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

[Singuy]

Enhanced Summon and NOA were part of "old EAP". For 2.5 years EAP revenue has been partly deferred. Now Tesla can recognize most/all of that previously deferred EAP revenue.​

Enhanced summon (and NOA) are now part of "new FSD". A small part of the "new FSD" revenue deferred in Q1 can now be recognized. Going forward, a small part of FSD revenue will be recognized at time of sale instead of being fully deferred.

That's going to be confusing. EAP and FSD's pricing changed randomly throughout the year. Also it's interesting to not realize revenue until a feature is out. Is this a legality issue?

 

[urarthur]

Has this idea been discussed before?

Sell cars at lower price, buyers pay monthly to rent battery packs. The monthly rental fee is comparable to gasoline cost. This will eliminate the worry about battery life.

Renault is doing it with the Zoe in Europe. You can buy the car 7k cheaper and pay rent 70e/month for a 7500km/year.

It's an interesting concept and I think Tesla should concider it.

Very capital intensive though. Myabe later on theu can structure it and sale it as a consumer asset backed security to investors to raise cash.

 

[ggr]

Renault is doing it with the Zoe in Europe. You can buy the car 7k cheaper and pay rent 70e/month for a 7500km/year.

It's an interesting concept and I think Tesla should concider it.

Very capital intensive though. Myabe later on theu can structure it and sale it as a consumer asset backed security to investors to raise cash.

The company in Israel, "Better Place", died a well-deserved death IMHO. I was a technical consultant to a VC firm and was asked to evaluate them, and I concluded that they were just capitalizing on people's fear of new technology and range anxiety. We had already lived with the Roadster for a year or two at the time, and it was obvious that home charging was a far superior experience. Renting the battery rather than owning it is a necessary condition for battery swapping to really work.

Edit: not to be confused with the excellent TV series "The Good Place".

 

[RobStark]

Renault is doing it with the Zoe in Europe. You can buy the car 7k cheaper and pay rent 70e/month for a 7500km/year.

It's an interesting concept and I think Tesla should concider it.

Very capital intensive though. Myabe later on theu can structure it and sale it as a consumer asset backed security to investors to raise cash.

Renault only had a 22 kWh battery for 2012-16 period.

Now it also offers a 41 kWh battery. It got some early adopters used to this.

But it is a dumb capital intensive idea and Tesla shouldn't follow.

Tesla's batteries are on pace to average 200k plus miles.

No need to alarm the early majority with exotic lease deals of only the battery pack.

 

[Fact Checking]

That's going to be confusing. EAP and FSD's pricing changed randomly throughout the year. Also it's interesting to not realize revenue until a feature is out. Is this a legality issue?

While it's it's historically complex and complicated, it is not confusing to the accounting software: Tesla is tracking every VIN's production details, material costs, labor overhead and the order details, very likely including the price of every option paid.

I suspect Tesla's database is also tracking which version of EAP/FSD each customer bought, and defines deliverables.

When a milestone is met it's basically a database query to calculate the amount of deferred revenue that will be recognized.

The costs of EAP/FSD development go into R&D and SG&A, so they are already paid and accounted for - so FSD deferred revenue can be recognized with near 100% margin, so it increases GAAP income directly.

 

[SO16]

Seems applicable to Tesla today.

Bezos 2014 - Jeff Bezos explains why Amazon makes no profit.

 

[urarthur]

Because Smart Summon is a part of the FSD option, so once they release Smart Summon they can recognize a portion of the FSD payments.

So that's a ~25% of 762 mln in deferred revenues? Q2 P/L looking better by the day.

 

[urarthur]

Renault only had a 22 kWh battery for 2012-16 period.

Now it also offers a 41 kWh battery. It got some early adopters used to this.

But it is a dumb capital intensive idea and Tesla shouldn't follow.

Tesla's batteries are on pace to average 200k plus miles.

No need to alarm the early majority with exotic lease deals of only the battery pack.

You can buy a Renault Zoe for €25k (41kw, 200 miles) and rent the battery. This a very affordable deal for low budget consumers. Most use their cars for Home-Work and 200 miles is sufficient for this purpose.

I don't think Tesla will be competing in the 20-30k segment for a very long time. Their production is limited for the near term, so doesn't make sense to start selling cheaper cars. However, with battery renting they could potentially drop the Model 3 SR price below 30k and compete with the more cheaper (and inferior) Renault Zoe and Nissan Leaf (if demand ever becomes a problem).

 

[sparcs]

I don't think Tesla will be competing in the 20-30k segment for a very long time. .

Elon has mentioned a cheaper $25k vehicle, but their plans could change as always.

Maybe he pivots and strips down the model 3 even more. Remove the steering wheel, etc for a future of a robotaxis that cater to a future where we don't need to own cars at all.

 

[M3Rider]

The vast majority of vampire drain on Teslas is not from the battery dropping via natural processes but from the computers and BMS. The Leaf has neither as a source of significant drain. Having owned both, I can confirm that if a Leaf and a Tesla are left in climate-controlled garages for the same amount of time, the Tesla will lose *far* more energy. Possibly an order of magnitude more.

I value the reasons this is so, and therefore don't mind it. But it's absolutely a thing.

The new Leaf has BMS too, so no telling how the new drain will compare.

 

[Big Blue 1011]

.

Musk's claim is Tesla Network will be so wildly popular that they will be unable to build enough cars to satisfy demand for a decade. And no competition will deploy at scale during that decade, either. So it's "just like Manhattan taxi medallions".

...but genetics prevent it

NYC issued fewer than 14,000 taxi medallions. That’s why the cost went up. Regulated scarcity. Do you think it will take Tesla more than 10 years to sell 14,000 FSD robotaxis in NYC? If so, I’ll agree with your math.

 

[mongo]

The new Leaf has BMS too, so no telling how the new drain will compare.

@Zaxxon
All lithium batteries have a BMS for balancing and over/under charge protection.
The computer systems in the Tesla that provides walk up unlock, internet access, and sentry mode is the big difference.
Teslas do hsve a deeper sleep mode which is not normally entered into on a day to day basis, so long term drain is not easily extrapolated from short term.

 

[Pezpunk]

. Do you think it will take Tesla more than 10 years to sell 14,000 FSD robotaxis in NYC?

How many have they sold there so far?

 

[Dan Detweiler]

Renault is doing it with the Zoe in Europe. You can buy the car 7k cheaper and pay rent 70e/month for a 7500km/year.

It's an interesting concept and I think Tesla should concider it.

Very capital intensive though. Myabe later on theu can structure it and sale it as a consumer asset backed security to investors to raise cash.

With batteries from Panasonic being the bottleneck with production, I don't think there's any way at this point to have a bunch of extra battery packs for leased pack replacement. Just don't see it happening.

Dan

 

[RobStark]

You can buy a Renault Zoe for €25k (41kw, 200 miles) and rent the battery. This a very affordable deal for low budget consumers. Most use their cars for Home-Work and 200 miles is sufficient for this purpose.

I don't think Tesla will be competing in the 20-30k segment for a very long time. Their production is limited for the near term, so doesn't make sense to start selling cheaper cars. However, with battery renting they could potentially drop the Model 3 SR price below 30k and compete with the more cheaper (and inferior) Renault Zoe and Nissan Leaf (if demand ever becomes a problem).

Without subsidy/price cut it won't be much cheaper than just leasing the entire car. A better option is to subsidize the lease on the entire car to lower the price barrier to entry.

Leasing battery pack separately implicitly tells customers battery pack is potentially untrustworthy and may be far less reliable than an ICE or transmission.

Neither GM nor VW sell you a car and lease the engine or transmission in order to lower the sticker price on the car/glyder.

 

[Webeevdrivers]

The new Leaf has BMS too, so no telling how the new drain will compare.

For sure. I have asked a Facebook acquaintance with an EPlus to keep us up to date.

 

[Singer3000]

Mod: some posts moved to the politics thread. If you want to discuss the effect of tariffs, this might be a reasonable place, but that's not what these posts were about. --ggr.

I haven’t seen the deleted messages but the effects of a possible European US tariff war are among the most important for TSLA right now.

Lots of media chitter chatter this weekend that the long trailed US tariffs on German autos will soon be upon us.

1) Did much of a consensus form on what this might mean for Tesla’s sales? Ignoring the recessionary effects such a trade war might prompt, to what extent might increases in North American demand make up for lost European sales?

2) Is there a vague guess of the value share of European components inside a model 3?

3) How quickly could a Giga 4 in Europe realistically come on stream once the trigger is pulled?

4) Would a Tilburg style assembly centre be enough to get over the tariff wall?

5) Norway does not maintain a common external tariff with the EU but politically might it choose to apply any EU counter tariffs against US auto anyway?

6) If European sales slump, how severely impacted will be the FCA credits that everyone got so excited about?

I don’t have answers only questions I’m afraid.

 

[EVNow]

Enhanced Summon and NOA were part of "old EAP". For 2.5 years EAP revenue has been partly deferred. Now Tesla can recognize most/all of that previously deferred EAP revenue.​

Enhanced summon (and NOA) are now part of "new FSD". A small part of the "new FSD" revenue deferred in Q1 can now be recognized. Going forward, a small part of FSD revenue will be recognized at time of sale instead of being fully deferred.

Yes, Summon is the only part of new EAP that is not in production.

So that's a ~25% of 762 mln in deferred revenues? Q2 P/L looking better by the day.

I doubt it. I don't think they can really claim summon is actually 25% of the "deliverables". Also, they need to actually install HW3 on all cars. My guess is, they recognize all the remaining AEP revenue, but won't recognize more than 10% of FSD - or conservatively nothing at all. It would make more sense to recognize a chunk of revenue when NOA on city streets is delivered. But, if this makes a difference in Q2 being "break-even" (non-GAAP), they could recognize the revenue - assuming it affects non-GAAP profit as well.​

BTW, here is the new language on FSD.

All Tesla vehicles have the hardware needed in the future for full self-driving in almost all circumstances, at a safety level we believe will be at least twice as good as the average human driver.

I believe a large part of FSD can be recognized once they release NOA in the city.

Another interesting part is they are aiming for "twice as good as avg human". If we take avg human as 4.2 crashes / Million Miles, FSD has to be 2.1 crashes/MM or less for them to recognize full FSD revenue. I think they have to also cover all the scenarios listed in the "features for FSD" thread (and may be some more).

4.2 crashes/MM = 99.9994% error free operation.

2.1 crashes/MM = 99.9998% error free operation.

So, Tesla is aiming for 6 Nines.
​

 

[powertoold]

The average sober driver or average driver overall? I don't think it's fair to compare overall, should be average sober driver.

 

[Big Earl]

That's not true. You exit AP by pushing the stalk up to the first indent. Reverse doesn't engage unless you push the stalk all the way to the limit of its travel. That may seem to be a minor distinction but, as you nearly learned the hard way, it's important to learn how to use the various features of your car.

Autopilot can be disengaged by lifting the drive stock to either the first or second detent (N or R). Holding on the first detent for one second will engage neutral. Lifting to the second detent below 5 MPH will engage reverse. Lifting to the second detent above 5 MPH does nothing if Autopilot is not engaged.