Alphacrux
Member
Hoping they will announce S/X refresh, but putting the odds at no more than 50/50. I did my part, purchased FSD for $2K. I’m guessing many others did the same.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
mutle
Member
As someone who has been following Apple for many years I can absolutely believe it. Nikkei always post articles about how supplier sources indicate iPhone production will fall by 50%. Every year. Never happened.
I am sure that some anonymous person spread a false rumor to Nikkei. In that sense the article is "true".
Pras
Member
..
My guess is they are asking Panasonic to reduce price. Or else Tesla may also source more from Chinese suppliers or even try new options like producing own cells using maxwell solid state battery.
The way I read it, two points. First Tesla has already found other partners for Shanghai. Second, they want to focus on new better cells and not just expand.
My guess is they are asking Panasonic to reduce price. Or else Tesla may also source more from Chinese suppliers or even try new options like producing own cells using maxwell solid state battery.
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Let's go back to the range during which humanity has existed, for safety. That's 180-280ppm.
Reciprocation. Plus starts violating interstate commerce which is what lets Tesla sell online to states that outlaw direct sales (like mine).
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Bloomberg - Are you a robot?
“Panasonic will study additional investments over 35 GWh in collaboration with Tesla,” the Japanese company said in an emailed statement in response to the Nikkei report.“
Seems confirmed by Panasonic.
“Panasonic will study additional investments over 35 GWh in collaboration with Tesla,” the Japanese company said in an emailed statement in response to the Nikkei report.“
Seems confirmed by Panasonic.
Todd Burch
14-Year Member
Another thought that’s been nagging me related to the big S/X drop this quarter that I haven’t seen anyone mention:
I can understand how the 3 could cannibalize Model S sales. But I can’t imagine it would cannibalize Model X sales significantly. They are just two absolutely different vehicle classes and customers.
Moreover, S/X production in Q4 was not dramatically higher than previous quarters. So even though there was a tax credit cliff, I don’t think there were enough sales pulled forward into Q418 to leave an air pocket in Q1.
Also, from Q418 to Q119 the typical S/X customer would be paying about $3,750 more for the same car. Given the ASP of S/X, I find it hard to believe that the demand is SO elastic in that price range that a $3,750 increase in price would suddenly cause a 40-50% drop in sales compared to other Q1s. I know Q1 is typically a weak quarter, but...
I’m starting to wonder if there’s something else going on here—something we don’t know yet.
The drop of 75kWh S/X, price drops, layoffs, etc all point to having trouble moving cars.
But it doesn’t all quite jive for me.
-Tax credit dropoff doesn’t seem to explain it because a 50% drop in demand is hard to explain when the effective cost of the car only goes up by ~4%.
-The demand pull-forward theory doesn’t make sense since S/X production is already limited to <30k cars per quarter...so at most they could only have pulled a few thousand potential sales from Q119 into Q418.
-Model 3 wouldn’t cannibalize X sales significantly.
And yet the price drop/store closure/layoff announcements gave the appearance of a demand problem for S/X.
This leads me to believe that S/X drop in Q1 was due to a number of factors: some minor pullforward due to tax credit cliff, some loss due to increased effective cost in Q1 due to tax cliff, some cannibalization due to Model 3, and Q1 being a weak quarter for the auto market.
It’s possible that Tesla is actually taking advantage of this to prep for their S/X refresh. Perhaps they saw this coming and decided to do the following:
1. Get rid of Lower end S/X range to create a gap between 3 and S/X.
2. Lower price on rest of S/X.
3. Introduce refresh of S/X with new motor/pack/interior/whatever (Raven plus something else).
4. (2) above limits unhappy pre-refresh buyers that “just missed out”.
5. (1) above opens up time and space on the production line to start installing the tooling/equipment for a refreshed S/X.
6. Meanwhile, production changes for Europe/Asia will obviously create some challenges in the 3 production line, so production would be expected to slow a bit. While those kinks are worked out, crank out cells for use in Tesla energy products.
So maybe...just maybe...we are getting set up for a surprise here. Yes, Tesla auto results for Q1 are clearly disappointing and will not look good from a financials perspective. But maybe it’s all a bear trap—it’s possible Tesla energy took off in Q1, and there are lots of upcoming S/X improvements that we’ll know about within 2 weeks (announced at the FSD event?)
IF Tesla’s loss is much smaller than predicted due to Tesla Energy contributions (or is a surprise slight profit due to other factors), and IF the FSD event and Raven/S&X refresh/something else announcement is coming, we could actually see share price jump considerably and Tesla could actually be in a much better position than many of us think.
It’s worth considering at least.
I can understand how the 3 could cannibalize Model S sales. But I can’t imagine it would cannibalize Model X sales significantly. They are just two absolutely different vehicle classes and customers.
Moreover, S/X production in Q4 was not dramatically higher than previous quarters. So even though there was a tax credit cliff, I don’t think there were enough sales pulled forward into Q418 to leave an air pocket in Q1.
Also, from Q418 to Q119 the typical S/X customer would be paying about $3,750 more for the same car. Given the ASP of S/X, I find it hard to believe that the demand is SO elastic in that price range that a $3,750 increase in price would suddenly cause a 40-50% drop in sales compared to other Q1s. I know Q1 is typically a weak quarter, but...
I’m starting to wonder if there’s something else going on here—something we don’t know yet.
The drop of 75kWh S/X, price drops, layoffs, etc all point to having trouble moving cars.
But it doesn’t all quite jive for me.
-Tax credit dropoff doesn’t seem to explain it because a 50% drop in demand is hard to explain when the effective cost of the car only goes up by ~4%.
-The demand pull-forward theory doesn’t make sense since S/X production is already limited to <30k cars per quarter...so at most they could only have pulled a few thousand potential sales from Q119 into Q418.
-Model 3 wouldn’t cannibalize X sales significantly.
And yet the price drop/store closure/layoff announcements gave the appearance of a demand problem for S/X.
This leads me to believe that S/X drop in Q1 was due to a number of factors: some minor pullforward due to tax credit cliff, some loss due to increased effective cost in Q1 due to tax cliff, some cannibalization due to Model 3, and Q1 being a weak quarter for the auto market.
It’s possible that Tesla is actually taking advantage of this to prep for their S/X refresh. Perhaps they saw this coming and decided to do the following:
1. Get rid of Lower end S/X range to create a gap between 3 and S/X.
2. Lower price on rest of S/X.
3. Introduce refresh of S/X with new motor/pack/interior/whatever (Raven plus something else).
4. (2) above limits unhappy pre-refresh buyers that “just missed out”.
5. (1) above opens up time and space on the production line to start installing the tooling/equipment for a refreshed S/X.
6. Meanwhile, production changes for Europe/Asia will obviously create some challenges in the 3 production line, so production would be expected to slow a bit. While those kinks are worked out, crank out cells for use in Tesla energy products.
So maybe...just maybe...we are getting set up for a surprise here. Yes, Tesla auto results for Q1 are clearly disappointing and will not look good from a financials perspective. But maybe it’s all a bear trap—it’s possible Tesla energy took off in Q1, and there are lots of upcoming S/X improvements that we’ll know about within 2 weeks (announced at the FSD event?)
IF Tesla’s loss is much smaller than predicted due to Tesla Energy contributions (or is a surprise slight profit due to other factors), and IF the FSD event and Raven/S&X refresh/something else announcement is coming, we could actually see share price jump considerably and Tesla could actually be in a much better position than many of us think.
It’s worth considering at least.
Carl Raymond
Active Member
If there were a citation to a press release or something, I'd believe this. But there isn't.
Todd Burch
14-Year Member
"the Nikkei said without citing its sources"
So ignore what Nikkei said, it's a rumor. Let's see what Panasonic said.
"“Panasonic will study additional investments over 35 GWh in collaboration with Tesla,”
That's not confirmation of anything.
Perhaps Tesla and Panasonic have revamped their ramp-up plans. Which were probably pretty nebulous to start with and have changed a dozen times already. I don't think we can trust the way Nikkei reported its unsourced article, however.
(I never heard of any definitive plans to exceed 35 GWh at Nevada before now anyway. Carsonight has been saying that the labor market makes it a bad place to expand at the moment. We already heard that Tesla was planning to use non-Panasonic battery suppliers in Shanghai. Which, incidentally, supported my belief that the reason for making only SRs there is to use inferior battery cell tech to avoid Chinese IP theft.)
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I feel Panasonic is not thrilled by Tesla buying into Maxwell tech, they fear the writing is already on the wall.
In the original Nikkei article:
テスラ、米EV電池工場の拡張投資凍結（写真＝AP）
It shows no source, but quoted Tesla PR person's comments: "we will keep investing into GF1 as necessary".
So if I read the article at face value, Panasonic is the source of the article and Tesla is kind of disapproving.
Also it is a bit concerning that their Tesla production graph only shows 2017 Q4 2018 Q1Q2Q3Q4 2019 Q1, giving impression that Tesla's production is stalling. I got screenshot of the article in PDF. Will see.
テスラ、米EV電池工場の拡張投資凍結（写真＝AP）
It shows no source, but quoted Tesla PR person's comments: "we will keep investing into GF1 as necessary".
So if I read the article at face value, Panasonic is the source of the article and Tesla is kind of disapproving.
Also it is a bit concerning that their Tesla production graph only shows 2017 Q4 2018 Q1Q2Q3Q4 2019 Q1, giving impression that Tesla's production is stalling. I got screenshot of the article in PDF. Will see.
Carl Raymond
Active Member
Carl Raymond
Active Member
I’m not reading anything into it. Not without a source of any kind quoted. It also strikes me as implausible that Panasonic would drop the ball now, just when things are hotting up. Every cell sees life, if not in a car then in storage. GF1 is a money machine for Panasonic. Very fishy.
This whole report is odd, but it doesn't appear to disclose any obvious change of previous plans.
As far as I knew, there had been no sign off on expansion beyond 35gWh and GF1 is currently at 24-26gWh. Now we are told the plant is currently at 35gWh and there had previously been plans to expand to 54gWh.
35gWh is enough for c.10k Model 3s per week in addition to the energy business. So since Tesla cancelled plans to get to 10k 3s per week in Fremont last year, there is clearly no need to expand beyond 35gWh until mid 2020 when Model Y starts to ramp up.
The article and response comments from Tesla and Panasonic all seem to indicate they will continuously monitor the requirement for further investments. This is as you would expect.
We are also told that "Panasonic will also suspend its planned investment" in GF3. But we had never been told Panasonic planned to invest in GF3, my impression was it would be supplied by local manufacturers plus some cells imported from GF1.
I don't think there is actually any new information here, just information already known dressed up as FUD.
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