Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Yeah its GS more than MS. GS has always been the main underwriter and seem to be Elon's "personal bankers".
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Q3 2015 Report & Conference Call
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Yeah its GS more than MS. GS has always been the main underwriter and seem to be Elon's "personal bankers".
Regardless, it doesn't matter who administers it. There's going to be a lead and then a bunch in the syndicate. All that really matters is the uptake rate and magnitude of the capital raises, all of which have been favorable thus far. The only way there will be a capital raise if it's for Gigafactory number 2 or some massive capital expansion that will catapult Tesla into the next wave of growth.
For tftf, what do you think the capital raise would be needed for? I'm under the impression that you think it's needed for Tesla just to operate and not used for growth when history has proven that this is simply not the case. The first raise was for GF1 + bolstering partnerships. The second raise was for a cushion and because it was advantageous.
Have you looked at the recent 10-Qs? Very little of the $2bn was actually invested in the GF (or GF1 as you call it). Tesla and/or Panasonic will need to invest $4-5bn in total until 2020. Either that or the GF1 will never produce the 35 (cell level) or 50 GWh on the pack level (less output, also see current scale of building vs original plan).
Tesla spent 80-90% of the $2bn raised in early 2014 on other items (not on the GF1) and already raised new money (about $750m) in mid-2015. I discussed this gap many times in the GF thread.
The Model3 R&D in 2016 and beyond as well as further expansion isn't cheap either.
It's true that of the $2B raised, only a bit more than $200M has been spent on Gigafactory construction.
$4-5B is projected to be the total cost of the facility... however, the facility doesn't need to be completely finished in order to start churning out cells and finished packs. From what I have read about the Gigafactory, it is going to be comprised of many separate lines operating in parallel. Tesla can build some initial lines that will begin to produce cells and packs. The company and its partners can continue to scale up. Panasonic's annual investments, additional capital raises, and possible revenue from vehicle and Tesla Energy sales can provide the money.
What is key is that Tesla continue to demonstrate that its products make money. Model S makes money. I think it's likely that Model X will also make a lot of money. It's these products that give the big investors confidence that continuing to finance Tesla, either through debt or equity, will be worth it in the long run.
Johan
Ex got M3 in the divorce, waiting for EU Model Y!
Don't read too much in to the exact numbers being mentioned under each label.
Investment in R&D is not as clear cut as you'll have it. When they invest in battery research this goes toward both Tesla Energy, Tesla Motors and also likely GF usefulness. The GF is not just a building and manufacturing plant, but also "a product". The first GF will require much higher investment than GF2 and beyond, just as the first MX are likely sold at a loss (per car and number of hours invested basis). But the MX as a profit will have handsome GM eventually.
So again, expansion being "cheap" or not has nothing to do with the number of dollars invested. $5 billion is "cheap" if it results in a factory being able to produce products sold for $2 billion in profits per year, for 15 years, for example.
SW2Fiddler
We Are Cognitive Dissidents
Here's the thing.
(I say this having driven my Model S with ridesharing thru Uber for several months earlier this year...)
The S classic, even with no AP hardware and no hope of EVER being auto-anything, proved to be already 95% perfect for Uber Ridesharing. The nav, the WOW Factor (starting at the dramatic handle-presenting followed by the passenger getting their first glimpse of the 17" screen
), the smooth quiet ride - with option of quickness when quickness is needed, and overall SAFETY of which the public is becoming more and more aware... really trump all other cars Uber partners are driving. For the driver, the efficiency and cost to operate! I never Supercharged a single watt for Uber-use but costs were STILL so low as to make other Uber partners really take note.The missing link? No integration between the rideshare app and the onboard Nav, and unwieldy audio media connection. Having to use a smartphone for the rideshare part, and doing navigation/entertainment on the built-in.
Autonomy is not needed, at all. Just a Tesla-offered app that does what the Uber app/network does to connect the passenger and driver/owner. Displays the passenger info, lets the driver assess and accept/reject the request. Plays the passenger's playlist during the ride.
Let this sink in... This could be in the works to install tomorrow on all Tech Package-d Model S. Passenger "Hail A Tesla" app. It lets owners monetize their sizable investment in that drivable asset. Puts butts in Tesla Seats for brand awareness. Gathers data for any future true-autonomous Tesla fleet.
Elon's remark about Product Announcement might not be referring to something that has to wait for Full Autonomy.
TL;dr: AJ Question may have been thinking long-term, EM Non-Answer may have been due to Short-Term product plans!
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Yes I have looked at pretty much all the 10-Q's. Your description of very little is pretty absurd given that 10% of it has been invested in 15YTD and it's not complete yet. It's being phased an I'm estimating capex spend at a rate of $50M per quarter.
Where did you see the 80-90% of the 2B raised is spent already? Please link.
The $750M raised was a cushion so they don't need to dip into the line of credit. Given the context it makes sense because I'm thinking they need to put aside more in the event other suppliers slow them down and they have to make deals or do acquisitions.
We see where the cash flows go and what's stepped up significantly in one quarter was Investing activities which was due to things we already know of like the paint shop, double amount of robots, setting up for tooling and dies in michigan, tillburg, etc. All of these moves lay the foundation for a larger magnitude of internally generated cash in the long term. It's pretty clear what the money is being spent on.
That's true, but then the Model3 can not be sold in the planned numbers. Looking at rough estimates, the GF in stage 1 can maybe pump out 7 GWh (20% of planned output), that's quite a difference to 35 GWh. Many bulls seem to think that the GF is "done" when it starts pumping out first cells in late 2016 (for ESS) and 2017 (first EV cells).
Most of TSLA's current valuation hangs on the Model3 project at very high margins and very high volume (500k cars/year by 2020). However, that subject wasn't touched upon in the last CC. A few hundred Model X cars shipping a few weeks later won't matter in the long run.
We will see when the Model3 appears on sale (I don't believe in "late 2017") and what Tesla's cell capacity will be at that time (maybe only 100k cars/year can be built unless an additional $3-4 bn is invested in the GF by Tesla/Panasonic...and that will take another 1-2 years to build out, capacity can't be added overnight in a battery factory of that size, also see current building structure versus originally planned building structure in Nevada).
Eh, who cares? The day is too short to worry about this (since none of us investors have any realistic control over what the company can or can't accomplish) and I have a few martinis I need to drink. I have no expectation that Model 3 will be built at the 300k+ units/year level for some time.
At least something I can agree with
Here's a good recipe: How to make the perfect martini | Life and style | The Guardian
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The Gigafactory will seemingly be built in 7 stages, each block possibly meaning 5 GWh of production per year. It is also supposed to reach full production in 2020.
Half the cost of the gigafactory will be covered by Tesla, or about 2.5 billion. With 200 million already invested, and 17-21 quarters to go, that means the capex for Gigafactory needs to be at 110-135 million per quarter. If the capex related to the gigafactory drops below this, we can be fairly sure they are falling behind schedule.
Also, assuming the first phase is finished in Q3 2016, and the last phase will be finished in Q4 2020, the completion dates for the different phases should be something like:
1st phase: Q3 2016 (5 GWh/year or 70k Model 3)
2nd phase: Q2 2017 (10 GWh/year or 140k Model 3)
3rd phase: Q1 2018 (15 GWh/year or 210k Model 3)
4th phase: Q4 2018 (20 GWh/year or 280k Model 3)
5th phase: Q3 2019 (25 GWh/year or 350k Model 3)
6th phase: Q2 2020 (30 GWh/year or 420k Model 3)
7th phase: Q4 2020 (35 GWh/year or 500k Model 3)
I was being generous and used 7GWh for phase1 (depending on cell or pack level, I rounded up for pack level capacity with full output once projected at 50GWh).
In any case, if one building corresponds to one block as this article says then sateliite and drone images will immediately show when Tesla starts building up additional battery capacity in the future:
Tesla Gigafactory Could Be Over Twice Initially Planned Size | CleanTechnica
That's a lot of additional investments needed to ever reach full capacity...we will see in the next 10-Q how much has been spent on block 1 so far.
PS: Moving this over the GF investor thread as it's better suited there.
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jhm
Well-Known Member
Not quite. Active safety is standard on the car. One pays an extra $2500 for Autopilot.
In any case, I went to the service center today and learned that the radar needs to be recalibrated. And without it my car does not have Emergecy Braking. The SC is quite busy so the earliest I could take it in was Nov 21. I take this as an indication that the local fleet of Teslas is getting pretty large.
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Here's the thing.
(I say this having driven my Model S with ridesharing thru Uber for several months earlier this year...)
The S classic, even with no AP hardware and no hope of EVER being auto-anything, proved to be already 95% perfect for Uber Ridesharing. The nav, the WOW Factor (starting at the dramatic handle-presenting followed by the passenger getting their first glimpse of the 17" screen
The missing link? No integration between the rideshare app and the onboard Nav, and unwieldy audio media connection. Having to use a smartphone for the rideshare part, and doing navigation/entertainment on the built-in.
Autonomy is not needed, at all. Just a Tesla-offered app that does what the Uber app/network does to connect the passenger and driver/owner. Displays the passenger info, lets the driver assess and accept/reject the request. Plays the passenger's playlist during the ride.
Let this sink in... This could be in the works to install tomorrow on all Tech Package-d Model S. Passenger "Hail A Tesla" app. It lets owners monetize their sizable investment in that drivable asset. Puts butts in Tesla Seats for brand awareness. Gathers data for any future true-autonomous Tesla fleet.
Elon's remark about Product Announcement might not be referring to something that has to wait for Full Autonomy.
TL;dr: AJ Question may have been thinking long-term, EM Non-Answer may have been due to Short-Term product plans!
This is exactly right. Tesla could have initiated its own ride sharing venture anytime over the last two years. The fact that it has not even been announced yet may be taken to mean that it is not a high priority for Tesla. Entrepreneurs are free to buy Tesla cars and hire them out. That's just not Musk's thing at the monent. Maybe when Tesla is selling 5 million cars per year and is looking for a fresh growth angle, but not just yet.
StapleGun
Member
There is still a critical mass required to start a useful ride-sharing program. I don't think Tesla is anywhere close to that in any cities right now. Just think of what percentage of Model S owners would participate (low because your typical Model S driver does not need a side income), and what percentage of time those drivers would be available for rides (also low because many of them would have a regular job as well). Without a reasonable amount of drivers the time you wait for a car would be unacceptably long. Someday they will have enough drivers to make it work, but not today.
You can't use this argument on both ends. You can't say Tesla will be hugely limited by capacity and also argue that there will be massive competition happening from 2017 - 2020 by most manufacturers utilizing undisclosed LG capacity.
Uber has their **** together and is doing so many things right while completely disrupting an industry that has grown complacent and fallen behind the times (sound familiar?).
For Tesla to compete directly with Uber using non-autonomous cars is not the correct strategy, and I think Elon is wise enough to see this. There are no major weaknesses in Uber's model that can be exploited in this way. Integrating a ride hailing app with the car's built-in infotainment as opposed to a smartphone is not a big enough differentiator / advantage to give Uber a run for its money. Uber is surely collecting much of the same data through the app that Tesla is collecting through the vehicles
The advantage will absolutely be autonomy. I'd expect autopilot to be sufficiently refined within one year to be able to drive more reliably than humans from highway on-ramp to highway on-ramp between major cities. I'm imagining a park-and-ride-like system where I hop into a Model S at a station in Los Angeles and wake up in San Diego, Las Vegas or San Francisco a few hours later.
For Tesla to compete directly with Uber using non-autonomous cars is not the correct strategy, and I think Elon is wise enough to see this. There are no major weaknesses in Uber's model that can be exploited in this way. Integrating a ride hailing app with the car's built-in infotainment as opposed to a smartphone is not a big enough differentiator / advantage to give Uber a run for its money. Uber is surely collecting much of the same data through the app that Tesla is collecting through the vehicles
The advantage will absolutely be autonomy. I'd expect autopilot to be sufficiently refined within one year to be able to drive more reliably than humans from highway on-ramp to highway on-ramp between major cities. I'm imagining a park-and-ride-like system where I hop into a Model S at a station in Los Angeles and wake up in San Diego, Las Vegas or San Francisco a few hours later.
jhm
Well-Known Member
Anothe thing to keep in mind with all this is that equipment is about 80% of the cost of the GF. So the bought the land and framed the first quarter of the building. It seems that spending around $200M to $300M at this point is about right. I'm not sure if solar, wind and geothermal systems count as plant costs or equipment. Regardless very little equipment has been installed at this point.
Another interesting thing about rolling out equipment is that one line can be set up after another. The lag time from when Tesla buys a line worth of equipment and when it goes into production can be pretty short. Suppose one line has 100MWh annual capacity, costs $8M half of which Tesla pays for, and it makes product worth $300/kWh at 15% gross margin to Tesla. So in a year Tesla grosses $30M revenur on the line and nets $4.5M. This then cover the cost of the $4M initial investment plus interest. What's installed one year can fund the next years of installations.
This is why Tesla only needed about $2B. The first $1B finances property and plant, and the second $1B finances this first round of equipment needed to self-fund the rest of the equipment. So the sooned Tesla can get some equipment operating in the GF, the sooner they can begin the self-funding process. In this way Tesla Energy products are a real boost to ramp up the self-funding machine before Model 3 packs are needed.
Pretty cool, huh?
1101011
Proud TSLA/SCTY shareholder since 2013.
There is one significant advantage that Tesla has over UBER that does not require autonomous driving: fueling cost. At 1/4 the fueling cost to an ICE (and even less with solar), Tesla would easily be able to undercut UBERs pricing. That is why the CEO of UBER previously said he would buy as many Model 3's as he can, not because of autonomous driving. Although, I do also see that autonomous driving is another significant advantage.
callmesam
Member
Uber is dead once Tesla announces their product.
Just a matter of time before the other manufacturers follow suit.
Why would an automakers sell cars to Uber when they can start their own services?
Uber's end game is getting the driver out of the car.
Uber is just an app.
"driving" is a terrible job, unless the purpose is "make work".
Just a matter of time before the other manufacturers follow suit.
Why would an automakers sell cars to Uber when they can start their own services?
Uber's end game is getting the driver out of the car.
Uber is just an app.
"driving" is a terrible job, unless the purpose is "make work".
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