Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[ReflexFunds]

Panasonic addressed Tesla battery production in today's call. Starts at 33:28, ends at 35:54 : teslainvestorsclub

"35 gWh initial investment has been completed and utilization as per Elon is 24 gWh currently. This year we want to increase this (utilization) rather significantly.

We have 3 fast/higher speed lines. When they become operational we will see improved efficiency. And we shifted tools (old to new tools) we were not able do sufficient verification; we saw disruptions (problems) and we (now) know the reasons and so in June we will start replacing the jigs, and therefore the yield will improve quite a bit.

And through localization of the workforce, which would mean we will have fewer Japanese expats. We will have more number of lines that can be operated only by local personnel and this can reduce the fixed costs. And of course, the demand from Tesla will be good enough for the full capacity, that is the assumption. If that assumption holds than the Tesla battery business can break even this year (for Panasonic).

As per demand, we need to clearly identify how much Model 3 demand will increase (moving forward). As per Model X (and S), last quarter, we saw decline but Tesla is already taking actions to revamp that demand; and we're talking with Tesla on this and there is upside potential there."

h/t reddit user /u/space_s3x

Finally an explanation. So it looks like the three new high speed lines are not working due to problems with some of the new tooling. But the fix is planned for June.

 

[SPadival]

I listened again to the investor autonomy day presentation, after waiting for the noise to die down. IMHO, it is indeed game, set and match - especially with the automatic annotation of images. The schedule may not exactly correspond with Elon Time, but we will get there within a quarter or two after that.

Also, I noticed that Elon said he expects Tesla to be cash flow neutral until the robotaxi fleet is activated. However, two days later he said they expect to be cash flow positive for Q2 (and Q3) !!

 

[Dan Detweiler]

Eventually (as always with Musk).
But, just another public prediction on Twitter about something happening by a certain time period....

0% chance by end of this year.

I think many people, even Tesla fans, will agree you have to add at the very least 6 months to any of his time predictions.

Let's revisit this post in 7 months and see who was right.

Dan

 

[replicant]

Toyota, Panasonic to set up company for 'connected' homes - Reuters

Sounds like they want some of Elon's data-driven playbook action (ride-sharing, insurance, maintenance, energy like solar and home batteries):

Toyota and Panasonic to work on EV/batteries but now also on connected homes/cars: Toyota has been developing connected cars that can share information on usage - data that could be leveraged for on-demand ride-sharing, insurance and maintenance.

The automaker has said it will tap into its partner network and its operations which range from building and selling cars, homes and companion robots to expand into new transportation and home energy services.

The (renewable) energy and (electric) transportation revolutions might be so disruptive and shuffle so many geopolitical cards, that the biggest countries won't let foreign powers take control over their technology and strategic industries. I expect the USA to force local players like Tesla to localize as much of their supplies so the country can maintain some sort of independence. Idem in China, Japan and what will remain of the UE.

I just don't know when and how the industry will be compelled to organize themselves this way.

I read recently that the UE is offering subsidies to local auto manufacturers in order to build battery factories in Europe, but "incentives" won't suffice, for sure. They might have to wait for near bankruptcy to get their manufacturers to invest in local production, and I'm sure the US and Japan won't take that risk and start doing that early, somehow.

I think Tesla should be concerned about this possibility and anticipate by trying localize their supply chain and manufacturing as soon as possible (i.e having each sale region own some capacity to make batteries, electronics and solar panels, favoring local partners to avoid future taxes and political hostility). IMO, that's what Trump is doing (intentionally or not) without much opposition from democrats because it makes geopolitical sense, and China might be forced to react in the same way. Japan should worried about Toyota immobilism regarding EV and AV but I wouldn't be surprised if Panasonic and Toyota start working together in these area -- forcing Tesla to seek new industrial supplies that aren't in in rival automotive alliances. This could excludes the Europeans (Renault / Nissan(?), VW, PSA, Daimler + BMW -- the last two are close to do a merger IMO, FCA migth be the first bankruptcy), the Chinese (BYD, BAIC, SAIC, Geely...), the Japanse (Toyota + Pana?). In this case, which US company could be a good partner for Tesla?

 

[Dan Detweiler]

I figured it out!

We need to treat this thread like I treat my family reunions. Any topic is on the table...except religion and politics. We are all safe with that policy I think lol!

Dan

 

[Sean Wagner]

I don't want to be safe in an investor thread. Not safe from ostensibly bad news, smartly derived alternative views, and the knowledge that orchestrated substance abuse in the highest executive office intrudes, though it is also a symptom of deeper distress and decline [comparisons with globally competitive first world economies might expand horizons].

#PANASONIC #GF1 #CellSupply

Panasonic addressed Tesla battery production in today's call. Starts at 33:28, ends at 35:54 : teslainvestorsclub

"35 gWh initial investment has been completed and utilization as per Elon is 24 gWh currently. This year we want to increase this (utilization) rather significantly.
...

Finally some much-awaited data essential to the enterprise from the source. Thank you.
Three thoughts:

- "Significant" utilization increase should translate to around 3 +1/-0.5 gWh of additional cell production. It will take a lot longer to close in on the top number of 35 gWh, and new investment needs to begin before.
- As expected, Panasonic seems to be planning to take lessons learned to further [new] factories. Balancing opportunity, company resources, and risk mitigation. It's a sellers' market right now, but they know - say from computer memory - how that can turn. Elon musk be chompin' at the bit.
- As expected, qualified manpower for hire continues to be a problem with GF1.

And the obvious - Panasonic can't be satisfied their GF1 operation isn't profitable yet but see a path to get there this year.

 

[Sean Wagner]

#CHINA #UsedCarMarket

From the Softbank 2018 investor presentation [edit: projection for 2025]:
https://cdn.group.softbank/en/corp/...s/pdf/2018/softbank_presentation_2018_004.pdf

Cars whose software stays current [while top-notch hardware remains relevant longer] are a distinct competitive advantage in the used market too.

 

[Pras]

Finally some useful data essential to the enterprise from the source. Thank you.
Three thoughts:

- "Significant" utilization increase should translate to around 3 +1/-0.5 gWh of additional cell production. It will take a lot longer to close in on the top number of 35 gWh, and new investment needs to begin before.
- As expected, Panasonic seems to be planning to take lessons learned to further [new] factories. Balancing opportunity, company resources, and risk mitigation. It's a sellers' market right now, but they know - say from computer memory - how that can turn. Elon musk be chompin' at the bit.
- As expected, qualified manpower for hire continues to be a problem with GF1.

And the obvious - Panasonic can't be satisfied their GF1 operation isn't profitable yet but see a path to get there this year.

This looks so much like the problem Tesla had last year on GA. It seems the 35gwh target can be completed without any significant capex, hence Panasonic has all the incentive to do it fast.

Also Elon’s tweet on cell limit is making more sense now.... it was so Misrepresented by the hateful Dana Hull, as if Tesla was throwing Panasonic under the bus and blaming them falsely.

As for demand comment, Panasonic didn’t mention the powerwall side, but I assume Tesla can easily use the cells without launching model Y.

 

[HG Wells]

Autopilot reorganisation.
Tesla restructures Autopilot software team, Elon takes the reins

Why does stuff like this come out early in the morning.
They must be releasing info at like 12 AM California time.

 

[Sean Wagner]

hence Panasonic has all the incentive to do it fast.

They do. I think profits will also be a precondition of their investing for Model Y capacity [though expect some migration of prospective 3 buyers over to its CUV sibling]. Quite the choreography. I'm sure Tesla want to bring the Y to market asap.

 

[AcesDealt]

Autopilot reorganisation.
Tesla restructures Autopilot software team, Elon takes the reins

Why does stuff like this come out early in the morning.
They must be releasing info at like 12 AM California time.

Well if you saw Elon's blue balls tweet today you know how handy he is with a computer.

The autopilot team is going to not only come under timeline stress but a lot of moral stress as well. Mistakes will result in injuries. Huge amounts of negative press will be thrown fair or not against Tesla for any mishaps. Tslaq will send representatives to palo alto to shout shame shame. Elon has to be the one to take the fire.

The question isn't whether they will hit their timeline. They won't. The question is how big a deal it is that they won't.

This is going to be very weird how this all plays out.

 

[uselesslogin]

Autopilot reorganisation.
Tesla restructures Autopilot software team, Elon takes the reins

Why does stuff like this come out early in the morning.
They must be releasing info at like 12 AM California time.

Holy crap this article. I don't think a single person left the autopilot team yet he starts talking about turnover. Some people were let go and others promoted and Elon is getting more involved. Someone else will have to tell me if I read that wrong because Fred adds in everyone who left the team in the last 3 years.

 

[Pras]

Autopilot reorganisation.
Tesla restructures Autopilot software team, Elon takes the reins

Why does stuff like this come out early in the morning.
They must be releasing info at like 12 AM California time.

Fred is disappointed that Elon didn’t ask him before reorg.

As much as Fred seems worried, team reorganization happens everywhere. The pace here seems more than common companies, but when you are changing this fast, the team also needs to adjust at the same pace.

If you have key talent attrition risks, having a flatter structure is important. I run a team of seasoned analysts from top schools. I follow similar flat structure where the individual reporting/ team org is flexible to the demands of the projects. I end up changing team make up once a year, not very disruptive but impactful. The team members generally don’t mind if the rationale is provided and expectations are set upfront. And when the team task is growing, having more leaders within the team makes the decision making and throughput much efficient. For example, it could be that the rideshare app and robotaxi software are new projects and StuartBower can’t manage two parallel task, hence new leaders are needed. But nonetheless few will always be disappointed.

Last point, talent retention is primarily a compensation competitiveness issue. Working under Elon is difficult just as it is working in bridgewater associates, or any top managers like Bezos or Steve Jobs. All top result getters seem tough to work with. But once Tesla stock jumps, talent retention will be less of a problem.

 

[AcesDealt]

Holy crap this article. I don't think a single person left the autopilot team yet he starts talking about turnover. Some people were let go and others promoted and Elon is getting more involved. Someone else will have to tell me if I read that wrong because Fred adds in everyone who left the team in the last 3 years.

Yeah it seems anyone who writes about Tesla ling enough eventually falls into narrative fallacy mode where any recent news snippet has to get hooked in and cast as if it has some causal connection.

Elon tweeting about Tesla porn today and Bloomberg whips out an article connecting it to the SEC settlement and well, the Huang fatality. Any Elon intercourse on Twitter now gets connected to smoking pot and Saudi Arabia and the murder of journalists. Just roll with it and light it up.

 

[replicant]

Musk's (new?) strategy might to move as fast as possible in all areas (autonomous driving, future product lineup, online sales, supercharger network) until it make things insufferable for most people working with Tesla. This is required when you want to make sure the company could not be moving faster. This now applies to everything with one exception: the company financial position (hence the last capital raise) because of Model 3 ramp up ended up being too risky according to Musk (cf. summer 2018 Bloomber interview).

If there's one last "bet-the-company" move, it must be FSD -- "now basically our entire expense structure”.

They must have a good backup plan in case cash flow from Model 3/Y and FSD doesn't come big and early enough to ramp up production worldwide and pay for the production of the autonomous fleet. When will we know?

 

[lklundin]

Great, now would you care to pick out all of the business deals he has had throughout his life that proved successful?

See, this is why these types of arguments are so clouded. Each opinion can cherry pick the facts that best support their opinion and exploit those to justify their particular view.

Sounds very much like the arguments surrounding Elon and Tesla. We surround ourselves with those that generally share our opinion. Our bias is our fortress. In the end we make our choices based on our own interprutations and any attempts to sway people on the other side are generally fruitless because they have come to their own conclusions that happen to be different from our own. Until they have accepted and embraced a new reality for themselves, their opinion will generally not be swayed by others.

Dan

Thanks, with that I can now imagine how Trump would argue during his impeachment hearing:

"For those who doubt my honesty, think not about the times when I was proven to lie, but instead think of all the times when I told the truth"...

 

[schonelucht]

Also, I noticed that Elon said he expects Tesla to be cash flow neutral until the robotaxi fleet is activated. However, two days later he said they expect to be cash flow positive for Q2 (and Q3) !!

It's as if he doesn't really know it that well himself...

 

[elasalle]

If Tesla did (live) coast-to-coast demo, with a few (say < 10) manual interventions that would still be an achievement.
(Unlike SpaceX rockets, it's not all or nothing)

Then we can ask Lidar to step-out of their geo-fenced zones ...

 

[lascavarian]

I figured it out!

We need to treat this thread like I treat my family reunions. Any topic is on the table...except religion and politics. We are all safe with that policy I think lol!

Dan

For decades this limitation has been good etiquette for ham radio operators where they are contacting citizens of distant nations where politics and religious practice varies widely. Still works today.

 

[CorneliusXX]

Finally an explanation. So it looks like the three new high speed lines are not working due to problems with some of the new tooling. But the fix is planned for June.

It looks like we could well have little production unit growth this quarter if Panasonic don't expect to increase output this quarter. Perhaps some increase due to a greater proportion of short range models.