General Discussion: 2018 Investor Roundtable

[RobStark]

57:00 - Montana Skeptic claims that Martin Eberhard wanted to do hybrids. Says that Teslas have "2 tons of batteries".

This is really puzzling. Neither is factually accurate.

At the beginning Martin and Marc looked at an EREV , something akin to an i3 Rex concept.

Big battery with a tiny ICE for emergency situations.

Then determined the state of battery technology in 2004 was good enough for a BEV that cold actually replace not complement an ICEv.

 

[MacRocket]

The Fascinating Tesla Short Story | CleanTechnica

Hey Everyone,
One of our Very own TMC members has a great story in Cleantechnica.
There are some comments from other TMC members at the end of the article.
Well worth a read

 

[schonelucht]

Also, what did they use for battery pack costs? It's not like they could know that aside from estimating based on materials and and some pretty big assumptions about how they are made. My guess is that they over estimate the pack cost and that's the most expensive part of the car. As much as Sandy appears to hate robots, I'm sure they are over estimating the labor portion. Lastly, Tesla is more verticaly integrated than other manufactures, so they must be making a lot of assumptions about parts made in house and what those would cost of they were out sourced.

I agree that there is a good chance that their estimates on the battery pack are off. That's novel technology where even experts have a surprisingly wide range of estimates on best-in-class production costs. However I don't buy that for more regular car parts. I find his expertise credible in this area and I am sure they've looked at the amount of outsourcing and vertical integration (which isn't necessarily a cost saver in my experience). What surprised me about the teardown is that the spartan interior isn't matched by an equally spartan use of internal construction. Overall, I would have expected it to be more obvious that this car was built for margins, inside and outside. About in the same way as I was surprised to hear Elon say they've put 'too much new stuff in it' despite his many assurances they were not about to repeat the mistakes from the X. I can't shake the feeling that both issues are connected and that the Model 3 is not as simple as it could've been.

 

[anticitizen13.7]

At the beginning Martin and Marc looked at an EREV , something akin to an i3 Rex concept.

Big battery with a tiny ICE for emergency situations.

Then determined the state of battery technology in 2004 was good enough for a BEV that cold actually replace not complement an ICEv.

That would make sense, but I don’t know why Montana Skeptic would characterize this as “wanting” to do hybrids.

Evaluation of a technical option is not “wanting” to choose that option. If I have 3 options A, B, and C, and I choose option B, it doesn’t necessarily follow that I wanted to do A or C.

 

[RobStark]

That would make sense, but I don’t know why Montana Skeptic would characterize this as “wanting” to do hybrids.

Evaluation of a technical option is not “wanting” to choose that option. If I have 3 options A, B, and C, and I choose option B, it doesn’t necessarily follow that I wanted to do A or C.

Just FYI.

In case you get into an intellectual fistfight with a bear you are better armed with the facts.

And when doesn't MS skew the facts?

 

[Johann Koeber]

VW Boardmember Thomas Ulbrich was interviewed and said:

- by 2021 the factory in Zwickau will be converted from 100% ICE to 100 % EV
- 6 different models will be produced there
- 2020 the compact i.D. will replace the e-Golf

Source (in German)

VW-Standort Zwickau wird E-Mobilitäts-Werk - ecomento.de

 

[Reciprocity]

I agree that there is a good chance that their estimates on the battery pack are off. That's novel technology where even experts have a surprisingly wide range of estimates on best-in-class production costs. However I don't buy that for more regular car parts. I find his expertise credible in this area and I am sure they've looked at the amount of outsourcing and vertical integration (which isn't necessarily a cost saver in my experience). What surprised me about the teardown is that the spartan interior isn't matched by an equally spartan use of internal construction. Overall, I would have expected it to be more obvious that this car was built for margins, inside and outside. About in the same way as I was surprised to hear Elon say they've put 'too much new stuff in it' despite his many assurances they were not about to repeat the mistakes from the X. I can't shake the feeling that both issues are connected and that the Model 3 is not as simple as it could've been.

Outsourcing could be a cost saver if Tesla has a very specific need and has the intent and ability to automate the production were the suppliers can't or won't. Costs can be saved in shipping as well as the risks of issues with the supplier. Some things make sense to in source. Some suppliers have also setup shop in Fremont, which should also be taken into consideration. Elon quipped that they need a tunnel to where the seats are made. Most of the parts are clearly sourced so the vertical integration is probably pretty small for the things munro had expertise.

Was the $36,000 cost specific to the model they took apart? That car could have been a $49,000 car, so 36k is 33% GM. Even is it's the cheapest it could have been the GM would be 25%. The bigger battery and pup is $9000? So the $35,000 version of the car might have lower margins, but I don't see them being terrible based on this report so far. The base model is only about 20-25% of the demand so as long as the other variations are 20-25% higher margin then the base then the blended rate will be higher. And lastly, the golden egg is eap and FSD which have nearly 100% margin and the take rate has been extremely high.

 

[yngwie_2012]

The shorts have today another fud topic, that Keller leaving as VP Autopilot.
Lets see if that helps them to keep the stock from climbing

 

[Ovulation]

The value to society is when you have truly duplicitous, disastrous, and otherwise bad companies valued too highly. An exceptional example might be Enron and their accounting leading up to when the company came unhinged. It's the profit incentive from spotting situations like that, that incentivizes investors to look for and expose those situations, that short selling enables.

Or at least, that's how I think about it, and how I make the case for the existence of the short mechanism in the market. It's the yin to buy and hold yang if you will.

It's part of the cleansing process in a capitalist economy, to find and expose the bad business models and badly executed businesses, and eliminate them from the economy.


What makes Tesla such an epic tug of war, is that to my eyes, we have a large group of people putting a lot of money into the proposition, that Tesla is a badly run business, with another very large group of people putting a lot of money into the proposition that Tesla is changing human civilization. I agree with the earlier comment that this might be the most epic tug of war between shorts and longs ever (so far) over a single company.

Hmmm I don't know, I mean pouring money into a company should be enough incentive to closely scrutinize your investment, I really don't see how figures like Spigel are helping me to see my investment in a more unbiased, objective way.

 

[mongo]

Overall, I would have expected it to be more obvious that this car was built for margins, inside and outside. About in the same way as I was surprised to hear Elon say they've put 'too much new stuff in it' despite his many assurances they were not about to repeat the mistakes from the X. I can't shake the feeling that both issues are connected and that the Model 3 is not as simple as it could've been.

Check out the firewall in the fully stripped version, the car is ambidextrous. I didn't see much complexity/ new stuff in the tear down, but did notice the wire harnesses were a lot thinner than most cars.

 

[dc_h]

What makes Tesla such an epic tug of war, is that to my eyes, we have a large group of people putting a lot of money into the proposition, that Tesla is a badly run business, with another very large group of people putting a lot of money into the proposition that Tesla is changing human civilization. I agree with the earlier comment that this might be the most epic tug of war between shorts and longs ever (so far) over a single company.

I think the dichotomy can, in part, be explained by Tesla’s own inner conflict. They have a design, engineering and branding lead the rest of the industry can only dream about, but their operations lag. They are that gifted kid who gets B’s, because he only opens the books for finals and then pulls an all nighter (refer to Elon’s instagram on the GF roof). They can hit their margins and can be the best, but its all pushed back because they don’t do their homework and execute the pop quizzes.
So the shorts see poor execution and the Kong’s see industry leading design, engineering, performance and margin opportunities and the shorts see Elon building tunnels and dragons. The exciting part of the battle is that both sides have valid points. If Elon has Tim Cook as his operations chief, there would be no shorts left and they’d already be making 500,000 or more cars a year.
I’m long shares. The shorts are in deep, but execution could still let them off the hook, but if we hit 5000 cars a week by June 30, they’re toast.

 

[Drax7]

The shorts have today another fud topic, that Keller leaving as VP Autopilot.
Lets see if that helps them to keep the stock from climbing

Chanos bad mouthing tesla and warning us that Porsche is coming.
Pathetic frankly, and his excuse for being short china is too , given
His prior reason of a bursting bubble .

 

[aubreymcfato]

I really do not think that is correct. Elon wants to deliver solutions to highly resistant markets from Tesla Roadster to Falcon Heavy, doing things thought to be impossible. These have spawned imitation and innovation quite broadly. Busses have never been difficult, which is why known non-innovators like Blue-Bird are notable, with BYD unquestionably the global market leader. Nothing about busses has needed Musk-style innovation. Semi is a completely different issue and that have spawned some entertaining competition too.

Despite being a TSLA shareholder I do not think Elon is concerned about stock market reaction except to the extent that it could impede constant innovation. That is fine with me.

If this is true, than I would really like Tesla to set up a PR website to contrast FUD and explain what they are trying to do, filled with important documents and facts.
Maybe I'm naive, but if this is the rationale behind the decision of not making buses, then an explanation would counter progressive/left/environmental critics (we already have the ICE/oil/you-never-gonna-do-it/short critics in ample supply).
What's great about Elon is that Master Plan 1&2 are written, and he wrote them at the beginning.
It's a very good document to explain to people why he started with the luxury segment (a recurrent critic is that Tesla is just for the elite, and always will be).

Tesla (as a company) really needs people that *understand* what is trying to accomplish and are neither religious cult fans nor religious cult trolls.

 

[McMuggets]

So this needs to be mentioned, or maybe I missed something.... Has production restarted at the factory for Model 3's?

 

[Todd Burch]

So this needs to be mentioned, or maybe I missed something.... Has production restarted at the factory for Model 3's?

Yes.

 

[McMuggets]

Yes.

Strange, media trumpets the temporary stoppage, but I can't find anything on the restart. Do you have a link?

 

[wnorris]

Maybe I'm naive, but if this is the rationale behind the decision of not making buses, then an explanation would counter progressive/left/environmental critics (we already have the ICE/oil/you-never-gonna-do-it/short critics in ample supply).

Elon stated that busses were originally planned, but he felt the market for an electric bus was further enough along to make it unattractive. I do not remember what interview this was from, but this was what I remember hearing.

 

[Yggdrasill]

Strange, media trumpets the temporary stoppage, but I can't find anything on the restart. Do you have a link?

I find it helpful to keep an eye on this thread: Found a LOT of Model 3's in a Tesla lot - Pictures inside

 

[McMuggets]

I find it helpful to keep an eye on this thread: Found a LOT of Model 3's in a Tesla lot - Pictures inside

Thanks. Funny how a temporary stoppage makes front page news, and a restart does not. Similarly, the Autopilot lawsuit was all over the news, and apparently the plaintiff dropped the lawsuit but I didn't see any of that in the media except for a little blurb.

 

[schonelucht]

Was the $36,000 cost specific to the model they took apart?

Their detailed cost analysis isn't finished. His remark was in the context if Tesla would be able to make a profit on a $36k version. I understand that to mean including cost of sales and research.