General Discussion: 2018 Investor Roundtable

[gora321]

Elon took few days off in Israel (maybe not). Could be good sign for production bottlenecks.

 

[WarpedOne]

No

 

[sweter]

That vacation doesn't matter, but this tweet from few days ago makes me optimistic:

I read it as a massive push in production for last week of the quarter. Totally expected ofc, but good to see it reinforced.

Therefore I think any attempts at modelling and estimation are moot. My statistics professor used to repeat "you can't predict technology".

 

[Reciprocity]

That vacation doesn't matter, but this tweet from few days ago makes me optimistic:

I read it as a massive push in production for last week of the quarter. Totally expected ofc, but good to see it reinforced.

Therefore I think any attempts at modelling and estimation are moot. My statistics professor used to repeat "you can't predict technology".

Agreed, you are almost better off with gut feel at this point. But it's nice to see some data points that agree with you gut. You certainty cannot predict this stuff and it's very hard to measure with the data we have. @Troy has done the most work on this and I trust his assessments better then my own because I know he is worker harder at then anyone else.

I personally am not ready to say 2k/w+ yet, but I am very encouraged by what we have seen and expect more of the same next week. I have been fooled to many times by my own confirmation bias to take anything for granted this time. I think doubling production this quarter and next is realistic and a fair expectation. That would put us shy of the 5k/w but still at a very impressive 4k+ and a tripling of auto production and doubling of revenue in just 12 months is very impressive.

I am also encouraged by the lack of major issues reported. Some 12v issues reported seemed to be fixed by a software update. Fit and finish seems to be as good if not better then model S/X. I have only seen a handful of 3s in the wild and mostly at superchargers, so I expect that to explode over the next 6 months. That is when you will see more of a model 3 craze then has already been established.

 

[ValueAnalyst]

I respectfully disagree. QC is an integral part of production. Saying that we can disregard it today because it will improve in the future is the same as saying we can disregard any other bottleneck today because they too will be resolved in the future.

I’ve been thinking about this, and you’re right, that is what I’m saying.

The fact that Tesla can manufacture S/X at volume with no material quality issues (as indicated by lower than industry-average warranty accruals/expenses as a percentage of revenue) indicates that Tesla will get there with Model 3, too, and likely soon. Considering such temporary supply-side bottlenecks, unless there’s a logical argument for their possible/likely persistence, may not be the best use of time, and it may be best to assume them out when predicting the future given historical success.

For example, battery module automation bottleneck at the Gigafactory had significant potential to become a major headache, because the issue was at the core of Tesla, but that specific issue seems to now have been resolved. Temporary QC or DC bottlenecks that are normal during ramp aren’t as worrisome.

Supply-side bottlenecks sure beat demand-side bottlenecks, because the former are mostly under Tesla’s control.

So my question to you is, “What is the next step-change bottleneck?”

One issue is the parts warehouse automation (software?), as Elon mentioned, and what do we have on that? Not much discussion has happened AFAIK. That gets us to 5,000/w. What happens to Gigafactory output of parts automation is not there yet? Important to think about ahead of time.

What other issues lie ahead for 2Q? Transporting S/X safely in Europe? We’re also about to hit the 200,000th delivery in the US; how do we deal with the upcoming surge in demand? Can Grohmann lines be replicated for S/X? How quickly? At what capacity? How about the upcoming paint shop CapEx? How much does it cost? When?

VIN tracking has been beaten to its limit of usefulness, and now we’re in speculation territory, but many other (I think) more important 2Q/3Q18 issues are flying under the radar.

 

[mongo]

If you’re annoyed by arguing to find the truth, this is not the place for you. You should be seeking people to argue against you so that you can straighten thoughts and thanking them, instead of telling them to stop.

They have a point in that there are only 4 trading days left in March, and we will have near zero visibility on this week's production until the report early April. 5k is a super stretch for this week, so is it helpful?

Now, I'm all in on a 5k in April debate. Personal opinion is Fremont is stocked to gills with parts due to supplier agreements and low production. The last 9 months has let them tune most of the line to near its phyiscal max. Only addressible restriction they have is the internal conveyance which may have been addressed during the recent shutdown. So, once the packs start flowing due to step change in GF1 production capacity, I predict a gi-mongo-ous step change in output. (Tempered only by the limits of their parking lot and ability to get transport scheduled)

 

[Words of HABIT]

Eligible Electric Vehicles

"Note that incentives will be provided under the previous EVIP program for EVs ordered prior to March 9, 2018, provided that the EV is delivered and that the application is submitted by September 7, 2018."

There should be surge in MS & MX deliveries in Ontario Canada for Q1 due to above, with a slow down potential for Q2, small market overall, but a contributor. Noticed that Government of Ontario's web site still does not have Tesla M3 listed as incentive, although would expect the full $14k CAD.

 

[defc0n]

It's a strong personal feeling of mine that Tesla won't be doing 5k/wk this coming week based on everything that I've heard. Please don't parse my comments like it's coming from Elon. I don't feel like discussing 5k/wk at end of March is useful, it's rather argumentative and annoying. Please stop.

I see no evidence to suggest anywhere near 5k/week right now. I personally don’t anticipate a rate much better than 1500/wk. I would be VERY surprised if the guidance of 2500 is hit.

As always, can’t tell you what the stock will do short term either way.

 

[Intl Professor]

Just for perspective and long with more apparent patience because in old age my mind slows as much as my metabolism on an almost daily perception, I can imagine in a year or so an endless round of vin counting, etc. as here, when the MS/X refresh comes out, when the Y comes out, when the semi comes out, when the roadster, when....

 

[racer26]

Eligible Electric Vehicles

"Note that incentives will be provided under the previous EVIP program for EVs ordered prior to March 9, 2018, provided that the EV is delivered and that the application is submitted by September 7, 2018."

There should be surge in MS & MX deliveries in Ontario Canada for Q1 due to above, with a slow down potential for Q2, small market overall, but a contributor. Noticed that Government of Ontario's web site still does not have Tesla M3 listed as incentive, although would expect the full $14k CAD.

There is ZERO chance of a surge in Ontario because of this.

This change (removing S/X from the list due to being >$75kCAD MSRP) came on March 9 with no warning whatsoever, publically, or even behind the scenes to the EV groups I'm part of that work with our legislators. If nobody knew the change was coming until it happened, it can't impact sales.

 

[Starno]

I see no evidence to suggest anywhere near 5k/week right now. I personally don’t anticipate a rate much better than 1500/wk. I would be VERY surprised if the guidance of 2500 is hit.

As always, can’t tell you what the stock will do short term either way.

I think they'd have registered way higher VINS if they'd expect to achieve 5000/w soon.

 

[ValueAnalyst]

I think they'd have registered way higher VINS if they'd expect to achieve 5000/w soon.

What's your definition of soon?

Also, I never said this is likely (actually explicitly said the opposite), but simply pointed out that it was not impossible.

 

[Reciprocity]

I think they'd have registered way higher VINS if they'd expect to achieve 5000/w soon.

I agree. But last weeks VIN registration was a spike on the order of 4700/w so we could be closer then many expect. They first must get over the 2500/w hurdle but, and this is a big butt.. pun intended. If you recall, the last timeline for 5k/w was March 31st and the one prior to that was Jan. 31st. If they thought there was even a glimmer of hope that Jan 31st or March 31st where achievable many months ago, then they must have had a reason to believe that. My point is that a bottleneck in one place may not have impacted the progress on bottlenecks in other places. Production as a whole can only go as fast as the bottlenecks that limit the total output. But many other issues could have been resolved while dealing with the Semi Automatic pack assembly lines. The shutdown could have been part of a plan to rapidly expand production once the pack assembly bottleneck lifted. It could have been as simple as them deciding that they could shut down the Model 3 line for 4 days or whatever it was, to allow some packs to get assembled and while they made major updates to fix issues on the model 3 lines, in prep for a burst of packs and a continued supply or more packs that would be ramping from April 1 going forward. The point is that production could take a nice stair step up from about 2000/w to to say 3000/w as early as mid April. Elon even alluded to this on the CC when he said, if you gave me 2 weeks hear and there it could be a totally different result because of the nature of the improvements at this point of the production process. The S-Curve was a silly way to describe it when everyone in the know, knew that it would be more like a lot of small slopes up with a few big step ups over the first year. With the timing of the shut down, I think we are seeing on of those big steps up. The slope will hopefully not flatten to much but continue to rise 4k/w and eventually 5k/w. I dont expect another big jump until they start to add new hardware to duplicate parts of the model 3 line to achieve 10k/w eventually in 2019.

What do I want to see? Another 2500 vins early or mid next week. VIN assignments to actual customers 14k, 15k and even 16k by the end of the week. And many many happy customers taking delivery in a huge push including my local service center, which has mostly been S/X recently after doing about 50 model 3s in early Feb. There are still some trickling through but it was like 10 day for a while in Feb.

 

[Starno]

I agree. But last weeks VIN registration was a spike on the order of 4700/w so we could be closer then many expect. They first must get over the 2500/w hurdle but, and this is a big butt.. pun intended. If you recall, the last timeline for 5k/w was March 31st and the one prior to that was Jan. 31st. If they thought there was even a glimmer of hope that Jan 31st or March 31st where achievable many months ago, then they must have had a reason to believe that. My point is that a bottleneck in one place may not have impacted the progress on bottlenecks in other places. Production as a whole can only go as fast as the bottlenecks that limit the total output. But many other issues could have been resolved while dealing with the Semi Automatic pack assembly lines. The shutdown could have been part of a plan to rapidly expand production once the pack assembly bottleneck lifted. It could have been as simple as them deciding that they could shut down the Model 3 line for 4 days or whatever it was, to allow some packs to get assembled and while they made major updates to fix issues on the model 3 lines, in prep for a burst of packs and a continued supply or more packs that would be ramping from April 1 going forward. The point is that production could take a nice stair step up from about 2000/w to to say 3000/w as early as mid April. Elon even alluded to this on the CC when he said, if you gave me 2 weeks hear and there it could be a totally different result because of the nature of the improvements at this point of the production process. The S-Curve was a silly way to describe it when everyone in the know, knew that it would be more like a lot of small slopes up with a few big step ups over the first year. With the timing of the shut down, I think we are seeing on of those big steps up. The slope will hopefully not flatten to much but continue to rise 4k/w and eventually 5k/w. I dont expect another big jump until they start to add new hardware to duplicate parts of the model 3 line to achieve 10k/w eventually in 2019.

What do I want to see? Another 2500 vins early or mid next week. VIN assignments to actual customers 14k, 15k and even 16k by the end of the week. And many many happy customers taking delivery in a huge push including my local service center, which has mostly been S/X recently after doing about 50 model 3s in early Feb. There are still some trickling through but it was like 10 day for a while in Feb.

I hope so ... I'm still not raising my expectations though. This time I want to be surprised .... I like surprises

 

[Dennisj00]

Re: Norway trucking . . . Looks like they should build a few more prototype semis and ship them to Norway ASAP!

 

[froggy]

wanted to give some qualitative color on Model 3, I took delivery of mine in San Diego, pre=ordered on 1st day back in 2016. ..the car is AMAZING. There are NO quality issues with paneling, trim, etc...when you see those comments or reviews on the internet, I now believe some people are just haters and are trying to get a reaction from people or spread FUD. I believe 99.999% of owners are going to love this car, its incredible, have taken 10 people on joy rides so far and they absolutely love it, BMW 3 & 5 series are f'ed; Porsche is f'ed, you would have to be out of your mind to choose a new 3 or 5 series over a Tesla 3...also, the reviewers who complain about the lack of knobs or buttons or that you have to get used to the touchscreen, again, bunch of whiners trying to spread FUD, its very intuitive and easy to use and better than anything in a traditional car or some of the wazoo stuff you get in a Lexus or BMW. If you have an Android or iPhone, using the center touch screen is super simple, plus I love the voice command functionality and am excited for that to advance to more and more features. Tesla knocked it out of the park with the 3. As soon as production is ramped, its over. After enjoying this product for a few days, it doesn't matter that there have been production delays' BMW, Porsche, Ford, GM, won't be able to catch Tesla, they are so far ahead its a joke that people even try to say the competition is going to catch up, there isn't a chance.

 

[ValueAnalyst]

I agree. But last weeks VIN registration was a spike on the order of 4700/w so we could be closer then many expect. They first must get over the 2500/w hurdle but, and this is a big butt.. pun intended. If you recall, the last timeline for 5k/w was March 31st and the one prior to that was Jan. 31st. If they thought there was even a glimmer of hope that Jan 31st or March 31st where achievable many months ago, then they must have had a reason to believe that. My point is that a bottleneck in one place may not have impacted the progress on bottlenecks in other places. Production as a whole can only go as fast as the bottlenecks that limit the total output. But many other issues could have been resolved while dealing with the Semi Automatic pack assembly lines. The shutdown could have been part of a plan to rapidly expand production once the pack assembly bottleneck lifted. It could have been as simple as them deciding that they could shut down the Model 3 line for 4 days or whatever it was, to allow some packs to get assembled and while they made major updates to fix issues on the model 3 lines, in prep for a burst of packs and a continued supply or more packs that would be ramping from April 1 going forward. The point is that production could take a nice stair step up from about 2000/w to to say 3000/w as early as mid April. Elon even alluded to this on the CC when he said, if you gave me 2 weeks hear and there it could be a totally different result because of the nature of the improvements at this point of the production process. The S-Curve was a silly way to describe it when everyone in the know, knew that it would be more like a lot of small slopes up with a few big step ups over the first year. With the timing of the shut down, I think we are seeing on of those big steps up. The slope will hopefully not flatten to much but continue to rise 4k/w and eventually 5k/w. I dont expect another big jump until they start to add new hardware to duplicate parts of the model 3 line to achieve 10k/w eventually in 2019.

What do I want to see? Another 2500 vins early or mid next week. VIN assignments to actual customers 14k, 15k and even 16k by the end of the week. And many many happy customers taking delivery in a huge push including my local service center, which has mostly been S/X recently after doing about 50 model 3s in early Feb. There are still some trickling through but it was like 10 day for a while in Feb.

Agree with most of this, but "another 2500 vins early or mid next week" is optimistic; they just registered close to 5,000, so I'm not expecting any more next week. On the other hand, I agree with the VIN assignments expectation. We should see some in the 15,000's by the end of next week, and if we get 16,000+ by Friday, then shots on me.

 

[Reciprocity]

Agree with most of this, but "another 2500 vins early or mid next week" is optimistic; they just registered close to 5,000, so I'm not expecting any more next week. On the other hand, I agree with the VIN assignments expectation. We should see some in the 15,000's by the end of next week, and if we get 16,000+ by Friday, then shots on me.

That was kind of my point. I was want to see overshoot like numbers to make me feel like 2000+/w will be reported and a very positive outlook for the ramp though the end of the second quarter. Elon will be right sooner or later. He was with 20,000 a year model S and 100,000 a year S/X. Maybe it's too soon for 2500/5000, but I'm fine with. 2000+ and 4000+ at the end of next quarter.

 

[JRP3]

Elon will be right sooner or later.

Fixed.

 

[SteveG3]

today,

If you’re annoyed by arguing to find the truth, this is not the place for you. You should be seeking people to argue against you so that you can straighten thoughts and thanking them, instead of telling them to stop.

3 days ago,

Am I the only one who noticed ValueAnalyst's new footnote to his posts: "@SteveG3 disagrees with this post." Funny. Let's see if we can share the same sandbox. I favour having different opinions. That is what makes the TMC Forum special. Agree to disagree is ok in my book.

lols