General Discussion: 2018 Investor Roundtable

[sdtslafan]

100%

Ok, but just to clarify, you think there is no chance of a hardware defect? Can you explain how you know in basic terms? Is it because it works intermittently? Obviously makes a big difference as to the time frame required to resolve this thx

It's times like this when I wonder why tesla always pushes the envelope so much? Why go out of their way to improve what is already so much better than the competition when it adds additional execution risk?

But that's what makes the company great I guess... I hope customers realize the lengths tesla goes to in order to bring them the absolute best product and move the field forward...

 

[ValueAnalyst]

An FT article this morning is a good example of how views move from impossible to inevitable without ever stopping at probable.

The conventional view now is that EVs are the future, but the incumbent auto makers are in the poll position to take advantage of the change. Some of the arguments have merit and are worth considering. In general, I think they overstate incumbent advantages to harness electrification toward their ends and understate Tesla's lead. Of course, Tesla still needs to profitably manufacture the 3 at scale to prove out the advantages of its position. We'll see, but I think it is well positioned to do so and we will know within the next year. Also, traditional automakers will make lots of EVs and will follow the transition -- I'm just not convinced they are in the poll position.

One odd omission from the article. There is not a single mention of fast charging networks for distance travel. I think there is this assumption on the conventional side that a fast charge network similar to Tesla's Super Chargers can be easily rolled out by the big auto makers. But Tesla's Super Chargers require tight integration with its batteries and the software that manages those batteries on their cars. Has anyone else seen indications that the major auto companies have figured this out? True fast charging networks still seem to be ominously lacking for the major auto cos, no? I'm sure Volkswagen is not investing 25 billion euros without a plan on this. But what's their plan for supercharging? Do they have one or are they just discounting the importance of distance travel?

curious as to others views on this.


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I think you make great points, but for conservatism purposes, I do not see Tesla's Superchargers as a major component of its moat. Tesla has already offered other automakers to share the cost/benefit of its network, and I think one day others will have to take Tesla up on its offer. I don't think Tesla will look to profit from such partnerships per se, but surely sharing the related CapEx would benefit Tesla's cash flow outlook.

One correction: Volkswagen agreed to pay battery cell and related technology suppliers 20 billion euros ($25 billion), not 25 billion euros.

I agree with you that others will have to solve the long-distance problem, and I think the ultimate solution goes through Tesla.

 

[ValueAnalyst]

On $100/share discussion:

We should note that key long-term, big-pocket investors have recently accumulated shares at $300+ per share with no control privileges.

M&A control premium generally ranges from 25% to 30%, assuming Elon would even consider selling Tesla.

 

[Waiting4M3]

Ok, but just to clarify, you think there is no chance of a hardware defect? Can you explain how you know in basic terms? Is it because it works intermittently? Obviously makes a big difference as to the time frame required to resolve this thx

It's times like this when I wonder why tesla always pushes the envelope so much? Why go out of their way to improve what is already so much better than the competition when it adds additional execution risk?

But that's what makes the company great I guess... I hope customers realize the lengths tesla goes to in order to bring them the absolute best product and move the field forward...

MCU is an off the shelf chip like a CPU designed and made by the likes of Intel. It's not some chip that is specifically designed for Tesla. There is no reason such chip would not work from a hardware perspective, only matters how Tesla programs it to work.

 

[dhrivnak]

An FT article this morning is a good example of how views move from impossible to inevitable without ever stopping at probable.

The conventional view now is that EVs are the future, but the incumbent auto makers are in the poll position to take advantage of the change. Some of the arguments have merit and are worth considering. In general, I think they overstate incumbent advantages to harness electrification toward their ends and understate Tesla's lead. Of course, Tesla still needs to profitably manufacture the 3 at scale to prove out the advantages of its position. We'll see, but I think it is well positioned to do so and we will know within the next year. Also, traditional automakers will make lots of EVs and will follow the transition -- I'm just not convinced they are in the poll position.

One odd omission from the article. There is not a single mention of fast charging networks for distance travel. I think there is this assumption on the conventional side that a fast charge network similar to Tesla's Super Chargers can be easily rolled out by the big auto makers. But Tesla's Super Chargers require tight integration with its batteries and the software that manages those batteries on their cars. Has anyone else seen indications that the major auto companies have figured this out? True fast charging networks still seem to be ominously lacking for the major auto cos, no? I'm sure Volkswagen is not investing 25 billion euros without a plan on this. But what's their plan for supercharging? Do they have one or are they just discounting the importance of distance travel?

curious as to others views on this.


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I think it would be easy for the major manufacturers to roll out a fast charging network but I see NO indication that they will. For me this is a significant differentiator for Tesla. This is why I ordered a Model 3 over a Bolt.

 

[dc_h]

This may turn out to be a catalyst for bears tomorrow to push the stock down further. Expect negative articles about this soon.

Maybe VIN 122xx is more important. If 13xxx out this week could imply approaching 2000 a week.

 

[mongo]

MCU is an off the shelf chip like a CPU designed and made by the likes of Intel. It's not some chip that is specifically designed for Tesla. There is no reason such chip would not work from a hardware perspective, only matters how Tesla programs it to work.

@sdtslafan
I have been involved with automotive products where a silicon bug was only discovered after production started. That said, a software change patched/ masked the problem.

The issue is the IPC (instrument panel cluster) is not responding to the MCU. The cluster did not change, so there is an issue on the MCU side. If the car functions on the center display still work, then the MCU is functional, so the issue is somewhere in the communication protocol between the two of them.
The exception would be if the MCU communication HW itself was failing/ marginal. However, that is low probability, especially given (albeit a single one) report of a car being SW patched back to functionality

 

[Waiting4M3]

@sdtslafan
I have been involved with automotive products where a silicon bug was only discovered after production started. That said, a software change patched/ masked the problem.

The issue is the IPC (instrument panel cluster) is not responding to the MCU. The cluster did not change, so there is an issue on the MCU side. If the car functions on the center display still work, then the MCU is functional, so the issue is somewhere in the communication protocol between the two of them.
The exception would be if the MCU communication HW itself was failing/ marginal. However, that is low probability, especially given (albeit a single one) report of a car being SW patched back to functionality

Also the original post:

"She said that during the hour wait they were required to patch in a “very senior engineer” into my car to get it satisfactory (aka, good enough) for delivery."​

The customer was located in Alabama, Tesla's senior engineer remotely patched in and applied some temporary fix within an hour while they were waiting for the delivery. This clearly seems to be that it can only be possible if they were applying a SW fix.

 

[dc_h]

Also the original post:

"She said that during the hour wait they were required to patch in a “very senior engineer” into my car to get it satisfactory (aka, good enough) for delivery."​

The customer was located in Alabama, Tesla's senior engineer remotely patched in and applied some temporary fix within an hour while they were waiting for the delivery. This clearly seems to be that it can only be possible if they were applying a SW fix.

Sounds like a firmware patch. If this is known, no new cars would have the issue. Minor issue. Senior guy is level 2 Support. It’s not a programmer. If it affects more than a hundred cars, they can train field engineers.

 

[mongo]

Sounds like a firmware patch. If this is known, no new cars would have the issue. Minor issue. Senior guy is level 2 Support. It’s not a programmer. If it affects more than a hundred cars, they can train field engineers.

Sounded to me like a developer in Fremont remoted into the car to diagnose and fix the issue. May have previously traced down the problem and did the fix manually.

 

[NicoV]

Sounded to me like a developer in Fremont remoted into the car to diagnose and fix the issue. May have previously traced down the problem and did the fix manually.

That’s what I thought too. Could be just a matter of changing a setting or replacing a couple of files. By letting one of the devs do this, they also get information if the fix works.

 

[mongo]

That’s what I thought too. Could be just a matter of changing a setting or replacing a couple of files. By letting one of the devs do this, they also get information if the fix works.

Yeah, test out the fix, then automate and push the updater to the SvC toolset and/or bulk remote update the vehicles. Good to test with someone standing by to reset things the physical way, if needed.

 

[Sudre]

MCU is an off the shelf chip like a CPU designed and made by the likes of Intel. It's not some chip that is specifically designed for Tesla. There is no reason such chip would not work from a hardware perspective, only matters how Tesla programs it to work.

There are several reasons the chip might not work. Improper cooling and improper power regulation are both motherboard issues (hardware). Both will fry the CPU over time. Both cause reboots. I would hope that after having those issues with the original MCUs they would have properly addressed that in the new 2016 design. Those issues can be fixed with software but it leads to slower performance.

The current problem does seem to have appeared after a software update so hopefully it is just a software problem that will quickly be resolved.

 

[30seconds]

An FT article this morning is a good example of how views move from impossible to inevitable without ever stopping at probable.

The conventional view now is that EVs are the future, but the incumbent auto makers are in the poll position to take advantage of the change. Some of the arguments have merit and are worth considering. In general, I think they overstate incumbent advantages to harness electrification toward their ends and understate Tesla's lead. Of course, Tesla still needs to profitably manufacture the 3 at scale to prove out the advantages of its position. We'll see, but I think it is well positioned to do so and we will know within the next year. Also, traditional automakers will make lots of EVs and will follow the transition -- I'm just not convinced they are in the poll position.


curious as to others views on this.


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I like the FT. But on EVs, and most issuess relating with technology products, they have been extraordinary off the mark for decades.

It’s like talking to Wall St economists who live in Manhattan about why people in LA drive cars.

Let’s take a “simple” issue - OTA updates. In 2012 Tesla launches the Model S where the entire firmware of the car, from battery pack management to windshield wiper control, can be repeatedly upgraded via software updates. It is now 2018. There are exactly zero production cars outside of Tesla that can do this.

So why haven’t the mighty global companies been able to follow? Either the car companies don’t believe this ability is of any value to the consumer or it is a lot harder to completely redesign every component of your supply chain & automotive computing infrastructure than the FT believes.

Same on battery composition, production or supply.

And we will see, but now Tesla is aiming to increase manufacturing speed and resulting efficiency well beyond current manufacturers.

I think they will be successful.

 

[ChrisA]

And we will see, but now Tesla is aiming to increase manufacturing speed and resulting efficiency well beyond current manufacturers.

Yes, this is the key. If Tesla is able to profitably scale 3 production, this narrative about incumbent advantages will quickly end.

 

[Waiting4M3]

I like the FT. But on EVs, and most issuess relating with technology products, they have been extraordinary off the mark for decades.

It’s like talking to Wall St economists who live in Manhattan about why people in LA drive cars.

Let’s take a “simple” issue - OTA updates. In 2012 Tesla launches the Model S where the entire firmware of the car, from battery pack management to windshield wiper control, can be repeatedly upgraded via software updates. It is now 2018. There are exactly zero production cars outside of Tesla that can do this.

So why haven’t the mighty global companies been able to follow? Either the car companies don’t believe this ability is of any value to the consumer or it is a lot harder to completely redesign every component of your supply chain & automotive computing infrastructure than the FT believes.

Same on battery composition, production or supply.

And we will see, but now Tesla is aiming to increase manufacturing speed and resulting efficiency well beyond current manufacturers.

I think they will be successful.

The OTA update issue becomes even more apparent when you look ahead to autonomous driving. How will the traditional automakers update their autonomous driving when they've been loath to even update the maps on their navigation system? add one more wrinkle, they might have to ask their dealers to do this for them.

 

[ValueAnalyst]

Found a LOT of Model 3's in a Tesla lot - Pictures inside

Are these pics of any use anymore? We already know Tesla is producing at some level of volume, but can't tell if the level has changed.

 

[Buddyroe]

Are these pics of any use anymore? We already know Tesla is producing at some level of volume, but can't tell if the level has changed.

Especially considering that lot was filled with 3's about 4 months ago. It means nothing to me at this point.

 

[JRP3]

At least the lot isn't empty

 

[JRP3]

VW ready to "Blow Right Past Tesla"... in a few years of course Volkswagen's Electric-Car Program Is About to Blow Right Past Tesla