Short-Term TSLA Price Movements - 2016

[neroden]

This is very helpful, thanks racer26:

I'll take a whack at checking your math by estimating a different way.

Aerodynamic & rolling resistance, power & MPG calculator - EcoModder.com

Rolling resistance - Wikipedia, the free encyclopedia

https://en.wikipedia.org/wiki/Rolling_resistance#Physical_formula_and_tables

OK, some thoughts to put into that. First of all, most short-haul trucks run a duty cycle where they go one direction full and the other empty. (Railyard -> Store and back, for example). A smaller number of short-haul trucks run both ways full (port <-> railyard), but they're usually on shorter routes.

and .0045 is already pretty optimistic on the Crr. And sure, 80k lbs is a fully loaded worst case. Tesla does have experience with producing vehicles with low Cd, though, so maybe they can do better than my optimistic estimate of 0.6

I'm not sure how well Tesla can do, but most trucks in the US have crummy Cd. Sideguards alone will help the Cd. Jerome's experience with semis involved a particularly streamlined semi design, so I think we can bet Tesla will make an even more streamlined design.

Truck drivers are allowed to drive for 11 hours in the US, and 69mph * 11 hours = 759mi.

759mi * 2.17kWh/mi = 1647kWh. You could probably have 8x 200kWh modules.

I will point out that this follows the rule of "more range than you need". In fact, only long-haul truck drivers drive this much; short-haul truck drivers don't typically drive that much. Tesla will probably, as they have with cars, offer trucks with different battery pack sizes in order to provide better economic payback to people with different use patterns. I started to look this stuff up and a short hauler might go 400 or 500 miles in an average day.

So let's imagine a lineup:
T1600 -- 1600 kWh, 730 mile range
T1400 -- 1400 kWh, 640 mile range
T1200 -- 1200 kWh, 550 mile range
T1000 -- 1000 kWh, 460 mile range
T800 -- 800 kWh, 360 mile range

The fundamental problem is that most buyers, even in the truck industry, won't look very much past the upfront purchase cost. So let's take a possible Gigafactory battery cost of $135/kwh ("30% reduction" on $190). A typical semi costs only $150K. In order to have enough pricing room left to build the rest of the truck, I think in the near term, the largest battery they could use is the 1000 kWh. All right for short-haul, not as good for long haul. Now if they get down to $95/kwh ("50% reduction" on $190) they could make a 1400 kWh.

...I've left something else out, though. A short-haul truck is usually empty 1/4 to 1/2 the time. The archetypal trip is "deliver, return empty", which is half full. This means that this callculation, which was assuming full trucks, is badly understimating the practical range for short-haul trucks. In short-haul duty, the 1200 would probably be overkill on range for the short-haul duty cycle. Though we know everyone likes having extra range.

The economics get better if diesel prices go up, obviously. I have to point out that short-haul trucks idle a lot, spend quite a bit of time moving very slowly in parking lots, have lots of deceleration (where regenerative braking would help) and are often not operating in the diesel engine's ideal range (as they drive from stoplight to stoplight) so the energy efficiency benefits of electric drive are better for the short-haul market than for the long-haul market. I don't think I can estimate the fuel savings properly for the short haul market because of these factors.

I don't think you need to pay for the cell cost with the fuel savings though. Semi's are expensive vehicles, and I'm guessing the cost savings of not needing a big diesel engine will buy a fair number of batteries.

I can't figure out how much a diesel engine for a truck costs. I'm guessing it costs less than the truck as a whole, but beyond that I dunno.

One thing I realized is that -- with no large engine block -- Tesla could make something closer to a "cabover" style truck which is as roomy in the interior as a "long hood" truck. This would give better visibility (safer for pedestrians), and make it more maneuverable than "long hood" trucks, and make it a lot easier to sell in Europe (where they still use cabovers). It would make it roomier and more comfortable for the driver than a standard cabover. They might not do this because of driver safety, but even if they go halfway toward this, it should make it an *attractive* truck (shorter and more maneuverable with large interior space).

 

[neroden]

I assumed that building tubes on pylons would be much cheaper than laying railroad tracks. If not HL obviously isn't substantially cheaper.

Yep. It's not cheaper! Actually, it's often more expensive. It you can lay the tracks on the ground, maybe just shoving some dirt around with bulldozers, that's always cheaper. Bridge pylon construction is the expensive part of civil construction, quite consistently -- tunnel construction is the even-more-expensive part.

Civil construction is a known thing; you can look up the costs. It has some really wild variation geographically. Part of it is based on the underlying soil and hydrology (dry hard rock is great, anything else is more expensive.) Part of it seemes to be based on how much of a cartel the construction companies are in your area, how powerful the construction unions are in your area, how much earthquake-proofing is required (lots and lots of earthquake-proofing is required in California), and so on. But it's really nothing to do with whether you're putting tubes on top of the pylons or putting a flat bridge deck on top.

Actually, I'd love it if someone figured out a way to vastly reduce civil construction costs, or indeed to simply get the prices in the expensive areas down to the cost in the cheap areas. Railways are *already* using premanufactured bridge decks and upper sections of pylons to cut costs where they can practically do it (this is cheaper than in-place construction), so don't suggest that. You always have to do in-place construction for the foundations of the pylons, which is a tedious and probably un-solvable problem, but if that could be solved (some sort of prefab foundation) it might cut bridge costs massively. Of course this sort of improvement would benefit HSR just as much as it would benefit Hyperloop.

 

[imherkimer]

Yep. Not.

Please show your math.

 

[drinkerofkoolaid]

I can think of at least 5 things analysts aren't including in their price targets. I might consider selling when it's clear that these 5 things are priced in. I won't say what they are or what my price target is out of fear that my comment might prevent it from happening.

Hint: If Tesla can produce a cost effective Truck, the market for the Truck will be gigantic.

Random question. Has anyone had any luck negotiating with their broker based on the obscene amount of money brokerage firms are making lending out shares? Please PM me if you have. Probably best to not mention any specifics in a public post.

 

[MitchJi]

Yep. Not.

The only possible justification for Elon's cost savings claims would be that it's cheaper to build the tubes than conventional railroad tracks. So if you are correct that means that Elon and everyone working with the HL are all imbeciles.

I'm sorry but you need to provide some evidence before I'll buy that.

 

[neroden]

Please show your math.

Not my job. Like I said, civil construction costs are a *thing*, you can look them up.

 

[MitchJi]

Not my job. Like I said, civil construction costs are a *thing*, you can look them up.

In other words you can't justify your statements.

 

[neroden]

The only possible justification for Elon's cost savings claims would be that it's cheaper to build the tubes than conventional railroad tracks. So if you are correct that means that Elon and everyone working with the HL are all imbeciles.

I'm sorry but you need to provide some evidence before I'll buy that.

Already provided, if you want to bother to look. Just go look up the cost drivers in major railway projects. It's mostly civil construction.

I'm going to make a point. This is the INVESTMENT thread. I have more information than you. I'm being generous by providing some to you for free. You, as an investor, should go do your research to see what I'm talking about. If you don't want to believe it, that simply allows you to make poor investments, which means *I make more money off your losses* by betting the other way. I do not have an incentive to go dig up all the citations, which come from years and years of looking at public construction project cost breakdowns, for the benefit of a lazy person like you. You do have the incentive to do the work. If you want me to do the work for you, I can quote you my consulting rate.

If you want to bury your head in the sand, no skin off my back; I make more money, you make less.

Elon isn't an imbecile. He simply failed to look up the costs of civil construction, and *got them wrong*. This is the problem with back-of-napkin ideas.

 

[racer26]

We know the following two things:
1. Tesla will use batteries for their Semi's. No way that they will try to get the highway infrastructure built for electric roads. If you doubt that look at the hassles they've had getting dealership laws changed.

2. We can be confident that they have a clear path towards doing that affordably. They are competent to do the basic cost calculations.

I believe that a large part of their confidence comes from the fact that their battery costs are less than we know. I think even ny $85 per kWh figure is probably high.


I think believe that driverless Semi's are part of Tesla's plan. Highway driving is a relatively easy problem to solve.

Why would they need to go 11 hours without stopping. The only reason would be if there's a cost benefit. You are arguing that it's a necessity and using that as reason that's the economics don't work. Circular arguments.

From Tesla's officials statements you don't know what you claim to know. Inaccuracies and omissions. I'm sure that $135 too high. Of course you are welcome to your own opinion.

I absolutely agree with you. Tesla will use batteries for their Semis, because its the variable they can control.

I also agree they have a clear path to doing that affordably.

I also agree their battery costs are (probably) less than we know, and your $85/kWh figure may not be that far out of line. You said conservative. Using the information that is publicly available, and without assuming anything, a conservative estimate should be more like $135/kWh was all I was suggesting. I'm personally expecting real world GF cost to be around $75-100/kWh.

I agree driverless is part of the plan, and relatively easy to solve, but I don't think regulators will allow it for quite some time, so I believe a Tesla Semi will be able to make its value proposition without being driverless.

If you paid attention to the formulas I used, the hours without stopping was only used to estimate a reasonable pack size. Pack size doesn't change the economics of it in terms of fuel consumption. I wasn't actually suggesting the economics don't work, necessarily. I was just trying to use physics to come up with reasonable estimates of what it would take to do it. No amount of battery technology or intelligent design will change that you need a certain amount of power to move a big vehicle through the air and across the road surface.

Conventional - Sleeper Trucks For Sale
This seems to suggest that the ballpark price range of existing diesel sleeper cab trucks is $130-150k USD. As others have suggested, the trucking world is all about the dollars and cents. You wont sell a more expensive truck unless you can make an economic argument for it.

Several searches comes up with long-haul trucks averaging about 100,000 mi/yr. Lets say 5 year life of the truck (though its probably closer to 10 year). 500,000 mi. 2014 regulations state new sleeper cab trucks have to achieve at least 7.2mpg. So lets base on 8mpg. 500,000 mi / 8mpg = 62,500gal of fuel.

62,500 gal of fuel * $2.50/gal = $156,250 in fuel costs
Cost per mile work sheet for Owner Operators
suggests about $12,500 in repairs, maintenance and tires per year is $62,500
plus the $150k cost of the truck, is $368,750 total cost of ownership for 5 years.

I can't find a new price, but used DD15 Detroit Diesel with low mileage goes for around $15,000 on used markets. Lets estimate $25k new.

I assume you need to go 11 hours straight, because recharging takes time, which can be done while the driver sleeps.

So if the rest of the truck is worth around $125k, Based on yesterday's math, I needed around 1000kWh of batteries to make it run 11 hours.

1000kWh * pack cost of... $100/kWh assuming decent gains from GF is a $100,000 battery.

That would make it about a $225,000 truck.

500,000 mi @ 1.61kWh/mi = about 805MWh. 805MWh * $40/MWh wholesale electricity cost is $32,200.

Tires and maintenance costs will probably be around the same price, so $62,500

That totals to $319,700 total cost of ownership for 5 years.

Certainly seems like it could be viable.

 

[neroden]

How much does urban geometry change when all the parking spots are moved to the outskirts? Autonomous cars don't need localized parking. Just removing street parking frees up 2 lanes for all the Muskian pods to travel.

Now *that* is a great idea. Street parking is a terribly inefficient use of space. Unfortunately:
-- a lot of street parking is actually needed for truck loading, taxis, and so on;
-- it's proven remarkably hard to remove parking or convert it to anything else even when it's vastly underused according to statistics. There's a bizarre political problem where business owners think parking is terribly important even when all their customers arrive on foot or by taxi, and residents who own cars feel very possessive about street parking even though they have no legal rights to it. Go figure. The parking would have to be removed *after* you'd somehow changed this *psychology*, and if you have an idea for how to do this, boy would I love to hear it.

 

[imherkimer]

Already provided, if you want to bother to look. Just go look up the cost drivers in major railway projects. It's mostly civil construction.

I'm going to make a point. This is the INVESTMENT thread. I have more information than you. I'm being generous by providing some to you for free. You, as an investor, should go do your research to see what I'm talking about. If you don't want to believe it, that simply allows you to make poor investments, which means *I make more money off your losses* by betting the other way. I do not have an incentive to go dig up all the citations, which come from years and years of looking at public construction project cost breakdowns, for the benefit of a lazy person like you. You do have the incentive to do the work. If you want me to do the work for you, I can quote you my consulting rate.

If you want to bury your head in the sand, no skin off my back; I make more money, you make less.

Arrogant,rude, dismissive, and entirely un persuasive.

 

[neroden]

I absolutely agree with you. Tesla will use batteries for their Semis, because its the variable they can control.

I also agree they have a clear path to doing that affordably.

I also agree their battery costs are (probably) less than we know, and your $85/kWh figure may not be that far out of line. You said conservative. Using the information that is publicly available, and without assuming anything, a conservative estimate should be more like $135/kWh was all I was suggesting. I'm personally expecting real world GF cost to be around $75-100/kWh.

I agree driverless is part of the plan, and relatively easy to solve, but I don't think regulators will allow it for quite some time, so I believe a Tesla Semi will be able to make its value proposition without being driverless.

Racer26: I agree with all of the above, and I really appreciate your analysis, so I'd be very interested in what you think about my estimates of short-haul vs. long-haul duty cycles, since your analysis has mostly been for short-haul. I believe the value proposition for an electric truck is *way* better for short-haul -- the duty cycle gives you more efficiency benefits from electric vs. diesel, and you don't need as long a range -- so I think that market will be stronger, and I'd like to look at what sort of margins Tesla can get in that market.

If you paid attention to the formulas I used, the hours without stopping was only used to estimate a reasonable pack size. Pack size doesn't change the economics of it in terms of fuel consumption. I wasn't actually suggesting the economics don't work, necessarily. I was just trying to use physics to come up with reasonable estimates of what it would take to do it. No amount of battery technology or intelligent design will change that you need a certain amount of power to move a big vehicle through the air and across the road surface.

Conventional - Sleeper Trucks For Sale
This seems to suggest that the ballpark price range of existing diesel sleeper cab trucks is $130-150k USD. As others have suggested, the trucking world is all about the dollars and cents. You wont sell a more expensive truck unless you can make an economic argument for it.

Several searches comes up with long-haul trucks averaging about 100,000 mi/yr. Lets say 5 year life of the truck (though its probably closer to 10 year). 500,000 mi. 2014 regulations state new sleeper cab trucks have to achieve at least 7.2mpg. So lets base on 8mpg. 500,000 mi / 8mpg = 62,500gal of fuel.

62,500 gal of fuel * $2.50/gal = $156,250 in fuel costs
Cost per mile work sheet for Owner Operators
suggests about $12,500 in repairs, maintenance and tires per year is $62,500
plus the $150k cost of the truck, is $368,750 total cost of ownership for 5 years.

I can't find a new price, but used DD15 Detroit Diesel with low mileage goes for around $15,000 on used markets. Lets estimate $25k new.

I assume you need to go 11 hours straight, because recharging takes time, which can be done while the driver sleeps.

So if the rest of the truck is worth around $125k, Based on yesterday's math, I needed around 1000kWh of batteries to make it run 11 hours.

1000kWh * pack cost of... $100/kWh assuming decent gains from GF is a $100,000 battery.

That would make it about a $225,000 truck.

500,000 mi @ 1.61kWh/mi = about 805MWh. 805MWh * $40/MWh wholesale electricity cost is $32,200.

Tires and maintenance costs will probably be around the same price, so $62,500

That totals to $319,700 total cost of ownership for 5 years.

Certainly seems like it could be viable.

There's the same bias against upfront costs in trucking as there is when people buy cars. The TCO savings here is ~$60K, but the difference in upfront cost is about $90K. Trucking companies often have relatively poor credit ratings, so if they have to finance this over 5 years, they would likely end up paying quite a lot in interest, which will eat into the TCO. I think that'll suppress sales in this market until some people have owned the trucks for long enough to prove that the TCO is lower even including interest.

I think if we ran these numbers for short-haul trucks we might get better results, though. I'm having trouble pinning down the assumptions to use for short-haul trucking, though, so I don't think I can run an estimate today.

 

[neroden]

Arrogant,rude, dismissive, and entirely un persuasive.

It doesn't need to be persuasive. That's my *point*. I actually make more money if there are fools out there investing badly because they did not do their research.

 

[imherkimer]

Now you are saying that Elon and company are fools.
You seem to think you are superior to everyone and have no need to justify your platitudes because we are all fools. Not helpful in any way, and not a meaningful contribution.

 

[neroden]

It is a fallacy to think that throwing more money at the problem (at Tesla if you look at it from the business perspective) would make things faster. This is not how it works.

The Mythical Man-Month, right!

More money in the short to medium term would be useless, they need to build "v 0.5" of everything first. Engineering and design don't scale at all with more people. There's the right size of the team for the job and I have no reason to doubt Tesla has that figured out.

They've had over ten years to get it right, and the engineering seems to have been getting better and better. I suspect they actually have one team for each "product" at this point (for instance, Jerome with a team doing semi trucks), which is the only way I know to scale up engineering.

Please note that this also means that the additional products aren't "distractions" in any way. Model 3 already had as many designers and engineers as they needed and could use; presumably so did the Gigafactory. The additional products will be using additional teams who would otherwise have been idle or causing distraction to the main teams.

The way to go faster is to hire the absolute best talent available. For Tesla, it's easier to accomplish than for anyone else in the business. That is the key advantage.

They certainly can hire the best engineers and designers (...when Faraday and Apple aren't poaching them) and I would guess they've been able to assemble more than one team's worth.

 

[neroden]

Now you are saying that Elon and company are fools.
You seem to think you are superior to everyone and have no need to justify your platitudes because we are all fools. Not helpful in any way, and not a meaningful contribution.

I bothered to look up the cost breakdowns of many railway or roadway projects which are civil construction, and the civil construction rates, until I had a decent investor's understanding of the topic.

You didn't bother. Who's superior in terms of *doing their research*? This is all public information and is really not hard to look up if you are willing to bother.

Some fool here then tried to demand that I dig up all my old citations for him, which I'll be happy to do at my *hourly consulting rate*, since it's tedious and boring work. That's really all there is to be said.

 

[MitchJi]

It doesn't need to be persuasive. That's my *point*. I actually make more money if there are fools out there investing badly because they did not do their research.

I'll rephrase my comments. If you want to be credible you need to provide more information.

Fools investing? Nobody is considering whether investing in the HL.

The article that you provided a link to was pretty foolish IMO.

If you're talking about investing on the theory that you know that Elon's a fool and you have infinite wisdom based on ridiculous unsubstantiated claims then I'm comfortable with that.

Some fool here then tried to demand that I dig up all my old citations for him, which I'll be happy to do at my *hourly consulting rate*, since it's tedious and boring work. That's really all there is to be said.

Generally when people start attacking others, it's an excellent indication that they don't have any factual basis for their arguments.

I'm trying to respond with some respect and compassion.

I apologize to everyone here for anything that I've done that's contributed to the unpleasant tone,of this discussion. I'm going to stop participating in this topic.

 

[imherkimer]

Ok.mi looked it up. Where is the comparison to total cost of the hyper-loop as outlined by Elon?
Don't see anything that makes the case, sorry

 

[neroden]

I'll rephrase my comments. If you want to be credible you need to provide more information.

Fools investing? Nobody is considering whether investing in the HL.

Sadly, a bunch of people actually are. :-( If you're planning to stay out of that, then I guess you don't really care either way whether Elon was talking nonsense about it, right?

I think the history of this nonsense is informative regarding Elon's incorrect ideas about public transportation, which are actually *very common* incorrect ideas about public transportation. A lot of very smart people have dumb ideas in particular areas because they've never done their research. This is basically what "due diligence" is for.

 

[neroden]

Ok.mi looked it up. Where is the comparison to total cost of the hyper-loop as outlined by Elon?
Don't see anything that makes the case, sorry

Do the comparison yourself, *or look up the various blog entries where other people already did the comparison*. Elon was making assumptions about the cost of Hyperloop which are based on assuming unrealistically low prices for planting pylons. I dug through this years ago. After I'd satisfied myself regarding this, I put the references away and it would now be tedious work to find them again.