Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

S70D investor implications

This site may earn commission on affiliate links.
Honestly, if one of your 2 motors goes out the car is going to throw a "pull over safely". I doubt you will just drive on your merry way until you can get it serviced.

According to Elon, yes you can just drive on your merry way.


I guess we should eliminate the AC unit to reduce maintenance,cost and the possibility of something going wrong.

Ditto for power liftgate, power windows, power locks, Tesla handles, power adjustable seats, pano roof, and maybe the touchscreen for knobs and dials.

Maybe the Chinese Government had it right all along and we should all sell our Teslas and get electric bikes.


BTW Just as there are Luddites that "prefer" RWD there are also Luddites that prefer the "feel" of a manual transmission. So should Tesla add a Fast & Furious RWD 6 seed manual Drifter special?
 
According to Elon, yes you can just drive on your merry way.


I guess we should eliminate the AC unit to reduce maintenance,cost and the possibility of something going wrong.

Ditto for power liftgate, power windows, power locks, Tesla handles, power adjustable seats, pano roof, and maybe the touchscreen for knobs and dials.

Maybe the Chinese Government had it right all along and we should all sell our Teslas and get electric bikes.


BTW Just as there are Luddites that "prefer" RWD there are also Luddites that prefer the "feel" of a manual transmission. So should Tesla add a Fast & Furious RWD 6 seed manual Drifter special?

Firstly, I am not saying that 2 motors is bad because I care about having the absolute minimum number of moving parts, but you may be responding to others that are suggesting that.

What I am saying is that for your Dual to drive from point A to point B, I HIGHLY suspect you will need to have a 100% working drive train. TM could maybe have their software accomodate a front motor go out and just use the back, but are seriously suggesting that the car would just drive with only a front motor? It isn't designed to do that, it won't have the right driving characteristics, range will be a mystery, power super low etc. And that assumes that one of the motors failed in such a way that it is still freely turning, which may not be the case. If I was designing the car and I sensed that one of the two motors was not working, I would throw the "pull over" warning and not let it start again, just like it does for electrical faults. the alternative idea, that the car will keep driving with one motor mysteriously dead, its just too unsafe to contemplate.
 
Yes, I see it as a writing on a wall: S85 is about to be axed.
They just need to empty inventory of RWD only parts before they do that.
The next thing to go will be 85kWh battery. If not before then with Model X launch, tesla will replace 85 with 100kWh battery.

Not much sense in introducing a new model with same battery as the model introduced 4 years before it. Not after continuous talk about batteries getting better with time.

Yeah, the useful purpose the standard S serves at this point is to show what a better deal the new line up is. I got my 85 last month and am in shock to see it obsoleted so damn quickly! As a shareholder, I love it. As a new buyer, I wish I had known what the new options would be.
 
Yeah, the useful purpose the standard S serves at this point is to show what a better deal the new line up is. I got my 85 last month and am in shock to see it obsoleted so damn quickly! As a shareholder, I love it. As a new buyer, I wish I had known what the new options would be.

Tesla really is developing at a lot faster pace than what is common in that industry.
 
Safe to talk about an upcoming S100D yet? Or still too speculative?

Edit: I suggest stretching some investigative dendrites, if the theory of 70D being partly due to a better battery chemistry, the move from 222 mi expected to 240 mi means a significant step from current battery chemistry. So its not the E generation. It could be the F.

First person who drives a 70D, check the battery. If it is later-than-E, the rumor has merit.

I'll bite. The problem I have with the 100D is that the new supply is too constrained so there is more profit to be had deploying the limited supply to other version. This is just a temporary issue. We will know that they are no longer constrained on the new supply once the 100D or P100D is introduced in the Model S. I do expect the Model X to take precedence on this.

A secondary concern I have with the P100D is that performance may suffer. First off putting higher density cells into the the P85D, shall we call it P85Dhd, will make the car lighter and improve acceleration and cornering. By contrast, the P100D would be a heavier car with slower acceleration and poorer handling. If you were to put the two in a race that does not challenge range limits, the P85Dhd would win, just as the the P85Dhd would win against the P85D. The caveat here of course is that some new technology does not compensate for the weight difference. For example, if the 100 pack could deliver more power, then perhaps enhancements in inverter and motors could lead to better acceleration in spite of the added weight, but this does not help with cornering. So maybe some additional technology could make this work, but I suspect high performance drivers would prefer the lighter P85Dhd to the P100D. An interesting exception to this would be a special Autobahn version, where the performance objective is to be able to sustain peak cruising speeds. So the buyer would give up offline acceleration for top speed and range at top speeds, hence the label, Model S P100D Autobahn. Such developments could be really cool, but it would take a few year and Tesla may well have bigger, more profitable markets to address in that time.

So there you have it: Tesla is supply constrained all over again, and really cool ideas will have to wait until more profitable opportunities have been seized. That's why the S100D will have to wait.
 
just published an article on SA about the impact of the 70D - Seeking Alpha PRO Alerts Article - Early Look for Subscribers | Seeking Alpha - I'll publish a summary here once it goes live to the public tomorrow. But the idea is to calculate how many extra cars can Tesla make and deliver based on what % of sales the 70D takes and how much extra money will it make Tesla. It also calculates if Tesla used all those batteries for storage, how much extra money does that mean.

It sounds like you took up my challenge to build your own model for how the 70D adds incremental profit. I look forward to reading this. Good luck.
 
Also, Model S can't really sell better - they still sell every car they make, 2 month before they actually make it.

Well, maybe it can.

If Tesla is still being limited by batteries instead of something else in their factory or supply chain, moving a bunch of customers to 70s instead of 85s would increase their production capability - they can build 6 70Ds with the same number of cells as 5 85Ds.

Combined with people mostly giving the money back to Tesla in higher margin options, this could be a substantial increase to Tesla's sales/profit margin.
 
Well, maybe it can.

If Tesla is still being limited by batteries instead of something else in their factory or supply chain, moving a bunch of customers to 70s instead of 85s would increase their production capability - they can build 6 70Ds with the same number of cells as 5 85Ds.

Combined with people mostly giving the money back to Tesla in higher margin options, this could be a substantial increase to Tesla's sales/profit margin.

Right you are. As long as they are battery supply constrained they will net the most profit by selling many units even if the ASP is lower.
 
A secondary concern I have with the P100D is that performance may suffer. First off putting higher density cells into the the P85D, shall we call it P85Dhd, will make the car lighter and improve acceleration and cornering. By contrast, the P100D would be a heavier car with slower acceleration and poorer handling. If you were to put the two in a race that does not challenge range limits, the P85Dhd would win, just as the the P85Dhd would win against the P85D. The caveat here of course is that some new technology does not compensate for the weight difference. For example, if the 100 pack could deliver more power, then perhaps enhancements in inverter and motors could lead to better acceleration in spite of the added weight, but this does not help with cornering. So maybe some additional technology could make this work, but I suspect high performance drivers would prefer the lighter P85Dhd to the P100D.

Given that the current P85Ds aren't delivering anywhere near the maximum power Tesla told us the motors (and presumably inverters) are capable of, I don't know why you think the putative P100D would need some other technology to be faster; with comparable battery technology it should have ~20% higher power output capability, and if folks are right that the current cars are only producing ~360-400 kW on a sustained basis, the motors have headroom to absorb it all (above ~40 mph, anyway.)

Whether performance below that speed would be equal depends on how much torque the car has in reserve now - something not clearly established yet on P85Ds, though the P85 could spin the rear tires pretty well with TC disabled.
Walter
 
Given that the current P85Ds aren't delivering anywhere near the maximum power Tesla told us the motors (and presumably inverters) are capable of, I don't know why you think the putative P100D would need some other technology to be faster; with comparable battery technology it should have ~20% higher power output capability, and if folks are right that the current cars are only producing ~360-400 kW on a sustained basis, the motors have headroom to absorb it all (above ~40 mph, anyway.)

Whether performance below that speed would be equal depends on how much torque the car has in reserve now - something not clearly established yet on P85Ds, though the P85 could spin the rear tires pretty well with TC disabled.
Walter

Yeah, you could be right if current battery power is the limiting factor. If something else is the limiting factor, then it would need to be addressed.

When Tesla really wants to get serious about performance, they'll make a new Roadster. ;)
 
Yeah, you could be right if current battery power is the limiting factor. If something else is the limiting factor, then it would need to be addressed.

When Tesla really wants to get serious about performance, they'll make a new Roadster. ;)

With about 900 horsepower from four of the new smaller "221 hp" motors driving each wheel independently through four gearboxes and half shafts (possibly just three, one for each rear and one for both fronts to keep things lighter?) and a lightweight high output pack in the 50-60 kWh range to help keep the car light?

I'm sure it would be a lot of fun. I guess I need to win the lottery quick, before Tesla gets around to announcing it. :p
 
Well, maybe it can.

If Tesla is still being limited by batteries instead of something else in their factory or supply chain, moving a bunch of customers to 70s instead of 85s would increase their production capability - they can build 6 70Ds with the same number of cells as 5 85Ds.

Combined with people mostly giving the money back to Tesla in higher margin options, this could be a substantial increase to Tesla's sales/profit margin.

I too am wondering about the financial impact of this move.

I think it would depend on the physical difference of the 70D and 85D vehicles. Is it just in the number of cells in the battery pack, or is there something else?

The 70D and 85D appear to have the same motors and inverter system. The difference is that the 85 battery pack can deliver more energy to the motors than the 70 pack. There also may be a difference in software. They major difference, I'm guessing, is only in the number of cells in the battery pack.

The 85D is a 10k premium over the 70D. 10k is a lot of extra money for roughly 20% more cells in the battery. The margin must be pretty high for that upgrade.

On the other hand, if what Saghost speculates is true, and Tesla can sell 1 extra 70D, that might more than make up for losses in 85D sales. This also makes sense in that it slightly increases the total number of EVs on the road.

I find the 70D compelling in a way that the S60 was not, because it does meet the 200 miles + 20% safety buffer that Elon mentioned as what he thought was a baseline minimum. I know that I would not have been completely happy with the 208 miles EPA range of the S60. I would have no regrets about 240 miles EPA range on the 70D.
 
Right you are. As long as they are battery supply constrained they will net the most profit by selling many units even if the ASP is lower.

ASP is revenue per vehicle, and optimizing that matters when Tesla is primarily constrained by unit production per week. Another metric, revenue per kWh, becomes more important when Tesla is primarily constrained by its battery supply.

So just considering base revenue plus $10k we get the following revenue per kWh:
Ver. @ price... base + option = rev per kWh
60... @ $70k.... $1167 + 167 = 1333
70D @ $75k... $1071 + 143 = 1214
85... @ $80k.... $ 941 + 118 = 1059
85D @ $85k... $1000 + 118 = 1118
100D @ $95k... $ 950 + 100 = 1050
P85D @ $105.. $1235 + 118 = 1353
P100D @ $115. $1150 + 100 = 1250

So we see when Tesla wants to maximize it's revenue given its battery supply. The P85D and standard 60 lead the line up. Unfortunately, uptake of the 60 was too slight. If customers were choosing the 85 over the 60 just to get a reasonable range, then Tesla would lose $274 revenue per kWh. This may not seem like much but on a base of 1 GWh, that is a loss of $274M in sales. Moreover, GM on option revenue is likely around 50% while GM on base revenue is likely closer to 25%. So on a gross profit basis, even more was being lost when customers chose the 85 over the 60. So one could rightly be concerned that the 85 was cannabalizing profit from the 60. This is precisely why the 70D is so important. Customers are enthusiastic about the 70D in a way that was lacking for the 60. So unit sales for the 70D should be much higher than for the 60. Moreover, when customers choose the 70D over the 85, Tesla gains $155 revenue per kWh. And choosing the 70D over even the 85D is a gain of $96 revenue per kWh. So one need not worry that the 70D might "cannabalize" the revenue of 85 or 85D. So long as Tesla is constrained in battery supply we actually do want as many customers as possible to choose the 70D over anything but the P85D.

Now I've also thrown in some hypothetical 100D and P100D versions at a spread of $10k to their 85D counterparts. You can play around with your own pricing ideas for these version, but here we see the easy potential for 100 versions to reduce revenue per kWh by about $100. Given that Tesla wants to sell on order of 4.5 GWh worth of batteries this year, giving up about $100 per kWh on everything but the P85D leaves around $300M in revenue and perhaps $100M in profit on the table. So the 70D very well could add as much as $1 EPS, while introducing 100D and P100D prematurely could destroy as much as $1 EPS. So we really do want people to buy either the P85D or 70D according to their means, and if they really can't decide between either at least they should buy the 85D. This is a truly excellent new line up for customers and shareholders alike.

Now consider this if the new Model S line is priced around $1200 per kWh with a GM of 30%. That is gross profit of $360/kWh. This gives us a major clue about how Tesla may need to price stationary IF stationary is drawing on the same supply as automotive. This is a big IF. It may well be wrong, but just for kicks lets see what it may imply. Under this condition, the profit per kWh needs also be $360; otherwise, Tesla should put the supply in cars and get a better return. So let's say at this point Tesla's cost per kWh is $170 and to round our the package with other added value components is $20 per kWh. Then the selling price should be around $5500 for a 10 kWh home storage device. I'm not so sure that will fly. Even at Gigafactory prices of $100/kWh, you still can't get around the $360 profit hurdle. So the only way I see stationary working is if the battery supply for stationary is obsolete for automotive use. So this is direct contradiction to our big IF. Stationary becomes a wonderful business for making use of production line of cells that have become obsolete for automotive. As Tesla plows ahead with advancing battery technology, the stationary market aids with planned obsolescence over the life of cell lines. Perhaps profit of $60/ kWh is attractive and a 10 kWh home battery can be priced attractively at $2500. We shall see on April 30.

Planned obsolescence for automotive cells has interesting implications for introduction of new cells into an existing line of vehicles. Tesla may not be able to convert each product at the same time. Thus, Tesla must determine which products to upgrade first. Wherever it is introduced it will decrease the cost of the vehicle and may make modest performance gains. So the prudent choice for upgrade is the version where the performance gains will boost sales the most and help customers migrate to products with higher revenue per kWh. The 70D masterfully does both of these. The boost of range from 208 miles for the 60 to 240 to 250 miles for the 70D is most compelling. And the fact that D and SC are thrown in as well solidly justifies the $5k increase in price while making the car a true road trip worthy vehicle. This is the kind of repackaging that is going to drive unit sales where they were lacking. As pointed out above this move pushes customers into products with higher revenue per kWh, while the cost reduction in batteries improves the GM at the same time. I predict that the next Model S to get higher density batteries will be the P85D because it will improve performance and continue to upsale the 85D. Lastly the 85D will be upgraded and the 85 dropped. So long as Tesla is cell constrained it is unprofitable to introduce the P100D or something 100D, but these make sense once there is a surplus of new cells and there is a need to increase ASP. As long as the P100D is not on the market we know that Tesla is certainly not demand constrained.
 
Finally the missing tweet

Tweet.JPG


This is why we had to wait

Follow up.JPG