn't buying cells from a separate external supplier, they are setting up supply chain to get raw materials to GF1 for Panasonic to use in Panasonic provided cell making machinery. If the machines work, where is the advantage in multiple suppliers? From a supplier point of view, all production is purchased so it would crazy to not work with Tesla (assuming a profitable sales price).

If the cells were externally sourced, then geographical or company diversification would be good to limit impact of a facility or corporate issue. With tooling in house, having two sections with two suppliers is no different than two sections with the same supplier (other than any supplier specific worker issues). If the contract allows Tesla takeover on Panasonic breach of deliveries, then Tesla is immune to most issues (other than the equipment getting repossessed? ).

 

[MP3Mike]

I don't think they'd use Panasonic in one factory and Samsung (or whomever) in another, but perhaps that will happen. If they end up with multiple supplies I'd imagine they'd rather have all in all locations ... in any case, to do so they'd have to do some kind of cross licensing deal unless each supplier was product limited (i.e. all model 3's are Panasonic, all TE powerwall/packs are Samsung) so that you don't have a variance in cell performance between different modules/packs in a product line... which might end up having been the real deal breaker for having multiple suppliers.

I'm pretty sure that the cell formulation belongs to Tesla, not Panasonic. The only Panasonic IP is in the actual production of the cells.

 

[Intl Professor]

Nice to see the NYT treating Musk's effort in Thailand fairly positively even if there is nothing new to the cognoscenti here.

Elon Musk Defends His Rejected Mini-Sub Plan for Thai Cave

Another article does shed color on the refugee problems of some of the Wild Boars and their leader.

Stateless and Poor, Some Boys in Thai Cave Had Already Beaten Long Odds