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

[Artful Dodger]

This line is from a National Geographic special I just watched:

"All bears must make the most of Summer. Soon there will be nothing left for them down here. And then, it will be time to den."​

Sounds legit.

Cheers!

 

[RobStark]

Fiat Chrysler confirms merger talks with Renault

PARIS -- Fiat Chrysler Automobiles has made a "transformative merger" proposal to French peer Renault, FCA said on Monday.

The deal will create a world leader and help address some of the weaknesses in both automakers.

FCA said the combined business would be 50 percent owned by FCA shareholders and 50 percent owned by those of Renault.

 

[Tslynk67]

We’re in Normandy for a week. Drove most of the way down here on AP. Still no NoA, but initiating a lane change no longer needs the indicator fully engaged, now you just tap it, the car asks you to place your hands on the steering (if not already) and then it commences when safe. It’s a much better experience than before and the bouncing around in the land seems to be a thing of the past. Love it.

Charging is never, ever an issue - even easier these days with the newer cable Tesla supplies - it’s less fussy about earth and neutral, just seems to work everywhere.

In any case, a good excuse to post a photo of my MX - undoubtedly one of the prettiest ever made, don’t you think?

 

[mrmage]

Is the conversion price protected for share dilution? Or will it always be set at $310?

Certain events may increase the conversion rate (reduce price), like change of control, issuing dividend as stocks, or splits. I don’t think there’s adjustment for dilution due to raises. The prospectus is here.

424B5

 

[RobStark]

 

[Mike Smith]

VW to Reshuffle $56 Billion Battery Push as Samsung Deal at Risk

 

[Huskyf]

Nice french article about the Futur of Tesla going to be top number one !

Comment Tesla pourrait devenir leader mondial de l’automobile en 10 ans | Contrepoints

 

[RobStark]

VW to Reshuffle $56 Billion Battery Push as Samsung Deal at Risk

Samsung initially agreed to deliver batteries for just over 20 gigawatt hours, enough to power 200,000 cars with 100 kilowatt hour packs, before different views on production volume and schedule emerged during detailed negotiations, said the people, who asked not to be identified as the talks are confidential. The impasse cut pledged supplies to less than 5 gigawatt hours, they said.

 

[aubreymcfato]

FWIW, Norway is going really well.
All high margin cars, healthy number of Model X (100Ds), but Model S still completely cannibalized by the 3.
Model 3 sold this month are already more than both S+X sales last May.
If the ships delivered the cars, we could see a nice end of the month.

Tesla Registration Stats

 

[EVMeister]

but Model S still completely cannibalized by the S.

Self-cannibalization?

 

[Pras]

FWIW, Norway is going really well.
All high margin cars, healthy number of Model X (100Ds), but Model S still completely cannibalized by the S.
Model 3 sold this month are already more than both S+X sales last May.
If the ships delivered the cars, we could see a nice end of the month.

Tesla Registration Stats

I think that the Raven cars haven’t started to arrive. So that will be the bigger push towards the end of Q.

 

[guidooo]

OT

If Renault could sell a lot more ZOE's they no doubt would - but they cannot, they cannot compete with Tesla head on.

Like many (all?) car manufactures they seem to have some problems getting sufficient supplies.

Renault worries about battery supplies in growing EV market

Think the Zoe's CCS charging capability in the upcoming model will make it a great car for many Europeans. More than good enough for daily driving, sufficient for the incidental LR trip.

In the same class as the to be released Opel Corsa-e and Peugeot e-208. With the difference that the Zoe has been designed from the ground up as an EV.

 

[davecolene0606]

what happened to this guy?

Greg Wester (@gwestr) | Twitter

Too much sugar

Fire Away!

 

[Fact Checking]

Sorry I have to pour some cold water on this “30k per week at Giga 3” idea. I watch Giga 3 pretty closely but have never heard of anything about that 1.5 million per year number. The official figure is 500K per year.

“
上海超级工厂将为中国市场生产 Model 3 电动车和未来的新车型。工厂建成后，计划在初始阶段每周生产约3,000辆 Model 3 电动车，在完全投入运营后年产量将攀升至500,000辆纯电动整车（注：这一计划受包括监管部门审批以及供应链情况等当地因素的影响）。
”

I'm sure there will be other improvements in the future, but we’ll have to wait for official confirmation.

I'm pretty sure the 500k/year figure is outdated, as even the first reports of the Shanghai deal suggested much higher figures:

• Tesla Shanghai Gigafactory To Produce Model Y & Model 3 | CleanTechnica

That's the environmental feasibility study for "phase 1", which cites 250k/year (does anyone have a copy or a direct link to that study?). The current building is clearly only using a quarter of the available land, and four phases add up to 1 million cars/year capacity.

This also derives from the 3k/week figure for phase 1: the 3k/week figure has been announced for Model 3 capacity only. Conservatively assuming equal Model Y capacity gives 6k/week, which over four phases gives 24k/week, or ~1.2m/year. (But Model Y capacity might be double the Model 3 capacity, as originally planned.)

But I'm pretty sure I saw the 30k/week figure somewhere semi-reliable too, to answer @DaveT's question on sourcing of that figure.

 

[generalenthu]

Yes, and note that the underlying question is a valid question and a valid concern: how does Renault merging with Fiat impact the Fiat-Tesla CO₂ pool?

Basically the "easy" CO₂ emissions numbers to keep in mind are:

• _90 g/km: EU average per carmaker target limit above which where fines begin
• 105 g/km: Renault's average for every new car sold, +15 g/km over EU requirements
• 115 g/km: Fiat's average for every new car sold, +25 g/km over EU requirements
• __0 g/km: Tesla's reduction of the average for every new Tesla sold in the EU - which reduces the pool's emissions by -105-115 g/km, depending on the exact mix of Fiat and Renault cars made, reducing the pool's EU fines significantly, until their average drops below 90 g/km at which point there are no fines imposed by the EU.

(The actual rules are (much) more complicated, but this is the gist for it, with the additional twist that the first few ten thousand Tesla (and Renault ZOE) units sold each year will reduce liability by about twice as much than the remaining EVs, due to the 'super-credits' system. The super-credits still only have an about ~1 g/km order of magnitude impact on the total averages, so they are very good to Tesla, but the ZOE doesn't significantly change the overall calculation.)

These average emissions numbers are very difficult to change for both Fiat and Renault, as they involve either the introduction of competitive EV models, or the changing/elimination of very profitable but high emission luxury models: both Renault and FCA changed these averages by less than 1% from 2016 to 2017.

The CO₂ fines are per unit, so if the Fiat pool gets larger by Renault joining, it brings in, on average, millions of units per year that have 15 g/km CO₂ emissions. This can only be offset by Tesla: the Renault ZOE is already included in Renault's 105 g/km average and Renault still has to pay billions in fines. If Renault could sell a lot more ZOE's they no doubt would - but they cannot, they cannot compete with Tesla head on.

So Renault joining the Fiat pool should increase Tesla's payout ceiling by at least 50%, IMHO. (@generalenthu, @Doggydogworld and @ReflexFunds might be able to offer much more accurate estimates.)

Agree. Couple of small corrections - the target is 95gm/km and the emissions you are quoting are NEDC rather than NEDC-c which are higher. These are offsetting and so your estimates of overages are pretty good.


I was happy to hear this merger news as the credits are going to be substantially more valuable for a combined Co. It's unclear how the Tesla FCA contracts are structured for 2020 and beyond. I hope Tesla gets an opportunity to renegotiate and have appropriate change in control provisions in their contract, which any half-brained lawyer would have included.

 

[generalenthu]

Here is an idea that someone should tweet out to Elon or Zach.

Tesla should very seriously consider cross listing it's shares in Hong Kong. This has been done in the past by a handful of firms, but I'll get to this further below. The basic idea is once listed in HK, the shares become accessible to mainland Chinese investors.

This plan has many advantages. China is a huge market and is shaping up to be the manufacturing base of Tesla for potentially all of Asia if not more. The government did a huge favor by letting Tesla own 100% of their factory. It's only fair that mainland investors get to put their $s or RMBs in this opportunity. So this will:

• Let Tesla widen it's shareholder base. Having concentrated ownership is not healthy. Just look at how TRP and fidelity dumped their shares, because a new manager didn't like the story
• Greater Chinese ownership will immunize Tesla from trade wars. China wants to end it's oil dependence and clean up air. So the government already loves Tesla. This will reduce any further reason for China to tilt the scales in favor of Chinese competitors like the Germans are doing
• China will also be a huge R&D base for Tesla with a lot of white-collar workers who like to get stock based compensation. This opens up an opportunity to do that

Tesla would not be the first company to do it. Coach, the handbag maker did this to much fanfare about 8 years ago.
Coach eyes dual listing in Hong Kong - Reuters

Then they ran into, well, nowhere. They had very little liquidity, because they did not do a HK IPO and simply listed their shares in HK. Without a wide base, the liquidity eroded. I don't think this will be a problem for Tesla, as other tech listings have gone on to do well. Especially if they did an IPO in HK. Something tells me Tesla will not be a dull low volume stock.

In any case, if Tesla is going to produce in the order of a few million cars in the next 3-5 years, I see very few ways of doing this with organic cash generation. I think it's a no brainier for them to do an HK IPO later this year or early next year after a couple of good quarters paint a better picture of what they can do.

The more I think about it, the more it feels like they should have done it last year.

 

[Dan Detweiler]

Re: Consumer Reports - Comments on Autopilot

So I have been considering this report by Jake related to CR considering AP to be like an inexperienced driver - perhaps young. I reviewed all the FSD HW presentation done by Pete Bannon.

It is important to listen to the comments/criticism from CR. I think I agree to some extent as to the observation but not the conclusion.

Yes, there are times that AP (2.5 for me) has that quality of control that seems unsure and can be uncomfortable. It is silent, I can't tell where it's attention is and I cannot directly interact without moving the wheel or taking control. This is uncomfortable and not the way it would be with an inexperienced human driver.

I think Jake feels uncomfortable with the veiled nature of the driving decisions and feels uncomfortable. AP does not feel discomfort or the need to explain itself. We humans make assumptions and convert that into conclusions often on not much more than feelings. Tesla is publishing data. The data seems to take a back seat to the feelings but the data, in my book, is the important part.

The reality is that real inexperienced drivers are on the road daily making mistakes and learning as they go in both fair and poor weather. There are people of various capacities driving daily. AP is not that much different other than it is a bit occult as to the internal bits.

So what I am seeing is that AP is getting better at both driving and also at communicating with humans. The interface is improving with a bit more feedback as can be seen in the red color now used on the lane lines, vibrations, tones etc to clue the driver as to what is perceived. Yes, AP knows there is a vehicle in the blind spot. Good stuff and part of development. AP is having to drive the vehicle as well as manage the occupant experience.

There is a good question as to whether it is desirable for AP to drive in a manner that makes humans comfortable or whether AP should be turned to highly prioritize safety. These two goals may be mutually exclusive if resources are constrained. I suspect in a few months the new FSD HW and tuned up SW will come closer to satisfying both goals.

And there is the possibility that AP simply drives differently with 8 continuous vision points than a human does with 2.

Excellent post. I agree with your observations. I have learned to put up with some reactions by the system that perhaps make me feel a bit uncomfortable, knowing that those decisions are based on safe implementation. I know that the car can see and recognize potential threats far better than I can. It is a process and it will get better and better over time.

Dan

 

[Dan Detweiler]

I'm in the minority, but I'm positive that safety and passenger experience are opposing goals.

For example, if the car drives more slowly at the speed limit, it's likely to be safer. Ditto if it waits longer for an opening.

Otoh, passengers don't want cars driving at the speed limit or that wait too long at a turn. Ironically, I think people will also require fsd to be orders safer than humans before they'll ride with it.

For these reasons I believe the uses for fsd are different than what most think and will take longer than expected.

Hence the difference between people that see FSD as a cool convenience feature and those that see it as an absolute necessity (disabled, elderly, etc.).

Dan

 

[RoadsterPlease]

check out Andy Slye breaking down why Tesla Model 3 is a great investment:

 

[Dan Detweiler]

Tesla currently makes the motors and drivetrains at GF1, correct? Is the plan to also build drivetrains at GF3?

Dan