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

[ZenRockGarden]

Can we please take the Apple debate elsewhere. I have many opinions on this but I am trying to respect the fact that this is not in fact an Apple discussion board.

What you are stating is not "Fact" and just drums up debate. Take it elsewhere please or use a different analogy if you must.

Tank Yew

It's by far the best analogy we have from the last 100 years.

We get rare radical tech innovators. They tend to be a-holes. This seems to go with the territory. They move humanity forward by exerting their vision onto the rest of everyone who would have just refined how the flip-phone or gasoline engine operated.

I'm sorry if you don't like the analogy. But it's real. There's a real trade-off ahead. Do you want a more stable, steady, reasonable Tesla run by Elon's skilled subordinates, or do you want drama and stupidity, and... more things no one else would have been able to hammer into existence.

 

[Ogre]

It's by far the best analogy we have from the last 100 years.

We get rare radical tech innovators. They tend to be a-holes. This seems to go with the territory. They move humanity forward by exerting their vision onto the rest of everyone who would have just refined how the flip-phone or gasoline engine operated.

I'm sorry if you don't like the analogy. But it's real. There's a real trade-off ahead. Do you want a more stable, steady, reasonable Tesla run by Elon's skilled subordinates, or do you want drama and stupidity, and... more things no one else would have been able to hammer into existence.

Your understanding and interpretation of events around Steve Jobs is just wrong. I have the choice.

- Try and engage as if your basic (wrong) assumptions are correct which leads me to the same wrong conclusions you make.
- Argue about your core assumptions - moderators have asked us not to turn this into an Apple discussion room.
- Put you on ignore.

Since the first 2 options are unpalatable I’m left with the third option if you choose to continue making your wrong headed Apple analogies.

 

[ZenRockGarden]

Your understanding and interpretation of events around Steve Jobs is just wrong. I have the choice.

- Try and engage as if your basic (wrong) assumptions are correct which leads me to the same wrong conclusions you make.
- Argue about your core assumptions - moderators have asked us not to turn this into an Apple discussion room.
- Put you on ignore.

Since the first 2 options are unpalatable I’m left with the third option if you choose to continue making your wrong headed Apple analogies.

By all means, take your Jobs-invented iPhone and use the multi-touch screen to click "ignore"

I will be here assuming that Elon is a rare major innovator, similar to Jobs, having similar impact on the companies he leads with similar (boring / deadly) outcome if he's removed and we let the underlings try to keep doing it without his leadership and drive.

Elon is an ahole. A very necessary one.

 

[unk45]

…
Saturn (a business plan before it's time unfortunately because it would have been a perfect company/division to apply the Tesla model)? …

GM did commission a study of direct sales and service with fixed prices. That study used an economic comparison using several examples in with analogies existed. The data were financially compelling and the consumer evidence equally compelling. I know because I led the study. My NDA long ago has expired.

They gave up due to overwhelming dealer opposition, but tried to apply as much as they could.
Ford obviously is trying everything they can get away with.

 

[unk45]

By all means, take your Jobs-invented iPhone and use the multi-touch screen to click "ignore"

I will be here assuming that Elon is a rare major innovator, similar to Jobs, having similar impact on the companies he leads with similar (boring / deadly) outcome if he's removed and we let the underlings try to keep doing it without his leadership and drive.

Elon is an ahole. A very necessary one.

Just one gigantic difference. Elon is an engineer.

 

[TN Mtn Man]

That is not an accurate way to look at it. While no EV is perfect, the problem is not the actual product, the F-150 Lightning, it's that Ford cannot make and distribute them in large enough numbers to put a meaningful dent in all the ICE trucks they sell. Ford knows this. It costs too much to build because it's overweight and inefficient and needs too many batteries for its capabilities. Even at the high prices buyers are paying, Ford loses money on everyone they sell. They only have the F-150 Lightning in order to appear to be on-board with electrification - it buys them time, emissions credits and helps keep the regulators away while they continue to keep selling millions of ICE trucks at a profit.

Don't focus on the product, focus on how many they make available and how cheaply they can sell them and still make a small profit. If it's only a small fraction of the overall market it's inconsequential. Ford will NEVER make the Lightning in large quantities, they don't have enough floor space dedicated to them and, as time goes on, you will see they don't even maximize the space they have allocated to Lightning production.

The points you make (heavy, inefficient, expensive to build) seems to counter your first point, in that the problem IS the actual product. Having said that, I agree with your overall sentiment, but I don't think it finishes the thought process. My understanding is that Lightning is not designed as an EV from the ground up, rather it's based on a standard F-150 with the engine/driveline removed and electric motors and a battery pack bolted on. (I'd like to see a comparison of the frame between the two vehicles.) Now, I'm sure Ford knew it wouldn't be efficient. But IMO they were trying to do specific things.
1) Get an EV truck out quickly to establish their name in the market, with modest development costs.
2) Get a EV truck out to see how well the market accepts it, what features buyers want and what they don't, and get a feel for demand.
3) Buy time with a vehicle in the market so they can do a proper, ground-up design, building on what they learn with Lightning and Mach E and what the competition does. I recall reading that Ford was working on a successor model before Lightning went on the market.

I'd also speculate that an additional concern was to build a truck that looks as much like a traditional pickup as possible to not alienate the traditional P/U buyer. I love Cybertrucks styling and packaging, and the fact that it loses the long, high hood of a conventional P/U, resulting in a much more compact overall vehicle. But it's anything but traditional and not something many P/U buyers will accept initially. This is a way to transition buyers to new technology without alienating them.

 

[Matias]

That isn't what Elon and his lawyers are claiming.

The Twitter acquisition is of very, very, very minor concern to long term buy and hold Tesla investors. I was go as far as to say it in terms of the big picture, it is totally irrelevant, Surely it is time to discuss it in a separate thread, that I can ignore,

It is funny, that it is ok to discuss e.g. SpaceX launches in this thread (zero effect to TSLA) but not Twitter deal (Musk's selling to finance it tanked TSLA 10%).

 

[SN_8]

It is funny, that it is ok to discuss e.g. SpaceX launches in this thread (zero effect to TSLA) but not Twitter deal (Musk's selling to finance it tanked TSLA 10%).

You don't see the difference between the one-off launch reminder and the TWTR discussion argument excrement that has been posted throughout the weekend?

 

[Usain]

Here is some rough maths on that relying in part on my sometimes suspect memory. And a lot of wild guesses.

A Fremont made 50 kWh Model 3/Y costs about $30,000 to make? (I seem to remember $29,000 for some reason) - We can partially deduce this from gross margins, but China is a complicating factor.

Labor on a Model 3/Y at Fremont $9,000?

Battery pack I'll assume $8,000, cells $6,000?

If my numbers are off, we can try to source better numbers.

We need to talk about when Austin is fully ramped no earlier than the end of 2023. The cost of cells probably halves to $3,000 but we may need to add back $1,000 for depreciation on the 4680 production equipment. Overall saving $2,000 on a 50 kWh pack.

A Chinese 50 kWh LFP pack might be $4,000 in China? But by the time it is landed in the US we can add some additional costs perhaps now $5,000?

So if Tesla could make the Austin Model Y with a Chinese LFP pack, they might save another $1,000.

For the rest of the car, I think the improvements with front and rear castings, workflow and ergonomics possibly save another $2,000.

So an Austin made Model Y might be $4,000 cheaper than a Fremont made Model Y (by the end of 2023), possibly costing around $26,000 to make.

The $30,000 number (if remembered correctly), was from a long time ago, and many parts components and raw materials might have been cheaper then,

Partial justification for my numbers is the Munro teardowns and the lavish praise of the Model Y design from Munro staff on many aspects. Munro don't just like good design, they like good design which saves money.

Appreciate the numbers.

However, it looks like you left in the same $9,000 labor cost (less $2000 for "improvements with front and rear castings, workflow and ergonomics") ?

The cost of labor will be a lot lower in Texas than in California. I think the effect is a lot more than $2000.

1. Hourly wages are lower in Austin
2. Austin 4680 MY with front/rear castings and structural pack will need less people to assemble.
3. The fully ramped 4680 MY line will move faster, maybe 3 times faster than Freemont. So that cuts hourly labor cost by 1/3 right there.

If labor cost per vehicle in Freemont is $9000, I think you could put a cost of only $3000 per vehicle in Austin. But it could be much lower than that.

This is why I'm thinking that the Austin 4680 Model Y could have the lowest production cost of any car built in the USA.

 

[TheTalkingMule]

By all means, take your Jobs-invented iPhone and use the multi-touch screen to click "ignore"

Jobs didn't invent the smartphone, not even remotely close. He simply demanded that a well put together team of engineers replicate a sleeker one, then promoted the hell out of it.

Read up on it before you start tithing and kneeling.

 

[Usain]

The Bolt beat the Model 3 to market, and we know how that ended.

Cybertruck is dependent of the 4680 ramp and definitely in the back end of 2023.

But fast forward to 2025 we can compare CT sales to Ford sales, and IMO I already know the outcome.

I was one of those 2017 Bolt buyers (hence the name "Usain"). I couldn't get a Model 3 so I got a Bolt. And I was happy with my purchase. The Bolt is a fun little car.

But on the Bolt forums, I soon started complaining that Tesla was improving the Model 3 while the Bolt was standing still. Those folks didn't like it much when I pointed it out.

I think this situation is a little different. Ford was smart to use the F-150 name on their electric pickup. And they even made it look like an F-150 and reused much of the same design and parts. I think Ford can eventually eke out a small profit on the F-150 lightning and cater to their loyal F-150 fan base. Maybe Ford will even stay in business.

This will have no bearing at all on Cybertruck. Tesla will sell every CT it can make and do so at a very healthy profit. CT will sell at a higher price point because it will have greater value than the F-150. But both vehicles will sell as many as they can make for several years to come.

 

[SmokyPeat]

Appreciate the numbers.

However, it looks like you left in the same $9,000 labor cost (less $2000 for "improvements with front and rear castings, workflow and ergonomics") ?

The cost of labor will be a lot lower in Texas than in California. I think the effect is a lot more than $2000.

1. Hourly wages are lower in Austin
2. Austin 4680 MY with front/rear castings and structural pack will need less people to assemble.
3. The fully ramped 4680 MY line will move faster, maybe 3 times faster than Freemont. So that cuts hourly labor cost by 1/3 right there.

If labor cost per vehicle in Freemont is $9000, I think you could put a cost of only $3000 per vehicle in Austin. But it could be much lower than that.

This is why I'm thinking that the Austin 4680 Model Y could have the lowest production cost of any car built in the USA.

Lowest cost of production seems like a definite no. Highest profit margin once Austin is ramped is likely though.

 

[hobbes]

Ships from china usually show up 6 weeks into the quarter and statistics won't tell you if it is LR from china or P from Berlin.

We were discussing data from teslastats.no which actually is the only source that does tell you whether it is from Berlin or not:

 

[Usain]

Lowest cost of production seems like a definite no. Highest profit margin once Austin is ramped is likely though.

Why a definite no?

I think we are all expecting EVs to cost less than ICE eventually. And I don't think anyone else will match the production efficiency of the Austin 4680 Model Y.

I don't see how any other car will have a lower production cost when Austin is fully ramped.

 

[hobbes]

Wasn´t Elon supposed to give a talk yesterday at the Sun Valley conference? Didn´t find any reports so far...

 

[SN_8]

Wasn´t Elon supposed to give a talk yesterday at the Sun Valley conference? Didn´t find any reports so far...

https://twitter.com/x/status/1545875629954027521

 

[SmokyPeat]

Why a definite no?

I think we are all expecting EVs to cost less than ICE eventually. And I don't think anyone else will match the production efficiency of the Austin 4680 Model Y.

I don't see how any other car will have a lower production cost when Austin is fully ramped.

The new Ford Maverick starts at $20k. Assuming that Ford isn't making any profit on that vehicle yet, but isn't producing them at a loss, that's still far cheaper than Tesla will be making the Model Y. I like your enthusiasm, just trying to temper it with a dose of reality.

 

[TheTalkingMule]

For those that argue Germany can't move quickly through it's bureaucracy, they've already made huge changes to small/medium scale solar tariffs in response to Russian economic aggression. Anyone can now pretty much print money with solar.

Germany raises feed-in tariffs for solar up to 750 kW

The new provisions are part of the new version of the country's renewable energy law, which was approved today by the German parliament.

www.pv-magazine.com

Once they move on to storage, I think we'll be shocked at the efficiency and scale of their solutions. I'd imagine they'll mandate storage at the grid level across all utilities and new large solar/wind farms. They'll likely subsidize distributed storage and then incentivize "active interconnection".

I suspect Berlin Gigafactory will need to expand many times over in short order.

 

[Stretch2727]

Here is some rough maths on that relying in part on my sometimes suspect memory. And a lot of wild guesses.

A Fremont made 50 kWh Model 3/Y costs about $30,000 to make? (I seem to remember $29,000 for some reason) - We can partially deduce this from gross margins, but China is a complicating factor.

Labor on a Model 3/Y at Fremont $9,000?

Battery pack I'll assume $8,000, cells $6,000?

If my numbers are off, we can try to source better numbers.

We need to talk about when Austin is fully ramped no earlier than the end of 2023. The cost of cells probably halves to $3,000 but we may need to add back $1,000 for depreciation on the 4680 production equipment. Overall saving $2,000 on a 50 kWh pack.

A Chinese 50 kWh LFP pack might be $4,000 in China? But by the time it is landed in the US we can add some additional costs perhaps now $5,000?

So if Tesla could make the Austin Model Y with a Chinese LFP pack, they might save another $1,000.

For the rest of the car, I think the improvements with front and rear castings, workflow and ergonomics possibly save another $2,000.

So an Austin made Model Y might be $4,000 cheaper than a Fremont made Model Y (by the end of 2023), possibly costing around $26,000 to make.

The $30,000 number (if remembered correctly), was from a long time ago, and many parts components and raw materials might have been cheaper then,

Partial justification for my numbers is the Munro teardowns and the lavish praise of the Model Y design from Munro staff on many aspects. Munro don't just like good design, they like good design which saves money.

The cost of labor in Fremont is not $9K per unit.

Some rough math with some high estimates.

20K Employees x $80K per Employee fully loaded = $1.6B

$1.6B/500K Cars = $3200 per car all in including management.

Typical car plant has 14-25 hours of labor per unit which is $700 to $1250. Management and admin would go on top of this and add about 1/3 typically.

Tesla is higher in Fremont due to the vertical integration, poor layout, and complexity of building 4 different models but not $9K. The model Y is probably the most efficient of the 4 in Fremont due to the rear giga casting and being the latest implementation.

 

[unk45]

Why a definite no?

I think we are all expecting EVs to cost less than ICE eventually. And I don't think anyone else will match the production efficiency of the Austin 4680 Model Y.

I don't see how any other car will have a lower production cost when Austin is fully ramped.

It is quite logical for people to regard this as implausible. The questions begin to be a trifle less dismissive when one considers:
1. A 9000 ton Gigapress. Does that imply a single cast undercarriage with the Giga stamping attach points and parts inclusion we already see with Model Y front and rear? We don’t know.
2. Exo-skeleton. We know what enormous benefits that has in some aircraft and other vehicles. We can only imagine for Cybertruck.
3. No paint! By itself that saves at least $500 unit cost. Factory wraps, etc will be another huge money maker by automating a normally manual process. Not cost reduction, per se, but astronomical margins!

The list goes on. I am convinced that @Usain could be correct, even if the odds seem low.

In my very humble opinion I suspect the singular impediment is battery cost.

We all should keep in mind that the F150 and Silverado plus their derivatives (Escalade, Suburban, Expedition, Navigator) account for well above 100% of GM and Ford profits. Although they go to enormous lengths to hide this, these are their sole keys to survival.
(anybody can argue, but when doing so understand that their small vehicles just act to reduce fleet fuel economy and other standards, plus always have positive contribution to overhead, a critical factor.)

Now consider Tesla. Cybertruck will have very low labor cost, low factor space, highly scalable production. It will be, as it is, a demand for technological wizardry with stainless steel. Even the 9000 ton press is a scale issue, but Tesla/Idra know how to do it.

So, why is it ’impossible’ for @Usain to be correct?

PS he did NOT say cheapest in the world, just the US. The US has not been very successful with the cheapest production since River Rouge was producing Model T, has it?