General Discussion: 2018 Investor Roundtable

[RobStark]

Treehouse aims to be that:
TreeHouse | Beautiful, Healthy & Sustainable Home Upgrades
But they have only 3 stores right now. We designed their store in Dallas and it is net zero energy and has a couple Tesla Powerpacks in use and on display. They sell Powerwalls as you might imagine. The Treehouse customers would be the rifle shot to the Home Depot shotgun.

Tesla has a gallery within 2 miles, 5 miles and 15 miles of those three Treehouse stores. My guess would be a large percentage of Treehouse customers have already walked inside a Tesla gallery.

Eventually Tesla will have a store within 40% of Home Depots in the USA. Or 800 Tesla Solar Stores within Home Depot.

If it was me I would have started more conservative and just sold through Tesla stores.

Save money and cherry pick the lowest lying fruit.

But maybe that is one of the many reasons I am not a billionaire. To risk averse.

Maybe Elon sees an opportunity to gobble up market share during Trump's 4 years worth of Solar Tariffs.

 

[Cattledog]

Maybe Elon sees an opportunity to gobble up market share during Trump's 4 years worth of Solar Tariffs.

Yup.

 

[hobbes]

Another Update of VIN registrations with NHTSA as per Model 3 VINs (@Model3VINs) | Twitter, after just 8 days - my analysis in blue (changes in italic):

• Oct 28: 494 new VINs, rounded to 21/day used assuming assigned in the following 24 days until...
• Nov 21: 1201 new VINs, rounded to 41/day used assuming assigned in the following 29 days until...
• Dec 20: 954 new VINs, rounded to 119/day used assuming assigned in the following 8 days until...
• Dec 28: 3568 new VINs, rounded to 127/day used assuming assigned in the following 28 days until...
  (NOTE: might be fewer working days -> higher rate due to possible holiday shutdown)
• Jan 25: 1672 new VINs, rounded to 209/day used assuming assigned in the following 8 days until...
• Feb 2: 1262 new VINs

Even though VINs are likely not used exactly in the specified time windows, looks like ramp is progressing nicely .
We can be more sure if this trend continues during the next few VIN updates, hopefully at quicker pace from now on (although there was another time already where they registered new VINs after just a week and went back to monthly after that).

 

[schonelucht]

If Tesla wants the Tesla experience, they will pay their Tesla sales people a decent wage. Or a slightly lower decent wage plus commissions to motivate people. But not having them so desperate that they acost people shopping for light bulbs.

Yes this is key. Tesla has all the opportunity to make the Tesla-in-Home-Depot shop a positive experience. But it comes at a price and the economics only works if the product has sufficiently gross margin. The Trump tarif may make a positive impact but is that in itself enough? It's all around a pretty severe turnaround from management message during the SolarCity acquisition for sure. Again, would be an interesting question to hear from them how and why that thinking changed.

 

[jbcarioca]

I have to disagree. Need to put service centers where sales are. If unable to market because State limits the sales model, then the state legislature is the issue. I went to school at Cornell, great area. Always thought it funny that any area 10 miles north of New York City (or as New York residents say “the city”) is called upstate. Haven’t lived in New York for 35 years but back then ask any New Yorker how many pro football teams in New York and they would say 2 ignoring buffalo bills.

You may be generalizing a trifle. ‘The city’ to NYC residents + nearby NJ, CT and NY counties is the Bourough of Manhattan (NOT New York county, which includes Spuyten Duyvil which is physically attached to The Bronx, so is part of the Bourough of The Bronx but not part of Kings County. Obviously this reflects my long Association with NYC.

Back to auto sales, specifically Tesla. IIRC roughly 85% of NYS auto sales are Downstate (I.e. 5 counties of NYC +Nassau, Westchester, Dutchess and Orange counties. More recently Putnam has been sometimes included. All else is Upstate. Obviously this nomenclature is reflective of a Downstate bias. That means Tesla goes where the high end cars are most strongly represented.

All this is ridiculous from an Upstate perspective, especially for people in the heavily populated, well-educated, wealthy enclaves in the Finger Lakes and above. One only needs think about Corning and Rochester for a few seconds before understanding that there is major Tesla potential there and already are lots of Tesla owners. @neroden has very obvious justification for all his posts.

Another fact: For decades The City has had few successful auto dealers. It’s no accident that the Manhattan leading dealer has been Steven Kessler Motors (Ferrari, Maserati etc), nor for that matter that he branched out to North Miami (irrelevant note: I bought numerous cars from Steven in Manhattan, and he followed me and everyone else to Miami).

If Tesla does not establish Service Centers or Downstate Style Service reliable pickup and delivery this year they may miss an enormous opportunity. IMHO that means Syracuse, Rochester, Corning/Elmira and somewhere around Buffalo. They could maintain a single larger parts depot in one of them with satellite Semi-car Collection/delivery and, say, three dedicated SC’s.

One major point, the Snow Belt, as the Buffalo-centric nomenclature might have it, is far more important than most assessments realize because of the concentrations of high technology expertise in the entire region. That is the Tesla seeet spot.

Sorry for the long New York-centric discussion. However, looking at a map and deciding Buffalo gives to Toronto, Albany, Syracuse etc go to Boston is probably how we arrived in this situation. Some New Yorkers need to make loud noises of advocacy!

 

[Reciprocity]

Yes this is key. Tesla has all the opportunity to make the Tesla-in-Home-Depot shop a positive experience. But it comes at a price and the economics only works if the product has sufficiently gross margin. The Trump tarif may make a positive impact but is that in itself enough? It's all around a pretty severe turnaround from management message during the SolarCity acquisition for sure. Again, would be an interesting question to hear from them how and why that thinking changed.

I think you guys are not seeing the forest through the trees. Think solar tiles more then panels. Why can't Tesla be competitive without tatifs? Grohmann automation should help keep costs down while scale should help as well. To me, they may not sell many panels to consumers and mostly use them for their own needs. Tiles are a consumer product that will fit nicely in home Depot. Also, Tesla is selling in their stores. Illinois had never had solar City and Tesla is adding solar to me service center in highland Park, Il.

 

[HG Wells]

Do home depots out west carry roofing tiles? Only asphalt in Georgia.

 

[Runarbt]

Maybe Elon sees an opportunity to gobble up market share during Trump's 4 years worth of Solar Tariffs.

Most likely. Seems like an Excellent opportunity if they soon will have volume production of solarpanels.

Lets all send out thanks to the great orange one.

 

[DragonWatch]

Do home depots out west carry roofing tiles? Only asphalt in Georgia.

Only asphalt in Washington

 

[Reciprocity]

Do home depots out west carry roofing tiles? Only asphalt in Georgia.

I am not sure why that is relevant. No stores anywhere have Solar tiles until they do. The question is not what stores are selling, its what is the target market for the products. If you have roof that is newish,, then solar panels are superior as you are not going to tear off a good roof to put on tiles. Also, tiles do not fit every region of the country which could be why 800 stores and not all stores. You are not going to put a $50k roof on an $80k house for example. But if your home is $500k+ like many and places like So. Cal that has a lot of Spanish tile, you cannot put anything but Spanish tile on your roof in certain places. These stores would be an ideal place to sell Solar tiles. I think the biggest place where roof tiles will be used is new construction in places where higher end asphalt would have been used but certain where tiles would have been used. I dont know exactly the price point where it makes sense, but in some cases having a solar roof option on new construction would be a no brainer. People can choose from asphalt (with or without solar), tile or solar tile.

 

[DragonWatch]

Do home depots out west carry roofing tiles? Only asphalt in Georgia.

Just did a web search thru Home Depot and "Roof Tiles" netted nothing of value (skylight framing). Searched "Roof Shingles" and while some really cool patterns, they were all asphalt.

Edit: Nine out of ten I will use Lowe's because they include the military discount on top of an offered discount. Example if both Home Depot and Lowe's are offering a close enough refrigerator at twenty percent off; at Lowe's I get my 10% military discount also, resulting in a 30% discount. Home Depot not so much ~ NO. I have even encountered a no military discount on specific items at Home Depot:-( On the other hand I will always buy electrical items at Home Depot; noting that they are pretty much never on sale. Plus Lowe's has the "My Lowe's" card whcih now can be tagged with the Military status on the card which in turn allows online orders including the military discount FYI ~ I have been shopping at HD since 1974. Lowe's only since they moved into Washington, about fifteen years or so.

 

[Starno]

 

[dc_h]

Here's a 2018 image from Google Maps:

FYI: Maps view from iPhone and iPad is more up to date than from a PC. I don't know why, but I've checked around Fremont and also heading to Florida next week and see the same issue.
Regarding the map data, if you did not see already, it appears the space north of Tesla is being developed for residential use, so this is not the start of new plant space. The December drone fly over shows the development already in process. I did do some comparison between google maps, the streetview (which is older) and the drone and you can see 3 or new buildings on the north side of the plant, one of which is the multistory stamped parts storage, and another similar multistory building on the south end of the plant, which may be a similar storage facility for different parts. If I have time over the weekend, I'll try to compare the drone shots with the building plan they released in the Fremont city planning meeting.

 

[Starno]

Also, from Model 3 owners club forum :

 

[EinSV]

I continue to think too much is being made of the insideEV delivery estimates, which do not shed much light on production rates. Many people seem to be ignoring or underestimating what is likely to be a large volume of cars that have been produced but not yet delivered.

A good starting point is to look at S/X numbers. Over the past five quarters, Tesla has averaged about 25K S/X deliveries per quarter -- roughly 2000/week. Despite Tesla's efforts to optimize quarter-end deliveries, they still had quite a few S/X built but still in transit to customers:

Q4 2016 6450
Q1 2017 4650
Q2 2017 3500
Q3 2017 4820
Q4 2017 2520

The average is 4388, the median is 4650 so let's call it 4500.

If Tesla were producing 1000 Model 3 per week at steady state -- half of S/X production -- all else being equal at the end of a quarter you would expect them to have roughly 2250 vehicles in transit (half of 4500).

Subtracting the 860 in transit at the end of Q4 means an additional 1390 vehicles produced, for a total of 3265 using insideEVs delivery estimates. (1875+1390=3265).

But this likely underestimates the vehicles in transit and therefore the production volume.

First, Tesla focuses on optimizing end of quarter deliveries, not monthly deliveries. This pattern is clearly shown in the insideEV numbers where the third month of the quarter always has by far the largest number of estimated deliveries. Some of this is due to starting out each quarter focusing on production for overseas delivery, but that's not the whole story.

In January Tesla opened up Model 3 orders to customers outside of California and many of those cars were still in transit at the end of the month. In addition, Tesla is clearly still just getting up and running with the Model 3 delivery process, so additional delays can be expected getting cars into customer hands. Finally, if production is increasing you would expect a higher proportion of cars to be produced toward the end of the month and those cars are less likely to be delivered.

Bottom line: leaving questions about accuracy aside, I don't see anything in insideEVs numbers that is inconsistent with Tesla being on track to meet its Q1 target (whether they meet that target is another story). In fact, even if the insideEV numbers are accurate, they are consistent with Tesla producing in excess of 4000 Model 3s in January.

 

[DragonWatch]

I am not sure why that is relevant. No stores anywhere have Solar tiles until they do. The question is not what stores are selling, its what is the target market for the products. If you have roof that is newish,, then solar panels are superior as you are not going to tear off a good roof to put on tiles. Also, tiles do not fit every region of the country which could be why 800 stores and not all stores. You are not going to put a $50k roof on an $80k house for example. But if your home is $500k+ like many and places like So. Cal that has a lot of Spanish tile, you cannot put anything but Spanish tile on your roof in certain places. These stores would be an ideal place to sell Solar tiles. I think the biggest place where roof tiles will be used is new construction in places where higher end asphalt would have been used but certain where tiles would have been used. I dont know exactly the price point where it makes sense, but in some cases having a solar roof option on new construction would be a no brainer. People can choose from asphalt (with or without solar), tile or solar tile.

Tossing out a house at $80K is unrealistic, sadly. My wife and I bought our first house back in 1975 at $30K and sold it for $60K two years later when I re-entered the US Army. That same house is roughly $500K today in Orange County, California ~ that is my wild A$$ guess since I have not looked it up in a very long time. You know glutton for punishment

Here in Washington our son-in-law encouraged us to buy a rental ($160K) with him/our daughter back around 2010 and it has creeped up to a point ($225K) we might refinance it so that we can put a new roof on it; and make a better profit on rent. That house was a good deal since it is currently owner financed (we put minimal down) and a long time friend of our son-in-law. Our son-in-law has his own business managing rentals and has several rentals of his own. So, yes we probably will not re-roof with Tesla tiles, but I will push, if not fund better asphalt tiles. If solar tiles are in the cards, fantastic.

At the same time, my wife and I helped them buy their current home because they were unable to purchase the house since he owned so many properties during the "Great Recession/Depression." They get it all when both my wife and I die anyway; plus the Grandpups enjoy growing up on an acre and a half of forested land in the northwest. This house I want re-tiled with Tesla solar tiles or panels within the next couple of years and will again provide the financial backing if desired. Our son-in-law tends to balk at our stepping in to assist. I know how he feels, since I had the same feeling when my parents paid for meals when they stopped by to visit us in Germany.

Then there is our lake house. The previous owner was less than an honorable human. We spent the last year and a half putting sheathing (I was including sheathing on my house drawings in high school back in '63 thru '68) on and replacing all the cedar siding with Hardie board. Now we no longer hear the wild noises outside, the house is structurally sound, and we added three pane windows for better insulation. Oh yes, the new roof within ten years. The previous owner installed medium grade roof tiles alright, but he failed to state that they had not removed the previous tiles. A practice that is discouraged currently. Bottom line we are going to replace that roof within the next two years and hope that the plywood sheets are still usable; or replace them as is necessary. Since we have solar panels on our primary house since 2013, we are comparing the pros and cons of tile vs panels. We are waiting for a input from Tesla now on our situation. As much as I am for Tesla tiles, the panels may win out. Net metering here in Washington has become a pain in my butt too. Oh, and I will not get into the story about the former owner attaching a twenty by twenty foot deck on second story with only eighteen nails holding the ledger ~ remember no sheathing either:-(

Now, living in Olympia I have to drive all the way to Seattle for service on our MX; a oneplus hour drive each way ~ god help us if there is a traffic problem. If they put a desk in Home Depot where I can talk to a human face to face that will make my day. Oh, and the desk is fifteen minutes away While I just dodged a bullet when my wife bought a new iPhone 8 instead of the ten; talking to someone in person makes life easier.

Bottom line, I hope this aides you in understanding the previous writers question about Home Depot's carrying asphalt tiles based on my real life scenario Also, many of us are making this decision based on it is the sustainable thing to do. My philosophy of life is you carry back out what you hike in with ~ just sayin' Also, my call sign is MajorBS49. My philosophy of life stemming from my retired military rank and my own initials ~ again, just sayin'

Edit: If you can buy a house for $80K with good bones and rent it for over $1K; you might want to consider buying it for an investment.

 

[MP3Mike]

If Tesla were producing 1000 Model 3 per week at steady state -- half of S/X production -- all else being equal at the end of a quarter you would expect them to have roughly 2250 vehicles in transit (half of 4500).

I'm not sure you can use the S&X numbers to estimate for the 3. The main issue is that S&X have international delivery delays and the 3 does not. So I would expect a smaller percentage of Model 3s to be "in transit" at the end of the quarter.

 

[EinSV]

I'm not sure you can use the S&X numbers to estimate for the 3. The main issue is that S&X have international delivery delays and the 3 does not. So I would expect a smaller percentage of Model 3s to be "in transit" at the end of the quarter.

The international deliveries are an added factor, but Tesla's usual practice is to build for international deliveries at the beginning of the quarter so they can be delivered by the end of the quarter. It will be interesting to see how quarter-end Model 3 v. S/X numbers in transit numbers compare, if Tesla continues to report separately. Lack of international deliveries favor Model 3, but increasing ramp rate and lack of existing delivery infrastructure for the Model 3 favor S/X in terms of converting production to deliveries quickly.

And the biggest factor for January deliveries is that Tesla makes no effort to maximize them as they do with quarter-end. Quite the opposite. That one factor alone suggests to me that using the quarter-end S/X numbers as a benchmark is likely to be too conservative.

 

[Waiting4M3]

Another Update of VIN registrations with NHTSA as per Model 3 VINs (@Model3VINs) | Twitter, after just 8 days - my analysis in blue (changes in italic):

• Oct 28: 494 new VINs, rounded to 21/day used assuming assigned in the following 24 days until...
• Nov 21: 1201 new VINs, rounded to 41/day used assuming assigned in the following 29 days until...
• Dec 20: 954 new VINs, rounded to 119/day used assuming assigned in the following 8 days until...
• Dec 28: 3568 new VINs, rounded to 127/day used assuming assigned in the following 28 days until...
  (NOTE: might be fewer working days -> higher rate due to possible holiday shutdown)
• Jan 25: 1672 new VINs, rounded to 209/day used assuming assigned in the following 8 days until...
• Feb 2: 1262 new VINs

Even though VINs are likely not used exactly in the specified time windows, looks like ramp is progressing nicely .
We can be more sure if this trend continues during the next few VIN updates, hopefully at quicker pace from now on (although there was another time already where they registered new VINs after just a week and went back to monthly after that).

I suspect that the 28 day gap between Dec 28 and Jan 25 is due to holiday down time, and likely the outlier. But time will tell, and hopefully soon.

 

[schonelucht]

If Tesla were producing 1000 Model 3 per week at steady state -- half of S/X production -- all else being equal at the end of a quarter you would expect them to have roughly 2250 vehicles in transit (half of 4500).

I agree with the conclusion that the insideEV numbers are not necessarily an indication that 1000/week target by end of January wasn't reached. But one thing to keep in mind that there is something different between S/X and 3 wrt in transit. The former pipeline is much, much longer due to international deliveries. All else equal I would expect the 3 pipeline to be smaller. I think not everything else is equal though. Many service centers need to familiarize themselves with Model 3 before they can deliver in numbers leading to local build ups (there are a lot of reports of centers with up to a dozen cars waiting).