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

[Fact Checking]

#Tesla registered 11,121 new #Model3 VINs. ~100% estimated to be dual motor. ~84% estimated to be International. Highest VIN is 247633.
Model 3 VINs on Twitter

Wow - pretty large jumps: 54,077 VINs registered in the first two weeks of Q1'19 production - I count that from December 30.

As a comparison, Tesla registered 32,050 in the first 2 weeks of Q4'18 production (until October 14).

That's a 68% increase over the Q4 rate of VIN increases.

 

[Cherry Wine]

could this be an attempt on Tesla's part to prevent outside entitites from closely tracking production / delivery numbers in real time? Over the last three quarters, simply applying a .85x multiplier to VINs turned out in retrospect to be the most accurate way to estimate deliveries. Perhaps Tesla is seeking to eliminate that unintended "leak" of information?

Unlikely. More likely that they just front-load VIN registration within the quarter. Also, based on past comments from @Troy, the multiplier has been drifting downward slightly and is now at ~.80x.

I'm sure someone has done the estimates on where dual motor demand "should be" within Europe -- I wonder how these VIN registrations, taken at .80x, measure up to those estimates. To me, looks like "so far so good."

 

[Fact Checking]

could this be an attempt on Tesla's part to prevent outside entitites from closely tracking production / delivery numbers in real time? Over the last three quarters, simply applying a .85x multiplier to VINs turned out in retrospect to be the most accurate way to estimate deliveries. Perhaps Tesla is seeking to eliminate that unintended "leak" of information?

Maybe, although I think they have an interest in making production estimates more predictable. (That is why I was looking at the VIN allocation pattern and found the simple 0.85 factor to begin with.)

So there's two main possibilities I can see for why Tesla has registered ~65% more VINs in the first two weeks of Q1 production, compared to Q4 production:

• Tesla is more confident about their production abilities, so they will commit to new VINs faster,
• or Tesla plans a higher Model 3 production rate for Q1.

We'll soon have a better idea which of these is the case, in the next 2 weeks:

• if historic VIN allocation patterns are repeated by Tesla in Q1'19, then they'll allocate most of the required VINs by January 31.
• the earnings report and update letter might include production guidance for Q1'19.

But what might make it more difficult is that Q1'19 brings in a new VIN allocation pattern: international VINs, in addition to US VINs.

 

[Fact Checking]

Unlikely. More likely that they just front-load VIN registration within the quarter. Also, based on past comments from @Troy, the multiplier has been drifting downward slightly and is now at ~.80x.

It's very close to 85% for the last 3 quarters if you correctly identify the production quarter boundaries for VIN allocations - which are NOT the same boundaries as the financial quarter boundary. 'Next quarter' VIN allocations IMO start sooner than the end of the previous quarter.

See this post where I used 85%.

 

[humbaba]

No, there's not been some secret 10GWh extra capacity installed at Giga (in addition to everything else that would be required at Fremont). And don't hold your breath waiting for some grand announcement at all when 75D sales end. At the very least, if they plan to do anything at all, they'll probably wait at least a week or two so that it doesn't seem like a giant middle finger (if it's a good thing they do) to the people who just bought 75Ds.

IMO the termination of the 75D is purely to rationalize their line up. Put simply the 75D was too close to the M3 -- Tesla would rather sell either a higher end S or X, or a higher end M3. This supports high production levels of M3 to keep its costs down while maintaining the S & X as premium vehicles. It makes no sense to keep it in production. But Tesla does want to sell out the units so some "get 'em while they're hot" rhetoric is only to be expected.

(Somewhat related, I'm not convinced the MR has a long life expectancy for similar reasons -- it was released simply to get something lower priced as a stop gap for the SR not being ready yet. This is well demonstrated by its release being a surprise. Once the SR is being sold there's not much reason to keep the MR around.)

 

[KarenRei]

==> OT <==
Distributed vs Centralized generation <<======
Why pay 4-6 cents per kWh to transmit and distribute electricity 1,000 - 2,000 miles?

It doesn't cost that much. Not least of which because you don't transfer all power across HVDC links. You only transfer surplus power to deficient areas. Each region is still responsible for generating most of its normal, everyday needs.

 

[elasalle]

Wow - pretty large jumps: 54,077 VINs registered in the first two weeks of Q1'19 production - I count that from December 30.

As a comparison, Tesla registered 32,050 in the first 2 weeks of Q4'18 production (until October 14).

That's a 68% increase over the Q4 rate of VIN increases.

Needs more Ships

 

[humbaba]

I haven't been keeping up (at all) so this may well have been covered already, but I found a moderately interesting article on market watch [1]

This matches what I've been saying about autonomy and it appears that the rest of the industry may be starting to move to Tesla's approach of incremental capabilities. If this proves out (that the industry looks to autonomy for incremental gains rather than an abrupt transition to complete autonomy) I'm wondering what (if any) impact that may have on Tesla's perceived value. Will the incremental releases be relegated to "market expectation of gradual roll out" or will they be legitimized as "leader in capability"?

1) Tech finds a middle lane for autonomous cars at CES

 

[SpaceCash]

Market Action:

I don't think we'll stay at 339 all day. I expect a 5-7 dollar swing one way or another by eod. Fingers crossed for green because duh

 

[SageBrush]

EIA is currently using overall 28% capacity factor for new utility US solar.

Yep. Mighty impressive, due to the widespread use of single axis tracking in utility PV solar.

 

[Fact Checking]

IMO the termination of the 75D is purely to rationalize their line up. Put simply the 75D was too close to the M3 -- Tesla would rather sell either a higher end S or X, or a higher end M3. This supports high production levels of M3 to keep its costs down while maintaining the S & X as premium vehicles.

Do you mean you think that only the 100D and P100D will be sold?

That would be awfully risky:

• According to @Troy's tracker, the 75D S/X is about 55% of sales. (!)
• Q1 is the seasonally weakest quarter, with the softest demand.
• Speculation has been swirling for months about an interior refresh, about 2,170 adoption. There's been a leak a couple of months ago about the new S/X interior. Everybody expects HW3 inclusion in the Model 3 in March/April.
• The P100D was introduced in the summer of 2016. The competition had 2.5+ years to catch up.
• Most tellingly, Tesla refused to comment about the removal of the 75D. This only makes sense if they have other, not yet announced plans. If dropping the 75D was their sole change then Tesla PR would try to reduce confusion and stop speculation, which speculation causes deferred demand. Instead, Tesla and Elon are 100% mum...

Now, in principle it's possible that they screwed up and just killed demand for the S/X. There's no way they can deliver 22k+ 100D's in Q1 IMO, at current prices.

So I do think the alternative has a higher than 90% probability: soon they'll announce new Model S/X plans and a new product lineup, with new pricing.

 

[KarenRei]

IMHO, the most likely change to the 100D and P100D would be a price reduction. Which would boost demand.

They've got very nice margins on them. 75Ds were dragging the gross margins down (but even then they were solid)

Let's do some math. Let's say that the 75D's margin is 12%, which is dragged up by the 100D and P100D. So that's $76k (for the Model S) * (1-0,12) = $67k production cost. Now let's say that their 18650s cost them $150/kWh at the cell level. Using 25kWh more per pack is just under $4k, so let's say $71k. But they currently charge $94k for the 100D, which would mean a 32% margin** on it. I bet they could trim the margin down to 15% or so on the 100D (with the P100Ds pushing the average margin up to 25%). So Model S would then start at ~$82k.

Basically they'd be cutting $12k off the price of Model S and X.

** ED: The calculated 32% margin on the 100D suggests that the 75D's margin is even less than my guestimated 12%.... they may have a sub-10% margin on them.

 

[RobStark]

I agree with most of your post, but I think Tesla's primary target should be (and will be) the short haul market - which is more than 70% of the U.S. market.

Tesla IS aiming for the long haul market with Megachargers.

Most buyers will use the trucks for short haul duties.

Like retail buyers Truck Fleet Operators have range anxiety and want to buy trucks with excess capacity for intended use. At least for the first generation of trucks. They worry about trucks running out of juice a mile short of destination because of weather,traffic conditions etc.

 

[Fact Checking]

IMHO, the most likely change to the 100D and P100D would be a price reduction. Which would boost demand.

Yes. My guess: 100D as "Long Range", and a new, larger pack for even longer range, plus a Performance version.

 

[Bet TSLA]

If you could limit the comparison to similar driver demographics (or, more easy, to >$50,000 sedans), the analysis would be more probative.

This is exactly right. Tesla's conclusions about safety have never been supported by the data. I've been disappointed that they've presented their results this way, as it's obviously wrong.

My belief from what I've seen is that auto-pilot is a good thing for safety in its current state, but not much. However it will only get better.

 

[humbaba]

Do you mean you think that only the 100D and P100D will be sold?

That would be awfully risky:

• According to @Troy's tracker, the 75D S/X is about 55% of sales. (!)
• Q1 is the seasonally weakest quarter, with the softest demand.
• Speculation has been swirling for months about an interior refresh, about 2,170 adoption. There's been a leak a couple of months ago about the new S/X interior.
• Most tellingly, Tesla refused to comment about the removal of the 75D. This only makes sense if they have other, not yet announced plans. If dropping the 75D was their sole change then Tesla PR would try to reduce confusion and stop speculation, which speculation causes deferred demand. Instead, Tesla and Elon are 100% mum...

Now, in principle it's possible that they screwed up and just killed demand for the S/X.

But I do think the alternative has a higher than 90% probability: soon they'll announce new Model S/X plans and a new product lineup.

You may well be right and the sales information is something I didn't know and wasn't accounting for -- that definitely is significant. But consider that citing Tesla's PR activity is not all that persuasive. In fact, I think the single most common complaint about Tesla is the lack of communication.

While Troy's tracker doesn't seem all that useful for the M3 (was significantly off last quarter), my understanding is that sampling is better for the S/X so I would expect that to be meaningful.

Given the foregoing... If they do any reformulation I would expect it to be performance and/or range and to try and keep a clear separation between the S and the 3. Something Apple has known for a long time is that fewer choices are better (for the seller). They haven't always kept their product line up clean, but I think it has always been much cleaner than competitors.

And, at least for now, I think Tesla needs a simple line up with clear choices in order to maximize sales. Economies of scale favor the 3, while the S is positioned as the premium. Eliminating a shorter range to avoid it colliding with the "mass market" sales makes sense. This could be done if there was a battery refresh that simply kept the same number of models that extended range, or if there was a performance refresh that made the more expensive S that much more compelling.

While I'm sure that Tesla has other, not announced, plans, I would not count on them keeping a model that isn't sufficiently differentiated from the 3.

 

[KarenRei]

Yes. My guess: 100D as "Long Range", and a new, larger pack for even longer range, plus a Performance version.

My view is that it's much more likely that they'll import Model 3's drivetrain for one of the motors in order to extend range rather than to scrap a huge investment in 18650 production (possibly even freeing it up some of the world's best cells for the competition!) and spending a fortune to build another 10GWh/yr at Giga (plus all of the investments at Fremont).

* ~10% range boost
* ~10% charge rate boost (less power used per kWh)
* Lower home charging costs
* 10% fewer cycles on the battery = less warranty costs and/or they can be more aggressive with the cells
* Drive units are a much cheaper part than a battery pack. Even where capital is needed, you're talking much less
* Drive unit production is the smoothest, most automated production process Tesla runs at Giga, and possibly in the entire company. Very few humans involved. Readily scalable.
* Drive units are not structural elements (battery packs provide critical stiffening to the frame). You're not having a meaningful affect on your crash test data by changing drive units.

Plus lots of other things I'm forgetting.

 

[larmor]

Today's @CNBC FUD...

Tesla under pressure as Ford, Nissan and GM roll out new competition for electric car buyers at Detroit auto show

• Ford rolled out bold new plans to invest $11 billion in electric vehicles by 2022.

New Shortsville Times headline: Tesla does not burn enough cash to keep up with competitors' vaporware

 

[CuriousSunbird]

May have been the case prior to the introduction of the Model 3, but hardly true now.

I think it still holds true as the ASP of a Model 3 is still above $50,000. If we had seen significant numbers of Model 3s sold at a (net of credit) price in the $20ks, it would make the limitation less necessary, but we did not.

 

[JustAaronnoraA]

What could they even announce? Would Tesla be able to set up new battery pack assembly for Model S/X at GF1 using 21-70s without anyone hearing about it?

ER date?

Market Action:

I don't think we'll stay at 339 all day. I expect a 5-7 dollar swing one way or another by eod. Fingers crossed for green because duh

As i hate to admit but 335-342 will drag till tomorrow or at least AH unless something big happens macro.