He said "Tesla NEEDs to make a move " because inventory is growing. Sounds like he is worried management is sleeping at the wheel
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Surprised there aren't any polls yet ...
... but what % of prospective MY 5 seater buyers would buy a MY 7 seater if they were at same price point ?
Tesla should try this and see how this improves the order book/take rate ... if it works nothing else needs to be done maybe ... just make up $ with more vol ...
.. better than retooling, selling at 55K etc. etc.
... but what % of prospective MY 5 seater buyers would buy a MY 7 seater if they were at same price point ?
Tesla should try this and see how this improves the order book/take rate ... if it works nothing else needs to be done maybe ... just make up $ with more vol ...
.. better than retooling, selling at 55K etc. etc.
thesmokingman
Active Member
Should be everyone. The 3rd row folds flat and you don't lose much space to it folded flat vs the 5 seat. Now if they did the 3rd row treatment to the MYP it would be a resounding win. Fyi, I originally was buying a LR specifically for the 3rd row, but last minute switched to the MYP cuz power. If a 7 seat MYP would have been possible, that would be the one to get.
It impacts some extra cargo space (but most wouldn't care) .. I think. Mileage is almost the same last I looked.
start with default 7seater as is. Make the 3rd row removable in a few quarters down the road.
Franz is working on Gen 3, don't disturb him with having to redo MY height, weight etc
For those interested in knowing how Tesla AP and FSD stack up to Mobileye, I just wrote a long post here. tl;dr, I think Tesla is far ahead now and pulling away.
At a kids birthday party with a few billionaires.
How do I convince them to buy TSLA without having a KQID Time Machine?
How do I convince them to buy TSLA without having a KQID Time Machine?
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Tell them it’s because we love Tesla. They should offer TSLA shares to each others
Tesla investor and former 'fanboy' questions whether Elon Musk is purposely tanking the carmaker's stock
Earlier this year, Elon Musk became the first person to ever lose $200 billion in net worth. His fortune dropped in large part due to Tesla's stock.
www.businessinsider.com
I agree with Troy, we need some action from Tesla. The fact that numbers are climbing so quickly within 1 week suggests demand is weaker than production. People might not want to spend so much in this environment. Price cuts are needed in US. Easiest option will be to reduce 5 seater by 7.5k and mention it as a discount. Mention on website about 7 seater being eligible for IRA. When they offered that discount, inventory disappeared quickly last month. No need to drop it all the way to 55k to make it eligible for IRA.
ElectricIAC
Good-Natured Rascal
It’s been a week. Relax.
Are people really going to finance 85k+ SUVs with 6%+ financing rates? I felt my 3.2% finance rate on my Model Y was already abusive when I signed in June 2020, I wonder how many buyers working 2 jobs to make ends meet with their retirement investment portfolios down -30% will show up at the Tesla showroom once Tesla cuts the prices down 10%. Like Elon said, it’s Economics 101 however do you go with sequential 3% cuts every 3 months or readjust faster? The problem is with all the buyers from the previous month who will be pissed and call Tesla to get a refund.
adiggs
Well-Known Member
Oh no.
800 cars in inventory in the US. Not 800 cars on a single (large) dealer's lot. Not 800 cars in a single city.
800 cars inventory for the US.
I trust Tesla will bump price up and down to manage inventory and demand to support continued rapid ramp in production. Tesla has lots of levers to pull for increasing demand. Like having a few cars in inventory so that prospective buyers can take a test drive, or "gotta-have-it-now" buyers can get one now.
If nothing else, that's two things that haven't been true for too long.
Indeed
800 cars... so less that two days of production from Austin?
800 is less than 4 cars per store. Tesla has 4 models (ignoring variants).
With 7 seat costing $3k more currently, people don't buy it unless they need it. If the 7 seat Y costs the customer $4.5k less than a 5 seat (IRA-option), they'll buy the 7 seat.
If only that bar went to 50 instead of 44. What a difference that would make!
/s
TL;DR - My first impression was that the calcs were at the very top end of bullish and unbelievable and after doing the math it seems 60% at the end of 2023 is well within reach.
Longer version - Hearing 70% margins sound extraordinary and I nearly gagged.
My second impression was largely the same, but there is actually sound reasoning and detailed analysis (not quite @Gigapress level or @The Accountant or @mongo or your own). I participated in a Spaces call yesterday with Omar (WholeMarsBlog and @ZeApelido ) here (Warning: recording is ludicrously long so the Tesla Energy stuff is close to the front around 14m35s mark). It starts getting good when Meta (who I deeply respect as an engineer) starts talking about bottlenecks around the MP ramp. I think this conversation is still largely speculation however.
Then I'm thinking, 60% sounds possible.
My third and possibly last impression will be tomorrow on a Spaces call where a bunch of folks will listen and be able to ask questions on the reasoning. Happy to report back if folks are interested.
I'm keeping an open mind, but I'm hoping to come away with a range of possible margins for Q4 and Q1.
Remember, Tesla may qualify for ALL 4 of these with MPs (or they may not depending on where the batteries are coming from)
- 10% of the cost of battery electrode active materials
- $35/kWh of battery cell capacity
- $10/kW of battery module capacity (or, for a battery module that does not use battery cells, $45/kWh)
- 10% of the cost of producing a battery mineral.
and including at the bottom, the possible 4 IRA credits...
| Fully ramped MP gross margins | ||||||
| Component cost | $/kWh | Total kWh | Total cost | Final totals | ||
| LFP Prismatic | 110 | 3916 | $430,760 | $430,760 | ||
| electronics | $240,000 | $240,000 | ||||
| wiring | $80,000 | $80,000 | ||||
| rack | $160,000 | $160,000 | ||||
| $910,760 | Total cost | |||||
| $2,400,000 | Total ave price | |||||
| 62% | Gross margin | |||||
| Total capacity for 2023 | Giga Nev + Lathrop | 12100 | $18,019,804,000 | 2023 Gross revenue | ||
| *IF* all 4 IRA credits achieved assume $65/kWh | 68% | Gross margin | ||||
| $19,747,200,000 | 2023 Gross revenue |
Troy's concerns about US demand are a refreshing change from his concerns about China demand...
I would really love to have Tesla financing. I’m certainly no expert in this area; but I agree, financing rates are currently a big factor for those making the Tesla stretch.
I still see commercials constantly for GM/Toyota and others offering attractive financing below market rates. Seems like this could be an easy demand lever to pull for very low cost. With all that cash stacking up…maybe that time is near.
I recently saw someone posted that Tesla China is offering attractive financing options; so clearly Tesla sees this as either a revenue stream or a benefit to demand.
I found this article from south China morning post saying that Tesla has been offering financing deals for Chinese buyers as far back as November 2021. Anyone know where we’re at with this in other markets?
dhanson865
Well-Known Member
This is mostly from memory with some scanning of the discussion at 2x to remind me since I didn't feel like listening to 45 minutes of content again so I may be leaving something out or using the wrong terminology. If you want to tear this apart go listen to the actual discussion and don't attack me for this dump. Also keep in mind there were multiple people speaking. This isn't one persons words so don't attribute everything to zerosum33.
No he didn't ask us to pick a production volume, one has been given. I didn't take notes, you tell me the source but if you google 25 megapacks lathrop you'll see a Fredtreck article from Oct 2022 saying the output is 25 megapacks per day. And others probably just repeating Fredtrek. I don't know if he used another source but the concept is that Lathrop is producing large quantities now and those don't show up in the earnings until they are installed and the site turns on.
Telsa won a contract ~Sep 2021 Arevon for 6 GWh but didn't have capacity to fill it at that point. This is his supposition for why Lathrop got built out when it did. Arevon is suppose to bring online multiple large sites in 2023 (9 projects in California). ~2000 megapacks needed for that.
Order page says 2024 delivery so he assumes there are backlog of orders to cover current production for a year or so out at 25 units per day. And there is demand to per EIA to triple that just for the US (doesn't clearly say what the maximum production rate of Lathrop is). Someone else mentions Elon says demand is "psuedo infinite".
terminology for scale here: 10,250 of the current megapacks = 40 GWh capacity = 10 GW power (EIA uses power for tracking and projections)
old megapacks were 1/4 the capacity of current megapacks.
New megapacks have 16% higher price per kWh compared to old megapacks.
2023 if tesla produces at full rate at Lathrop Tesla has ~50% of the market share of EIA installs for storage in 2023.
Full scale for Tesla Energy will be hundreds of GW, considerably more than the numbers on that terminology line above.
Fluence is the #2 player in this space and was using CATL LFP cells until Jan 1 2023 but those are available for Tesla now (he doesn't say what Fluence switched to or give a source). This frees up a large supply of LFP cells for megapacks.
Martin Viecha (Tesla IR) had an event recently (Goldman Sachs roadshow) and said Tesla now has enough cells sourced to cover auto and energy equally (not been true in the past, but is being touted as true now).
Mentioned new megapacks have a RIM Pricing clause which allows Tesla to pass through commodity price changes to the end customer. (not sure what RIM stands for). He mentioned a minimum and maximum price in the clause but I didn't catch any values.
He discussed the income from Powerhub | Tesla Support that is a required purchase with every Megapack install. No known pricing. Discussed what Fluence charges for similar services that Powerhub provides.
He discussed the maintenance contract (see below)
Someone discussed the income from Autobidder | Tesla Support
In terms of working capital / free cash flow Tesla gets paid on Megapacks before the cost occurs.
ERCOT sees a 3x return on investment in reducing grid congestion costs from the second the site goes live to the end of 1 year of operation.
~20 wall street analysts consensus $400m gross profit for Tesla Energy for 2023 across powerpacks, solar PV, and megapacks.
If every megapack gives only $1m profit and you get 25 a day that's 16 days. That's all Tesla has to do to meet consensus in 2023. 400 megapacks.
In 2019 before the big C, Tesla was talking about ramping energy in 2020. Zack E. Customers were larger states, countries, etc that stopped building out.
Deposits for megapacks are very small and aren't on the balance sheet like car deposits. They aren't recognized until the project is deployed. So you can't easily monitor the rate of this ramp until Tesla opens up.
Mega packs are currently installed at Apple HQ2 and in multiple countries in very large installations.
Tesla PV is assumed to be a money loser hiding the profits from megapacks to this point.
Once the megapacks are over 250 megapacks (10 days of production at 25 per day) you've covered the fixed cost base and you see operating leverage. (based on the web site scraping)
Acknowledges this is a show me story, we have to see something hitting the earnings very soon or he's wrong. Q4 2022, q1 2023 at the latest. Should be obvious if he is wrong or right.
Public Utilities that are over 40% gross margin are trading at 25x to 30x. With TSLA around $100 a share he says Tesla Energy is worth $70 a share easily and you get the car business for $30 a share or so.
Lathrop was the fastest factory in Tesla history to ramp from 0 to mass production. Plan is to expand in Lathrop and we might see several new sites or maybe copies of Lathrop added to Austin and Berlin. With one person suggesting cell production would be easier than adding more car production at an existing site.
cost of installation is in addition to any software, hardware, or maintenance costs. Average order is ~130 megapacks and installation cost is more profitable on large installs than it is on small installs. This is why powerwalls and powepacks were reduced or removed...
a little more than fits on one screen so I'll cut it up
now you see those blue links at the bottom? The 2nd one is
https://tesla-cdn.thron.com/deliver...os2kvy/WEB/megapack-web-maintenance-agreement Which is a PDF that is a Contract with NDA.
* Price. The price for the maintenance on Your Megapack System on an annual basis (not including taxes) is listed in your order as the “Annual Price”. Every year, your Annual Price will increase by 2%.
* Term. Tesla will perform maintenance in accordance with this Agreement for 15 years following the Start Date.
* Confidentiality. You agree to keep this Agreement confidential, as well as any non-public, confidential or proprietary information or documentation provided to you by Tesla in connection with this Agreement, including Tesla specifications, manuals, and similar documents. You also agree not to advertise or issue any public announcement about this Agreement or use our mark, name or logo in any marketing literature, web sites, articles, press releases (including interviews with representatives of media organizations of any form), or any other document or electronic communication, without Tesla’s written consent.
So the revenue streams are
* production of megapacks (which will show up on the earnings report)
* margin on megapack sales (what does a megapack cost now, someone tossed out $2M but there is no price on the website, again should show up on earnings report)
* installation of megapacks
* margin on Telsa Powerhub (software)
* profits from Autobidder (software)
* margin/profits on a required maintenance contract that basically lasts 15 years (starts at $8290 per year for 1 megapack, by 20 megapacks it's $100,000 a year) is this profitable or near cost? Won't show up during the quarter the megapacks are sold, kicks in around project go live date?
Troy's concerns about US demand are a refreshing change from his concerns about China demand...
He was right about China demand
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