General Discussion: 2018 Investor Roundtable

[aubreymcfato]

IMO, nobody can figure out when the frackers will go belly-up! They seem to be financed by an endless flood of dumb money. Initially, the business model / scheme was to sell their wells to the oil majors at inflated prices -- so the oil majors provided the dumb money. THAT might still be working, I'm not sure, but I think the oil majors have gotten a bit wiser. The next scheme is essentially optimistic talk to Wall Street to get money, which has definitely been working. Perhaps the increase in interest rates will help discourage this, by convincing Wall Street to invest in T-bills instead? Who knows.

I thought the oil price crash in 2008 would have done it --- nope. The crash in 2014-2015 -- nope. I would have thought the horrible ten years of stock market underperformance and negative cash flow would have done it. It didn't. I would think this price crash would do it, but at this point I'm not betting on it!

Well, if you can figure out when the flood of wasted investment into fracking companies will end, please let me know. It seems to depend on an element of mass psychology which I can't predict. Every one of these very-debt-heavy, cash-flow-negative companies keeps managing to pile on MORE debt. I can't figure out when people will stop buying the debt. I don't even know who's buying the debt.

Sometimes I think about Tesla as the greatest BDS-like action against oil industry of all time.
It's not just that they are producing great EVs and battery solutions that can enable scalable renewable energy to global levels, but they can financially suck it up capital that was previously invested in oil.
The moment Tesla assures the market that they can be profitable 3, 4 Qs in a row, it will be harder to believe the major short narrative, and huge piles of money will be moved.
I fear/hope that the oil empire will crumble faster than many expect.

 

[HG Wells]

Well a few years ago I was thinking about opening a line of boutique gas stations.
That sold gas at a dollar or two above the competition.
I guess you could say I just flirted with the idea.

Oil is organic. Its all natural. You could make gas with no added ingredients.
The advertising was simple and direct.

Everybody loves organic food, Doesn't your car deserve it ?

 

[watteau]

Well a few years ago I was thinking about opening a line of boutique gas stations.
That sold gas at a dollar or two above the competition.

Our Gas comes from High Grade Wells!

 

[bhtooefr]

You joke, but there actually is a business in selling ethanol-free gas as a premium product, as well as high octane racing fuels, higher cetane and lubricity diesel (American diesel fuel is low cetane and poor lubricity compared to what's sold in Europe), etc., etc.

 

[HG Wells]

You joke, but there actually is a business in selling ethanol-free gas as a premium product, as well as high octane racing fuels, higher cetane and lubricity diesel (American diesel fuel is low cetane and poor lubricity compared to what's sold in Europe), etc., etc.

I buy ethanol-free gas for my lawn mower.
I have the bad habit of leaving gas in the tank over the winter.
Before i switched to ethanol-free gas I had to take the mower in for an engine clean almost every year.

 

[JRP3]

If you can get ethanol free gas it's better to store vehicles with a full tank, adding stabilizer of course. Empty tanks condense moisture on the inside in the cold,leading to rust and water in the fuel system. Another advantage of battery power over ICE.

 

[ReddyLeaf]

You joke, but there actually is a business in selling ethanol-free gas as a premium product, as well as high octane racing fuels, higher cetane and lubricity diesel (American diesel fuel is low cetane and poor lubricity compared to what's sold in Europe), etc., etc.

True. Some older gas vehicles really require this stuff. The manual for my 70s era car said: use regular gasoline, 92 octane.

 

[Curt Renz]

I spoke by phone this evening with a sales agent at the Tesla store in Westmont, Illinois (west suburban Chicago). I was told there is a modest number of Model 3’s in inventory at the five stores throughout Chicagoland, and any of them could be transferred between stores at a customer’s request. They exist so that Chicagoland customers can still receive delivery before the end-of-year deadline for the full tax credit.

 

[bhtooefr]

From Market Action:

Rental cars and company fleets will be a huge market once Tesla is able to capitalize. Just one anecdote, my ex works for a huge Sweedish company here in the states and their entire fleet of company vehicles are hybrids so that they can meet their internal "green" numbers. No doubt they will be interested in EVs once they are feasible. There are definitely other companies with similar goals.

One note is that fleet sales are typically seen as a very bad sign in the traditional automotive industry... because fleet is seen as the low-margin last resort by traditional automotive manufacturers. This could be seen by the market as Tesla pulling a last resort demand lever, even if it's actually driven by the fleets themselves beating down Tesla's door to get the cars.

 

[Curt Renz]

Electrek - today:

Tesla releases software update to help unfreeze charge port
Tesla starts new leasing company in China
Tesla updates Model 3’s headlights, earns better rating from IIHS

 

[Curt Renz]

I spoke by phone this evening with a sales agent at the Tesla store in Westmont, Illinois (west suburban Chicago). I was told there is a modest number of Model 3’s in inventory at the five stores throughout Chicagoland, and any of them could be transferred between stores at a customer’s request. They exist so that Chicagoland customers can still receive delivery before the end-of-year deadline for the full tax credit.

I spoke again today with another Tesla sales agent from that Westmont, Illinois store.

He said that if a car with a specific configuration is not in inventory in Chicagoland, it still may be possible to have one trucked here from another region before the end of the year. Even next year, cars will be first sold from inventory, and made-to-order in Fremont only if the desired configuration is not available in inventory.

He also noted there are about 300,000 Model 3 reservations that have not yet led to orders. I suspect that many of those are due to those waiting for the less expensive short range version. Many of those potential customers might not earn enough to be able to take advantage of the full $7500 tax credit, but may still qualify for most of the $3750 tax credit that will be available during the first half of 2019.

Due to that the sales agent does not expect a drop off in demand once 2019 arrives. In fact he expects demand to grow exponentially as the base for word-of-mouth advertising grows. Of course the referral program aids in that regard.

 

[Curt Renz]

Detroit News - last night and updated today: Payne: A Tesla is Detroit News Vehicle of the Year

 

[neroden]

He also noted there are about 300,000 Model 3 reservations that have not yet led to orders. I suspect that many of those are due to those waiting for the less expensive short range version.

That or the less expensive non-premium interior.

Many of those potential customers might not earn enough to be able to take advantage of the full $7500 tax credit, but may still qualify for most of the $3750 tax credit that will be available during the first half of 2019.

Yeah -- I'm not sure Tesla will get the SR car out in the first half of 2019, though. They might be getting their cars in the second half of 2019, with the $1875 tax credit.

Due to that the sales agent does not expect a drop off in demand once 2019 arrives. In fact he expects demand to grow exponentially as the base for word-of-mouth advertising grows. Of course the referral program aids in that regard.

 

[RobStark]

EV Sales: Global Top 20 - November 2018

 

[Buckminster]

EV Sales: Global Top 20 - November 2018

Baic EC series doing well. Looks like this:

$25,000, before subsidies
Trouble is, race to the bottom has begun..
It will get killed by this(ORA R1) :

USD 8,680 (subsidies included).

 

[jeewee3000]

He also noted there are about 300,000 Model 3 reservations that have not yet led to orders. I suspect that many of those are due to those waiting for the less expensive short range version. Many of those potential customers might not earn enough to be able to take advantage of the full $7500 tax credit, but may still qualify for most of the $3750 tax credit that will be available during the first half of 2019.

That or the less expensive non-premium interior.

To add to the above, in my opinion the greatest factor is that only the US-based reservation holders - and recently part of European reservation holders - had the chance to order the car.

Those in the US still holding their reservation are either waiting for other configurations or waiting for financial reasons (TSLA hitting ATH, for example ), those in other markets waited because there is/was no other option.

Expect a surge in reservations turning into orders from the European side before January 1st since that is the deadline Tesla mentioned in their order-invitation: order before then and they guarantee delivery in February 2019. Many a family is deciding on car colour and whether or not to invest in EAP but will make up their minds before New Year's Eve.

 

[Chickenlittle]

Baic EC series doing well. Looks like this:

$25,000, before subsidies
Trouble is, race to the bottom has begun..
It will get killed by this(ORA R1) :

USD 8,680 (subsidies included).

Where do the legs go?

 

[Chickenlittle]

Well a few years ago I was thinking about opening a line of boutique gas stations.
That sold gas at a dollar or two above the competition.
I guess you could say I just flirted with the idea.

Oil is organic. Its all natural. You could make gas with no added ingredients.
The advertising was simple and direct.

Everybody loves organic food, Doesn't your car deserve it ?

Arsenic and asbestos also “organic”. You can corner those markets-not too late

 

[bhtooefr]

From Market Action (there's probably a better thread than this, but screw it, and quoting two posts out of the discussion):

Re-reading the PDF, indeed, it lloks like they used a well-to-wheel factor of 2.9. Taking this into account, I still get to an astonishingly high number of 110Wh/km. Let’s say this is competitive with an EV with one passenger, but as soon as you get to 2 passengers per EV it’s no contest.

Background info: I looked this up because there are political parties in Belgium that want to expand public transport. Over the last few decades, a lot of train stations have been closed, and the frequency of trains has gone down (a lot). With the above data, if the frequency goes up without a corresponding increase in passengerkm (most likely, because it’s the unpopular timeslots that have been scrapped), you quickly come to the point that electric robotaxis with just one passenger are more energy efficient than trains. So the political idea that better public transport is better from a social and ecological point of view is not correct. From the ecological point of view it’s not correct because of the enegergy disadvantage mentioned above, and socially it’s incorrect because the most energy efficient solution will also be the cheapest solution.

(some other posts)

Agree on the last sentence but with different conclusions about impact to public transport: The disadvantage of going from where you aren't to where you don't want to be - as NicoV so nicely summarized it - will matter much less when you can switch to a robotaxi for the first and last mile. As long as ground transportation remains 2D (i. e. until a decent network of tunnels increases capacity), public transport is faster than individual transport in metro areas and potentially cheaper per mile. In other words: PT will be more attractive with the advent of FSD as it will seamlessly integrate with more modes than today. Electric scooters already partially close the gap.

Additionally, is the Belgian rail system the model of an efficient rail system? I'd look at the national averages for, say, Japan, if you want to hold EVs up to the best rail can offer, although I'm not sure where to find that info. (There, you have Shinkansen service that's faster than even Boring tunnels (and a Tesla Model 3 Performance driving at top speed would be much higher energy consumption), subways that have extremely high utilization factors, etc., etc.)

Also, public transit has lower space utilization for the passengers it transports than personal cars, due to no need to park the vehicles when the passengers disembark, as well as just natural higher passenger density within the right of way. (Autonomous cars can mitigate this by driving in search of parking far away, but that increases traffic volumes and energy consumption.) See this image (which many cities' urbanists have recreated, actually I don't think this one's even the original):

And then there's the cost element, a well-utilized public transit system almost certainly has lower maintenance costs per passenger km than many cars. (A poorly-utilized one, OTOH...)

 

[NicoV]

And then there's the cost element, a well-utilized public transit system almost certainly has lower maintenance costs per passenger km than many cars. (A poorly-utilized one, OTOH...)

The way I view is that public transport makes sense in very dense traffic situations, like peak hours between cities. Expanding the service (as proposed by some political parties) to a wider geographical coverage and a higher frequency creates a poorly utilized service, and robotaxis are a better solution to provide mobility to the entire population.