General Discussion: 2018 Investor Roundtable

[vgrinshpun]

Models S was destroying its competition in US for the past several years, and it was just a matter of time before it could do the same in Europe. And this time has come. It outsold both MB S-Class and BMW 7 Series in Europe in 2017. Meanwhile, Model X approximately matched sales of Porsche Cayenne, while outselling BMW X6. No wonder German press is full of snide remarks about Tesla. I'd love to hear discussions in Daimler and BMW boardrooms on this topic. Delicious.

I am wondering what will happen after the MS/MX refresh...

Sales of the Model S in Europe jumped 30 percent to 16,132 last year, according to JATO. Mercedes S class sales grew 3 percent to 13,359. BMW 7 series had sales of 11,735, down 13 percent.

Tesla is competing strongly in Europe's large premium SUV market with the Model X. Its sales in the region last year were 12,000, about the same as the Porsche Cayenne and nearly 2,000 more than the BMW X6, according to JATO data.

 

[hobbes]

Models S was destroying its competition in US for the past several years, and it was just a matter of time before it could do the same in Europe. And this time has come. It outsold both MB S-Class and BMW 7 Series in Europe in 2017. Meanwhile, Model X approximately matched sales of Porsche Cayenne, while outselling BMW X6. No wonder German press is full of snide remarks about Tesla. I'd love to hear discussions in Daimler and BMW boardrooms on this topic. Delicious.

I am wondering what will happen after the MS/MX refresh...

While I am equally happy with Tesla´s good results in Europe (obviously), I don´t like it if this is turned an issue of nationalities. There have been negative reports, mostly for Tesla not delivering on Model 3 production (who could blame them), but voices recognizing Tesla´s accomplishments have been getting louder all along. This is an excerpt from the last article that was published on many national outlets in similar form:

The Model 3 is Tesla's new highlight
...
At the end of 2017, a German premium manufacturer secured one of the first Tesla Model 3 for this amount. For ten days, various executives were allowed to put the car through its paces. Then it was weighed, measured and disassembled into its individual parts. Each assembly was tested, but especially the power electronics surprised the testers. Compact, expandable, fully integrated, modular, easily accessible, well protected, low priced and astonishingly clever in many details - that was the verdict of the experts, which the colleagues from other manufacturers gradually joined. Meanwhile, manufacturers and suppliers nationwide have about a dozen compact Teslas in the making.

Das Model 3 ist Teslas neues Glanzstück

Let´s keep it to BEV vs. fossils.

 

[D-egg-O]

BMW i3 has always had a frunk. It's not as large as on any Tesla, but enough room for charging cables, UMC, repair kit etc and a little bit of extra for a bag of groceries so that you don't waste trunk space for this stuff.

It can also be used to carry champagne and ice: champagne.png

Is this an add on option or standard?

 

[jhm]

Prediction: Gas taxes are coming and there is not much of a chance that they will not.

Trump has proposed a 25c increase to the federal gas tax, but that is just the start. The new Trump infrastructure plan is based on Public/Private partnerships. It took me a while to really get what this meant, but what I believe will happen is that the Fed will make available some funds for infrastructure projects, but only 20% for each project. This is to encourage the local governments to invest and private companies to invest and come up with the other 80%. The trick here is that the 20% goes back to the Fed if its unused. Local governments are as broke as the Fed, so this means that the local governments will do whatever it takes to get a hold of that money. If that means raising the local gas tax, they will do it. They will not let money get returned to the Fed, it never happens. You could see gas taxes go up as much 50c a gallon to fund these projects. While bad for most people and, it will be good for Tesla and EV owners. How this impacts the economy as a whole is TBD as well. In many cases it will mean more high paying jobs, but everything will get more expensive because fuel is a component for almost everything we consume. Someone way smarter then me.. usually @neroden or @jhm or @RobStark though I have not seen neo around in weeks. Ever since that post about Tesla failing him in service. I hope we did not lose him. Though I occasionally disagreed with Neo, I loved his insight and have learned a lot from him. Rob on the other hand.. J/K.

That's interesting. I was not aware of the 80/20 split. I do worry that the attempt to engage private investment means that it will only support projects where their is private ownership and private return. Hence it is not really about public infrastructure. It's just government subsidize private investment. So it's not clear how much local governments will want to participate in subsidizing private investments. For it to be a real partnership of federal, state and local government on truly public infrastructure, I suspect the federal government would need to kick in a lot more than just 20%. So it may be too little for public infrastructure and too much an unnecessary subsidy for private investments. We'll see.

 

[Reciprocity]

Lets play a game of what the short fudsters will say about this:

Elon Musk's Tesla Roadster Could Crash Back Into Earth

MS would say, you have a better chance of being hit by this roadster then a model 3.

MBS would say, Fraud boys cars are dangerous to humans even when you shoot them to mars.

Other Shorts: In about 1.5 million years, Tesla will finally deliver your car, but there is still only a very small chance.

 

[Reciprocity]

That's interesting. I was not aware of the 80/20 split. I do worry that the attempt to engage private investment means that it will only support projects where their is private ownership and private return. Hence it is not really about public infrastructure. It's just government subsidize private investment. So it's not clear how much local governments will want to participate in subsidizing private investments. For it to be a real partnership of federal, state and local government on truly public infrastructure, I suspect the federal government would need to kick in a lot more than just 20%. So it may be too little for public infrastructure and too much an unnecessary subsidy for private investments. We'll see.

Well, you must have a local public partner. There is no Fed to Private option. The Private must partner with the Public to get the 20% for the project. Private wont invest if there is no profit incentive, they are charities. They will be risking serious capital, they will want a return. Roads and bridges would obviously have tolls. I wonder if the energy infrastructure and grid are included here. I could see Tesla involved in some projects and the profit would come from selling electricity generated and stored. Similar to what they do in Kauai. Boring company is another good example. In Chicago, The Boring company is bidding on a tunnel from Downtown to Ohare. Certainly there would be a usage fee that would be less then an Uber ride but more then light rail.

 

[RobStark]

Porsche axes all diesel variants from line-up | Autocar

 

[BioSehnsucht]

The new Trump infrastructure plan is based on Public/Private partnerships. It took me a while to really get what this meant, but what I believe will happen is that the Fed will make available some funds for infrastructure projects, but only 20% for each project.

Do you like toll roads? Because this is how every road gets converted to toll roads.

Between that and Trump selling off federal protected lands to various private interests (like mining uranium), we're well on our way to the future depicted by Snow Crash

 

[jhm]

Porsche axes all diesel variants from line-up | Autocar

I guess it is fair to say that some passenger EVs are displacing diesel consumption.

 

[Dennisj00]

Do you like toll roads? Because this is how every road gets converted to toll roads.

Between that and Trump selling off federal protected lands to various private interests (like mining uranium), we're well on our way to the future depicted by Snow Crash

Y, we have the infamous I-77 toll road PPP Under construction with the private company from SPAIN! No estimate of the toll charge before releasing the no-bid contract and no expansion of free lanes for 50 years!

Current estimates of toll - $10-20 for 10 miles at peak. Not gonna work.

 

[dc_h]

Do you like toll roads? Because this is how every road gets converted to toll roads.

Between that and Trump selling off federal protected lands to various private interests (like mining uranium), we're well on our way to the future depicted by Snow Crash

I’m pro toll. Hate me, it’s ok.

Texas has been using tolls to expand roads and it has been a critical factor in the states growth. Illinois has terrible traffic and a $2 toll for the 15 miles from the end of our western suburb toll road to the city would be less than wasted gas, but maybe more than wasted electricity. Regionally we have 4 toll roads that end approaching the city. Extending to the city where the roads intersect would find 8-12 billion in construction and be great for the economy. Like LA, events like a ballgame can put busy roads over the top.

Sorry for off track. Mod me if you must.

Ps. Snow Crash rules!!

 

[Drumheller]

I’m pro toll. Hate me, it’s ok.

I'm anti-toll because several of the tolls in the USA are owned by offshore companies, so that money is going out of the USA, not helping USA infrastructure.

 

[RobStark]

I'm anti-toll because several of the tolls in the USA are owned by offshore companies, so that money is going out of the USA, not helping USA infrastructure.

The toll roads are the helping infrastructure.

Because they are better than no road there at all.

Trade is good.

Are you anti-Model S and anti-Model X because battery cells are made in Japan?

Anti-Gigafactory because the equipment is coming from Japan or Germany?

Anti Grohmann Engineering/Tesla Advanced Automation Germany because those dastardly Germans are "stealing American jobs"?

Anti-computer and smartphone because they are made in Asia?

Anti-wind farm because much of the expertise is Danish/Northern European?

Anti-Solar farm because the panels are made in China/Vietnam?

The most "self sufficient" country on earth is probably North Korea.

 

[JRP3]

I'm anti-toll roads because tolls don't seem like the most efficient way to collect revenue, plus they slow traffic.

 

[dc_h]

I'm anti-toll roads because tolls don't seem like the most efficient way to collect revenue, plus they slow traffic.

Toll collection is 99% digital here. No slowing. Our toll roads are state managed, generally pretty well. Road quality is better than our public roads and the most recent toll road (355) had the bidders self insure road maintenance. You want well built roads, have the builder self insure.

 

[Drumheller]

The toll roads are the helping infrastructure.

Because they are better than no road there at all.

Trade is good.

Are you anti-Model S and anti-Model X because battery cells are made in Japan?

Anti-Gigafactory because the equipment is coming from Japan or Germany?

Anti Grohmann Engineering/Tesla Advanced Automation Germany because those dastardly Germans are "stealing American jobs"?

Anti-computer and smartphone because they are made in Asia?

Anti-wind farm because much of the expertise is Danish/Northern European?

Anti-Solar farm because the panels are made in China/Vietnam?

The most "self sufficient" country on earth is probably North Korea.

The red tape is done by a US state gov't
The roads are built by a US state gov't
The tolls are setup and raised by a US state gov't
Then the state sells a long term lease on the toll roads for up front cash. The state uses that cash for new infrastructure projects but then can no longer collect tolls on that original road for the duration of the lease. Meanwhile, the buying company collects all of the tolls for that lease, likely to be several times the original amount of purchased lease.

It's short-sighted. Kicking the can down the road for future spending and debt.

 

[vgrinshpun]

While I am equally happy with Tesla´s good results in Europe (obviously), I don´t like it if this is turned an issue of nationalities. There have been negative reports, mostly for Tesla not delivering on Model 3 production (who could blame them), but voices recognizing Tesla´s accomplishments have been getting louder all along. This is an excerpt from the last article that was published on many national outlets in similar form:



Das Model 3 ist Teslas neues Glanzstück

Let´s keep it to BEV vs. fossils.

I don't like it being turned in an issue of nationalities either, so please let us not do so.

Nothing in my post was intended to be, and I do not believe was about nationalities. It is a fact that executives of both Daimler and BMW were dismissive and snarky in their remarks about Tesla and their vehicles, on more than one occasion. The same holds true about German press. Because they feel threatened. It has nothing to do with nationalities (and quite frankly I find your post personally offensive because it implies that I am the one who does turn this into such). It has everything to do with the rivalry of automotive leaders in the premium sector. Ignoring and white washing it is not going to do any good for an investor.

Peace.

 

[BioSehnsucht]

I'm fine with tolls, as long as you don't convert a non-toll road to a toll-only road (by which I mean, no toll-free service road). There's a few places around DFW where you are either forced onto a toll road or take a much slower / longer route, where before the road was free (well, "free" - being paid for by taxes, etc) - not for entire toll roads but for some sections of them. Depending on your commute, you "may not have a choice" but to take the roll road. Moving close to where you work is often not an option (as paradoxically it seems affordable housing is never near your place of employment - and if it is, somehow, you'll end up getting a new job across town).

I mainly don't like toll roads becoming infinite money machines for corporations (especially those outside the US, but even US owned and operated). Toll roads to build a road, recoup costs, make a decent but not excessive profit are fine, but should eventually be converted to non-toll or at least have the toll reduced to just cover maintenance (basically being the tax that would normally pay for a publicly owned road), not the ongoing profit gouging we see around here. I don't mind corporations making a buck, I just don't want them to own our critical transportation infrastructure forever and hold us over the barrel while doing so.

As far as the actual structure of toll roads goes, I like how the rebuilt section of 635 in Dallas between the Bush Turnpike (toll road) and (US not I) 75 was done, we got nice rebuilt lanes, and more of them, up top, and below grade we got "managed" (read: prices go up when non-toll traffic slows down) toll lanes. You can never use the toll road, or you can use the roll road and go even faster than good legal traffic up top would allow (higher speed limit on the tolled section). I was looking forward to them doing the same from 75 to I-30, but it sounds like that might not happen now ... Usually when a new toll road goes up, it replaces the public road that was in the same place, and if you're lucky there's a public service road for most of the route, so you can take a much longer (due to stop lights, etc) drive for free, or pay for the privilege of driving the route in a similar amount of time to what you would have before the toll road ...

 

[hobbes]

I don't like it being turned in an issue of nationalities either, so please let us not do so.

Nothing in my post was intended to be, and I do not believe was about nationalities. It is a fact that executives of both Daimler and BMW were dismissive and snarky in their remarks about Tesla and their vehicles, on more than one occasion. The same holds true about German press. Because they feel threatened. It has nothing to do with nationalities (and quite frankly I find your post personally offensive because it implies that I am the one who does turn this into such). It has everything to do with the rivalry of automotive leaders in the premium sector. Ignoring and white washing it is not going to do any good for an investor.

Peace.

Thanks for clarifying. Lots of company officials and press give unbalanced statements on Tesla overly criticizing them. That is not just true for Germans. No personal offence meant. Peace.

 

[hobbes]

@Troy posted this on reddit: Tesla.com now shows June 2018 for new Model S/X orders
Moved there from late March. IMHO all of the possible reasons he lists might be in play at the same time: Refresh, production line upgrades, and tax credit optimization. What do you think?

This might affect delivery numbers for Q1 and thus stock price...