Long-Term Fundamentals of Tesla Motors (TSLA)

[petit_bateau]

I have included doggydogworld's most helpful pieces of information, and stirred in some errors & estimates of my own doing, and the result is as follows. I am sure I don't need to tell anyone here the significance of these numbers, which are in line with many of ours' expectations & observations, but it is always nice to get confirmatory detail.
regards, pb/dspp

BY MODEL

BY MANUFACTURER GROUP

BY TYPE

 

[CorneliusXX]

I have included doggydogworld's most helpful pieces of information, and stirred in some errors & estimates of my own doing, and the result is as follows. I am sure I don't need to tell anyone here the significance of these numbers, which are in line with many of ours' expectations & observations, but it is always nice to get confirmatory detail.
regards, pb/dspp

BY MODEL

BY MANUFACTURER GROUP

BY TYPE

These are great. Any chance you could do a table by manufacturer for just the BEV Type? PHEV is a dead end and IMO dilutes Tesla's true market share - which should be around 40% by $mkt share.

 

[petit_bateau]

These are great. Any chance you could do a table by manufacturer for just the BEV Type? PHEV is a dead end and IMO dilutes Tesla's true market share - which should be around 40% by $mkt share.

Not a problem, see below. However I think both perspectives are worth understanding. I agree that PHEV is a dead-end and any manufacturer that is still investing product-development money in the PHEV-space is wasting it. However because of the legacy PHEV-products, and those that are still coming through the pipeline, they are a small-but-useful part of what it takes for a auto-manufacturer to build buying power with the cell-manufacturers. For that reason alone it is worth keeping an eye for another few years.

By the way doggydogworld clearly has sight on a better database, and there is an error term betwen what he is looking at, and what I have kludged together. Nonetheless it is still informative.

 

[CorneliusXX]

Not a problem, see below. However I think both perspectives are worth understanding. I agree that PHEV is a dead-end and any manufacturer that is still investing product-development money in the PHEV-space is wasting it. However because of the legacy PHEV-products, and those that are still coming through the pipeline, they are a small-but-useful part of what it takes for a auto-manufacturer to build buying power with the cell-manufacturers. For that reason alone it is worth keeping an eye for another few years.

By the way doggydogworld clearly has sight on a better database, and there is an error term betwen what he is looking at, and what I have kludged together. Nonetheless it is still informative.

Thanks. That's a commanding lead for Tesla.

I get your point about PHEVs - Do you think helps with buying power much? It's13% (9.4 GWh) of GWh total - as a comparison, It was noted today that LG is going to add 8.8GWh of production just to accommodate MiC MY production.

 

[petit_bateau]

Thanks. That's a commanding lead for Tesla.

I get your point about PHEVs - Do you think helps with buying power much? It's13% (9.4 GWh) of GWh total - as a comparison, It was noted today that LG is going to add 8.8GWh of production just to accommodate MiC MY production.

It does when you are BMW with 0.4GWh trying to persuade the sweety shop to start another line. That's why scoring the game has to include both types of player for the next few years. After all look at what Wuling have managed to achieve with just 0.7GWh. Now is not the time to take one's eye off all of the balls.

 

[petit_bateau]

I've asked here in the past, does anyone have data on the utilisation of the Tesla charger network. The reason was to do some capacity analysis and valuation analysis. I did a crude comparison with the Shell global numbers. No-one responded.

Here is a Reuters piece on petrol/diesel (gas) filling stations , "Under pressure from investors and governments alike to cut emissions, major European oil companies are ploughing billions into renewable energy but are struggling to craft business plans that promise the returns shareholders have come to expect. Europe’s big oil firms, however, have another card to play: their vast global networks of filling stations."The new black gold? Big Oil bets on retail networks in an electric era

So .... I ask again, does anyone have any insight into actual utilisation of the Tesla charger network ?

 

[ItsNotAboutTheMoney]

I've asked here in the past, does anyone have data on the utilisation of the Tesla charger network. The reason was to do some capacity analysis and valuation analysis. I did a crude comparison with the Shell global numbers. No-one responded.

Here is a Reuters piece on petrol/diesel (gas) filling stations , "Under pressure from investors and governments alike to cut emissions, major European oil companies are ploughing billions into renewable energy but are struggling to craft business plans that promise the returns shareholders have come to expect. Europe’s big oil firms, however, have another card to play: their vast global networks of filling stations."The new black gold? Big Oil bets on retail networks in an electric era

So .... I ask again, does anyone have any insight into actual utilisation of the Tesla charger network ?

For reference, in 2019 Fastned reported 9.9% utilisation, for some definition of utilisation.

Fastned 2019 Results Reveal High Growth Of Charging Business

In an interview with Fully Charged, Dale Vince said Ecotricity's albatross had 4% utilisation.

 

[petit_bateau]

For reference, in 2019 Fastned reported 9.9% utilisation, for some definition of utilisation.

Fastned 2019 Results Reveal High Growth Of Charging Business

In an interview with Fully Charged, Dale Vince said Ecotricity's albatross had 4% utilisation.

Thank you, that is most helpful. I'll have a play with it.

Re Fastned, good stuff. Re Dale Vince, well let's just say he is not on my Xmas card list.

 

[CorneliusXX]

Thank you, that is most helpful. I'll have a play with it.

Re Fastned, good stuff. Re Dale Vince, well let's just say he is not on my Xmas card list.

In my day job I've seen a couple of credit papers on buying charging networks in a couple of regions. @ItsNotAboutTheMoney has mentioned similar utilisation rates to what I have seen (c.6%).

The main problem with trying to buy these networks is that there's relatively high up front capex and uncertain cashflows - which make these networks difficult to finance at reasonable leverage. That's why non-Tesla networks have poor pricing - they either need to charge a subscription (additional revenue certainty) or charge high costs per kWh to show enough revenue to be able to get external financing.

I suspect Tesla has higher utilisation than competing networks as they have a larger fleet and effectively a captive customer base - which should lead to a more optimised charger rollout and less volatility in utilisation, but I would expect it to still be relatively low utilisation on average with large spikes around periods of high travel (holidays).

 

[petit_bateau]

In my day job I've seen a couple of credit papers on buying charging networks in a couple of regions. @ItsNotAboutTheMoney has mentioned similar utilisation rates to what I have seen (c.6%).

The main problem with trying to buy these networks is that there's relatively high up front capex and uncertain cashflows - which make these networks difficult to finance at reasonable leverage. That's why non-Tesla networks have poor pricing - they either need to charge a subscription (additional revenue certainty) or charge high costs per kWh to show enough revenue to be able to get external financing.

I suspect Tesla has higher utilisation than competing networks as they have a larger fleet and effectively a captive customer base - which should lead to a more optimised charger rollout and less volatility in utilisation, but I would expect it to still be relatively low utilisation on average with large spikes around periods of high travel (holidays).

Thanks CorneliusXX, and ItsNotAboutTheMoney. That was helpful in sense-checking.

Using guesstimates with key parameters of avge 75kW chargerates, and average 10% network charging, I come up with a 8-9% average Supercharger connector utilisation on a 10h/d basis. That corresponds to a 3% utilisation on a 24h/d basis, or a 20% utilisation on a 4h/d peak-time basis. Those look within spitting distance of the various numbers you have offered.

Plugging in the implied mkt cap from Fastned of $1.5m/station (using the March 2020 mkt cap for Fastned) that implies a $3-$4bn mkt cap is embedded in the Tesla Supercharger network, so about 1-2% of the o/a Tesla mkt cap.

In terms of valuation drivers the two key ones are to increase spend/visitor, i.e. make cash out of concessions; and to increase value per site from the grid connection. I think that the sites are specced to supply about a 50% use, so 100% of connections at 50% charge, or 50% connections at 100% charge. So if 50% that means that 50-6 = 44% of the grid connection capacity is under-utilised. The opportunities for increasing the value of that in a bi-directional manner should be obvious !

 

[nwdiver]

Wonder how much snow they're expecting in hell...

 

[ItsNotAboutTheMoney]

Thanks CorneliusXX, and ItsNotAboutTheMoney. That was helpful in sense-checking.

Using guesstimates with key parameters of avge 75kW chargerates, and average 10% network charging, I come up with a 8-9% average Supercharger connector utilisation on a 10h/d basis. That corresponds to a 3% utilisation on a 24h/d basis, or a 20% utilisation on a 4h/d peak-time basis. Those look within spitting distance of the various numbers you have offered.

Plugging in the implied mkt cap from Fastned of $1.5m/station (using the March 2020 mkt cap for Fastned) that implies a $3-$4bn mkt cap is embedded in the Tesla Supercharger network, so about 1-2% of the o/a Tesla mkt cap.

In terms of valuation drivers the two key ones are to increase spend/visitor, i.e. make cash out of concessions; and to increase value per site from the grid connection. I think that the sites are specced to supply about a 50% use, so 100% of connections at 50% charge, or 50% connections at 100% charge. So if 50% that means that 50-6 = 44% of the grid connection capacity is under-utilised. The opportunities for increasing the value of that in a bi-directional manner should be obvious !

Funny you should mentioning increasing site value, that's Gridserve's model.

 

[petit_bateau]

Wonder how much snow they're expecting in hell...

View attachment 614207

Well, we know that answer ...

.... http://web.mit.edu/kilroi/Public/humor/hell.txt

 

[petit_bateau]

Funny you should mentioning increasing site value, that's Gridserve's model.

Yes, but they (GridServe) don't make the Powerwalls & etc to fully use the spare 44% of capacity. At least not without buying the hardware & the trading software from the people that do, er, TSLA. And they haven't put this sort of business model out in the market.

If you take RDS/Shell's mkt cap as $190 bn. and you ascribe 25% of the RDS value to retail - which is a crude approximation - then it means that Shell's 45,000 sites are worth ~ $45 bn, so on average $1 mln per site. That implies that Fastned is overvalued by 1.5x at present*, or perhaps right-valued if you correct for global avge vs Fastned avge locations.

I get to about 45,000 Tesla Supercharger stations (or equivalent) in late 2020s, perhaps 2028, in the scenario of 20mln vehicles/yr by 2020. So that would still be only 1-2% of TSLA mkt cap on the $1m/site basis. Selling a coffee and a croissant, or even a pint of milk + flowers + wine + pasta ain't going to push that much above $2m however hard one tries to pull the spend-per-visitor value lever.

If however one looks at the value-per-industrial-grid-connection lever, and takes the simplistic view that all kWh are equal, then going from 6% grid utilisation to 60% utilisation should be a 10x value change. Since grid balancing / intermittency services are highly non-linear in value this ought to be easily possible. That alone takes the value of the Tesla Supercharger network from being a 'mere' enabler at 1-2% of TSLA mkt cap to 10-20%. But as we all know intermittency value is very non-linear, so done right this is at least a ~30% mkt cap lever to be pulled. It can go much higher, but the average-over-the-year is quite context-specific to particular locations and market types.

I'm not seeing even ARK putting those sums together.

[edit: or were overvalued back in Mar 2020, but right now they are up 3x on those numbers ]

 

[wdolson]

There are basically two places where people will want to use public charging. One is on the highway and the best situation there is to be near services travelers want to use: restaurants, sundry things people might need like bottled water and over the counter meds (analgesics, No-Doz, etc.), as well as tourist attractions.

The other use case is for people who don't have charging options at home. Mostly apartment and condo dwellers, but also some people in older single family homes with no option to install a home charger (a friend's husband would love to own a Tesla, but their house is in a neighborhood where everyone parks on the street and few people have driveways or garages).

For those people, they need to charge somewhere where they are likely to leave their cars for a while and somewhere they go regularly. Work places are the first, best place, but as far as retail goes, the place most people go most consistently is food shopping. Converting a gas station that is near or co-located with a supermarket would probably get a lot of usage.

Around the Portland area I have seen chargers at some destinations. The airport parking areas (which get heavily used), sports venues, museums, and some retail locations. The retail ones at non-food location I see used the least, though I have seen cars plugged in these more in the last year. I have good charging at home and always have enough charge to get back home so I never use public chargers around town.

 

[ByeByeJohnny]

I'll admit I didn't watch all of the video. So some of my question might be answered in it.

But how are they gonna make that building profitable or even breakeven?

With 36 stalls. Say 1,5 person per car. Let's be really generous and say that you can get to 20% usage during a 12 hour day with every car staying for 20 minutes.

That would give you 36x1,5x3x0,2=32,4

So that would give you around 30 people at the location per hour. Many of them will not buy anything. Yet they will have to have at least 2 people working in the store there. That's impossible to make profitable.

For these charging locations to work with stores etc they need probably 100+ people there per hour. There is probably not that many locations in the world yet that can support upwards of 100 EV stalls. So for now put them next to gas stations to share facilities and then there will be room to expand the number of stalls as the gas stations get less cars every year.

While I was googling this a bit I saw that they got a £5 million grant for this station. So I'm assuming the next one will be in a location that can pull in more EVs and/or they will have a lot cheaper building.

 

[tmp131]

I know that TSLA had the regulatory credits deal with FCA (between $1.4 to $1.8 billion) and recently Honda (~$100 million).
In 2020, through Q3 TSLA has realized about $1.1 billion already, and I anticipate they will realize another $400 million in Q4. Does this mean they won't have much regulatory credits left in 2021? Or TSLA will continue to strike deals with other manufacturer so they can meet the strict EU's 95 g/km CO2 standard?

 

[st_lopes]

I know that TSLA had the regulatory credits deal with FCA (between $1.4 to $1.8 billion) and recently Honda (~$100 million).
In 2020, through Q3 TSLA has realized about $1.1 billion already, and I anticipate they will realize another $400 million in Q4. Does this mean they won't have much regulatory credits left in 2021? Or TSLA will continue to strike deals with other manufacturer so they can meet the strict EU's 95 g/km CO2 standard?

The credit regime was extended and tightened even further if I’m not mistaken. So reasonable to forecast that they will continue to realize on regulatory credit deals for the next 2-3 years.

 

[UkNorthampton]

The credit regime was extended and tightened even further if I’m not mistaken. So reasonable to forecast that they will continue to realize on regulatory credit deals for the next 2-3 years.

Gets stronger & stronger. 2020 will be used as a 'base year' - so many ICE OEMs were trying to minimise EV sales to reduce the angle of the graph/cuts. They failed. many OEMs will be in trouble & needing to sell credits. Also, EU has said likely to get stricter anyway.

 

[tmp131]

Gets stronger & stronger. 2020 will be used as a 'base year' - so many ICE OEMs were trying to minimise EV sales to reduce the angle of the graph/cuts. They failed. many OEMs will be in trouble & needing to sell credits. Also, EU has said likely to get stricter anyway.

Besides that Honda deal, I just haven't seen any other deal. I suppose it is not public yet??? When you say "Gets stronger & stronger. 2020 will be used as a 'base year' -", do you meanTSLA can claim/realize $500 million or more per quarter?