General Discussion: 2018 Investor Roundtable

[generalenthu]

Only if you believe the claims in the article, which starts off with irrational fear mongering about lithium batteries.

I didn't even see any claims.. how many cycles can it be effective over? What's the cycle efficiency. Even lead acid batteries are $100 per kWH. Flow batteries are I think even cheaper on sticker price. Also looks like it may not be able to hold a charge for more than a few days.

Would be interesting to see more hard numbers.

 

[AWDtsla]

We literally incentivize people not to work (and have been doing so for generations) by giving them more a month in housing, food, and medical care than they can earn at an entry level job

Oh please, we give you electric cars and smartphones with GPS and instant connectivity around the world, and you barely had to do anything for it. You certainly didn't have to learn or contribute anything like Pythagoras, Newton, Ohm, Ampere, Volta, Bohr, Rutherford, Feynman, Tesla, Edison, Plank, Einstein. I'm barely covering anything here, forget about modern medicine or the comforts of home, or anything you eat.

You're all freeriders and you don't deserve what you get.

 

[neroden]

It isn't true because of the source? I've lived in San Francisco all my life and there is more income inequality here than anywhere else I've been. LA is the same.

The real reasons for the housing crisis and massive inequality in San Francisco are:
(1) ZONING. Basically, it's illegal to build apartment buildings in California. The new Mayor of San Francisco (London Breed) has pledged to change this.... but for now, it's still illegal.

The ban on new housing creates homelessness, prevents most people from getting ahead (because all their money goes to try to find housing, and probably to transportation since their housing is so far away from their jobs), and massively increases the wealth of the "old money" who already have housing.

Nice long article digging into this. It's 4 years old, you have no excuse for not having read it.
How Burrowing Owls Lead To Vomiting Anarchists (Or SF’s Housing Crisis Explained)

Too hard to read? It's also a comic book!
Burrowing Owls, Vomiting Anarchists & SF Housing: The Comic

(2)...exacerbated by Proposition 13, which again benefits the "established" and hurts anyone new, by letting "oldsters" and corporations pay far lower taxes than newbies.

(3) Your nice climate. When people are homeless, if they have a choice of California, Arizona, or Minnesota, in Arizona they will die of heatstroke, and in Minnesota they will freeze to death, but in California they will live.

 

[dmunjal]

The real reasons for the housing crisis and massive inequality in San Francisco are:
(1) ZONING. Basically, it's illegal to build apartment buildings in California. The new Mayor of San Francisco (London Breed) has pledged to change this.... but for now, it's still illegal.

The ban on new housing creates homelessness, prevents most people from getting ahead (because all their money goes to try to find housing, and probably to transportation since their housing is so far away from their jobs), and massively increases the wealth of the "old money" who already have housing.

Nice long article digging into this. It's 4 years old, you have no excuse for not having read it.
How Burrowing Owls Lead To Vomiting Anarchists (Or SF’s Housing Crisis Explained)

Too hard to read? It's also a comic book!
Burrowing Owls, Vomiting Anarchists & SF Housing: The Comic

(2)...exacerbated by Proposition 13, which again benefits the "established" and hurts anyone new, by letting "oldsters" and corporations pay far lower taxes than newbies.

(3) Your nice climate. When people are homeless, if they have a choice of California, Arizona, or Minnesota, in Arizona they will die of heatstroke, and in Minnesota they will freeze to death, but in California they will live.

You ever visited the Bay Area? Zoning is an issue in SF but how about the rest of the Bay Area which also has massively high cost of living and income inequality.

At least you acknowledge that government is at fault here. Local or state. That's the only point I'm making.

 

[neroden]

You ever visited the Bay Area?

I probably know more about it than you do. Living there all your life doesn't seem to have made you bother to actually learn anything about it.

(And yes, of course I've been there, and I know a lot of people who live there.)

Zoning is an issue in SF but how about the rest of the Bay Area which also has massively high cost of living and income inequality.

It's actually an even worse issue in the rest of the Bay Area. Did you even read the article I linked? It goes into detail! Zoning in places like Mountain View is far, far worse than in SF proper. It's even a problem in most of the East Bay, and in Marin and Sonoma, oh my god.

At least you acknowledge that government is at fault here. Local or state. That's the only point I'm making.

Well, you made the point very badly, because you didn't actually understand what was going on. YES, there are some massive problems caused by both local and state government in California. If you want to fix them, it helps to know what the actual problems are and who caused them (hint: Republicans pushed Prop 13, and instituted the first zoning codes) rather than just making incoherent, brainless attacks on "government".

California ain't liberal at *all* when it comes to its land laws.

 

[Duffer]

Did you drive thru LA in 1974, and _attempt_ to breath the air?
"hello, Sulpher Dioxide" (SO2), Hello Carbon Monoxide" (CO)

Yes and thankfully we were driving through as quickly as possible.

The real reasons for the housing crisis and massive inequality in San Francisco are:
(1) ZONING. Basically, it's illegal to build apartment buildings in California. The new Mayor of San Francisco (London Breed) has pledged to change this.... but for now, it's still illegal.

The ban on new housing creates homelessness, prevents most people from getting ahead (because all their money goes to try to find housing, and probably to transportation since their housing is so far away from their jobs), and massively increases the wealth of the "old money" who already have housing.

Nice long article digging into this. It's 4 years old, you have no excuse for not having read it.
How Burrowing Owls Lead To Vomiting Anarchists (Or SF’s Housing Crisis Explained)

Too hard to read? It's also a comic book!
Burrowing Owls, Vomiting Anarchists & SF Housing: The Comic

(2)...exacerbated by Proposition 13, which again benefits the "established" and hurts anyone new, by letting "oldsters" and corporations pay far lower taxes than newbies.

(3) Your nice climate. When people are homeless, if they have a choice of California, Arizona, or Minnesota, in Arizona they will die of heatstroke, and in Minnesota they will freeze to death, but in California they will live.

Golfing year around.

If you are a productive Californian (work & pay taxes) then finding affordable housing near where you work can, depending of course on where you work, be difficult. If on the other hand your life is subsidized by the taxpayers, the State mandates a percentage of ANY housing that is not gated to be given to low income families. For example, the new housing development that my sister-in-law bought into (starting at $600,000) a percentage of those homes were set aside for section 8 and for CDC parolees. Gated communities are exempted because the developers pay extra fees (passed on to the buyers) aka NIMBY.

There are several groups that provide housing vouchers to those living on the streets, most of the homeless refuse them because of the rules (no drugs, no alcohol, no weapons).

IF the California government truly wanted to resolve the "welfare state" issue they actually could do so. However, it's against their interests. The more demand > the larger the budget > the larger the budget > the more employees > more employees > more promotions. What agency at any level doesn't want growth? Additionally, the politicians need a beholden voter base to guarantee that they can remain at the trough.

 

[dmunjal]

I probably know more about it than you do. Living there all your life doesn't seem to have made you bother to actually learn anything about it.

(And yes, of course I've been there, and I know a lot of people who live there.)


It's actually an even worse issue in the rest of the Bay Area. Did you even read the article I linked? It goes into detail! Zoning in places like Mountain View is far, far worse than in SF proper. It's even a problem in most of the East Bay, and in Marin and Sonoma, oh my god.



Well, you made the point very badly, because you didn't actually understand what was going on. YES, there are some massive problems caused by both local and state government in California. If you want to fix them, it helps to know what the actual problems are and who caused them (hint: Republicans pushed Prop 13, and instituted the first zoning codes) rather than just making incoherent, brainless attacks on "government".

California ain't liberal at *all* when it comes to its land laws.

Prop 13 has been around a long time and the Bay Area has always been expensive.

But we've never seen anything like this.

Same with homelessness, it's always been an issue but not to this extent.

You just can't blame Prop 13 and zoning regulations for the extreme conditions we see today.

The amount of feces and needles on the streets is not due to Prop 13 or zoning.

It's easier to get a needle to shoot up heroine than it is to get a plastic straw in SF.

San Francisco More Concerned about Dirty Straws than Dirty Needles | Todd Starnes

 

[JRP3]

It isn't true because of the source?

It certainly could be inaccurate because of the source, just as most of the negative articles about Tesla only tell part of the story to paint an inaccurate picture.

 

[SPadival]

Now I'm wondering: how can we communicate this to Tesla?

PM me for the email

 

[AudubonB]

MODERATOR

Keep your -

Homelessness
Needles
Strident lectures in economics

And other dead-certain to be polarizing, OFF-TAPIOCA subjects and opinions

Out of here. Full stop. No quarter given. No mercy extended.

 

[EinSV]

That rarest of rare events these days -- a positive Tesla comment by a reporter (Tom Randall):

Tom Randall‏Verified account @tsrandall
The addition of the new lines in the next few months will bring Gigafactory cell capacity to 35 gigawatt hours. Back in 2014, when Tesla first unveiled plans for the Gigafactory, Musk forecast 35 gWh of cells in 2020—a goal that many thought at the time was outrageous

Tom Randall on Twitter​

 

[MP3Mike]

That rarest of rare events these days -- a positive Tesla comment by a reporter (Tom Randall):

Tom Randall‏Verified account @tsrandall
The addition of the new lines in the next few months will bring Gigafactory cell capacity to 35 gigawatt hours. Back in 2014, when Tesla first unveiled plans for the Gigafactory, Musk forecast 35 gWh of cells in 2020—a goal that many thought at the time was outrageous

Tom Randall on Twitter​

Yeah, but he got the details wrong, saying that they are only adding 2 new lines, which then has caused the shorts to make up FUD based on that incorrect information. Details matter people. (They are adding 3 lines which is a 30% increase in capacity.)

 

[brian45011]

Moved from Market Action thread:

...you need to explain why Tesla paid off their DOE loans nearly years early. There was no point in that either, right? ...

They paid the loan off early because a LOT of shorts were whining that Tesla was only alive due to generous handouts from the American public. So pay off the loan early WITH interest to show Tesla is viable and does not need any hand outs.

The DOE loan was paid off early to *get out from under the onerous paperwork requirements*. Tesla had to file extensive and ridiculous paperwork to demonstrate compliance with the DOE loans, which required many hours of work by highly skilled people -- Tesla wanted to stop wasting their time on it.

sub said: ↑
I did a quick search but did not find the answer, someone here will know. Didn’t Tesla pay back the DOE loan early because it had some restrictions in it that Tesla needed gone for business/funding purposes? I don’t remember exact details.
Apparently they did.Tesla’s loan payback deprives US of stock options worth $270 million

To provide some contemporaneous documentary context to what happened:

The total DOE loan was $465 million; $102.9 million for the P (Power-train) Facility and $363.1 million for the (Model) S Facility. Principal & Interest installments began on December 15, 2012; there were 28 equal installments for the P Facility and 40 equal installments for the S Facility. Original maturities were September 15, 2019 for the P Facility and September 15, 2022 for the S Facility.

p. 111 of Amendment No. 1 to Registration Statement on Form S-1

In the fall of 2012, Tesla was struggling with initial Model S production. It sold ~5 million shares in the 2nd follow on offering in mid-September 2012 raising about $150 million http://ir.teslamotors.com/static-files/7738bc45-7f30-45d8-bb6f-4fe82e6eeb95

Environmental subsidies became an issue in the 2012 election when Romney called Solyndria, Fisker, and Tesla "losers." Elon reacted:

Musk, in a blog posted before the debate on Wednesday, said misconceptions had arisen from last week’s disclosures by the company and he wanted to correct the media’s “wrong impression” that Tesla was in financial trouble.“We described a relatively pessimistic scenario for Tesla, which was incorrectly interpreted by some to be what we thought was the most likely scenario,” he said. “We raised the funds (from the stock offering) simply for risk reduction.”He reiterated that Tesla was on the verge of becoming cash-flow positive by the end of November and said it would not have to spend any of the new money it had raised until it began a major new vehicle program...Tesla has an ambitious portfolio of future products. The next vehicle due is the Model X, a mid-size crossover based on the Model S. Tesla plans to begin building the Model X in late 2013. https://www.reuters.com/article/us-tesla-ceo/tesla-is-fine-repaying-u-s-government-loans-ceo-idUSBRE8930SL201210041 and An Update from Elon Musk ​

Tesla's annual 10k was filed late in early 2013. http://ir.teslamotors.com/static-files/22a49572-53fe-47ed-9514-3100c29585f2 Shortly before that notice was filed, Tesla entered into:

FOURTH AMENDMENT, dated as of March 1, 2013 (this “Amendment”), to the Loan Arrangement and Reimbursement Agreement, dated as of January 20, 2010 (as amended by the First Amendment to the Loan Arrangement and Reimbursement Agreement dated as of June 15, 2011, the Limited Waiver dated as of February 22, 2012, the Second Amendment to the Loan Arrangement and Reimbursement Agreement dated as of June 20, 2012, the Second Limited Waiver to the Loan Arrangement and Reimbursement Agreement dated as of September 24, 2012, the Third Amendment to the Loan Reimbursement Agreement dated December 20, 2012​

The waivers and amendments related to DOE's concessions for Tesla's previous breaches of the financial covenants. The key provisions in the 4th Amendment were:

"At least five (5) Business Days prior to the Intended Pre-payment Date, the Borrower shall deliver to DOE and FFB a Prepayment Election Notice, specifying that it elects to prepay the Advances under the Notes in a principal amount that results in a Prepayment Price equal to $4,523,366.91 in accordance with Sections 3.6(c)(viii) and (ix)(C), and shall make such prepayment on or before June 15, 2013...

(i) Annex A to the Arrangement Agreement is hereby amended by amending and restating the following definitions in their entirety to read as follows (and, for the avoidance of doubt, the final payments under Note P and Note S to be made on the following dates, respectively, shall not be deemed prepayments subject to Section 3.6):

“‘Note P Stated Maturity Date’ means December 15, 2017.”
“‘Note S Stated Maturity Date” means December 15, 2017.”
​

In essence, DOE accelerated the maturity dates for the P and S notes by one and five years, respectively; and gave Tesla an option of paying, in addition to the normal (~$13 million) P&I installment due on June 15, 2013, another $4.5 million in principal so DOE would not call the entire loan. Tesla cash & equivalents balance at March 31, 2013 was $127 million while current liabilities were $212 million.

In the 1Q13 earnings conference call on May 7, 2013, Elon was asked about a possible capital raise. His response (paraphrasing):

"We don't have any plans right now to raise funding. Essentially we were positive cash flow in Q1 and expect to be about neutral in Q2, but there is always the possibility of being opportunistic about raising a round. We have spent no time on that at all. If we were to do a round it would be ... to protect against a force majeure event."​

At 13:30 et seq.

Just eight days later Tesla filed two prospectus; one for $660 million in 2018 convertible notes and the second for selling ~4.5 common million shares to raise an additional ~$415 million. Ultimately, counting commissions, net hedge fees, cash and additional shares, redeeming the 2018 notes cost Tesla at least double the original principal.

 

[brian45011]

I didn't even see any claims.. how many cycles can it be effective over? What's the cycle efficiency. Even lead acid batteries are $100 per kWH. Flow batteries are I think even cheaper on sticker price. Also looks like it may not be able to hold a charge for more than a few days.

Would be interesting to see more hard numbers.

Some more explanation. "30,000 cycles over 5 years"

 

[oneday]

Some more explanation. "30,000 cycles over 5 years"

Doesn’t seem like the energy density is that good. Or the C rate.

Quote at the very end of the segment. “and we’re reducing the size and thats where we’re going But that’s a while away.”

 

[bhtooefr]

Poor energy density and C rate isn't as much of a problem for grid storage applications, though, which are in competition with Powerwall (to an extent) and Powerpack (to a much bigger extent).

 

[AWDtsla]

Doesn’t seem like the energy density is that good. Or the C rate.

Quote at the very end of the segment. “and we’re reducing the size and thats where we’re going But that’s a while away.”

Can't find a single spec: NantEnergy - Air Breathing Zinc Rechargeable Storage Cell This is usually not a good sign.

 

[EinSV]

Yeah, but he got the details wrong, saying that they are only adding 2 new lines, which then has caused the shorts to make up FUD based on that incorrect information. Details matter people. (They are adding 3 lines which is a 30% increase in capacity.)

The tweet I quoted highlights an important point that is often overlooked -- Tesla is well ahead of its original schedule for Gigafactory battery production that most commentators thought was pie in the sky. Reporters -- especially Tesla reporters -- rarely seem to get all the details correct and I don't think the error here in another tweet detracts from his main point.

Of course shorts will attack any reporter saying anything positive about Tesla -- look what happened to Dan Neil on Twitter when he posted a positive review of the P3D.

 

[ggies07]

Tesla is bringing Model 3 to Paris Motor Show, inviting French reservation holders

Reservation holders will be offered to “skip the line” with a ID and their reservation numbers. The price of the vehicle will be shared later.”

 

[Sg911]

So, from hanging out in the Model 3 forums, I've concluded:
-- Tesla has a database integrity problem. The longest delays are happening to people who have put in all their information correctly, can see it at tesla.com, but when the operations schedulers / delivery schedulers go to look at it from THEIR end, it looks like something's missing (the $2500 deposit in two cases, license and insurance in two cases, delivery location in two cases, etc.) so the order doesn't get processed.

This is serious. I've been saying for years that Tesla has GENUINELY BAD Information Technology. This should not be happening and it should be fixed promptly. I doubt they're even aware of it.

I am pretty sure this is the cause of people not getting their cars when people who ordered far later got their cars.

-- This is totally independent of the chaotic mess related to delivery scheduling. The badly designed IT system requires that a "placeholder" delivery date be put in in order to kick the system into processing the order. This means *everyone* gets a bad delivery date once their order starts being processed. This fake delivery date should probably not be published to the customer at all. At that point, a human is supposed to actually handle the stuff related to making sure the car gets built, transported, and delivered -- this works when you have an active delivery specialist and doesn't work when you have an MIA one. (And they don't have enough employees doing it.)

The IT weaknesses are severe and are exacerbating the general internal communications weaknesses. It's actually terrible. If Tesla didn't have through-the-roof demand, this would kill the company. I've been warning about the communications problems for a couple of years; I didn't think they were going to kick the company in the ass quite this quickly.

I'll take bets on when Musk and Guillen recognize the nature of their problems and actually start fixing them. There are some hopeful signs that they might be starting to recognize the problems, but I wouldn't count on it -- I don't think Musk realizes that that have a data integrity problem. They do, it's serious, it should be very high priority, and there's *no way to communicate it to him* because the internal communications seem to be totally b0rked.

My confirmation on this ...
Charlotte, NC Waiting Room