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

[M|S|M MYP]

Call me surprised coming from this guy /s

 

[Singuy]

Rob should have the production numbers so look out for his YouTube video. 5k exports seems low so maybe the production number is much higher that wasn’t counted (at docks/on the factory lot)

So the 5500 here is not counted via P&D under deliveries right? Also with 4 factories we should see higher amount of stragglers sitting on lots or being transported vs 2 factories.

 

[TheTalkingMule]

Call me surprised coming from this guy /s

View attachment 862404

We're exporting record amounts of crude oil and refined products. Well above and beyond the amount of crude released from the strategic reserve.

US demand for crude oil peaked 4 years ago and is headed downward while domestic production is today still 7-8% lower than pre-pandemic levels.

I'd hardly call that an emergency.

Just like when JPMorgan "raises" their TSLA price target from $135 to $136, the true purpose of this statement is getting it in the headlines and algorithms.

 

[The Accountant]

It's a good thing that Tesla could export all those MIC vehicles out in September since they were having demand problems in China. /s

https://twitter.com/x/status/1579652739084455936

Vehicles sold in China were up 63% in Q3.

 

[Cattledog]

Vehicles sold in China were up 63% in Q3.

View attachment 862435

Well, I'd call that a demand cliff, it's just we're at the bottom of it ready to climb it.

 

[Todd Burch]

Well, I'd call that a demand cliff, it's just we're at the bottom of it ready to climb it.

Since all these people were wrong about China demand, I expect we’ll climb 15% tomorrow. /s

 

[MC3OZ]

Tesla doesn't compete in the low end today because it's either not economically feasible/desirable, or the product is not capable enough for their standards.

Anyone outside of Tesla making a cheap EV with decent range is likely sacrificing margins. Don't expect any volume production of significance, despite popularity. EVs with small batteries have poor range and poor torque. Basically the glorified golf cart. Sure there's a market for this, but Tesla's more than happy to let someone else tackle that segment.

With Tesla's manufacturing efficiencies, they likely could produce the best-spec'd low-end EV. But as long as they haven't tapped all the demand for the current 3/Y segments, there's no reason for them to rush to the bottom, where margins are crappy. Maximizing profit now allows them to continue to grow (more factories), which will then set them up to handle the volumes that a decent econobox EV would generate.

A sensible target is making a 20%-30% margin on an entry level EV in the $25,000-$30,000 price band,

It is not worth doing if:-
1. The price of the compact initial Tesla is far above $30,000.
2. The initial margin on the compact Tesla is less than 20%.
3. The resulting vehicles involve too many compromises, and seem cheap, or perform badly.

I think Tesla will do it, and it will eventually be 3-4 compact models on the same platform, that will rule a line on how far Tesla will go in that direction, for sometime, perhaps forever.

Tesla may also make a range of Cyber vehicles variations of the Cybertruck platform, I see that as a separate category which probably doesn't overlap

As per the Cybertruck I see the compact vehicles as a design challenge, the right designs at the right time can hit all of the targets, but a lot of time and effort is required to get the design right.

The compact vehicles probably also need mature 4680 cell production, producing cells in volume, with high reliability, at a good price.

Why I think this is needed is, to get to 20 Million vehicles sold worldwide, and support the volume of vehicles sales that allow a full build out of charging, delivery and service in all markets.

 

[JSML]

A sensible target is making a 20%-30% margin on an entry level EV in the $25,000-$30,000 price band,

It is not worth doing if:-
1. The price of the compact initial Tesla is far above $30,000.
2. The initial margin on the compact Tesla is less than 20%.
3. The resulting vehicles involve too many compromises, and seem cheap, or perform badly.

I think Tesla will do it, and it will eventually be 3-4 compact models on the same platform, that will rule a line on how far Tesla will go in that direction, for sometime, perhaps forever.

Tesla may also make a range of Cyber vehicles variations of the Cybertruck platform, I see that as a separate category which probably doesn't overlap

As per the Cybertruck I see the compact vehicles as a design challenge, the right designs at the right time can hit all of the targets, but a lot of time and effort is required to get the design right.

The compact vehicles probably also need mature 4680 cell production, producing cells in volume, with high reliability, at a good price.

Why I think this is needed is, to get to 20 Million vehicles sold worldwide, and support the volume of vehicles sales that allow a full build out of charging, delivery and service in all markets.

If I remember correctly, Martin Viecha, Tesla head of IR, said that the next vehicle platform would be shared by the robotaxi and a more economic EV. He then talked the comments by saying a more economic EV will not need to come before the robotaxi.

 

[JSML]

Since all these people were wrong about China demand, I expect we’ll climb 15% tomorrow. /s

I agree. SP should be up.

What was confusing was all the talk about unwinding the delivery wave. It made people think there were more cars exported from China. Was Tesla referring to this 5K exports or to Fremont?

 

[Eugene Ash]

What if they borrowed the money to do the buyback? That might explain participation of S&P in the game of late. I think this was alluded to in the SMR video I posted as explanation for the sudden comprehension of how well Tesla is performing by S&P.

Borrowing funds for non-productive use at high and rising interest rates.

 

[Eugene Ash]

The power consumption of the Semi is mostly the load of the actual work being done to overcome frictional forces, so there's minimal opportunity for improvement beyond Tesla's stated specs in 2017. The range of uncertainty is only like 5-10%.

I've calculated an estimated 1.1 kWh per mile of air drag power consumption at 75 mph using Tesla's 0.36 stated drag coefficient and 0.8 kWh per mile from rolling resistance.

Tesla can only do so much to make a big box with a 10 square meter cross-sectional area actually aerodynamic. Most of the design win was already achieved in 2017's design simply by making the front of the truck smooth, sloped and bullet-shaped.

It's also extremely unlikely that Tesla has found a way to revolutionize rolling resistance, and meanwhile their 82k lb fully loaded weight is more than the 80k lb legal limit for Class 8 diesel trucks, which increases the rolling resistance by 82/80-1 = 2.5%, all else being equal. The energy loss from rolling is due to vibrations, the material properties of rubber, and the road surface. Tesla may have squeezed out some tiny gain in this area but there's not much room for improvement.

The only way Tesla could get a major improvement in these areas is with platooning, such that one truck lowers its wind load by drafting behind the truck in front of it.

In the longer run, the only possibility for terrestrial freight transport at these speeds to require significantly lower energy loads is to do the platooning in a tube that contains the airflow and has either rails or smooth, clean pavement. One of these from Boring Co could do the job:
View attachment 862272

Here is a good breakdown of efficiency:

Electric Long Haul Trucks

I’ve delved before into what it would take to convert the world’s car fleet to battery power with our current battery technology (spoiler: lots and lots of cobalt). What about trucks?

www.sevarg.net

A 1.47kwh/mi with 2016 tech by a legacy OEM. So 650kwh could be the actual battery size.

 

[MrMoo]

Since all these people were wrong about China demand, I expect we’ll climb 15% tomorrow. /s

I know it's sarcasm but to be fair the news came out over a day ago so you can clearly see we climbed 15% yesterday.

 

[saniflash]

It's a good thing that Tesla could export all those MIC vehicles out in September since they were having demand problems in China. /s

https://twitter.com/x/status/1579652739084455936

https://twitter.com/x/status/1579675027276169216

 

[Singuy]

Here is a good breakdown of efficiency:

Electric Long Haul Trucks

I’ve delved before into what it would take to convert the world’s car fleet to battery power with our current battery technology (spoiler: lots and lots of cobalt). What about trucks?

www.sevarg.net

A 1.47kwh/mi with 2016 tech by a legacy OEM. So 650kwh could be the actual battery size.

Lots of miscalculations in this article.

The author assumed a diesel engine is 35% efficient. This is the efficiency of a gas engine, while a diesel is around 50% efficient.
Also the author assumed a diesel truck gets 10mpg which is the best case at hwy speed using the top of the line 2020 truck. Older trucks are in the 6-8mpg range while the new ones are 8-10mph.

 

[heltok]

If I remember correctly, Martin Viecha, Tesla head of IR, said that the next vehicle platform would be shared by the robotaxi and a more economic EV. He then talked the comments by saying a more economic EV will not need to come before the robotaxi.

I assume you are referring to this article?

A Tesla executive laid out the company's next 5 years at an invite-only conference

Electric vehicle architecture is so different that there's potential for a third revolution in automotive manufacturing, the Tesla exec said.

www.businessinsider.com

When asked about the possibility of Tesla making a cheaper EV, Viecha said that the company eventually wants a more affordable vehicle on the road. If a company wants to be a high-volume automaker, it needs a broad portfolio, and Tesla needs a cheaper offering before its company-operated robotaxi service comes out, he explained.

From this I do not read that they will share the platform.

Regarding his comments, I assume you refer to:

https://twitter.com/x/status/1569694551895592962

Here again I don't think he makes any claim for or against the order of Robotaxi and cheaper car, just that he didn't say anything about the date. Imo this does not confirm not before 2024, it just says that he was misquoted regarding 2024. Would not interpret this in any other way than that BI are not trustworthy.

I think Robotaxi will be a lot bigger than cheaper Tesla, so don't think they will share the platform.

Imo Tesla should make a tiny car. Like the Smart car they showed for Daimler a long time ago, but this time done right. No center console and have the seats next to each other. Two seats only... Hatchback, tiny frunk. The new LFP from CATL. No options other than color and FSD(start with delivering FSD models until they run out of demand). A bit fugly is okay. Something like this one:

 

[Gigapress]

I'm not expecting 30% margins on autos come 2025.

Why not?

Even in 2030 if Tesla still doesn't have autonomy figured out, they could make 30% gross margin on $40k average selling price with $28k cost of production. Tesla showed in 2021 that they can make 3 & Y for $35k, despite positioning the 3/Y platform as premium luxury cars and despite half of them coming from Fremont, so they would only need to find a way to pull out $7k of cost while keeping the car desirable enough to sell millions of units per year at the $40k price point.

I think people in general are severely underestimating how much cost can be pulled out of the 3/Y design from fully implementing the savings we currently know about and from deleting luxury features for an economy version. Tesla doesn't necessarily require a whole new car design to achieve this.

Known upcoming savings relative to 2021:

• Front and rear castings
• Labor that is not at SF Bay Area prices
• Structural 4680 battery pack with all the 50%+ cost reductions from Battery Day
• New and improved factory design like Berlin and Austin
• Reduced shipping expenses from simply having more factories with shorter average shipping distance
• No ultrasonic sensing system
• Li-ion 12V battery
• 8 more years of miscellaneous improvements

Economy version savings opportunities:

• Iron-phosphate battery cathode chemistry
• Cloth upholstery instead of premium leatherette
• No seat and steering wheel warmers
• Motor with less than 208 kW power rating
• Traditional sheet metal roof instead of glass
• Wheels smaller than 18 inches
• Front seats with manual position adjustment instead of motors
• Less fancy sound system (not everyone needs 15 speakers)
• Basic side mirrors that don't have motors for folding in and out (or no mirrors at all)
• Basic rearview mirror instead of electrochromic mirror (or no mirror at all)
• Manual steering column adjustment instead of motorized
• No wireless phone chargers
• Smaller console screen

With an economy 3/Y such as this, people could get like 80-90% of the Tesla vehicle experience, and 100% of the safety and standard software features, simply by being willing to sacrifice somewhat on range, powertrain performance, luxury comforts and premium conveniences. Until buying my Model 3, I had never had a car with any of these features. This base version could have 30% gross margin or more, but the premium versions like we have today would still be sold and would still contribute to overall average gross margin being even higher.

Cybertruck too will make fat margins for a long time and there is no competition. I don't think any other company even has the confidence to try making a copycat, let alone has the competence to do it and succeed. Once they get the process down it should be very cheap to produce compared to the price it will fetch.

 

[MC3OZ]

I think Robotaxi will be a lot bigger than cheaper Tesla, so don't think they will share the platform.

That depends on whether a Robotaxi is optimised for a typical number of passengers, and what that typical number of passengers is.

Even if saving money via ridesharing is an option many will prefer to not do it, and ride alone or in a small group.

We might find for 90% of trips 1-2 passengers is typical, Model 3/Y, S/X can still take larger groups and that can be scheduled when booking via the app. Tesla might develop a large minivan.

 

[Gigapress]

Here is a good breakdown of efficiency:

Electric Long Haul Trucks

I’ve delved before into what it would take to convert the world’s car fleet to battery power with our current battery technology (spoiler: lots and lots of cobalt). What about trucks?

www.sevarg.net

A 1.47kwh/mi with 2016 tech by a legacy OEM. So 650kwh could be the actual battery size.

I think the author's math is not accurate and it's also not a clean comparison for three reasons.

1) The Cummins-Peterbilt SuperTruck prototype did that test with a gross weight of 65k lbs whereas the Tesla Semi's rating is for 82k lbs. By my math, this cuts rolling resistance by about 0.2 kWh/mile from 0.8 estimated for the Tesla to 0.6 for the SuperTruck demo.​

​

2) The demo announcement also didn't mention what the wind was on that day, which has a big impact on energy consumption. Headwind? Tailwind? If so, how much? This is a wildcard and we don't know. They probably picked a calm day I guess, so let's assume it's zero. What about A/C? How smooth was the road? What did traffic look like? Without more info on the testing conditions we can't learn too much from the results.​

​

3) I have learned that I should not have modeled for 75 mph speed. 65-70 would be better. Since air drag is proportional to speed squared, this drops my 1.1 kWh/mile air drag loss to around 0.8-0.95 kWh/mile. Let's call it 0.8 since the SuperTruck did 64 mph for the test.​

Also, I looked up the info and found that the demo actually did 10.7 mpg, not 10 as the linked article used. However, applying a more realistic 50% thermal efficiency for a high-efficiency diesel engine as @Singuy pointed out (for reference, today's version of the SuperTruck achieves 55% thermal efficiency) and adjusting 0.2 kWh/mile for rolling resistance if the test had been 82 k lbs, then we have 40.7 kWh/gallon / 10.7 mpg * 50% + 0.2 kWh/mile = 2.1 kWh/mile total energy load.

I got 1.9 kWh/mile total loss for drag and rolling resistance for the Tesla at 82k lbs and 75 mph, which becomes 1.6 kWh/mile at 65 mph. At perhaps 93% total powertrain efficiency, that's 1.8 kWh/mile of battery drain under ideal operating conditions. Add in any extra load for cabin climate control, audio, auxiliary systems, hills, braking, precipitation, turbulence from other vehicles, etc. and the total can get to about 2 kWh/mile, same as the number we derived for the SuperTruck and same as Tesla's stated energy consumption for the Semi, and thus we need 1000 kWh for 500 miles of range.

Ain't no way Tesla is getting 500 miles of range at 65 mph while fully loaded with only 650 kWh of battery, unless it's driving on Mars.

 

[MC3OZ]

Imo Tesla should make a tiny car. Like the Smart car they showed for Daimler a long time ago, but this time done right. No center console and have the seats next to each other. Two seats only... Hatchback, tiny frunk. The new LFP from CATL. No options other than color and FSD(start with delivering FSD models until they run out of demand). A bit fugly is okay. Something like this one:

This is very similar to my thinking, no need for a centre console, seats closer together thinner frontal area, less drag, more efficient.

With front and rear castings and a structural battery pack, they might be able to make versions with a longer battery pack, to accommodate a 4-seat model, or a very small 2-seat van.

For these smaller models, it may be possible to cast the sides of the cars.

 

[insaneoctane]

Give Ford enough price increases on the Lightning and Mach-E and they might be able to squeeze out a profit in a few years... GM? Not so much unless Joe helps Mary out in some way.

Mary? Leaders don't need no stinkin' help....