General Discussion: 2018 Investor Roundtable

[Buckminster]

Where do the legs go?

In the gap between the seat and the dashboard. Same place as your cupholder, so you might have to forego your Dunkin Donuts if you buy one...

 

[jbcarioca]

Among the more consequential risks to Tesla as it grows is their continuing failures in after-sale service:
1. There are numerous threads here of all Tesla Models waiting many months for spare parts, and shipping defective or wrong parts repetitively. (note: I'm personally invested here. My model 3 is almost four months waiting for correct/undamaged parts. Thus far six individual cases involving three parts have been delivered incorrectly or damaged, always after a wait. Check the threads, lots of cases. If this is not fixed with alacrity, class actions will ensue.
2. Famously later service visits in various places, notably Norway. This seems to be improving, but more slowly than deliveries.
3. Delivery of vehicles with missing parts. Several cases. Model 3 Performance and dual motor badging plus spoiler. Random missing items for others.

The list goes on...

How much of this will be tolerated before the mess hits the share price?

 

[Tim]

I would argue that this is not only an inconsequential risk, but a symptom of Tesla's rapid expansion and a positive indicator for future success. Tesla's willingness to push out unfinished products(or rather mvp) and intentionally grow at a pace that stresses their distribution and support systems is one of their most important organizational characteristics that has allowed them to succeed against the entrenched incumbents.

Among the more consequential risks to Tesla as it grows is their continuing failures in after-sale service:
1. There are numerous threads here of all Tesla Models waiting many months for spare parts, and shipping defective or wrong parts repetitively. (note: I'm personally invested here. My model 3 is almost four months waiting for correct/undamaged parts. Thus far six individual cases involving three parts have been delivered incorrectly or damaged, always after a wait. Check the threads, lots of cases. If this is not fixed with alacrity, class actions will ensue.
2. Famously later service visits in various places, notably Norway. This seems to be improving, but more slowly than deliveries.
3. Delivery of vehicles with missing parts. Several cases. Model 3 Performance and dual motor badging plus spoiler. Random missing items for others.

The list goes on...

How much of this will be tolerated before the mess hits the share price?

 

[Curt Renz]

CNBC interview early this morning with ARK Invest CEO including significant mention of Tesla:

Watch CNBC's full interview with Cathie Wood

 

[30seconds]

I would argue that this is not only an inconsequential risk, but a symptom of Tesla's rapid expansion and a positive indicator for future success. Tesla's willingness to push out unfinished products(or rather mvp) and intentionally grow at a pace that stresses their distribution and support systems is one of their most important organizational characteristics that has allowed them to succeed against the entrenched incumbents.

Yes gives them speed but Model 3 is a mass market car and these customers are not as tolerant as early adopters.

Having your primary car unavailable for weeks to months due to part shortages is not an acceptable situation for most customers and will drive negative word of mouth affecting demand.

 

[Bobfitz1]

I would argue that this is not only an inconsequential risk, but a symptom of Tesla's rapid expansion and a positive indicator for future success. Tesla's willingness to push out unfinished products(or rather mvp) and intentionally grow at a pace that stresses their distribution and support systems is one of their most important organizational characteristics that has allowed them to succeed against the entrenched incumbents.

There is some truth in your post, but it's still just putting lipstick on a pig.

With 30K talented and dedicated employees, it should be possible to give people a C grade of service until service organization catches up with delivery volume. It's too frequently repeated Ds and Fs. A good friend I introduced to Tesla several years ago picked up her car 2 months ago and is still waiting for them to send her the title so she can register the car.
If a service rep promises to do something for a customer, why can't they input the to do into a laptop or tablet?

 

[Intl Professor]

CNBC interview early this morning with ARK Invest CEO including significant mention of Tesla:

Watch CNBC's full interview with Cathie Wood

Not much on Tesla, but it is the underlying example of what is possible.

Cathie's discussion of the future in a macro sense is the most important feature of this piece for me. For a variety of reasons well understood on TMC, the oil transition will come faster than expected as well as threats to traditional autos, by both electric, and autonomous driving. She was forced by their comments to repeat her perspective. Deflation this time is positive for growth. Technological change as it trickles through the economy, everywhere, is deflationary thus increasing demand for new products. In our times it is like the advent of industrialization, electricity, the auto at turn of 20th century. When hammered by moderators on effect for big banks she countered Paypal and SquareD are going to take over. Example: Brick banks at minimum spend $500 to acquire new customers; SquareD, $20.

I haven't followed her before nor read her stuff in detail, so this is probably old hat for those of you who know her better. Actually, she just gives empirical flesh to the theory of disruption and transition so it is clearer.

I'm very impressed as both consumers and investors how lucky we are to have this transition. My worry is politics, both domestic and international, will screw the pooch. But with more and more people paying attention and participating in democracy that can become disruptive too and policies will emerge to cushion the future's demands. Just think of how much traditional investment in infrastructure will be needed to clean up the mess climate change is making. That's a lot of traditional jobs. I hope it is well spent, and soon.

 

[jhm]

And then there's the cost element, a well-utilized public transit system almost certainly has lower maintenance costs per passenger km than many cars. (A poorly-utilized one, OTOH...)

Alternative Fuels Data Center

In US, transit buses operate at less than 25% capacity. This makes them less fuel efficient than private passenger autos on a passenger-mile per gallon of gas equivalent, 39.7 pmpGGE for cars vs 30.1 pmpGGE for transit buses. Demand response (includes taxis, Uber and paratransit) are much less efficient at 8.5 pmpGGE. It is unlikely that robotaxis will ever be as fuel efficient at private cars on a passenger mile basis because any sort of demand response vehicle must travel some fraction of miles without any passenger.

 

[NicoV]

Alternative Fuels Data Center

In US, transit buses operate at less than 25% capacity. This makes them less fuel efficient than private passenger autos on a passenger-mile per gallon of gas equivalent, 39.7 pmpGGE for cars vs 30.1 pmpGGE for transit buses. Demand response (includes taxis, Uber and paratransit) are much less efficient at 8.5 pmpGGE. It is unlikely that robotaxis will ever be as fuel efficient at private cars on a passenger mile basis because any sort of demand response vehicle must travel some fraction of miles without any passenger.

With robotaxis everywhere, the overhead will become very low.
Also, there’s overhead with mass transport: my favorite train route requires me to travel 10% further than just driving my car from where I am to where I want to be. And making those Ubers electric already eliminates the MPG gap.

 

[bhtooefr]

Alternative Fuels Data Center

In US, transit buses operate at less than 25% capacity. This makes them less fuel efficient than private passenger autos on a passenger-mile per gallon of gas equivalent, 39.7 pmpGGE for cars vs 30.1 pmpGGE for transit buses. Demand response (includes taxis, Uber and paratransit) are much less efficient at 8.5 pmpGGE. It is unlikely that robotaxis will ever be as fuel efficient at private cars on a passenger mile basis because any sort of demand response vehicle must travel some fraction of miles without any passenger.

Worth noting that paratransit is often in areas with ridership that can't even sustain normal buses and rail-based mass transit, which will skew things downwards.

That said, in my area, the only bus service (a demand-response service) is using particularly inefficient buses, with Ford gasoline V10 engines, which likely hurts its efficiency massively.

Ultimately, getting people to urbanize is going to help a lot with transportation emissions, but there's going to be a massive amount of the US population that stays in rural areas, exurbs, smaller cities that refuse to implement fixed-route mass transit, etc., etc., that is going to be unable to drive before too long.

And making those Ubers electric already eliminates the MPG gap.

Only if they're running on renewables, and there's still an efficiency (and therefore cost) gap from deploying the renewables.

 

[Artful Dodger]

Yeah -- I'm not sure Tesla will get the SR car out in the first half of 2019, though. They might be getting their cars in the second half of 2019, with the $1875 tax credit.

Good point! Approximately what income level would the average person with a spouse and two kids have to be at to have $1875 owing in U.S. Federal Income tax?

Cheers!

 

[bhtooefr]

For 2019 (or 2018 for that matter), children don't come into it AFAICT, but I believe for married filed jointly, $43,150 household income would be $1875 of federal tax liability ($24,400 of standard deduction plus $18,750 at 10% tax bracket). For married filed separately or single, I believe it'd be $29,441.67 ($12,200 of standard deduction plus $9,700 at 10% tax bracket plus $7541.67 at 12% tax bracket).

Also, for the $3750 tax credit for 1H19, you'd need to be at $58,883.33 household income for married filed jointly I think ($24,400 standard deduction, $19,400 at 10% tax bracket, $15,083.33 at 12% tax bracket), or $45,066.67 for separately/single ($12,200 standard deduction, $9,700 at 10% tax bracket, $23,166.67 at 12% tax bracket).

Finally, if you're planning on buying a car today, tomorrow, or Monday, to get the $7500... $89,675 household for married filing jointly ($24,000 standard deduction, $19,050 at 10% tax bracket, $46,625 at 12% tax bracket), or $64,547.73 for separately/single ($12,000 standard deduction, $9,525 at 10% tax bracket, $29,175 at 12% bracket, and $13,847.73 at 22% tax bracket).

(Disclaimer: I am not a tax professional. And apparently this posted before I added the disclaimer, when the site was having trouble.)

 

[HG Wells]

Also you can move money from an IRA to a Roth IRA to increase your tax liability.

IE If you are married and had 0 income move 89K from an IRA to a Roth IRA to get about 7500 in tax liability.

I think you have to move money before end of year but I am not a tax person.

 

[uselesslogin]

For 2019 (or 2018 for that matter), children don't come into it AFAICT, but I believe for married filed jointly, $43,150 household income would be $1875 of federal tax liability ($24,400 of standard deduction plus $18,750 at 10% tax bracket). For married filed separately or single, I believe it'd be $29,441.67 ($12,200 of standard deduction plus $9,700 at 10% tax bracket plus $7541.67 at 12% tax bracket).

Also, for the $3750 tax credit for 1H19, you'd need to be at $58,883.33 household income for married filed jointly I think ($24,400 standard deduction, $19,400 at 10% tax bracket, $15,083.33 at 12% tax bracket), or $45,066.67 for separately/single ($12,200 standard deduction, $9,700 at 10% tax bracket, $23,166.67 at 12% tax bracket).

Finally, if you're planning on buying a car today, tomorrow, or Monday, to get the $7500... $89,675 household for married filing jointly ($24,000 standard deduction, $19,050 at 10% tax bracket, $46,625 at 12% tax bracket), or $64,547.73 for separately/single ($12,000 standard deduction, $9,525 at 10% tax bracket, $29,175 at 12% bracket, and $13,847.73 at 22% tax bracket).

(Disclaimer: I am not a tax professional. And apparently this posted before I added the disclaimer, when the site was having trouble.)

Ok, first only $1,400 of the child tax credit is refundable so the other $600 requires a tax liability. Second, payroll taxes (aka FICA) Get like get subtracted from taxable income and that is like 7.5%.

 

[jhm]

With robotaxis everywhere, the overhead will become very low.
Also, there’s overhead with mass transport: my favorite train route requires me to travel 10% further than just driving my car from where I am to where I want to be. And making those Ubers electric already eliminates the MPG gap.

The big advantage that robotaxis have over private cars is capital efficiency. This is especially true if Tesla and others are able to make million mile electric drivetrains for cars. As fleet vehicles, that sort of extreme useful life can be well utilized in under 15 years. So certainly there is a savings in embedded carbon in such high utilization.

The point about energy efficiency stands however. Even if fleet vehicles are efficient EVs so are private cars. So miles per GGE can be the same. The key difference is in passenger miles per vehicle mile. Private cars are likely to do better on this metric, so passenger miles per GGE will likely be higher private cars if EV penetration of private and commercial fleets are the same. This "if" is the big question. Even if commercial uptake of EVs is faster than private uptake, this is just a transitory advantage. Long-term all vehicles go electric, so mpmGGE becomes dominated by passengers per vehicle.

 

[jhm]

Worth noting that paratransit is often in areas with ridership that can't even sustain normal buses and rail-based mass transit, which will skew things downwards.

That said, in my area, the only bus service (a demand-response service) is using particularly inefficient buses, with Ford gasoline V10 engines, which likely hurts its efficiency massively.

Ultimately, getting people to urbanize is going to help a lot with transportation emissions, but there's going to be a massive amount of the US population that stays in rural areas, exurbs, smaller cities that refuse to implement fixed-route mass transit, etc., etc., that is going to be unable to drive before too long.



Only if they're running on renewables, and there's still an efficiency (and therefore cost) gap from deploying the renewables.

Getting the right vehicle fit to meet specific demand is important. I think the tendency in public transit has been to error on the side of larger occupancy capacity than needed. This may be economically motivated by rationing the cost of the driver. Public transit folk ridiculed Musk for suggesting an autonomous transit vehicle for small occupancy. But if occupancy is less than 25% of capacity, something is really wrong with the size of the vehicle. To wit, you could put out vehicles at half the size saving a load in fuel and wear on the road, and still struggle to get occupancy up to 50%. Once we are talking about autonomous vehicles, the economics of rationing driver cost goes away. So I think autonomous will be a watershed moment for public transit. I think smaller vehicles will become much more economical.

 

[EVNow]

Getting the right vehicle fit to meet specific demand is important. I think the tendency in public transit has been to error on the side of larger occupancy capacity than needed. This may be economically motivated by rationing the cost of the driver. Public transit folk ridiculed Musk for suggesting an autonomous transit vehicle for small occupancy. But if occupancy is less than 25% of capacity, something is really wrong with the size of the vehicle. To wit, you could put out vehicles at half the size saving a load in fuel and wear on the road, and still struggle to get occupancy up to 50%. Once we are talking about autonomous vehicles, the economics of rationing driver cost goes away. So I think autonomous will be a watershed moment for public transit. I think smaller vehicles will become much more economical.

The problem with public transport sizing is the huge demand around peak times and much lower demand during off peak. Replace public transport with road size, for eg.

Ofcourse if the public transport is running at peak time with 25% occupancy, years after starting service, there is a problem.

BTW, I think the real watershed will be in telecommuting

 

[EVNow]

Good point! Approximately what income level would the average person with a spouse and two kids have to be at to have $1875 owing in U.S. Federal Income tax?

Cheers!

I hope Dems put EV tax credit extension as part of the deal to restart the government next week

 

[22522]

Any concerns about volume knob wear out service costs?

Twittle constantly to let it know I am there when on AP. Not sure that was the design scenario?

 

[techmaven]

I haven’t been on these threads lately, but I wanted to hop in and wish everyone a happy holidays, happy new year, and best wishes for your TSLA investment next week.

Some of us old guard haven’t been as active here lately. I am guilty of that.

In any case, January is going to be amazingly volatile. Hope you all have taken your anti-nausea meds and are strapped in for the ride.