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

[Gigapress]

Bingo! An EV is optimized for cases of lots of starting and stopping, and most limited in applications requiring high-speed (high aerodynamic drag) driving for long periods of times. For all the reasons you mention, Semi makes a lot of sense for local/short haul delivery applications and "city to city" runs (not necessarily cross country). Now, my question-rather than starting with Semi, why not start with smaller delivery vehicles, such as UPS/FEDEX/Amazon/mail trucks? Much more start/stop operation, lots of vehicles and demand, and a lot of exposure to consumers. How much of an impact would a Tesla logo on the BBT or Amazon truck customers see every day have on potential EV purchasers? And fewer miles covered in a given day, meaning more vehicles from a constrained battery supply. I'm curious why Tesla has left this open to Bright Drop and Rivian (and some others) at this point-seems like much less of a technical and production challenge than Semi. Semi does seem like a natural foundation for panel trucks.

Having said that, I'm wondering if Tesla is waiting to "drop the big one" on the delivery market, with a ground-up design, using their expertise in design for manufacturing and "alternate" construction methods, with a platform at a dramatically lower cost than anything currently on the market.

Tesla is supposed to unveil a “highly configurable robovan” design soon. That's probably the vehicle they intend to use for small urban deliveries because the official target is still safer-than-human autonomous driving by the end of this year. They probably have a backup plan in case autonomy once again doesn't work out on schedule.

 

[mongo]

Bingo! An EV is optimized for cases of lots of starting and stopping, and most limited in applications requiring high-speed (high aerodynamic drag) driving for long periods of times. For all the reasons you mention, Semi makes a lot of sense for local/short haul delivery applications and "city to city" runs (not necessarily cross country). Now, my question-rather than starting with Semi, why not start with smaller delivery vehicles, such as UPS/FEDEX/Amazon/mail trucks? Much more start/stop operation, lots of vehicles and demand, and a lot of exposure to consumers. How much of an impact would a Tesla logo on the BBT or Amazon truck customers see every day have on potential EV purchasers? And fewer miles covered in a given day, meaning more vehicles from a constrained battery supply. I'm curious why Tesla has left this open to Bright Drop and Rivian (and some others) at this point-seems like much less of a technical and production challenge than Semi. Semi does seem like a natural foundation for panel trucks.

Having said that, I'm wondering if Tesla is waiting to "drop the big one" on the delivery market, with a ground-up design, using their expertise in design for manufacturing and "alternate" construction methods, with a platform at a dramatically lower cost than anything currently on the market.

Why not walkin van? Margin, serivce, warranty, scale.
Your typical FedEx/UPS is an upfitter body on a commercial rolling chassis. Powertrain under their nationwide dealer network, body's by upfitter.
I think Tesla could make a great USPS delivery truck, but I wouldn't recommend them to enter either business.

 

[Artful Dodger]

【Aug.12.2022】August is still dominated by exports\Tesla Shanghai \4K # 454 | Wu wa

 

[mongo]

Why the free pass for Rivian? (I know, I know)

Rivian lost $1.7 billion in three months. Here's why that may not be a problem

Rivian lost a whopping $1.7 billion in the second three months of the year, but some auto industry experts say it's no cause for concern.

www.cnn.com

CNN Business article title: "Rivian lost $1.7 billion in three months. Here's why that may not be a problem"
"It's a measurement of nothing." James IP Womack, a fellow at the MIT Mobility initiative and author of a widely cited book on auto manufacturing.
"It's kind of amazing anybody can do this at all.""It's best at this stage to evaluate Rivian through its products, and how they make consumers feel."

In F'22 Q2 Rivian lost a whopping $1.7 billion. They reiterated their goal of producing 25,000 vehicles for all of 2022.

The article compares Rivian to Tesla. Tesla lost money during their ramp, sure, but is this a fair comparison? Let's take a closer look.
At Tesla's worst profit performance F'18 Q2 lost $717 million (Rivian's quarterly loss 2.3X higher than that of Tesla). Yet Tesla produced 254,530 vehicles for all of 2018 (10X more than Rivian hopes to achieve this year).

No panic now for Rivian due to their $15.5 billion war chest, however at this rate, when/if Rivian starts producing vehicles in the hundreds of thousands, they will truly be money furnaces and even $15.5 billion will not be enough. Rivian, Lucid and the majors are just beginning to go through the valley of death, the great abyss. This shows we can truly appreciate what Tesla has accomplished with incredible efficiencies. I wish all EV manufacturers the very best. Some will make it. Some will not. But come on James Womack, at least acknowledge that Rivian has a problem here.

The more articles I read, the more I want to invest in Tesla.

It's the cash burn vs cash on hand that is critical. It wasn't until Q2 2019 that Tesla had over $5 billion in cash on hand for the first time. In Q2 2018 they had $2.38 billion, $717M is 30% of that meaning less than a year of runway if things didn't change. Rivian's $1.7B on $15.5B is only 11%, so a bit over two years. Ignoring minimum working capital.

 

[MikeC]

Why the free pass for Rivian? (I know, I know)

Rivian lost $1.7 billion in three months. Here's why that may not be a problem

Rivian lost a whopping $1.7 billion in the second three months of the year, but some auto industry experts say it's no cause for concern.

www.cnn.com

CNN Business article title: "Rivian lost $1.7 billion in three months. Here's why that may not be a problem"
"It's a measurement of nothing." James IP Womack, a fellow at the MIT Mobility initiative and author of a widely cited book on auto manufacturing.
"It's kind of amazing anybody can do this at all.""It's best at this stage to evaluate Rivian through its products, and how they make consumers feel."

In F'22 Q2 Rivian lost a whopping $1.7 billion. They reiterated their goal of producing 25,000 vehicles for all of 2022.

The article compares Rivian to Tesla. Tesla lost money during their ramp, sure, but is this a fair comparison? Let's take a closer look.
At Tesla's worst profit performance F'18 Q2 lost $717 million (Rivian's quarterly loss 2.3X higher than that of Tesla). Yet Tesla produced 254,530 vehicles for all of 2018 (10X more than Rivian hopes to achieve this year).

No panic now for Rivian due to their $15.5 billion war chest, however at this rate, when/if Rivian starts producing vehicles in the hundreds of thousands, they will truly be money furnaces and even $15.5 billion will not be enough. Rivian, Lucid and the majors are just beginning to go through the valley of death, the great abyss. This shows we can truly appreciate what Tesla has accomplished with incredible efficiencies. I wish all EV manufacturers the very best. Some will make it. Some will not. But come on James Womack, at least acknowledge that Rivian has a problem here.

The more articles I read, the more I want to invest in Tesla.

From the tone of the article, the author Matt McFarland, seems to be very forgiving and sympathetic toward EVs and new tech.

Seems like he would treat Tesla fairly - let’s see if he has any other articles….oh.

We tried Tesla's 'full self-driving.' Here's what happened

When a dozen small children crossed in front of our Tesla with "full self-driving," I had good reason to be nervous.

www.cnn.com

 

[Singuy]

It's the cash burn vs cash on hand that is critical. It wasn't until Q2 2019 that Tesla had over $5 billion in cash on hand for the first time. In Q2 2018 they had $2.38 billion, $717M is 30% of that meaning less than a year of runway if things didn't change. Rivian's $1.7B on $15.5B is only 11%, so a bit over two years. Ignoring minimum working capital.

Totally unacceptable if it was Tesla. Zero people would be investing with those kind of expenses.

Comparing Q4 2012 Tesla's performance to Rivians'

Tesla total revenue: 306M
Gross profit: 23.8M
Loss from operations: -90M

Rivian total revenue: 364M
Gross profit: -704M
Loss from operations: -1.708B

Yup..Rivian's losses are totally not a big deal because they have money to burn....

The total loss from Rivian's past 2 Quarter is almost as much as Tesla's total loss since inception.

 

[Prunesquallor]

Of course.

https://twitter.com/x/status/1558183952069918720

 

[AZRI11]

We've known for some time that these were planned from Lathrop: (LFP definately part of the plan)

Tesla set to introduce larger Megapacks this quarter, targeting to grow Megapack production to nearly 50GWh by 2023 | (Jan 7, 2022)

Tesla set to introduce larger Megapacks this quarter, targeting to grow Megapack production to nearly 50GWh by 2023

Tesla broke ground last year on a new Megafactory in Lathrop, California. As the name implies the facility will produce Megapacks, Tesla’s utility-scale energy storage system. With the help of the Lathrop Megafactory, Tesla is […]

driveteslacanada.ca

Twitter account from someone who works for Tesla energy.

https://twitter.com/x/status/1557967118502506496

 

[MP3Mike]

Elon confirms that the wait list is just too long for the Model 3 LR

https://twitter.com/x/status/1558307261486956544

 

[Artful Dodger]

1 Bitcoin = 24,829.40 United States Dollars.

(ducks)

 

[WattsHappening]

This Friday close is excellent news after my 28 days on call and overnight family shifts at the ICU.

QQQ closing above at 330 which is above 324 200MA and 326 Bear market resistance line is the most bullish signal we got in the last 9 months.

Thanks for all the support everyone. Finally feeling positive!

Today was a good day for us shareholders. I reveled in watching the trading, and I'm hopeful that we have turned a corner in the macro market. We already know to expect an incredible Q3 and Q4 for Tesla. I am very excited for the next few months and beyond.

I know many of you have already expressed your support towards @OrthoSurg. Let me add my condolences. I've never met you, don't know what you look like and have just a faint understanding of your background. But I feel like I know you. And I felt your pain. And your last post was a relief to me, as I expect it was to many others.

TMC is truly a special community. We are bound by our strong support for Tesla cars, renewable/sustainable energy, support for Elon Musk, and yes, a common understanding of the incredible opportunity to make generational-changing investments in a once-in-a-generation company.

I am grateful to you all and to TMC for creating and maintaining this forum. I know I am richer for it, in more ways than one. As happy as I was with today's stock performance, I was just as happy and relieved to see your post. Best wishes to you and everyone on this forum.

Edit: and while I'm at it, let me also express my appreciation for the mods. You have a difficult and thankless job trying to keep us degenerates in line. And you do an incredible job keeping this massive thread alive and thriving. Thank you!

 

[StealthP3D]

Boy, Sandy has been making the rounds lately. Here he is on Bearded Tesla Guy. At the beginning of the video, he has the same report on 4680 as on the Autoline video. He seems to know a lot about the energy density but he isn't revealing any numbers. If they really have done some valid testing at that level then what he does tell us is very bullish.

Also, toward the end he talks about why he never gets asked back on networks like Bloomberg.

This is a really good interview with Sandy Munro. There's nothing too earth-shattering in here and you won't be missing a lot if you don't watch it, but I do think the interviewer did a good job keeping things "big picture" enough to let Sandy's unique knowledge shine. So many interviewers try to delve into the specifics and the nuts and bolts of technology but that is not where Sandy shines. For those who don't want to spend the time, here are my takeaways:

1) Sandy has matured a lot in his general understanding of Elon and Tesla in the automotive world. Remember Sandy's interview of Elon at GigaTexas? Sandy was all pumped to tell Elon what Sandy thought. Now, when Sandy was asked if he could give Elon any advice, Sandy said something close to "Elon doesn't need my advice, he's a lot smarter than I am. He knows what he's doing. I would actually like to ask HIM a few things!" That's a big change from not many months ago and a HUGE change from when he first tore down a Model 3. In auto-industry years that's a very short time to make such a big transformation. Sandy has seen the light and it all started with his Model 3 teardown. The speed of Sandy's transformation has been nothing short of amazing. He went from not understanding Tesla and where they were going to being one of the few who actually get it.

2) Sandy was consulting for GM on the EV1 and says the reason the Board of GM sacked Bob Stempel, an engineer, chairman and CEO of GM who greenlighted the EV1 project, and inserted CEO Smith who ordered all the EV1's shredded, was because the bean counters wanted profit NOW, not years down the road. I think Sandy is a little naive about why this happened. Yes, current profits are important, and that's the reason Smith gave for sacking the EV1, but the EV1 project was not that expensive, and it was leading edge technology that people loved and showed great promise for the future. My belief is big oil didn't like it and worked to install Smith and sack Stempel. This is how the dynamic between big oil and big auto plays out. Without this it makes no sense to shred perfectly good cars that people loved. As long as people were willing to pay to continue owning them it would have made more sense for GM to let them pay so they could graph the battery degradation and generally collect data over a longer period of time. It would have cost them almost nothing considering the small fleet size.

Big auto is big oil's subservient stepchild. That's one reason we have so many gas guzzlers in America. The concern was not the profit of GM, it was the profit of big oil. They are all in the same club and big oil made clever arguments and applied specific pressures. Of course, now that long-standing alliance is unravelling for the first time in many decades due to the absolute necessity of switching to EV's. But, of course, the club still exists, just not in the same happy "peas in a pod" serendipity that has been the norm for so long. Big auto is breaking up with big oil because they can see certain ruin if they don't. Big oil is constantly trying to convince them to be 'smart' about it and go slow but the smarter people in big auto can see that might not be in their best interest. The result is chaos and indecision about whether they are making a lot of EV's or not many at all. Actually, big auto doesn't have a great path towards EV's anyway which assists big oil in slowing them down further. The result is predictable, even with record amounts of subsidies. It will just prolong the agony.

3) I loved the part near the end where Sandy rails against the clowns who are talking EV's down with cliche sayings like "EV's are not good for road tripping" or "You can't recycle the batteries". He appears to believe this kind of irrational propaganda is dumb and threatens civilization as we know it and needs to be stopped. And he's serious about it, it's not just a talking point. Good for him!

 

[Artful Dodger]

My belief is big oil didn't like it and worked to install Smith and sack Stempel. This is how the dynamic between big oil and big auto plays out.

That's literally true. When the EV1 was first released, it's performance and range suffered from the use of seal lead acid (SLA) batteries. In 1999, when GM wanted to switch to nickel metal hydride (NiMH) batteries to improve the EV1, Chevron bought the patent on NiMH batteries, and immediately imposed restrictions on their usage to small handheld devices like flashlights and PDAs, while specifically DENYING the use of NiMH for automobile traction packs like the EV1.

The inventor of the patent, Dr. Masahiko Oshitani, claims he was lied to by Chevron, that they told him they would work to see wide-spread use of NiMH batteries. He said if he'd have know what Chevron planned to do, he would have kept the patent. This was over 20 years ago. GM still does not have a compelling EV (one that won't make you prefer their ICE model cars).

More here:

Patent encumbrance of large automotive NiMH batteries - Wikipedia

en.wikipedia.org

 

[insaneoctane]

As long as the % propulsion efficiency is the same at both speeds for a given powertrain, then the % range loss is equal to 1 - old speed/new speed. So for instance, increasing the speed from 65 to 80 mph would decrease range by a factor of 65/80 irrespective of the powertrain. Basically the ICEV would continue wasting 70% of the energy at higher speeds, but that waste portion will have grown in proportion to the wind drag, making the whole pie bigger.

Now an ICEV usually has more range than an EV, so this % reduction is more of a tangible problem for an EV in practice.

The % change in energy consumption per mile is, similarly, equal to the % change in speed. Consequently, higher speeds amplify the energy cost advantage of a Tesla Semi over a diesel semi. If for example the Tesla saves $0.25/mile on using electricity instead of diesel fuel when driving at 60 mph, then at 75 mph it would save $0.25 * 75/60 = $0.31/mile.

That extra 6 cents per mile is worth roughly $50k in net present value over a million miles of operation spanning a decade. I don't know if it's exactly that much but the point is that after doing the math I now believe Tesla was seriously sandbagging the cost savings of the Semi with their worst-case scenario comparison by presenting for 60 mph instead of 70 or 75 with more reasonable average diesel prices.

The same math applies to high-speed robotaxi fleets. Someday, especially in Boring Loops, we hope to see Robotaxis driving at maybe 100 mph or more. Little differences in energy efficiency are of amplified importance at those speeds and will contribute to Tesla vehicles being the clear economic winner for such fleets.

Spoiler: Physics Derivation

Example:

• ICE car gets 30 miles per gallon at 65 mph at 30% propulsion efficiency.
• 33.7 kWh per gallon of gasoline

What is power of wind drag assuming rolling resistance is negligible?

33.7 kWh potential energy/1 gallon​

* 30% propulsion efficiency​

* 1 gallon / 30 miles​

* 65 miles/1 hour​

= 22 kW of wind drag power​

​

If the gas car has an 18-gallon tank, it can sustain 30 mpg * 18 gal = 540 miles of range in this operating condition before running out of fuel.

​

If the speed is increased to 80 mph, the drag becomes 22*(80/65)^2 = 33 kW.

33 kW of wind drag power​

/ 30% propulsion efficiency​

* 1 hour/80 miles​

* 1 gallon/33.7 kWh​

= 0.0408 gallons per mile​

--> 24.4 mpg​

​

24.4 mpg * 18 gal = 439 miles range = 19% range loss vs 65 mph.​

​

Now let's take the same car and substitute a Model 3 powertrain with 85 kWh of useable battery and 90% propulsion efficiency.

22 kW of wind drag​

/ 90% propulsion efficiency​

* 1 hour/65 miles​

= 0.376 kWh of battery drain/mile​

--> 2.66 miles/kWh​

Range at 65 mph is 2.66 miles/kWh * 85 kWh = 226 miles

Again comparing at 80 mph:

​

33 kW of wind drag power​

/ 90% propulsion efficiency​

* 1 hour/80 miles​

= 0.461 kWh of battery drain/mile​

--> 2.17 miles/kWh​

2.17 miles/kWh * 85 kWh = 185 miles range = 19% range loss vs 65 mph. Same as the percentage loss for the ICE version, and this will always be true in general as long as propulsion efficiency doesn't vary with speed. This isn't quite true but it's close enough for this approximation.

​

General formula:
Wind drag power / propulsion efficiency / speed = stored energy used / mile
range = stored energy total / (stored energy/mile)

range = stored energy tot / (wind/efficiency/speed)
range = stored energy tot * efficiency * speed / wind

r2/r1 = (stored energy2 * efficiency2 * speed2 / wind2) / (stored energy1 * efficiency1 * speed1 / wind1)
Stored energy and propulsion efficiency are constant
r2/r1 = (stored energy2 * efficiency2 * speed2 / wind2) / (stored energy1 * efficiency1 * speed1 / wind1)
r2/r1 = speed2/speed1 * wind1/wind2

w2/w1 = (speed2/speed1)^2​

r2/r1 = speed2/speed1 * (speed1/speed2)^2
r2/r1 = speed1/speed2


Define x = energy/mile

x = Wind drag power / propulsion efficiency / speed
x2/x1 = (Wind2 / efficiency2 / speed2) / (Wind1 / efficiency1 / speed 1)
Propulsion efficiency is constant
x2/x1 = (Wind2 / efficiency2 / speed2) / (Wind1 / efficiency1 / speed 1)
x2/x1 = (wind2/wind1) * (speed1/speed2)

w2/w1 = (speed2/speed1)^2​

x2/x1 = (speed2/speed1)^2 * (speed1/speed2)
x2/x1 = Speed2 / Speed 1

I think this ought to be the last on this topic in this thread....I agree with your math and think I was biased in my evaluation of range impact, like you said, because my range is lower than typical ICEV. As a matter of fact, my previous car went 550 miles between fill ups. I think the perception is further influenced by the fact that EV vs ICEV have an inverse relationship between city vs freeway driving. Before EVs... cars always got improved mileage on highway vs city driving. Obviously EVs are the exact opposite due to city driving offering regen braking AND low aero loads. So maybe EVs feel the gut punch of reduced range more at higher speeds because of the increased aero load plus lack of regen...Anyway the fact that ICEV wastes ~70% of the available energy doesn't really enter into the calculus because it does this at any speed and we need only pay attention to the 30% that we can use....Thanks for the helpful debate!

 

[CorneliusXX]

Why the free pass for Rivian? (I know, I know)

Rivian lost $1.7 billion in three months. Here's why that may not be a problem

Rivian lost a whopping $1.7 billion in the second three months of the year, but some auto industry experts say it's no cause for concern.

www.cnn.com

CNN Business article title: "Rivian lost $1.7 billion in three months. Here's why that may not be a problem"
"It's a measurement of nothing." James IP Womack, a fellow at the MIT Mobility initiative and author of a widely cited book on auto manufacturing.
"It's kind of amazing anybody can do this at all.""It's best at this stage to evaluate Rivian through its products, and how they make consumers feel."

In F'22 Q2 Rivian lost a whopping $1.7 billion. They reiterated their goal of producing 25,000 vehicles for all of 2022.

The article compares Rivian to Tesla. Tesla lost money during their ramp, sure, but is this a fair comparison? Let's take a closer look.
At Tesla's worst profit performance F'18 Q2 lost $717 million (Rivian's quarterly loss 2.3X higher than that of Tesla). Yet Tesla produced 254,530 vehicles for all of 2018 (10X more than Rivian hopes to achieve this year).

No panic now for Rivian due to their $15.5 billion war chest, however at this rate, when/if Rivian starts producing vehicles in the hundreds of thousands, they will truly be money furnaces and even $15.5 billion will not be enough. Rivian, Lucid and the majors are just beginning to go through the valley of death, the great abyss. This shows we can truly appreciate what Tesla has accomplished with incredible efficiencies. I wish all EV manufacturers the very best. Some will make it. Some will not. But come on James Womack, at least acknowledge that Rivian has a problem here.

The more articles I read, the more I want to invest in Tesla.

I was considering having a dabble in Rivian when they were down to $20/share back in May. People love their vehicles and they've got guaranteed demand for their vans.

Not to sound too tautological but the only reason they're losing money is because they're just not making enough vehicles (Neroden mentioned the same thing on here about Tesla back in the day when Tesla was still not at scale, which helped solidify my understanding of the company when I was first learning about it) but production is increasing (albeit from a very small base). I know design is easy, manufacturing is difficult but the direction is going the right way and QoQ growth looks solid - Q2 nearly doubled Q1 production. They're still a long way from profit but their cost of revenues was 6x revenues in Q1 and only 3x revenues in Q2 - mostly due to increased production IMO and again heading in the right direction.

I could see Rivian be able to 20x from their $20/share position while for Tesla the same multiple is more difficult as Tesla would have to be the largest company in the world by a factor of 6. I'm not saying Rivian is a better investment - The difference is that Tesla is almost guaranteed to go another 3x-4x at a minimum over the medium term IMO (as far as a guarantee is possible) and that Rivian could end up staying a minnow and blowing through their cash pile before reaching proper scale, or just not figure out manufacturing at scale economically. Given how well Tesla has already performed, if Tesla goes another 3x-4x I know I could hang up my investing boots for life and live in luxury so it's difficult to invest in anything else.

 

[petit_bateau]

Why not walkin van? Margin, serivce, warranty, scale.
Your typical FedEx/UPS is an upfitter body on a commercial rolling chassis. Powertrain under their nationwide dealer network, body's by upfitter.
I think Tesla could make a great USPS delivery truck, but I wouldn't recommend them to enter either business.

Vans can be quite profitable, the Transit seems to have been the only thing keeping Ford Europe alive. Mind you the absolute margin is damming with faint praise, good only in comparison to the rest of the line up. I'm sure Tesla could do better.

"Jim Farley, Ford’s head of global markets, said commercial vans are earning 13 percent profit margins for the automaker in Europe. Ford is shifting its focus to concentrate on vans and SUVs to hit its long-term target of a 6 percent margin in the region, Farley said."

Ford seeks European profitability with shift to SUVs, vans

Ford is redirecting spending in Europe away from cars to focus on more profitable SUVs and commercial vans to return the region to profit.

europe.autonews.com

 

[MC3OZ]

I was considering having a dabble in Rivian when they were down to $20/share back in May. People love their vehicles and they've got guaranteed demand for their vans.

Not to sound too tautological but the only reason they're losing money is because they're just not making enough vehicles (Neroden mentioned the same thing on here about Tesla back in the day when Tesla was still not at scale, which helped solidify my understanding of the company when I was first learning about it) but production is increasing (albeit from a very small base). I know design is easy, manufacturing is difficult but the direction is going the right way and QoQ growth looks solid - Q2 nearly doubled Q1 production. They're still a long way from profit but their cost of revenues was 6x revenues in Q1 and only 3x revenues in Q2 - mostly due to increased production IMO and again heading in the right direction.

I could see Rivian be able to 20x from their $20/share position while for Tesla the same multiple is more difficult as Tesla would have to be the largest company in the world by a factor of 6. I'm not saying Rivian is a better investment - The difference is that Tesla is almost guaranteed to go another 3x-4x at a minimum over the medium term IMO (as far as a guarantee is possible) and that Rivian could end up staying a minnow and blowing through their cash pile before reaching proper scale, or just not figure out manufacturing at scale economically. Given how well Tesla has already performed, if Tesla goes another 3x-4x I know I could hang up my investing boots for life and live in luxury so it's difficult to invest in anything else.

This might sound funny, but I wonder if Rivian products are too well designed and engineered, so much so, that they are making thin margins on high priced products.

Being a low volume manufacturer doesn't make the transition to high volume any easier.

I do like the features of some of their products, if they are stuck with being a relatively low volume manufacturer, they might make it work.

I think high volume mass manufacturing say 500K per year would be a big challenge, especially competing against Tesla, Ford and the Chinese car makers.

The problem with getting to high volume mass manufacturing too late is, the race is run before you turn up.

As the race leader, Tesla is setting the pace, that is a big advantage.

 

[aubreymcfato]

This is a really good interview with Sandy Munro. There's nothing too earth-shattering in here and you won't be missing a lot if you don't watch it, but I do think the interviewer did a good job keeping things "big picture" enough to let Sandy's unique knowledge shine. So many interviewers try to delve into the specifics and the nuts and bolts of technology but that is not where Sandy shines. For those who don't want to spend the time, here are my takeaways:

1) Sandy has matured a lot in his general understanding of Elon and Tesla in the automotive world. Remember Sandy's interview of Elon at GigaTexas? Sandy was all pumped to tell Elon what Sandy thought. Now, when Sandy was asked if he could give Elon any advice, Sandy said something close to "Elon doesn't need my advice, he's a lot smarter than I am. He knows what he's doing. I would actually like to ask HIM a few things!" That's a big change from not many months ago and a HUGE change from when he first tore down a Model 3. In auto-industry years that's a very short time to make such a big transformation. Sandy has seen the light and it all started with his Model 3 teardown. The speed of Sandy's transformation has been nothing short of amazing. He went from not understanding Tesla and where they were going to being one of the few who actually get it.

2) Sandy was consulting for GM on the EV1 and says the reason the Board of GM sacked Bob Stempel, an engineer, chairman and CEO of GM who greenlighted the EV1 project, and inserted CEO Smith who ordered all the EV1's shredded, was because the bean counters wanted profit NOW, not years down the road. I think Sandy is a little naive about why this happened. Yes, current profits are important, and that's the reason Smith gave for sacking the EV1, but the EV1 project was not that expensive, and it was leading edge technology that people loved and showed great promise for the future. My belief is big oil didn't like it and worked to install Smith and sack Stempel. This is how the dynamic between big oil and big auto plays out. Without this it makes no sense to shred perfectly good cars that people loved. As long as people were willing to pay to continue owning them it would have made more sense for GM to let them pay so they could graph the battery degradation and generally collect data over a longer period of time. It would have cost them almost nothing considering the small fleet size.

Big auto is big oil's subservient stepchild. That's one reason we have so many gas guzzlers in America. The concern was not the profit of GM, it was the profit of big oil. They are all in the same club and big oil made clever arguments and applied specific pressures. Of course, now that long-standing alliance is unravelling for the first time in many decades due to the absolute necessity of switching to EV's. But, of course, the club still exists, just not in the same happy "peas in a pod" serendipity that has been the norm for so long. Big auto is breaking up with big oil because they can see certain ruin if they don't. Big oil is constantly trying to convince them to be 'smart' about it and go slow but the smarter people in big auto can see that might not be in their best interest. The result is chaos and indecision about whether they are making a lot of EV's or not many at all. Actually, big auto doesn't have a great path towards EV's anyway which assists big oil in slowing them down further. The result is predictable, even with record amounts of subsidies. It will just prolong the agony.

3) I loved the part near the end where Sandy rails against the clowns who are talking EV's down with cliche sayings like "EV's are not good for road tripping" or "You can't recycle the batteries". He appears to believe this kind of irrational propaganda is dumb and threatens civilization as we know it and needs to be stopped. And he's serious about it, it's not just a talking point. Good for him!

Can we put this in the thread of Particular Merit?

 

[CorneliusXX]

This might sound funny, but I wonder if Rivian products are too well designed and engineered, so much so, that they are making thin margins on high priced products.

Being a low volume manufacturer doesn't make the transition to high volume any easier.

I do like the features of some of their products, if they are stuck with being a relatively low volume manufacturer, they might make it work.

I think high volume mass manufacturing say 500K per year would be a big challenge, especially competing against Tesla, Ford and the Chinese car makers.

The problem with getting to high volume mass manufacturing too late is, the race is run before you turn up.

As the race leader, Tesla is setting the pace, that is a big advantage.

Maybe, but I think it's just too early in the ramp to know where their margins will shake out. The fixed cost overhead will be dwarfing any other item in cost of sales. They've got a factory designed to produce 150k vehicles annually while only producing at a 18k annual run rate in Q2. The good thing for them as far as I can tell is that they appear to have quite a bit of pricing power ($12k (~20%) increase in price in March this year), so margins could likely be healthy if they can continue that.

I wouldn't say it's too late to scale. EVs are still a small portion of overall vehicle sales and the truck/large SUV/van scaling has hardly started - it's mostly sedans and smaller SUVs/hatchbacks that have gone electric to date. We'll have to wait and see if Rivian can get their act together. The US has already taken steps to curb the number of vehicles that can be made in China and sold in the US with their new supply chain subsidy requirements so there could be a window.

Rivian also has a second factory planned that should be able to produce several hundred thousand vehicles year. Enough to be called scale but still a minnow compared to Tesla.

Anyway, this isn't the Rivian motors club so I'll leave it there.

 

[ToTheStars]

The Model Y in Texas is produced using gigacastings, so the amount of parts is significantly reduced compared to before.
How about the Model 3?
A few years ago the octovalve got integrated in the Model Y first, and in the other models later.
Do we know what the plans are regarding installing gigapresses in the other factories to produce other models (for instance Model 3) with gigacastings as well?