General Discussion: 2018 Investor Roundtable

[theschnell]

Some speculation from alleged inside sources on Reddit that the model 3 standard range release got pushed out to September and AWD release got advanced to May. SR buyers may never see the full 7.5K discount.

This should keep the ASP on the 3 pretty high, into Q3/Q4. I'd assume the performance version with AWD, Air suspension, with an optional Ludicrous mode would together be another ~20K more. i'd expect this to bump the model 3 ASP to around ~60K after release, in H2 2018. Tesla will likely prioritize shipping these over the standard LR once it is out.

Based on comments on this thread.

[Discussion] What is everyone doing in between cars if currently leasing and waiting for Model 3? • r/teslamotors

If this is true, and knowing Tesla I think it’s fairly likely to be true, they should at least let those of us who took time out of our day to stand in line get a Long Range car that is software limited to short range for the promised $35k prior to rolling out the AWD. Otherwise that is really a slap in the face to those of us who stood in line. Actually it’s a slap in the face to all SR buyers obviously, but if you reserved online your “investment” is much smaller and therefore only a soft front-handed slap rather than full on back-handed slap.

 

[neroden]

Let me try to explain it again. Tesla made a significant change after just 2500 cars to a very visible part of the interior without letting customers know that what was shown during the reveals, during the testrides and from the initial production was actually not what later customers were ordering. That's just poor communication. No? Maybe I am oldfashioned but if you are selling cars sight unseen, the least you owe your customers is being upfront with what exactly they are getting and pro-actively trying to avoid false expectations.

This is Tesla's weak point (communication) and it is already hurting the company -- quite a lot. There's still nothing which can really be called "competition", which is why this isn't affecting the company's near-term prospects. But when there is competition (perhaps imported BYDs) which gets the communications right, that's when I'm selling my Tesla stock, because Tesla has proven totally unable to get communications right, and they've had years and years to try to fix it.

Secondly, switching parts like this makes maintenance and service harder. Technicians must be trained on both materials and service centers/bodyshops/Fremont need to stock both or face longer wait times for parts. We see this problem with the Model S and X as well. Now, if it was just the interior material, it's not a big deal. But it's not a good sign for what to come.

 

[ggies07]

How can Tesla save the world if they are in Bankruptcy? Dont kid yourself, Tesla is in business to make money. Now it wants to reinvest that money into a massive expansion which will eventually meet the goals of the mission statement, but it cannot do that making bad fiscal decisions. One way they are successful in meeting the missions overall goal is to survive long enough to accomplish those goals. I get that it sucks for those wanting to take advantage of the full tax credit, but there is another side to even that story. Many of those in the market for a $35k car will not have enough Tax due to take full advantage of the tax credit anyway. I have no clue what the split is, but you would need to have $7500 in tax due/paid throughout the Year. Just the Fed portion, not state and not SSI/Medicare. You basically need to have no kids and make about $80k. You cannot roll over the unused credit into the next year.

I dont know how much this might play into the idea of releasing the $35k car later, but there will still be $3850 for the next couple of quarters, which is still over 10% discount. Putting that into context, it will be about the same discount as the cheapest model S today on a percentage basis or on the most expensive model 3.

What I dont get is that the Dual motor version is going to be more complex to validate and to manufacture, I would think that it would be simpler to just do a smaller pack. Or even the same exact pack, only software locked. I know it seems crazy now, but we have no idea what the status of cell production is, maybe its higher then they can sell based on much slower auto ramp. I know the pack assembly was the bottleneck, but maybe they have been stockpiling cells all this time. The issue there, is that you probably dont want those sitting for to long without normal use.

While the tax credit would/will be nice, it's more on the time scale of getting the car to me. I've waited since 2012. Almost everyone has been waiting two years by March since the reveal. I stood in line, reserved at 1:30pm CT. I have believed in the company for years. They talk about how this is the car for the masses, this is what the company has been leading up to - and yet they want to push the basic model away so they can get higher margins on their cars? I make a decent wage, as well as my wife - combined over 100K for our household, but we can't do a 55K car and over, 35K though we can. They've had six years of doing that now, the least they can do is mix up the orders and have both. This is about principals, about their mission of accelerating the EV market.

This was discussed awhile ago, I will always butt heads with those of you who do not see this.

 

[EnzoXYZ]

If this is true, and knowing Tesla I think it’s fairly likely to be true, they should at least let those of us who took time out of our day to stand in line get a Long Range car that is software limited to short range for the promised $35k prior to rolling out the AWD. Otherwise that is really a slap in the face to those of us who stood in line. Actually it’s a slap in the face to all SR buyers obviously, but if you reserved online your “investment” is much smaller and therefore only a soft front-handed slap rather than full on back-handed slap.

Tesla owes absolutely nothing to any SR buyer. Absolutely nothing. They owe tesla and any premium tesla buyer a thank you for making a compelling 35K EV possible. Boohoo people waited in line for the most demanded consumer product in history.

 

[Ugliest1]

While the tax credit would/will be nice, it's more on the time scale of getting the car to me. I've waited since 2012. Almost everyone has been waiting two years by March since the reveal. I stood in line, reserved at 1:30pm CT. I have believed in the company for years. They talk about how this is the car for the masses, this is what the company has been leading up to - and yet they want to push the basic model away so they can get higher margins on their cars? I make a decent wage, as well as my wife - combined over 100K for our household, but we can't do a 55K car and over, 35K though we can. They've had six years of doing that now, the least they can do is mix up the orders and have both. This is about principals, about their mission of accelerating the EV market.

This was discussed awhile ago, I will always butt heads with those of you who do not see this.

I hear your pain. However, I believe it's not really all that simple to create and mass-produce a car from the ground up (lots and lots of more knowledgeable people than me say that). I highly doubt that Tesla is pushing the basic model away simply so "they can get higher margins". I speculate it's a complex, complicated problem, and "mixing up the orders" with additional build options makes the line waaaay more complex and heightens risk factors for slowing the line down for EVERYONE. It's a balancing act with 100 plates spinning.

I get that it's frustrating. You've waited since 2012. My son has been waiting since he saw Who Killed the Electric Car circa 2008 along with the Secret Master Plan, and Canada doesn't even start seeing ANY Model 3 deliveries until "late 2018".

So, I hope this isn't butting heads. I see what you're saying, I just don't think it's that simple.

 

[Mkorpal]

I hear your pain. However, I believe it's not really all that simple to create and mass-produce a car from the ground up (lots and lots of more knowledgeable people than me say that). I highly doubt that Tesla is pushing the basic model away simply so "they can get higher margins". I speculate it's a complex, complicated problem, and "mixing up the orders" with additional build options makes the line waaaay more complex and heightens risk factors for slowing the line down for EVERYONE. It's a balancing act with 100 plates spinning.

I get that it's frustrating. You've waited since 2012. My son has been waiting since he saw Who Killed the Electric Car circa 2008 along with the Secret Master Plan, and Canada doesn't even start seeing ANY Model 3 deliveries until "late 2018".

So, I hope this isn't butting heads. I see what you're saying, I just don't think it's that simple.

It's a mix of both. Creating two different models increases the amount of engineering work and creates more complexity to a production line. So, when 1st starting out, you simplify by producing one model and slowly work on the 2nd on the side.

Now, when deciding which model you are going to produce, you obviously choose the higher margin one.

 

[Reciprocity]

It's a mix of both. Creating two different models increases the amount of engineering work and creates more complexity to a production line. So, when 1st starting out, you simplify by producing one model and slowly work on the 2nd on the side.

Now, when deciding which model you are going to produce, you obviously choose the higher margin one.

This is why I dont believe the original report, because the smaller battery is just a single part that probably has the exact same external connections and is the exact same form factor. The only difference would be less cells in the pack with some type of spacers filling the empty space. How is this handled in S/X today? So there would be no changes to the production line to do the SR. There would also be only minor changes to the pack line as everything but the final pack assembly would change since the packs are module based.

 

[dalalsid]

They talk about how this is the car for the masses, this is what the company has been leading up to - and yet they want to push the basic model away so they can get higher margins on their cars?

It was known:
1. Model 3 = BMW 3/Audi A4 etc. competitor so not exactly "masses" unless you look at TCO then you are in Accord/Camry territory which are also not exactly "masses" cars like Civic/Versa.
2. Tesla always has higher end models first. The company needs to survive for its mission to be accomplished so obviously higher margin products first until volume is achieved. I'm not sure why the expectation should be any different for the 3.

 

[Paracelsus]

It was recently asked on TMC 'I wonder how much billionaires talk to each other'. Sir Richard Branson is really stepping up his game in the hurricane-battered gulf with participation in new funding agencies for distributed grids that will likely use Tesla storage solutions, and now in Ireland with Climate awareness efforts. So I am hoping they do talk to each other.......a lot:

Richard Branson cuts ribbon on Wicklow climate change visitor centre

 

[Krugerrand]

It's a mix of both. Creating two different models increases the amount of engineering work and creates more complexity to a production line. So, when 1st starting out, you simplify by producing one model and slowly work on the 2nd on the side.

Now, when deciding which model you are going to produce, you obviously choose the higher margin one.

The implication that they picked a more expensive combo of options to yards, yardage, yardage is absurd. How about they chose based on past input from customers? That S and X have always been highly optioned? That there are many people still with range anxiety or some warped sense of how far they really drive or those who think they need a 2 million mile battery...for those reasons alone LT and PUP is as good as any place to start.

 

[JRP3]

This is why I dont believe the original report, because the smaller battery is just a single part that probably has the exact same external connections and is the exact same form factor. The only difference would be less cells in the pack with some type of spacers filling the empty space.

I agree, building a pack with fewer cells is not more complicated, if anything it's less complicated. The pack installation will be the same.

 

[sub]

Lawsuit claims Ford rigged Super Duty pickups to beat emissions tests

Sad. I read through the comments for a minute, bunch of knuckle draggers.

So, 2500 Model 3's delivered and Tesla made a significant change by switching the interior material. I don't have a particular issue with the new material as well, in that 90% of customers won't cars, 9% will grumble and maybe delay their purchase a bit and 1% will switch most of them to an S maybe. But.

1) It's once again infuriatingly bad communication from Tesla that people have to find this out through a forum post from someone who happened to notice it upon his delivery. (With the usual replies 'don't believe you', 'is a mistake', 'Tesla will make this right', ... until the pictures arrive)
2) More importantly, this is exactly the production pattern that creates or at least worsens the 'waiting for parts' issue where some repairs take weeks or months because of parts supply.

Not a good sign of things to come. Hopefully it's a one off.

No way! At least they didn't add AWD, larger battery options, AP that wasn't on the model S prototype and unlocking performance AFTER a customer purchase their car at no cost. Scam!

Edit: forgot about all the non functioning/existing software and options in the UI in the prototypes/test drives/ early customer cars. They better not fix that or I'm starting a class action suit!

Please, unless an owners model 3 says "alcantra" on their order page and showed up with cloth, this is moronic. Would you also like them to keep all the defective parts they have made improvements to since the prototype that they discovered via testing? How dare they make a swirtcharoo like that on their devoted customers Seriously.

My decision to buy a model X does look better with each passing day, I would be walking or renting as of today when my daughter gets her license.

 

[Richgoogol]

What’s with first solar? Up more than 8% today

 

[DurandalAI]

No fing way....I will be very upset...sigh.....hopefully it's just speculation.....At this point, I don't care of the damn stock price, I care about getting off my ICE and making the world a better place and Tesla actually doing what it's mission statement says instead of producing cars at high margin.

I don’t think it even has to be a binary choice. They could be producing SR, but producing less of them than the LR and AWD, but mixing them in. This way some SR units will start to ship but ASP can be kept high across the average of cars sold.

 

[AudubonB]

What’s with first solar? Up more than 8% today

As of 11:30 NY time, the solar stocks I follow are having quite the morning. In order, and hoping the tabulation holds up:

Hanwha -0.23%
Renesol +2.33%
Jinko Solar +2.71%
Canadian Solar +3.01%
First Solar +8.82%
Sunpower +10.60%

But I've not seen anything specific yet for reasons.

 

[Waiting4M3]

This is Tesla's weak point (communication) and it is already hurting the company -- quite a lot. There's still nothing which can really be called "competition", which is why this isn't affecting the company's near-term prospects. But when there is competition (perhaps imported BYDs) which gets the communications right, that's when I'm selling my Tesla stock, because Tesla has proven totally unable to get communications right, and they've had years and years to try to fix it.

It could be indicative of the internal culture in Tesla. Maybe the production team made this change decision and forged ahead without just adding it to a change list, wait for the quarterly meeting with sales/service/PR teams to all approve, while the quality/supply of the older revision part suffers through the current quarter. I for one am OK with them going "Leeroy Jenkins" on this so they can get as many M3s out as they can, this time.

 

[Waiting4M3]

As of 11:30 NY time, the solar stocks I follow are having quite the morning. In order, and hoping the tabulation holds up:

Hanwha -0.23%
Renesol +2.33%
Jinko Solar +2.71%
Canadian Solar +3.01%
First Solar +8.82%
Sunpower +10.60%

But I've not seen anything specific yet for reasons.

Any guess how much of that is bumping TSLA up? Supposedly Solar City isn't worth anything, so the solar sector bump should not add any value to TSLA, right?

 

[Paracelsus]

Lawsuit claims Ford rigged Super Duty pickups to beat emissions tests

Thanks for posting this link @sundaymorning. It sure seemed like it was only a matter of time. I still have that image of Merkel and Obama walking the White House grounds together just as the VW scandal got ramped up. What all was already known back then? After a long and frustrating VW buyback for the VW TDI in my parents estate, I have wondered 'what's next?' Will it be our Mercedes Sprinter 3.0 diesel? I really don't want to go through that process again. But we do know it certainly won't be our Model X

I am wondering if this news has anything to do with share price today. More importantly, I am wondering if this news might ease some of the tensions that Jonas speaks about regarding the adoption of Tesla products, and thus perhaps their pick-up will come to market sooner? We need a new truck, and it certainly won't be a Ford 'Heavy-Dirty' Diesel as the article called it. I will bet that name sticks around for a while.

 

[NateB]

As long as Tesla is production constrained, it seems clear to me that the best choice for Tesla's mission is to start out by selling higher margin cars if they can do this without sacrficing production speed (at the desired level of quality). If, due to the battery bottleneck, the dual motor assembly is ready before the long range orders are exhausted, then Tesla should start offering dual motors next.

For customers overall, this change should be neutral in the short term. Either Tesla disappoints the dual motors buyers (current plan) or the short range buyers (potential, unconfirmed change). In the mid-to-long term, if more cash up front means that Tesla can accelerate the second ramp from 5,000 to 10,000 per week, then lots more customers will benefit, including non-US.

 

[goinfraftw]

"Given the forecasts of 2 billion vehicles on the roads by 2040, and considering driverless vehicles need only be idle while recharging, we can roughly calculate that only 100 million ondemand driverless vehicles will be required to replace all 2 billion human-driven vehicles.

In other words, when every auto manufacturer begins producing the high-demand self-driving cars it will take just one year to reach oversupply."

I don't agree with everything in the article, but it certainly feels like there's going to be a mix-match of what they're talking about. Now that the Model 3 is out there and tangible, it's time for people to wonder again about the future (which I think is going to lead to significant gains in the stock price over the next 3-6 months).

Also, definitely have come around on job loss in the legacy industries and think there's tremendous job opportunities abound with this technology around creativity (i.e. what happens when you put a software stack on transportation?).

Source: Driverless Hotel Rooms: The End of Uber, Airbnb and Human Landlords