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

[Tslynk67]

What's funnier is they specifically tied the fact that you can't buy your car at the end of the lease because they need cars for the non-existent Tesla ride-sharing network. I can't even imagine writing that.

Then they must be incredibly confident about it.

Don't forget that we're probably driving around with AP software that was developed a year ago, Elon's car likely has the latest stable acceptance-test build, which like does a hell of a lot more than we can imagine.

Now if we get to 2022 and FSD isn't quite there, or not yet approved by the authorities, well Tesla can just sell them al CPO, if they want.

 

[NicoV]

Unfortunately the only people who can afford a EUR50k car here are aged over 50, and they are not exactly tech savy.

You should add the people that can calculate a TCO. Driving a Model 3 for 200k Km makes it a EUR35K car compared to a Prius.

 

[Tslynk67]

The shipping cost isn't helpful but it's the 10% tariff that's the biggest kick in the gangoolies. EU customers are made to feel grateful that green minded governments are giving various incentives to buy EVs. But really all they're doing is somewhat compensating the consumer from the protectionist wall thrown around the dieselgate producers in Germany. You work at the Commission don't you? Get it sorted mate!

Hey, I'm in IT in the Research Grants area, not sure that Juncker would read my email...

GF4 would resolve this. They need GF4 anyway. I accept that want to use GF3 as the new prototype, but that's going to go quickly and they can already be preparing GF4 now and still take the lessons-learned from GF3.

 

[Antares Nebula]

Who cares about "optics"? Tesla certainly doesn't (which is typical for a company which can't meet demand).

My only question is production. And no, it's not good news that they are killing two variants; it implies that they need to do so in order to get production rates up. (LR RWD was popular. There are only two reasons to kill it: one, it has worse margin than AWD, but in that case, why not raise the price; and two, having more variants is a problem. This tells me that having more variants is a problem.)

Yes, I wonder about the elimination of LR RWD. That seems like it could be a popular model.

 

[Prunesquallor]

[

That, plus:

• FSD take-rate in Europe was 40% back in March - which would add another ~$2k margin to sales.
• If they are fundamentally cell supply limited as Tesla's press release disclosed yesterday, then it makes sense to sell SR+ units with ~55 kWh packs vs. LR units with ~78 kWh packs, which consume ~42% more cells.

I.e. if we start thinking about Tesla cars hardware platforms that enable the selling of software products then it makes sense for Tesla to increase the number of units sold.

My interpretation would be - to get the highest automobile margin per cell, sell every SR+ you can to the EU as part of the FCA pool.

 

[electronblue]

I did not include inflation in my calculation, nor did I include the (significant) incentives that Germany offers:

I made the point that the price difference is smaller than even the (very low) inflation in Europe over that time frame.

It is of course not that simple since no price in foreign car sales folllows such a math. Cars sold abroad are almost always following a different margin than those sold at home. They must to be competitive. See how low Audi/BMW/etc prices are in the U.S...

The $35,000 Model 3 was of course never going to cost 32,000 or 35,000 eur in Europe in Tesla pricing but the 40,000 euro region would be realistic for Model 3 SR given past precedent, in Germany, and indeed would move it closer to the Audi A4/BMW 3 starting price.

But what of course is sold is only the SR+ so far at 4,000-5,000 euro higher than probably could be expected of SR in Europe. So I would disagree, no, the $35,000 Model 3 is so far not sold in Europe — not in features, not in name and not in (relative) price.

 

[bhtooefr]

Re: Tesla's pricing and policy oscillation, every automaker does this. In some cases, sure, not to the same extent (like the closing stores/nope leaving them open/now you have to go in to order some options thing), but...

It's just that the other automakers have ways of hiding it:

• Have MSRP be a certain percentage over the actually intended selling price, to absorb any price increases that need to happen. Price drops are advertised by the manufacturer as rebates off of MSRP.
• When an option is discontinued or taken off-menu, don't remove it from the website, just stop allocating cars with that option to dealers. So, the website says you can get that option, it says it costs $x, but you can't get it. (For off-menu options, sure, you could order it, but outside of the luxury and truck spaces, good luck getting a dealer to let you place an order in the US, they're highly motivated to sell what's on their lot and only what's on their lot.) And, even if you do order it, your order may well get cancelled.
• When a policy changes, it filters through dealers, and communication is poor enough with conventional automakers that inconsistent policy on a customer-by-customer basis is the norm, so an actual policy change doesn't get noticed except through kremlinology.

Basically, this is a perception issue - Tesla is more transparent about all of this (most of this because they have to be, because people are ordering rather than buying directly off of a lot (allowing orders for a config you don't intend to produce is very bad form when that's the primary method of getting something), and Tesla's policy of charging only MSRP on new cars means that pricing flexibility can only be done by changing the MSRP instead of changing the discount off of MSRP).

I think they wish they could have a universal chargeport, but that's probably sadly impossible thanks to stupid national governments.

I think they could move to Type 2 CCS in North America no problem. They would, of course, have to re-cable all of the Supercharger installations to be dual head, and supply a Tesla->Type 2 adapter as well as a J1772->Type 2 adapter, and they'd want to sell a J1772 CCS->Type 2 CCS adapter, but I don't see a legal reason why they couldn't use Type 2 here (or in other J1772 markets), because they're already using something "non-standard".

(Alternately, they could retrofit modified Type 2 ports to Model S/X, and Type 2 CCS ports to existing Model 3s, and Type 2 connectors to all HPWCs in the field, as well. That would have horrendous expenses, though, easier to just supply adapters.)

That would leave China as the odd one out.

 

[jhm]

Yes, the reason for shipping from Nevada to Shanghai is that currently GF1 is the only factory making high energy density 2170 cells which are required by the battery packs made in Shanghai. So for a few quarters we'll probably see 2170 cells shipped from Nevada to Shanghai.

Since cells have high mass density the shipment costs should be comparatively low.

Another reason is that Tesla is probably performing high stakes negotiations with cell suppliers right now, which means that at this stage Tesla wants to keep as many options open as possible. (To be able to credibly walk away from any of the offers.)

Thanks. I think the logistics could be vexing, not sure we want a ship load of batteries in transit at quarter end. So better to get a local producer.

 

[Artful Dodger]

carsonight 'DISQUS's gigafactory expansion report:

carsonight => dudu dada 15 hours ago

"Good question about the 6k Model 3 battery packs per week. I have been told repeatedly that is the production, so either they're going some place I don't know or information I received is incorrect on the Tesla side.

"On the Panasonic side there are 10 lines of machines capable of 300k cells per day each, and 3 lines capable of 400k cells per day each. At 18 Whs per cell, I will leave the arithmetic to you."​

Ed. note: I think this info is stale as of Mar 31, 2019. Panasonic now claims annual capacity at GF1 to be at 35GWh. Doing the math, that's 13 lines each producing 412K cells per day. Yesterday's Press Release from Tesla tends to support the idea that they have focused on increasing production from existing equipment.

IMO, the most likely situation now is that all 13 lines have been upgraded to 400K cells/day capacity, likely with at least one (1) of those lines (~2.5 GWh/yr) dedicated to TE cell production.

carsonight => dudu dada 14 hours ago

"I readily concede battery packs did not equal cars. Whether battery packs are being stored in that new distribution center or whether the information I received was erroneous I do not know. I do remember when there was doubts that someone close to me would be home for Christmas if GF1 did not reach 7k battery packs per week, though Tesla relented on that."​

TL;dr Panasonic continues to run flatout at GF1. Info on Tesla pack production is stale.

HTH.

Cheers!

 

[Pras]

Re: Tesla's pricing and policy oscillation, every automaker does this. In some cases, sure, not to the same extent (like the closing stores/nope leaving them open/now you have to go in to order some options thing), but...

It's just that the other automakers have ways of hiding it:

• Have MSRP be a certain percentage over the actually intended selling price, to absorb any price increases that need to happen. Price drops are advertised by the manufacturer as rebates off of MSRP.
• When an option is discontinued or taken off-menu, don't remove it from the website, just stop allocating cars with that option to dealers. So, the website says you can get that option, it says it costs $x, but you can't get it. (For off-menu options, sure, you could order it, but outside of the luxury and truck spaces, good luck getting a dealer to let you place an order in the US, they're highly motivated to sell what's on their lot and only what's on their lot.) And, even if you do order it, your order may well get cancelled.
• When a policy changes, it filters through dealers, and communication is poor enough with conventional automakers that inconsistent policy on a customer-by-customer basis is the norm, so an actual policy change doesn't get noticed except through kremlinology.

Basically, this is a perception issue - Tesla is more transparent about all of this (most of this because they have to be, because people are ordering rather than buying directly off of a lot (allowing orders for a config you don't intend to produce is very bad form when that's the primary method of getting something), and Tesla's policy of charging only MSRP on new cars means that pricing flexibility can only be done by changing the MSRP instead of changing the discount off of MSRP).



I think they could move to Type 2 CCS in North America no problem. They would, of course, have to re-cable all of the Supercharger installations to be dual head, and supply a Tesla->Type 2 adapter as well as a J1772->Type 2 adapter, and they'd want to sell a J1772 CCS->Type 2 CCS adapter, but I don't see a legal reason why they couldn't use Type 2 here (or in other J1772 markets), because they're already using something "non-standard".

(Alternately, they could retrofit modified Type 2 ports to Model S/X, and Type 2 CCS ports to existing Model 3s, and Type 2 connectors to all HPWCs in the field, as well. That would have horrendous expenses, though, easier to just supply adapters.)

That would leave China as the odd one out.

Also try to buy a new model upgrade car at a dealership they will hardly offer discount. But the discount starts once the models start to age. I think Tesla blog should explain this.

 

[Singer3000]

Hey, I'm in IT in the Research Grants area, not sure that Juncker would read my email...

GF4 would resolve this. They need GF4 anyway. I accept that want to use GF3 as the new prototype, but that's going to go quickly and they can already be preparing GF4 now and still take the lessons-learned from GF3.

Send it in internal mail taped to a bottle of brandy and he might

 

[Tslynk67]

French M3:


Autonomie Standard Plus

42 600 €



Transmission intégrale Dual Motor

Intérieur Premium
Longue autonomie

53 000 €

Performance

62 800 €

Hmmm, how come FR pricing is $5k less than B? Was this the case before when the M3 was first released over here?

 

[Dan Detweiler]

TT007 posted, so the SP is f*cked. We'll hit the bottom at $260 today

Just my Neural Net output trained from previous market reactions when TT posted

Well, one thing is for sure. The spin doctors over at all the media sites are sitting in their conference rooms as we speak tossing around ways they can turn this into a negative. You can bet that they will find a way to push the stock down. They always do. Keep on keeping on Tesla. You're doing great!

Dan

 

[Dan Detweiler]

Yes, I wonder about the elimination of LR RWD. That seems like it could be a popular model.

I am wondering that in 5 years the only Teslas you will be able to buy will be AWD with Autopilot. The old KISS principal...Keep It Simple Stupid.

Dan

 

[ReflexFunds]

So.

1. Panasonic said in an emailed statement that they have established a 35GWh/year cell capacity by end of March 2019 as reported by Reuters Tesla, Panasonic to seek productivity gains before new battery investments
2. Tesla said demand for cells is outpacing supply Tesla disputes report saying carmaker is freezing spending on $4.5 billion Gigafactory
3. Current cell demand from Tesla can't be more than 25GWh on a yearly basis (this is extremely generous, it's more likely close to 20GWh)

So. Who is lying? Panasonic or Tesla?

carsonight 'DISQUS's gigafactory expansion report:

carsonight => dudu dada 15 hours ago

"Good question about the 6k Model 3 battery packs per week. I have been told repeatedly that is the production, so either they're going some place I don't know or information I received is incorrect on the Tesla side.

"On the Panasonic side there are 10 lines of machines capable of 300k cells per day each, and 3 lines capable of 400k cells per day each. At 18 Whs per cell, I will leave the arithmetic to you."​

Ed. note: I think this info is stale as of Mar 31, 2019. Panasonic now claims annual capacity at GF1 to be at 35GWh. Doing the math, that's 13 lines each producing 412K cells per day. Yesterday's Press Release from Tesla tends to support the idea that they have focused on increasing production from existing equipment.

IMO, the most likely situation now is that all 13 lines have been upgraded to 400K cells/day capacity, likely with at least one (1) of those lines (~2.5 GWh/yr) dedicated to TE cell production.

I think the most likely reconciliation between Panasonic's 35gWh capacity comments and Tesla's cell constrained comments yesterday are that Panasonic are now confident their current 13 cell lines have the capacity for 35gWh without significant additional capex (far more than initially planned), but they have not yet achieved this level. Likely they have the 3 new lines running at 400k cells per day, 8 old lines running at 300k per day for Model 3 and 2 old lines running for Tesla energy.
I think Panasonic now sees a clear path to upgrading the 300k lines to 400k+ per day over the coming months, and hence has the ultimate capacity for 35gWh without additional capex, but these lines have not yet been ramped to capacity and hence Tesla is still using all the cells produced.
If this is the case, the most likely bottleneck right now is cathode supply from Sumitomo for Panasonic's cell lines.

 

[electronblue]

I am wondering that in 5 years the only Teslas you will be able to buy will be AWD with Autopilot. The old KISS principal...Keep It Simple Stupid.

Historically Tesla has discontinued and re-introduced car variants (eg going all AWD and then bringing RWD back) as demand levers or for other such reasons so it stands to reason the ever more limited selection may not be quite the permanent state of affairs as long as Tesla feels like they need such levers.

 

[Tslynk67]

I'm pretty sure anyone who already ordered will get their $35K car, as otherwise people will be suing. Anyone ordering now, you snooze, you lose.

Except that EU - plus other countries not yet open for ordering at all - didn't get the chance to order the base $35k

Also will impact the MY pricing too, no?

 

[Pras]

The leasing option suggest anything about current cash flow?

 

[brian45011]

Slide 24 has a breakout

Did Mr. Ito retire or "resign."?

Most relevant slides from the February 2019 deck:

 

[bhtooefr]

Oh, hey, S.1094's text is here: Text - S.1094 - 116th Congress (2019-2020): A bill to amend the Internal Revenue Code of 1986 to modify limitations on the credit for plug-in electric drive motor vehicles, and for other purposes.

This is confusing.

So, the current regime:

All sales through the quarter after 200,000 sales are reached (18Q4 for Tesla): full credit
All sales in the next two quarters (19Q1 and 19Q2 for Tesla): half credit
All sales in the next two quarters (19Q3 and 19Q4 for Tesla): 1/4 credit
All sales after that: zero credit

S.1094's regime:

All sales up through the day that 200,000 is reached: full credit
All sales from the day after 200,000 is reached, through the quarter after 600,000 is reached* (transition period): full credit minus $500
All sales in the next quarter: half credit (phaseout period) minus $500 (transition period is not declared to have ended, so the $500 reduction still applies I think, but I don't think this is the intent of the bill)
All sales in the next quarter: zero credit

Now, for the asterisk. There is an exclusion period - all sales from the day that an automaker hit 200,000 until this bill is enacted - the period that Tesla and GM are in right now - are excluded from the 600,000 total (but it's underneath the phaseout period section, so it may only apply to that instead of the whole thing).

And, it applies to all property purchased in 2018 and later - that is, if this passes as-is and you bought your car on the day after Tesla hit 200,000 cars sold or later, in 2018, you'd have to file an amended 2018 return to reflect the $500 reduction in tax credit. Anyone buying today would be able to claim $7000.

If the exclusion period applies to the transition period as well, because the entire day on which 200k is reached would be excluded, the day after the bill is enacted becomes the new 200k day, and you would not have to file an amended return, and anyone buying today would be able to claim $7500.

No matter what, this thing is retroactive to 2018 if it passes, so that shouldn't cause delayed demand if people understand that.