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

[elasalle]

Mission Possible/Impossible .... Nway at 5442 (398 registrations today) for March ... will/won't do 6K by Sunday ..

+usual Sat/Sun volume is no-existent or low .. but this is EOQ .. ~ cheers!!

Tesla Driver ‍ on Twitter
«DELIVERY BONANZA» «Tesla prepares for huge number of deliveries in Norway this weekend»

. Traffic jam of new @Tesla owners arriving to take delivery, staff working through the weekend delivering many hundreds of cars.

 

[brian45011]

Someone else may have a better idea if the RAV4 was an experiment to avoid buying ZEV or was otherwise a compliance vehicle.

Tesla and Daimler had entered into a 4 year JV in 2009. The RAV4EV was the method TM used in 2010 to get an early, inside look at TSLA's IP. There were some reports of cultural clashes; and, for probably a variety of reasons, the relationship never advanced after the initial cooperation on the RAV4EV. Toyota later sold the TSLA shares it bought in the IPO to help Tesla buy the NUMMI site and escape the Alameda County property tax millstone on a mothballed, potential Superfund site.

 

[humbaba]

Tesla need a "reset to factory" option available from the app that would wipe all personal data, well over-write with 0's.

Apple's encryption works because you're forced to have a PIN, fingerprint of Face-ID, hack any of these and your encryption is worthless. So perhaps Tesla can force the PIN and allow 10x entry before wiping personal.

I don't know, I'm not even a novice in this area.

[edit: too early in the morning and no coffee. As to your PIN -- still requires an encryption implementation. You are talking about implementation details. Personally, I don't want to have to enter a PIN to use my car or features of it. I think the security/usability balance is adequately addressed by using an unsecured encryption key that is then used to facilitate rapid wiping.]

Actually, Apple's encryption doesn't require a PIN, though they have increasingly pushed users into doing something to protect their data. It works (roughly) as I outlined. Wiping is accomplished by erasing the encryption key. In such a system you do not have to have a secret to encrypt the key -- but without it the data is not protected at rest. Tesla certainly could implement such a system. The point would be not to protect the data at rest, but to allow rapid wiping.

However, this is easier said than done:

1. the encryption key must be generated randomly. This is not as easy in practice as it is on paper
2. the encryption algorithm must be implemented correctly. This is, again, not as easy in practice as it is on paper and, like the key generation, is another common source of vulnerability
3. encryption operations must be fast. This is accomplished on your iPhone, laptop or desktop via hardware acceleration. I'm not sure what the processor capabilities in a Tesla are, but I would not be surprised if they lacked hardware acceleration for AES
4. encryption operations should be efficient. Yeah, there's a huge battery -- but introducing another energy drain is still not a good idea. This generally goes hand in hand with hardware acceleration
5. wiping capabilities must be securely implemented. Remember the security issues with the first Tesla remote unlock? Having your Tesla wiped by someone else would generally be considered a bad thing.
6. remote wiping capabilities would also be a practical necessity. And as soon as you say "remote" then you introduce even more security issues. Is it run through the API? Currently there is an "all or nothing" approach to API tokens granted for an account. Consider e.g., someone wiping all Teslas "for the lulz."
7. scope has to be defined and choices have implications. It's easier to have all storage encrypted, but do you really want a wipe to brick the car? And when you reduce the scope to "just" sensitive data you have to determine what constitutes "sensitive" and then evaluate all data. For example, are the logs sensitive?

Again, I'm not saying it can't or shouldn't be done, but this sort of thing is not as trivial as "let's just encrypt it." What I'm cautioning is to not expect or push for a rushed implementation. To educate that a fix is more than just turning on a capability, one that requires careful planning and hardware capabilities.

But when the problems with Tesla remote unlock were exposed Tesla did work on fixing the flaws. I expect this to be addressed as well, and most likely before other manufacturers.

 

[hacer]

I'm in denial of an ICE bubble? I am very much aware and in full agreement of the points you are making here about legacy auto makers. The Tesla "bubble" I refer to is the inability of some to see opinions outside the Tesla viewpoint. I have considerable experience in the EV space including sitting on advisory boards for legacy and EV auto makers. I can assure you some ICE manufacturers were more detached from reality than you may imagine but mostly at that time from fear of the unknown. That time has passed and the reasons now are likely many including the ones you cite above and some that remain perplexing The EV I mention was not an Audi but one built by another German maker that built several on their existing platforms (common then as you know) for R&D and viability. You can likely guess who they are as they have another "conversion like" EV on the way you are likely aware of-cough. If it were not for an NDA I would share the model but I can tell you it is one you have never seen with an EV drive but it has been in production for many ICE years and it would make a horrible EV based on weight alone. I am the first person to place blame on legacy auto makers, I have had passionate discussions with a few board members on their ignorance and resistance to enter the marketplace. I think some would get a good laugh from some of their comments and questions that certainly explains where there are today. I some ways culture and conservatism played a big role here when EVs like were about to merge onto the market. I hear what you are saying and I completely agree

Bob ZatU? Welcome to the board. Please be more careful to not liter it with cigar ash.

 

[Words of HABIT]

Dear market,

I was unprepared for the last foray into sub $260 territory, however I am ready now.

Can you deliver one more FUDtastic dip please, prior to heading for $500?

Thank you kindly.

Carl,
It was a typo, I meant than, than then.
Forgive me if I do not share your enthusiasm for another TSLA price drop to help you out.

 

[Mars ☰mperor]

Thanks for getting this update!

BTW., I really like it how the Chinese have coined it the "Tesla Super Factory" - which naming would save Tesla an awkward re-branding effort in a couple of years, when they'll be forced to explain why their factories that are spewing out terawatt-hours of batteries per year are called 'giga' factories.

It's just Giga is difficult to translate to proper Chinese.
Anyway Super Factory sounds good in Chinese.

Fun fact, both the National Geographic documentary "Megafactories" and Tesla "Gigafactory" are translated to "Super Factory" in Chinese.

 

[dgodfrey]

I'm in denial of an ICE bubble? I am very much aware and in full agreement of the points you are making here about legacy auto makers. The Tesla "bubble" I refer to is the inability of some to see opinions outside the Tesla viewpoint. I have considerable experience in the EV space including sitting on advisory boards for legacy and EV auto makers. I can assure you some ICE manufacturers were more detached from reality than you may imagine but mostly at that time from fear of the unknown. That time has passed and the reasons now are likely many including the ones you cite above and some that remain perplexing The EV I mention was not an Audi but one built by another German maker that built several on their existing platforms (common then as you know) for R&D and viability. You can likely guess who they are as they have another "conversion like" EV on the way you are likely aware of-cough. If it were not for an NDA I would share the model but I can tell you it is one you have never seen with an EV drive but it has been in production for many ICE years and it would make a horrible EV based on weight alone. I am the first person to place blame on legacy auto makers, I have had passionate discussions with a few board members on their ignorance and resistance to enter the marketplace. I think some would get a good laugh from some of their comments and questions that certainly explains where there are today. I some ways culture and conservatism played a big role here when EVs like were about to merge onto the market. I hear what you are saying and I completely agree

I appreciate your perspective but you seem to be carrying water for one off prototypes that rarely make it outside the car shows or even design studios. I too am skeptical about some secret Tesla killers ready to dethrone the champ at a moments notice.
So far with Tesla pitching we have not just a no hitter, but all strikeouts from the legacy automakers.
It seems though that there's a groundswell of concern if not outright panic that what we've been proselytizing for the past 8 years is finally taken seriously.
The auto industry barely survived the Great Recession. Now it faces its biggest hurdle yet
It's going to get messy.

 

[Creekstalker]

just in case anyone wanna watch - lots of TSLAQ - saw Gerber and ARK ... didn't watch the whole thing though ...

I watched it. To his credit, the producer of the video disclosed he was a bear and I was pleasantly surprised how much time he gave Gerber and ARK. Pretty even-keeled and non-hysterical for a bear-produced video, which will make it more believable to intelligent consumers who don't follow EVs like we do. I feel they captured the general bear v. bull argument effectively.

Basically, the whole thing was a hit piece on Elon interspersed with some valid-sounding arguments on both sides. Sure, there have been some mistakes made, especially on Elon's Twitter (we can all admit this, right?). As a bull, I can't say for certain if the Solar City acquisition was a good idea or not. I don't think that story is finished yet, but the filmmaker spends a lot of time characterizing it as a bad idea and dissing Tesla Energy for not having a solar roof widely available yet.

There was virtually no mention of just how wrong the bears have been for the last decade. Elon's tardiness on reaching goals hides the fact that he eventually gets there and does so far ahead of the competition. The conclusion was that everything comes down to who is right about Elon- the bears or bulls. This is wrong. It's going to come down to 1. Will consumers love the cars enough to buy them and 2. Can Tesla sell them profitably. The filmmaker didn't even give his impressions of the car.

Other observations:

- No mentions of OTA updates or lack of competition. What about the actual cars? Do people like them?

-Linette Lopez and that Montana Skeptic guy were really granted victim status with Elon as the bully.

- Speigell and Gerber both looked pompous, obsessed, and blinded by their bias. Wood looked smart. Tesla Charts is a loon.

-The idea that TSLAQ is providing a service to humankind rather than just trying to make a buck is laughable but the filmmaker made those guys look like social workers or something.

- It's worth watching. It'll leave you saying "Wait, what about..." and "Are you even going to mention..." quite often. A good insight into the bear mentality. They are focused on Elon and ignoring the growing number of awed consumers.

 

[KarenRei]

Visible Alpha analyst consensus figures, both production and deliveries:

Can Tesla Pull Off Another Model 3 Production Surprise?

 

[Zaxxon]

Norway has now quadrupled Q1 2018.

 

[diamond.g]

[edit: too early in the morning and no coffee. As to your PIN -- still requires an encryption implementation. You are talking about implementation details. Personally, I don't want to have to enter a PIN to use my car or features of it. I think the security/usability balance is adequately addressed by using an unsecured encryption key that is then used to facilitate rapid wiping.]

Actually, Apple's encryption doesn't require a PIN, though they have increasingly pushed users into doing something to protect their data. It works (roughly) as I outlined. Wiping is accomplished by erasing the encryption key. In such a system you do not have to have a secret to encrypt the key -- but without it the data is not protected at rest. Tesla certainly could implement such a system. The point would be not to protect the data at rest, but to allow rapid wiping.

However, this is easier said than done:

1. the encryption key must be generated randomly. This is not as easy in practice as it is on paper
2. the encryption algorithm must be implemented correctly. This is, again, not as easy in practice as it is on paper and, like the key generation, is another common source of vulnerability
3. encryption operations must be fast. This is accomplished on your iPhone, laptop or desktop via hardware acceleration. I'm not sure what the processor capabilities in a Tesla are, but I would not be surprised if they lacked hardware acceleration for AES
4. encryption operations should be efficient. Yeah, there's a huge battery -- but introducing another energy drain is still not a good idea. This generally goes hand in hand with hardware acceleration
5. wiping capabilities must be securely implemented. Remember the security issues with the first Tesla remote unlock? Having your Tesla wiped by someone else would generally be considered a bad thing.
6. remote wiping capabilities would also be a practical necessity. And as soon as you say "remote" then you introduce even more security issues. Is it run through the API? Currently there is an "all or nothing" approach to API tokens granted for an account. Consider e.g., someone wiping all Teslas "for the lulz."
7. scope has to be defined and choices have implications. It's easier to have all storage encrypted, but do you really want a wipe to brick the car? And when you reduce the scope to "just" sensitive data you have to determine what constitutes "sensitive" and then evaluate all data. For example, are the logs sensitive?

Again, I'm not saying it can't or shouldn't be done, but this sort of thing is not as trivial as "let's just encrypt it." What I'm cautioning is to not expect or push for a rushed implementation. To educate that a fix is more than just turning on a capability, one that requires careful planning and hardware capabilities.

But when the problems with Tesla remote unlock were exposed Tesla did work on fixing the flaws. I expect this to be addressed as well, and most likely before other manufacturers.

MCU2 should have hardware accelerated AES encryption and decryption capabilities.

 

[Fact Checking]

Had the same question myself based on said policy & Elon's memo, but it's a 2019 car (made in Jan), less than 50 miles, not a floor model as far as I can tell, it was in inventory in Mt Kisko NY. The fact that a similar discount was offered to a friend in a different state tells me that it may have been 'allowed' to clear inventory of higher specs cars: basically everything below an AWD would not be in inventory when they announced price increase a couple of weeks ago. It breaks a bit the rules but will certainly make Q1 a better quarter than without this last minute push (a 5% discount on M3 AWD still gives high margins and removes a car from the inventory book).

There's a few other factors as well:

• $50k AWD units with AutoPilot have healthy cash margins due to the way AutoPilot R&D expense is accounted as opex.
• A HW 2.5 car on inventory at the end of Q1 carries an FSD computer upgrade expense of about $1,000. Tesla will probably ship all cars in Q2 with the FSD computer included by default. By shipping it to you with HW 2.5 they'll only have to upgrade it once you purchase the FSD option.
• As a Tesla customer with your third purchase you are unlikely to sell the car in the near future which would compete against new Teslas.
• Everyone is assuming that the recent price cuts were only to increase demand in the U.S., but there's the possibility of a minor Model 3 refresh as well, requiring an inventory flush.
• Maybe Tesla is close to some key Q1 financial or delivery target they'd like to hit, which they'd incentivize with small discretionary discounts on high ASP units near the end of the quarter.
• You ordered on the 18th when the website estimated delivery within two weeks. Instead you'd have faced 4 weeks or longer delays. The small discount is a small effort to still keep their delivery promise.
• Tesla is production limited, and a RWD unit made in early Q2 would be crowding out a high ASP European or Chinese unit. By selling you an inventory AWD unit Tesla makes about $5k more from the U.S. sale and about $5k-$10k more from the EU/China sale in Q2. The $2.5k discount shares part of those margin advantages with you.
• Tesla might also be rewarding early adopter customers who bought Teslas at higher prices recently. It might not be a published policy but a discretionary perk.

I think a combination of these factors might be the background of the discretionary $2.5k discount you were given on that inventory AWD unit.

 

[mrdoubleb]

Norway has now quadrupled Q1 2018.

Yep. Was just about to post that we have now passed 6000 Model 3s in Norway.

 

[brian45011]

Any short borrowing interest rate changes ?

I occasionally check Fidelity for hard-to-borrow rates--I do not recall seeing any since early August and the 420 tweet.

 

[SO16]

Even if Tesla owners did not participate in an autonomous ride-sharing network, Tesla is in a practically unique position to profit from autonomous ride sharing due to the vertical integration: if they have demand issues any excess production can be used to expand the autonomous fleet. This helps keep margins high due to the economy of scale and the ride sharing service doesn't have to buy vehicles above cost from a manufacturer.

I say "practically unique" because GM could (at least in principle) do the same if they got Cruise to a functional level without a safety driver. The caveat for GM is that they are dependent on LG for making an EV and so would be disadvantaged compared to Tesla. The savings from their plant closures should be funneled immediately into in-sourcing EV production, but the company very obviously lacks the vision to do so.

GMs system will only work on well mapped roads.

 

[CorneliusXX]

I watched it. To his credit, the producer of the video disclosed he was a bear and I was pleasantly surprised how much time he gave Gerber and ARK. Pretty even-keeled and non-hysterical for a bear-produced video, which will make it more believable to intelligent consumers who don't follow EVs like we do. I feel they captured the general bear v. bull argument effectively.

Basically, the whole thing was a hit piece on Elon interspersed with some valid-sounding arguments on both sides. Sure, there have been some mistakes made, especially on Elon's Twitter (we can all admit this, right?). As a bull, I can't say for certain if the Solar City acquisition was a good idea or not. I don't think that story is finished yet, but the filmmaker spends a lot of time characterizing it as a bad idea and dissing Tesla Energy for not having a solar roof widely available yet.

There was virtually no mention of just how wrong the bears have been for the last decade. Elon's tardiness on reaching goals hides the fact that he eventually gets there and does so far ahead of the competition. The conclusion was that everything comes down to who is right about Elon- the bears or bulls. This is wrong. It's going to come down to 1. Will consumers love the cars enough to buy them and 2. Can Tesla sell them profitably. The filmmaker didn't even give his impressions of the car.

Other observations:

- No mentions of OTA updates or lack of competition. What about the actual cars? Do people like them?

-Linette Lopez and that Montana Skeptic guy were really granted victim status with Elon as the bully.

- Speigell and Gerber both looked pompous, obsessed, and blinded by their bias. Wood looked smart. Tesla Charts is a loon.

-The idea that TSLAQ is providing a service to humankind rather than just trying to make a buck is laughable but the filmmaker made those guys look like social workers or something.

- It's worth watching. It'll leave you saying "Wait, what about..." and "Are you even going to mention..." quite often. A good insight into the bear mentality. They are focused on Elon and ignoring the growing number of awed consumers.

I watched it too. I don't normally bother with these kinds of hit pieces as it's a waste of time. My confidence in Tesla was affirmed as the negative arguments are easily explained away.

There were concerns that a growth company loses money, the CEO is erratic, the company is reliant on subsidies, etc.

However one of the final talking points was about Tesla in China and even though the statements were negative, I was only reassured about the political will to drive Tesla forward. China has motivations from multiple angles to make Tesla succeed. They need to solve environmental concerns domestically, they need to show their population that they are at the forefront of technology, they need to show to the US that they are willing to open up their economy, they need to have posters for the ease of doing business and the speed and economic benefit of manufacturing in China.

I think the Chinese Government is willing to lose unlimited amounts of money and press their workforce into action to ensure Tesla's success. The factory construction is basically an advertising expense for China.

How can a company do anything but succeed with that sort of backing.

 

[SO16]

I hear these comments all the time. I have spoken directly to more than 5000 EV users about their EV usage, habits, buying choices, etc. As a an EV driver for more than 15 years and a person in the industry for almost as long I find that the Tesla bubble is pretty strong in some at times. As an investor, owner and Tesla business partner I found I had to unwind myself from my Tesla biases over time. We all get caught in our circles of thinking, I spend thousands of hours unwinding misinformation as have others here I am sure.

All this and you only joined TMC less than a year ago?

 

[EVDRVN]

I appreciate your perspective but you seem to be carrying water for one off prototypes that rarely make it outside the car shows or even design studios. I too am skeptical about some secret Tesla killers ready to dethrone the champ at a moments notice.
So far with Tesla pitching we have not just a no hitter, but all strikeouts from the legacy automakers.
It seems though that there's a groundswell of concern if not outright panic that what we've been proselytizing for the past 8 years is finally taken seriously.
The auto industry barely survived the Great Recession. Now it faces its biggest hurdle yet
It's going to get messy.

I never said a prototype was a Tesla killer, that term is idiotic and prototypes are for research or PR BS. These are not car show prototypes they are internal EV prototypes that companies use to test EV development. I am very aware of the state of legacy automakers and their issues, and barriers to quickly enter the EV market and I am in complete agreement that they are slow, ignorant and crippled. No one needs to convince me about the ICE industry or pro-EV talking points that would be like those that insist my EVs have a gas tank. My point was that there are people that think that some ICE makers have been sitting back doing nothing which is not true. Some have been doing work in the EV field before others that are selling EVs presently but those companies are doing nothing now to get into the market for reasons unknown. Toyota is a good example of this, they built the Prius with EV tech and the RAV4 EV. Toyota was poised long ago to build EVs but as we know they have done nothing. Are they ignorant? Are they milking ICE profits and FC money until they deem it's time to change? Perhaps they have a grand solid state plan that fits their long-term business plan. Or perhaps they are going to crash and burn as many here suggest, I have no idea but I know they can build EVs like others and that's all I ever said not that they are in any position to succeed or be competitive. I do know that some companies like MB were crippled by fear of the unknown, literally. They have taken small steps past that but like other compliance makers they seem to be ignoring basic premises of EV design and designing like they are building EVs on ICE platforms. IMO, complete failure. Nissan tried to jump in with a pseudo ground-up design but their culture was conservative and slow and ignored feedback from the US market. I met every product lead on the LEAF and they simply were not prepared for progressive companies like Tesla nor was it their space. These were passionate people restricted by a conservative Japanese company, this is why they opened offices in the SV in CA. There are many reasons traditional car makers will struggle or die in this market and even those with the ability to change manufacturing etc are far to messed up internally to execute. Look at GM and their lost opportunities. I do not see many good viable options in the near future for large scale growth outside Tesla at this time.

 

[SO16]

So this means Toyota could not make a viable EV model? They have the weight of these issues but that does not prevent them from building one, they already did this. They have considerable EV development like other companies and if they scrapped everything to go all EV they could but of course at a significant handicap.

Just curious on how many more decades before we consider this “competition is going to kill Tesla” narrative as “crying wolf”? We are already 1 and a half in. Do we need to give this at least 3 before discounting it?

Toyota is still pushing those fuel cells for some reason.

 

[EVNow]

Visible Alpha analyst consensus figures, both production and deliveries:

Can Tesla Pull Off Another Model 3 Production Surprise?

So, we are looking at a miss on S&X - and beat on Model 3