Short-Term TSLA Price Movements - 2016

[lango]

If one estimated the cost of the pack back in 2013, it likely was somewhere around $230/kWh and Tesla charged customers about $305/kWh. Maybe it was lower, but one would assume their GM would have been much better if it were substantially lower. Since then, commodity prices have plunged and the dollar has gotten much stronger. Since Tesla buys the cells in yen, there is about 25-30% off on the cell portion, the pack assembly costs are likely not all that much different. That leads us to the $185/kWh pricing. Back in 2013/2014, Tesla was talking about the Gigafactory and shaving 30% off the price of batteries. It wasn't clear exactly how that would happen other than consolidating production into one location of the various parts of the cell and achieving scale. I suspect it has to do with energy management, cutting out shipping, and compressing margins with scale. After all, one has to use a lot of energy to just charge and discharge the cells during production so there is always a ready amount of energy storage on site that has to be used. In any case, if the 30% is all process innovation, then we get another 30% on the $185/kWh. There might be savings in the pack integration as part of that, but one would assume that if there were a lot to be saved there, they would have already done it. Maybe just changing to bigger cylindrical cells will make some significant savings. In any case, that's $130/kWh. However, since commodity prices are really low, if those prices go back up somewhat, that will erase some of the 30% drop that has happened ahead of the Gigafactory process improvements. So instead of starting at $185/kWh, a significant rise in nickel, aluminum, cobalt, synthetic graphite, and/or lithium prices could make an impact of the next 2-5 years. So instead of modeling for $130/kWh, I chose to use $150/kWh to counter those arguments that the commodity prices aren't going to stay this low. The point is to make sure that the Model 3 is a viable product without needing to squeeze every last cost improvement on the pack.

At 55 kWh * $150/kWh, we're talking $8,250 for the Model 3 pack.
At 52 kWh * $130/kWh, we're talking $6,760 for the Model 3 pack.
At 60 kWh * $215/kWh, we're talking $12,900 for the Bolt pack.

Now, the Bolt pack pricing is expected to stay the same through 2019 according to GM's graph. We expect that Tesla's cell pricing to continue to improve.

One datapoint that I am interested in is how much commodity raw materials goes into a battery assembly pack. If you assume $20 price increase/KWh following from 50% commodity increase that assumes $40 would be commodity raw material out of the $130 (100% decline would be $40). If you instead assume 100% commodity price increase being $20 that would be $20 per KWh at $130. Knowing this would out a floor on how low battery packs can go.

 

[dc_h]

Good example: Isn't SpaceX putting Boeing out of the rocket business.

Correction: ULA, which was created to create a monopoly with Lockheed and Bieing for US govt contracts. McRat would approve. Lobby govt to form monopoly, outsource all work, including rocket engines, to Russia no less, so they can protect the American homeland from Russian aggression.
I think Tesla will continue to outsource where it makes cents, but in-source where it makes dollars: AP, batteries, power controls are the value drivers that will makes Tesla's the iPhone of autos. Aspirational vehicles that connect people to a better future, i.e. cool *sugar* that people want!

 

[CButterK]

Tesla's the iPhone of autos. Aspirational vehicles that connect people to a better future, i.e. cool *sugar* that people want!

Will Tesla make a *sugarfree* version for diabetics too?

 

[LargeHamCollider]

One datapoint that I am interested in is how much commodity raw materials goes into a battery assembly pack. If you assume $20 price increase/KWh following from 50% commodity increase that assumes $40 would be commodity raw material out of the $130 (100% decline would be $40). If you instead assume 100% commodity price increase being $20 that would be $20 per KWh at $130. Knowing this would out a floor on how low battery packs can go.

I've seen this discussed by Musk but forget where, iirc he said the cost of raw materials was in the $60-70/kWh range.

 

[RobStark]

Will Tesla make a *sugarfree* version for diabetics too?

Only if the American Association of Diabetic People storm the next Shareholders meeting.

 

[MitchJi]

If one estimated the cost of the pack back in 2013, it likely was somewhere around $230/kWh and Tesla charged customers about $305/kWh. Maybe it was lower, but one would assume their GM would have been much better if it were substantially lower. Since then, commodity prices have plunged and the dollar has gotten much stronger. Since Tesla buys the cells in yen, there is about 25-30% off on the cell portion, the pack assembly costs are likely not all that much different. That leads us to the $185/kWh pricing. Back in 2013/2014, Tesla was talking about the Gigafactory and shaving 30% off the price of batteries. It wasn't clear exactly how that would happen other than consolidating production into one location of the various parts of the cell and achieving scale.

I assumed you were starting with Jeff's call when the guy from GM said that GM's Bolt pack costs are $215 per kWh. Jeff said that Tesla's pack cost is under $190 per kWh.

It is pretty clear where the GF Cost savings are coming from, collocation and large scale custom cell making equipment (you can read the quotes by EM and JB supporting that here):
Short-Term TSLA Price Movements - 2016

The GF Will Use Custom Cell Manufacturing Equipment:
Tesla and Panasonic will be using custom cell manufacturing equipment at the GF, and that will have a big impact on the cost reductions...

I've seen this discussed by Musk but forget where, iirc he said the cost of raw materials was in the $60-70/kWh range.

It depends on when he said that since that's a major way that volumetric energy density increases reduce costs.

 

[Remus]

New hire from Audi
http://jalopnik.com/tesla-looks-to-solve-its-model-3-problem-with-audis-pro-1776611239

 

[tander]

Somewhere up the thread I recall reading someone say they are showing the m3 final version before June 30th (I think). Anybody know what the source was for that?

 

[kenliles]

Moving the just landed Falcon
Instagram video by SpaceX • May 14, 2016 at 7:42pm UTC


Yes I know
But it's the weekend, I'm a Rocket-Man, and it's cool
Deal with it

 

[30seconds]

Somewhere up the thread I recall reading someone say they are showing the m3 final version before June 30th (I think). Anybody know what the source was for that?

Came from Elon during the Q1 call. He said they have about 6 weeks to go to finalize. I don't think he said anything about showing it

 

[ludicrousspeed]

Came from Elon during the Q1 call. He said they have about 6 weeks to go to finalize. I don't think he said anything about showing it

Yep I wouldn't expect Pt II of the M3 reveal until much closer to deliveries. On a side note, when does everybody expect M3 mules to hit the road? Can't wait to see those

 

[SPadival]

Somewhere up the thread I recall reading someone say they are showing the m3 final version before June 30th (I think). Anybody know what the source was for that?

It was probably me guessing/predicting that they would show the Part 2 of the reveal. Was there a part 2 reveal of the Model X? I thought the owners received the keys sight unseen during the presenting ceremony, right?

Moving the just landed Falcon
Instagram video by SpaceX • May 14, 2016 at 7:42pm UTC

It needs a new coat of paint. That should be enough

 

[ludicrousspeed]

Was there a part 2 reveal of the Model X? I thought the owners received the keys sight unseen during the presenting ceremony, right?

That was part 2. MX was initially unveiled in 2012.

 

[CButterK]

Somewhere up the thread I recall reading someone say they are showing the m3 final version before June 30th (I think). Anybody know what the source was for that?

Elon indicated they will have a "Design Freeze" before June 30th. I don't think he said they will "show the final version M3" on June 30th. "Design Freeze" or I think Elon said "design lock down", is just to officialize the transition from R&D to Mfg, and to encourage R&D to finish up loose ends. It does not mean the final version is ready, and that no further design change will be allowed. Any additional changes will just require a LOT more documentation and negotiating with Operations group to make it happen, as volume purchase orders for production parts are starting to go out...

 

[Bgarret]

Funny how you write this article about Apple, Google, GM, Ford, Uber, Didi, Lyft and nearly every other rumor/player in the autonomous market and fail to mention Tesla. The 600lb gorilla in the article is the only volume manufacturer of an electric drive train vehicle - for many reasons, the only likely platform for autonomous driving, with the most advanced driver assist technology and the company with exponentially more driving data than any other....

The author is basically saying Uber is being boxed in and unless they partner with...hmmmm....who could they partner with?.....I don't know.....hmmmm, who have I forgotten to mention.....hmmm???

Why Apple's deal with China's biggest ride-sharing company is making Uber feel unloved

 

[SPadival]

That was part 2. MX was initially unveiled in 2012.

The distinction I am trying to get at is that Part 2 of MX had some Sig owners receive their car (sight unseen until that night) and keys, right?

The reason I am asking is that I don't expect the same for Model 3 Part 2 unveil.

 

[madodel]

The distinction I am trying to get at is that Part 2 of MX had some Sig owners receive their car (sight unseen until that night) and keys, right?

The reason I am asking is that I don't expect the same for Model 3 Part 2 unveil.

To clarify, the first six Xs at the reveal were Founders versions (one of which was Elon's X). No idea if there will be Founders versions of the Model 3, but since employees have priority they will be the first to receive and test the new model. Those of us with non-employee reservations should get a better idea of what we will be getting by the time our cars can be ordered.

 

[hoang51]

To clarify, the first six Xs at the reveal were Founders versions (one of which was Elon's X). No idea if there will be Founders versions of the Model 3, but since employees have priority they will be the first to receive and test the new model. Those of us with non-employee reservations should get a better idea of what we will be getting by the time our cars can be ordered.

There will be no Founders edition. This was Tweeted by Elon. Will post up link if I can find it or someone else can find it.

 

[sundaymorning]

New hire from Audi
http://jalopnik.com/tesla-looks-to-solve-its-model-3-problem-with-audis-pro-1776611239

A new Audi manufacture professional joins Tesla!! I hope the media picks this up, this is very positive news.

 

[RobStark]

There will be no Founders edition. This was Tweeted by Elon. Will post up link if I can find it or someone else can find it.

He tweeted there will be no Signature Editions. And I guess no Signature Red.

Didn't say anything about Founders Editions.

Would be cool if the employees get a Makers Edition badge though.