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

[schonelucht]

It seems the link is dead now, but there are many credible witnesses that the California DMV disengagement reports for 2018 once more did not include Tesla. Unless Tesla is breaking the law by not reporting, or the link was taken down because not yet complete, that means Tesla did not do a single kilometer of autonomous testing on Californian roads last year.

 

[SebastianR]

Fred alert: Claim that Tesla’s crash rate dropped with Autopilot contested, Tesla responds

Tesla says:

QCS’ analysis dismissed the data from all but 5,714 vehicles of the total 43,781 vehicles in the data set we provided to NHTSA back in 2016. And given the dramatic increase in the number of Tesla vehicles on the road, their analysis today represents about 0.5% of the total mileage that Tesla vehicles have traveled to date, and about 1% of the total mileage that Tesla vehicles have traveled to date with Autopilot engaged.

NHTSA’s original report did not only indicate that “Tesla vehicles crash rate dropped by almost 40 percent after Autosteer installation”, but the agency also concluded that it “did not identify any defects in the design or performance of the AEB or Autopilot systems” nor did it find “any incidents in which the systems did not perform as designed” (Page 10, last paragraph and Page 11, last paragraph, respectively). They also found that “the potential for driver misuse was evaluated as part of Tesla’s design process and solutions were tested, validated, and incorporated into the wide release of the product” (Page 10, first paragraph).

Our own vehicle safety data for Q3 and Q4, which includes data from roughly two billion miles driven in Tesla vehicles, shows that drivers using Autopilot were significantly less likely to be involved in an accident than those driving without using Autopilot.

Can we move on with life now, or do we need to fight more FUD stories?

 

[Fact Checking]

New It seems the link is dead now, but there are many credible witnesses that the California DMV disengagement reports for 2018 once more did not include Tesla. Unless Tesla is breaking the law by not reporting, or the link was taken down because not yet complete, that means Tesla did not do a single kilometer of autonomous testing on Californian roads last year.

There's a straightforward explanation for that: their HW3 FSD beta program, which we know is running on California roads using hundreds of vehicles, is using the AutoPilot model of "driver is responsible for having hands on wheel at all times", which isn't "autonomous testing", but which is field testing FSD for all practical purposes.

Plus there's also other ways of testing FSD:

• Off-line, by using the visual data from their massive fleet.
• In "shadow mode", where more experimental neural networks can run alongside the production version and the output can be checked against the production version - without affecting it in any way.

So for all those reasons I'd go with the Occam's Razor explanation instead: Tesla'sFSD testing is significantly underreported.

 

[KarenRei]

Rivian's existing financial backers include Saudi auto distributor Abdul Latif Jameel, Sumitomo Corp. of Americas and Standard Chartered Bank. ALJ has agreed to provide almost $500 million in funding, Sumitomo invested an undisclosed amount, and Standard Chartered provided debt financing of $200 million.

GM, Amazon in talks to acquire Rivian stake, report says

Not $450M Total according to trade journal Automotive News. That is just ALJ.

The seeding money, not mentioned above, came from the incubator lab at M.I.T.

I don't know why you feel a need to crap on Rivian every time their name comes up in the Investor Forum.

I don't know why you feel the need to treat a startup that's never mass produced anything and has an shell of a factory, some handmade prototypes and a couple hundred employees as equivalent to an actual automaker in mass production. Should we do the same with Nikola?

The fact that Tesla accomplished the transition from such a stage is extremely abnormal. It doesn't mean that anyone and their cousin can do it. I'm not saying that Rivian can't, I'm just saying that it's highly unlikely, based on history. And if they are to do it, they're going to need a lot of cash. Automakers (including Tesla) spend billions of dollars on new EV programmes - and most of said automakers already have established production systems and large trained workforces, distribution networks, etc etc. The costs of developing EVs is putting a financial strain on even some of the world's largest automakers. I'm not going to pretend that just because someone can handbuild some prototypes and make some slick marketing videos that this is not the case.

As for your claim about the $450M, every source I find on the net states that they have raised a total of $450M to date, including $200M of debt, and spent half of it. If you have a source that indicates otherwise, I'd appreciate a reference to that.

 

[Lessmog]

Why is Tesla being extra quiet on Model Y? I think investors are becoming bored with the stock. 2019 seems to be going a bit too smoothly and predictably, need something S3XY

You must be confused. Tesla is NOT The Boring Company. Despite some similarities.

 

[Lessmog]

But if that is Odin, those are not crows but ravens! Fake News, and not even all that new!

 

[schonelucht]

There's a straightforward explanation for that: their HW3 FSD beta program, which we know is running on California roads using hundreds of vehicles, is using the AutoPilot model of "driver is responsible for having hands on wheel at all times", which isn't "autonomous testing".

Except that the regulation explicitly says that is not enough to get out of the requirements. (emphasis mine)

Autonomous mode” is the status of vehicle operation where technology that is a combination of hardware and software, remote and/or on-board, performs the dynamic driving task, with or without a natural person actively supervising the autonomous technology’s performance of the dynamic driving task

Every single other manufacturer in the program also has a safety driver actively monitoring and controlling the system yet they still report. As required by regulation.

Your straightforward explanation therefore does not pass fact checking.

 

[RobStark]

I don't know why you feel the need to treat a startup that's never mass produced anything and has an empty shell of a factory, some handmade prototypes and a couple hundred employees as equivalent to an actual automaker in mass production. Should we do the same with Nikola?

The fact that Tesla accomplished the transition from such a stage is extremely abnormal. It doesn't mean that anyone and their cousin can do it. I'm not saying that Rivian can't, I'm just saying that it's highly unlikely, based on history. And if they are to do it, they're going to need a lot of cash. Automakers (including Tesla) spend billions of dollars on new EV programmes - and most of said automakers already have established production systems and large trained workforces, distribution networks, etc etc. The costs of developing EVs is putting a financial strain on even some of the world's largest automakers.

As for your claim about the $450M, every source I find on the net states that they have raised a total of $450M to date, including $200M of debt, and spent half of it. If you have a source that indicates otherwise, I'd appreciate a reference to that.

I don't treat Rivian as an actual mass automaker. Given their ability to recruit employees with serious experience in the auto industry and raise funds from serious people ( not a few million from crowd sources) I give them a good shot at becoming a real automaker. Most of those automotive startups that failed in the last 80 years tried to make ICEv to outcompete established ICEv players GM,Toyota,VW etc. We are in a different era.There will be more players than Tesla selling BEVs in the USA in 2030.

Automotive News, the trade journal of record, says they raised nearly $500M from ALJ, have an additional $200M in debt financing from Standard Chartered Bank, and Sumitomo invested an undisclosed amount. How does that equal $450M? These monies are not from "green" investors or "ethical" investors. But proper business people looking for a serious return on their investment.

Tesla spent roughly $400M to launch Model S. Rivian doesn't need a Model 3 type line capable of 5k-7k units per week to launch R1T which has a target of 20k units per year.

 

[Tslynk67]

Why is Tesla being extra quiet on Model Y? I think investors are becoming bored with the stock. 2019 seems to be going a bit too smoothly and predictably, need something S3XY

Yeah, we have had a good crisis for a few months, this isn't what I signed-up for!!

 

[avoigt]

Daimler CEO Zetsche:

(...) still I never experienced that from all sides "the continuous sleeping sickness of the autonomous industry is certified" (

...) "either all customers are as well diseased by the sleeping sickness or not all has been done in such a wrong way"

"I am fully "in peace" with myself"

„Ich bin mit mir total im Frieden“ - WELT

 

[Sean Wagner]

Please don't feed anti-Tesla trolls. Also, good that Tesla responded.

@KarenRei Rivian smells right to current or erstwhile industry insiders. As you note, that does not in any way guarantee success, but it gives them a fighting chance and moves the needle somewhat beyond fantasy land. Tesla's aim and backers were always different.

Mazda-Toyota skipped N.C., but state still has $1.6 billion up for grabs

In late 2017, North Carolina economic development officials jumped into the competition for a new Mazda-Toyota assembly plant in a big way.

They put together a blockbuster incentives package to attract the automakers to a megasite near Greensboro, ponying up state and local benefits totaling $1.6 billion.

But that 10-figure inducement didn't win the plant.

But far from being discouraged by the lost project, North Carolina officials say they're fine-tuning their proposal to compete for the next big car plant — whatever it might be.

"We were hungry, we were really hungry, and some folks might not believe it, but we're even hungrier now," said Brent Christensen, CEO of the Greensboro Chamber of Commerce.

Noted that too and feel it deserves to be brought to attention one more time.

And as he's not driving he can have a few excellent Belgian beers too!

That reminds me of that one Belgian strong beer too many in Tilburg some years back. Only realized it after getting up.

"According to the report, Audi and Porsche could delay the PPE in order to improve the cost and be competitive with Tesla."

Read: "Please, for the love of God, Tesla, slow down. Wait, did they seriously just purchase a company to let them lower their electrode manufacturing costs further...?"

Can't think of a ready meme, but that's some serious juju for the competition to chew on. Did have to think of Elon Musk repeating over time how he encouraged companies with better batteries to just send their samples to the Tesla lab for testing and they would take it from there.

"Tesla (NASDAQ:TSLA) let 150 employees go out of a 230-person team based at the Las Vegas facility tasked with Model 3 deliveries to North America, according to a Reuters exclusive." was in the link I previously posted.

And here is the Reuters link. Exclusive: Tesla's delivery team gutted in recent job cuts - sources | Reuters

Another heads up for those who might have missed the gist of it.

Shirley, you're joking right?

Dodged that one artfully.

If GM thinks, Rivian is that good, why not buy them ?

Looks like a smaller "speculative" investment by GM.

Wall Street Journal - yesterday: Prices of Pickup Trucks Charge Into Luxury-Car Territory

I'm considering the possibility that to get a jump on competitors a Tesla pickup could come before Model Y. Pickups are in great demand at high prices and profit margins. An early introduction of the Model Y might "osborne" the Model 3.

Karen, I think you wanted this meme template.

My day peppered with mirth you have. Rapid repeated respiratory tract contractions induced it has.

“The Rivian deal would come as its much larger electric car manufacturing rival, Tesla Inc, struggles to stabilize production and deliver consistent profits as it rolls out its flagship Model 3 sedan.”

Noted that too. Sigh.

Finally, I find these words from Warren Buffett helpful to bear in mind (and to avoid being pulled into intellectually disingenuous arguments w/FUDsters)

“What investors then need is an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals. A willingness to look unimaginative for a sustained period — or even to look foolish — is also essential.”

It bears repeating and thinking about. He said we can have fun going mental.

Cell supply capacity from the Panasonic side: "I can tell you that Panasonic stands ready to double production when Tesla can handle that volume."

Carsonight is a thinking person with inside sources. I value his input highly, and this is positive news. Worth reflecting from time to time on those mountains of battery cells pouring out of Panasonic's operation.


Regarding the RIVIAN news
Noone thinks it remarkable that both Amazon and GM would fund a company together?

It's a smart approach by GM. The corporation's original modus operandi was after all to gather several brands [versus amalgamate much later...] under one umbrella, and it worked well.

Rivian is not aiming at true high volume production, while the list of companies GM has taken over and turned into slow moving wrecks is very long, with very costly damage done. Not to mention the recent adventures with Fiat and Peugeot [not long ago partially owned by GM] that cost them upwards of a billion just for the severance.

I really think Ford should buy into Lucid and coopt them as electric Lincolns. Discounting the targer's health and viability, the car's character seems to fit to a tee.

 

[KarenRei]

I don't treat Rivian as an actual mass automaker. Given their ability to recruit employees

= Given their ability to pay several hundred people (actual serious automaker = tens of thousands of people)

Being able to recruit people means that you have enough money to offer them a paycheck. That's it. Give me a couple hundred million dollars and I'll recruit all sorts of "serious people" from any industry of your choice.

and raise funds from serious people

Like essentially every other auto startup whose corpses now litters the annals of automotive history.

I give them a good shot at becoming a real automaker

Even if it's true that they're being given a valuation of a couple billion dollars, that means that the market sees it as an order of magnitude more likely that they'll fail than succeed.

Most of those automotive startups that failed in the last 80 years tried to make ICEv to outcompete established ICEv players

Virtually every single automaker that's tried to break in has tried to do so through some "untapped niche". In recent years, these have often been EV companies, and yes, these have generally died too. Fisker? Aptera? Imperia? Electric Car Corporation? Micro-Vett? Lightning Car, probably? Faraday, soon enough? Lutz-backed VIA Motors is on life support, I guess. I could keep going. It's a giant wall of failure.

Automotive News, the trade journal of record, says...

What part of a request for a reference did you misunderstand? Let me be more explicit: A link. Actually cite what you're referring to.

(Also, saying "the trade journal of record" is a stretch)

ED: I think I've found what you're referring to:

GM, Amazon in talks to acquire Rivian stake, report says

"ALJ has agreed to provide almost $500 million in funding, Sumitomo invested an undisclosed amount, and Standard Chartered provided debt financing of $200 million."

1) Does not say closed all of that funding
2) Almost $500M != $500M
3) Says nothing about what they've spent so far (most sources say they've spent half of what they've raised so far - perhaps you've forgotten that they've been around for much of a decade and even bought an abandoned auto plant)

Example:

PressReader.com - Connecting People Through News

Now, perhaps everyone else is wrong and Automotive News' ambiguous wording is right, and the $450M was just ALJ and "undisclosed amount" is actually some huge figure. Even that wouldn't materially change the picture.

Tesla spent roughly $400M to launch Model S

1) I literally just pointed out how abnormal Tesla's success was. Expecting everyone and their cousin to be able to repeat it is just silly. Not remotely in accordance with history. Tesla pulled it off because the market was empty at that time (announced June 2008, unveiled March 2009). Not "empty of (insert particular class of electric vehicle here)". Empty of *virtually all electric vehicles*. Which let them get away with putting out what would be, let's be honest, a pretty unrefined product by today's standards. And even then, the vast majority of startups who tried to get into said empty market with electric vehicles died. What Tesla pulled off was extraordinarily exceptional.

2) Even the federal loan for building the Model S was larger than that ($465M).

Look, I wish Rivian well. But I'm not going to pretend that a startup with a couple prototypes stands more than a 1 in 10 chance of making it into the big leagues. Which is why it's being valued at only a couple billion dollars. And only at that by said companies that are thinking about investing. And only if said report is actually accurate. You seem to want me to pretend that any nobody who closes a couple rounds of funding can just walk on up and be the next GM or Tesla. Sorry, that's not the real world. I'm not going to do that.

 

[Tslynk67]

Hey there was the Zune, the Windows phone, Windows 8 and the legendary BoB. What more do you want? I don't understand why people still use Office. If people realized there were other options Microsoft would tank.

I don't understand why anyone uses Windows either, it's so incredibly crap. I'm forced to do so at work though, I'd be much more productive if they'd let me use a Mac.

 

[Tslynk67]

Got to love (not), Reuters insistence on knocking Tesla in just about every article.

“The Rivian deal would come as its much larger electric car manufacturing rival, Tesla Inc, struggles to stabilize production and deliver consistent profits as it rolls out its flagship Model 3 sedan.”

Big deal for Rivian to get Amazon funding though....

If Bezos wanted to make a difference then he could buy a stake in Tesla, doesn't make sense to me. It's like his rocket company, it's nowhere near Space-X, his money would be better invested under Elon's vision.

 

[Dan Detweiler]

FUD for today...

"Electric cars are inherently dangerous! Owners are prone to tripping over charge cables causing hand and knee abrasions while manufacturers deny any responsibility. Autopilot thought to be possible cause."

(yeah...ask me how I know. Yes, I am a clumsy idiot...and my knee is throbbing)

Hey, I should do a YouTube video and send it to the media outlets. I think I could get big bucks!

Dan

 

[mrdoubleb]

I don't understand why anyone uses Windows either, it's so incredibly crap. I'm forced to do so at work though, I'd be much more productive if they'd let me use a Mac.

OT: Completely OT and do not intend to start a religious war, but I think that is a very common misconception. Windows works perfectly fine on my home PC and Laptop, but is utterly crappy here at work as well even though we have decent HW. However in a corporate environment (not sure how big your company is, I work for a large multinational) they create a base load filled with a lot of scripts and security protocols and log in to company networks and drives around the globe and jobs scheduled etc. When we moved to Windows 8 some time ago (now we are on 10), the "vanilla" Win 8 version was compatible with 70% of our apps and internal sites etc. The custom load they built got less than half that score and we needed extensive remediation and app upgrades.

I am pretty sure of you loaded all that crap to a Mac it would suck too.

 

[mrdoubleb]

Regarding the Rivian conversation of @KarenRei and @RobStark, I know better that to get into the middle of that argument, but I think it is a lot less about money and number of people hired vs the experience you can`t buy. We`ve seen other startups with a lot more than 500 mil go belly up or being on life support and Tesla had industry vets as well. If you`ve noticed, Rivian`s plan is 20k cars by 2021 which is actually quite fair. I would call BS if they said 500k cars per year in 2 yrs or something like that.

 

[Tslynk67]

OT: Completely OT and do not intend to start a religious war, but I think that is a very common misconception. Windows works perfectly fine on my home PC and Laptop, but is utterly crappy here at work as well even though we have decent HW. However in a corporate environment (not sure how big your company is, I work for a large multinational) they create a base load filled with a lot of scripts and security protocols and log in to company networks and drives around the globe and jobs scheduled etc. When we moved to Windows 8 some time ago (now we are on 10), the "vanilla" Win 8 version was compatible with 70% of our apps and internal sites etc. The custom load they built got less than half that score and we needed extensive remediation and app upgrades.

I am pretty sure of you loaded all that crap to a Mac it would suck too.

I agree with this, our work version of W10 is burdened with garbage, but generally it's more performant than the previous W7 they were using.

But it's the usability and GUI of Mac OS that I like the most, everything is just super-easy and being Unix underneath, one can easily do clever stuff in terminal sessions too.

I bought my first Mac (iMac G5) in 2006 and it was a life-changing moment for me. No more late-nights having to reinstall operating systems and the like.

All that being said, my son is using W10 as he's into gaming, and he has no problems with it at all.

 

[RobStark]

= Given their ability to pay several hundred people (actual serious automaker = tens of thousands of people)



Like essentially every other auto startup whose corpses now litters the annals of automotive history.

Again, no one claims they are a serious automaker. That they have a good shot at becoming one.

Almost all of those corpses attempted to make ICEv and/or wierdmobiles.

Even if it's true that they're being given a valuation of a couple billion dollars, that means that the market sees it as an order of magnitude more likely that they'll fail than succeed.

If Jeff Bezos AND Mary Barra are willing to invest hundreds of millions of dollars given the right terms they think that they have a good shot at becoming successful even it is not 51% plus.

Virtually every single automaker that's tried to break in has tried to do so through some "untapped niche".

Not Tucker,Kaiser or American Motors.

Then there are dozens of sports car makers like Delorean.

And the wierdmobile companies like Aptera and Electra Meccanica.

How many failed startups raised hundreds of millions of dollars and made or attempted to make mainstream pickup trucks and SUVs without an ICE ?

The closest I can think of is Faraday Future. They have not quite failed yet. FF did not want to start small. Industry veterans told FF CEO he would need $10B-$20B to fund his ambitions. He disregarded this advise and budgeted $3B.

GM, Amazon in talks to acquire Rivian stake, report says

"ALJ has agreed to provide almost $500 million in funding, Sumitomo invested an undisclosed amount, and Standard Chartered provided debt financing of $200 million."

1) Does not say closed all of that funding
2) Almost $500M != $500M
3) Says nothing about what they've spent so far (most sources say they've spent half of what they've raised so far - perhaps you've forgotten that they've been around for much of a decade and even bought an abandoned auto plant)

Almost from $500m from ALJ. Not ambiguous. Plus $200M from Chartered Bank. Plus monies from Sumitomo. Yes, it does change the picture. Rivian is not a public company so they are not required to make their finances public.

1) I literally just above pointed out how abnormal Tesla's success was. Expecting everyone and their cousin to be able to repeat it is just silly. Not remotely in accordance with history. Tesla pulled it off because the market was empty at that time (announced June 2008, unveiled March 2009). Not "empty of (insert particular class of electric vehicle here)". Empty of *virtually all electric vehicles*. And even then, the vast majority of startups who tried to get into the market with electric vehicles died. What Tesla pulled off was extraordinarily exceptional.

2) Even the federal loan for building the Model S was larger than that ($465M).

No one thinks everyone and their cousin will succeed at making BEVs. We are in disruptive time unlike the last 80 years when Volkswagen and Chrysler were founded.. Some legacy automakers WILL fail. Some new players WILL emerge. That does not guarantee success for Rivian or anyone else.

Tesla raised $465M from a Federal Loan, Elon invested ~$60M personally, plus the VCs invested monies. Tesla spent monies on the Roadster and the program probably ended up losing money. Doesn't mean Tesla spent more than roughly $400M to launch Model S. Tesla had more than $1 in the bank in June 2012, maybe Tesla got close to that in 2013 with Elon was discussing selling Tesla to Sergey Brin and Larry Page. I remember seeing that ~$400M several times, doesn't mean it is correct but it is ball park.

I am done discussing this with a brick wall.

 

[KarenRei]

I am done discussing this with a brick wall.

Actually, I'd already been thinking exact the same thing while reading your post (I think you forgot that you started this by chewing me out for criticizing Rivian's chances).

(As much as I want to respond what you wrote above, I'll at least be polite enough not to pull a "I'm-going-to-write-a-long-post-and-then-declare-the-conversation-over-so-I-can-have-the-last-word" stunt)