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

[canoemore]

Jerome added a note, with great emphasis, that the Tesla Grohmann equipment has created much better machines, dramatically improving the overall manufacturing efficiency of the Model 3. He also said they are building a giant machine using Tesla’s Grohmann sub-division, something he was clearly eager to share but couldn’t yet talk much about. Hmm. He basically just emphasized that it was a “giant, giant, giant machine” that duplicates everything, is modular, is simple on the modular level, and … is gigantic. We’ll all have to wait a bit longer for more information on that.

Loving this - Alien Dreadnought 1.0 for GF3 secured.

What could be meant by "duplicates everything"?

1. Is he saying that the M3 line could be made of say 5 gigantic modules. Each module is identical but capable of performing each of the ~5 tasks in series if provided different s/w or:
2. Is he saying that the ~5 gigantic machines in a line are made of modules that can be reconfigured with different physical machines, or:
3. There is one gigantic machine that is made of modules that can be reconfigured with different physical machines

What would aliens do?

You know what I think? Elon's building the industrial equivalent of a ribosome. These are the giant, modular machines in the cell that read mRNA and translate it into proteins - they are the "machines that build the machines" for life. Although it's not quite so simple in practice, the same ribosome can make a huge variety of different proteins - all it requires is the raw materials (amino acids) and the right program (mRNA). Because Elon is so gung-ho about first principles thinking, the solutions his companies arrive at often converge with biological systems, which makes sense since the latter were produced via evolution's blind adherence to first-principles thinking. This would also fit with @Fact Checking 's speculation about the value of a modular manufacturing strategy - a cell can scale up it's "maufacturing capacity" for any protein product simply by producing more ribosomes.

The question isn't "What would aliens do?". It's "What does life do?". Which is convenient, since we can study life

All true, but direct solar energy (via solar panels of some kind) will prove to be the most cheapest and safest form of energy -- it's getting better every year. Almost all other forms of energy (fossil fuels, wind, tides, etc.) are derived from solar/sun, and therefore are secondary, less efficient sources than direct sunlight. Exceptions include deep earth thermal energy (derived from earth's hot core) (probably will never be as efficient as solar), and nuclear energy (has much higher safety risks than solar).

This is another example of convergence of intentional first principles thinking and the products of biological evolution. There are a few forms of life that gather energy from sources other than photosynthesis (e.g. chemoautotrophs), but photosynthesis is the ultimate source of energy for pretty much all of the biosphere. So sure, @brian45011 is technically correct that all sources of energy require an investment of resources to harness, but the controversy over which source makes the most ultimate sense is manufactured. All you have to do is look outside to know which one works best, and we're finally in a position to harness it.

 

[neroden]

1.) He said it multiple times--use the grid to provide stand-by power when self generation is insufficient and to shed excess generation when self generation exceeds the house's instantaneous load--that's effectively the service of a battery connected as distributed stationary storage.
2.) Can you name a single jurisdiction that requires by law a grid connection? He said 37 states require electricity (not grid connections) for habitable structures. Self generation satisfies those legal requirements.

Certain localities in Florida require grid connections. I don't have the citations with me, but --- it's Florida, yes, this really happens. :-(

 

[neroden]

Selling (*sugar*)puts @ $100 ...What say you, the traders on this thread ?

Meet the Tesla Bull | Real Vision

That strike price is too low to get real returns. Selling $200 strike puts is more like it, that's what I say.

 

[Krugerrand]

Hopefully Tesla can figure out a way to do more initial testing. It seemed like the initial battery pack machines for model three were not tested at full speed, prior to installation into the main production lines.

Stop with the crazy talk. It’s going to be just like Ikea; too many instructions to bother reading, take way longer to put together than expected, have a bunch of extra screws and nonsense left over, but will be functional in the end and look impressive.

 

[neroden]

Full disclosure, I'm an investor in Tesla stock. I cannot reveal too much in detail, you can probably guess and know by now, but my understanding is that there is definitely a huge 'battle' brewing in this stock on the short side vs the long side. Whether you're retail or an institutional investor, you will have to have serious conviction to stay in this stock.

More importantly, you have to be able to survive your brokerage making Tesla into a non-marginable stock and the stock price simultaneously dipping substantially -- without having to sell any stock. This is important. I've seen too many margined investors forced out by margin calls engineered by the short-sellers and market makers and brokerages.

If you don't, best to not invest in this stock at all, for the sake of Tesla. The hidden powers backing and behind the short side are highly influential and relentless, and have a lot riding on the failure of Tesla and the stock beyond the stock itself. I'm not sure Elon Musk even realizes the extent of this financial battle behind this stock. At some point and we may be on the verge of something for the next few quarters, I believe it's quite possible something 'extreme' will happen, in which either the shorts get absolutely crushed or there will be a lot more devastated and underwater longs (if not already).

I don't think the short-sellers can do anything to the company. They've already tried the courts, the state legislatures, massive disinformation campaigns, and repeated industrial sabotage! Not much further they can go really, unless they resort to assassination and murder.

Even Tesla's own internal failures (communications, communications, communications) seem to be insufficient to slow down demand.

Tesla's unstoppability will become generally apparent by spring of 2020.

 

[mongo]

Oh, I’m pretty sure some part of it won’t work right out of the gate/box. That’s how Tesla rolls and how they also come up with amazing advancements over a number of variations and iterations.

Hopefully Tesla can figure out a way to do more initial testing. It seemed like the initial battery pack machines for model three were not tested at full speed, prior to installation into the main production lines.

Stop with the crazy talk. It’s going to be just like Ikea; too many instructions to bother reading, take way longer to put together than expected, have a bunch of extra screws and nonsense left over, but will be functional in the end and look impressive.

I'm pretty sure Grohmann (especially as part of Tesla) will do a more thorough job of testing than the module assembly sub-contractor that reportedly didn't take into account part to part color variations (sorry, can't find link to this).

Get the entire thing working at the design site, then disassemble, ship, and reassemble at the factory with the team that made it. No extra pieces, no knowledge loss, no excuses.

 

[neroden]

Solar will continue to grow but it is only a partial solution because of irradiance limitations, both geographic and time-of-day.

If by that you mean that we need batteries and transmission, then yes? We need batteries and transmission. No matter what is used to capture power, both are extremely valuable. The electricity market has been weird, historically, due to the lack of storage; storage is massively valuable for any product.

 

[canoemore]

I have no idea what Tesla's plans are, but this is my first principles impression about the topic. First, the status quo:

• The fastest automotive production lines on the planet are over a kilometer long and consist of hundreds of stations, with most of the stations specialized to a single, very small task. Each station has a carefully calibrated time window to perform the step they handle, without slowing down the rest of the production line. They create a new car every 60 seconds or so.
  
• This design can perform very well when designed well and executed conservatively, but has a number of disadvantages:
  • The maximum production capacity of a factory is pretty much set on the design table, years in advance. Each station has a capacity and to improve the throughput of hundreds of stations all stations have to be made faster or more substations have to be added, on a usually cramped production floor.
  • As a result the lead time of capacity expansions is 3-5 years, the time to build a new car factory from scratch. This slows down the design cycle to snail's pace: the previous models are to a large extent cast into stone, and the next model has 3-5 years of lead time, sometimes more. This is why advances in the automotive industry are happening so slowly, and this is why there's so much resistance against change.
  • But there's production disadvantages as well: the whole production line is exposed to failure of a single critical station. If a station goes down unexpectedly then it immediately stops production in the pipeline up to the next and previous 'overflow line' that can buffer half assembled cars. If the outage is so long that later buffer lines drained or previous ones overflow then the production stoppage avalanches forward and backward and stops the entire production, idling the workforce and stopping a billion dollar capital from earning its investment cost. I.e. losses of millions of dollars per hour are possible.
• In software terms the automotive industry's production method is very monolithic. This design choice originates from the original Ford integrated assembly lines 100 years ago, from around 1913:
• 
  
  
• Technological innovations like industrial robots were basically shoehorned into a 1913 factory design. This is similar to the mistake that early steam engine driven factories committed when they converted to electricity: they reused the cramped, high density steam machine factory design which had to be dense due to the physics of the mechanical belt power distribution method, instead of using electricity properly and spreading out their factories. It took about 100 years after the electrification of industry for electricity to be used properly in factory design: big, sprawling buildings with enough space to expand physically, and electricity transported via power lines.
  
• Anyway, Ford's 1913 design was IMO never seriously changed as new technologies become available - I believe in part due to the long lead times, slow iteration frequency and general technological risk avoidance in the automotive industry. If we take the average iteration duration as 5 years, then the automotive industry is only on it's 20th version of its factory design, with evolutionary and not revolution steps along the way. While the comparison is not apples to apples and thus not fair, there's certainly agile software projects that do 20 revolutionary iterations in a single year.

Based on this it's IMO pretty obvious what the "Dreadnought" design should be, roughly:

• Multi-purpose modular work stations: the fundamental unit is a "generic industrial station", made by Tesla Grohmann. This is basically a generalized industrial robot that is designed to change its role flexibly AFTER it has been installed on the factory floor. I'll talk more about this later.
• Utilizing the third dimension: beyond stamping machines that require strong, deep reinforced concrete foundations weighing thousands of tons, most of the stations in a car factory don't have to be on ground level. Why not have 3-4 stories instead of a single story? This not only allows better real estate utilization, but also allows flexible expansion of production via the use of elevators and multiple floors.
• Utilizing two dimensions (horizontal space) more effectively: instead of creating a row of machines that have a set ordering at the design table, I'd create a less dense two dimensional layout initially as well, allowing for future growth.
• Utilizing FSD "EV carts" to move units between flexible work stations: I'd use self-driving EV "carts" that carry the partially assembled cars from station to station autonomously. They'd recharge themselves autonomously as well, whenever their battery levels get too low. Note that self-driving carts could also replace elevator systems (which are single points of failure), instead ramps could be used where the EVs carrying the partially assembled cars could move between floors - like in a multi-story parking garage.
• Automated conveyor system that feeds parts to sub-assemblies and the main assembly line.
  
• Much more parallelism: instead of having a single fundamental major assembly line flow that sub-assemblies feed into, I'd define multi-station 'clusters' of production that receive units in parallel. Any already installed generalized "Grohmann industrial station" could be retooled within a few hours to serve a completely different role: instead of installing a wire harness they could be applying screws or could be fitting windows. This means that if there's an imbalance in the capacity of factory during ramp-up, it doesn't have to be physically modified (or only to a minimal fashion), production capacity could be set aside to improve another workflow. No rails have to be modified and no serial production line gets upset: self-driving EV carts could just re-route their flow utilize the slightly different factory layout.
• Much less manual labor utilized: the Grohmann industrial station is 100% robotic. The main advantage of manual assembly labor is its flexibility - but if this flexibility can be offered at the industrial robot station level, it's a game changer.
• Flexible, gradual ramp-up that has good capital utilization during the ramp-up phase already: because each modular work station is flexible, a new factory with 10,000 units/week final capacity can be ramped up and can already make 1,000 units/week with just around 10% of the capital spent for the full production. The only 'extra overhead' is the large building built - but as we've seen it in Shanghai, large buildings can be built very, very quickly. Also note that even at the 100 units/week stage the factory can already be capital efficient and can expand "itself" without interruption of production equipment: because each station can be programmed to assemble 10% of a car, or just 1% of it, the role of each station can become smaller and more specialized as time goes on and capacity goes up. I.e. you don't have to spend capital, specify, order and wait for hundreds of stations to be built by first parties first, you can literally bootstrap a new factory with a large building and a dozen of work stations to produce ten cars per day or so. The factory will probably be earning money at that early ramp-up stage already! New stations can be installed without disrupting existing production flows - this is inherent in the less dense and autonomously routed and flexibly reconfigurable workflow.
• New stations can also be 'tested' without risking the existing production flow: a couple of units are handled at half speed or a quarter of speed, and the result in QA'd carefully. Note how this spreads out R&D as well: new optimizations can be applied anytime on existing stations as well, there's no pressure to "finalize" the design and put "pens down" at an arbitrary date when hundreds of millions of dollars worth of tooling is ordered. Instead it can all be done gradually and organically, optimizing it as they go.

Pretty much the only drawback that I can see is that this cannot be installed at Fremont where space is at a premium, but requires a large greenfield factory from scratch. The 'carts', the 'conveyor system' and the preemptively less dense installation of modules needs more factory space than is probably available at Fremont. They might still prototype it at Fremont though, as the design will work on smaller and larger scale just as well.

Gigafactory 1 and starting the production of the Tesla Semi on this platform, with low initial capital investment, would be an excellent approach IMHO.

Note that the tight labor market in Reno is not a problem if indeed their new factory design is almost entirely automated: Gigafactory 1 will be the dream job for industrial robot and production engineers, and I expect Tesla to do a super job attracting talent via luxury amenities. It won't really show up in CoGs as the factory scales up it won't have to hire all that much bigger of a workforce.

Basically I expect Tesla's Dreadnought to eliminate "production hell" entirely, by turning the ramp-up of a factory into a largely software space problem. (They might even be able to simulate a full factory, based on the known capabilities of the generalized work stations.)

There's much more to this topic, but this comment is way too long already ...

You're an excellent thinker.

 

[Hock1]

That strike price is too low to get real returns. Selling $200 strike puts is more like it, that's what I say.

Whenever I see someone here recommending selling puts, I cringe. There are many on this board who do not really comprehend options and the risks involved in using options. ONLY sell puts if you are willing to buy the underlying shares at the indicated strike price. IMO, since I have been here (2 years), several posters have made this mistake and are no longer with us. In my career as a broker I saw several situations where "investors", as a result of assignment, were on the hook for more money than they had. Paying for years. NG.

 

[SoGA Fan Club]

For some reason, I have never seen this quote by Teddy Roosevelt. However, from this moment on, every time I read an article critical of Musk, and his missed timelines, etc, I am going to post this quote in the comment section and/or post it to the author's twitter. This is SO perfect for the situation between Musk and the idiots of the world today. I sure wish Teddy was our president right now, he would totally appreciate and respect people like Elon Musk.


"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."

Teddy Roosevelt

 

[Artful Dodger]

So Grohmann are working on a giant giant car making machine.

Stamped and cast parts go in, body in white comes out. Just my guess. Other guesses welcome.

Body isn't the bottleneck right now. Battery cells are. I think the new machine makes batteries, and I think its being built in Fremont.

 

[Maitri982]

Fantastic interview by @ZachShahan, and this bit is very interesting:

"Jerome added a note, with great emphasis, that the Tesla Grohmann equipment has created much better machines, dramatically improving the overall manufacturing efficiency of the Model 3. He also said they are building a giant machine using Tesla’s Grohmann sub-division, something he was clearly eager to share but couldn’t yet talk much about. Hmm. He basically just emphasized that it was a “giant, giant, giant machine” that duplicates everything, is modular, is simple on the modular level, and … is gigantic. We’ll all have to wait a bit longer for more information on that."​

This was one of my pet theories about the Tesla Dreadnought Machine, that they'd break with the production line tradition and go modular:



I believe once Tesla unveils that new manufacturing architecture, which IMO will also be created by Tesla Grohmann entirely from scratch (I.e. no reliance on third party industrial robots, etc.). Much lower "lead time" to expand their tooling, Tesla would become "masters of their own destiny", as mentioned on the Autonomy Investor Day.

Tesla might have to be valued more as a software and IP company, which as @TradingInvest recently pointed out the market has not realized yet, because this new manufacturing technology will be so advanced that every industry will want to license it.

This might be as big as FSD.

Liked your post, but disagree on the licensing part. They will keep it as captive.

 

[VValleyEV]

OMG. The New York Times has a new article out today that is a tour-de-force of New York Times-style reporting. It’s about why EVs are still problematic, as evidenced by the difficulties one faces if one simply wants to drive from LA to Las Vegas.

L.A. to Vegas and Back by Electric Car: 8 Hours Driving; 5 More Plugged In

The New York Times is Dylan’s Mr. Jones, and this article shows exactly why The New York Times is so ill-suited, ill-equipped, out-of-touch, and hopelessly unable to help the public understand the EV transition. It’s like the paper is still trying to make heads or tails of General Magic’s Magic Cap and Apple’s Newton while the rest of the world is living with iPhones and Androids.

Because something is happening here
But you don’t know what it is
Do you, Mr. Jones?

OMG Indeed. 5 Hours of charging for an 8 hour round trip drive in a Chevy Bolt. Left me sadly shaking my head. Mention of Tesla but no comparisons, just something made to sound like Tesla cars would do no better: “The fastest Level 3 public chargers available fill up electric cars like the Chevy Bolt, Nissan Leaf or Tesla Model S in 30 minutes to an hour.” The total ignorance of assuming one always has to “fill up” an EV every time you stop, just because that is what you do with an ICE car, despite the fact that you can fill it up at your house before you leave and at you destination.

I have been meaning to reply with this screen shot, showing 1 stop for 10 minutes along the way for me to arrive in Las Vegas with 10% remaining charge.

 

[Fact Checking]

Liked your post, but disagree on the licensing part. They will keep it as captive.

Agreed 100%: what I meant is that they could license it, just like they could license Autopilot and FSD but are keeping it with Tesla as a giant moat of competitive advantage.

 

[Krugerrand]

I'm pretty sure Grohmann (especially as part of Tesla) will do a more thorough job of testing than the module assembly sub-contractor that reportedly didn't take into account part to part color variations (sorry, can't find link to this).

Get the entire thing working at the design site, then disassemble, ship, and reassemble at the factory with the team that made it. No extra pieces, no knowledge loss, no excuses.

My posts were way funnier.

 

[AZRI11]

Fantastic interview by @ZachShahan, and this bit is very interesting:

"Jerome added a note, with great emphasis, that the Tesla Grohmann equipment has created much better machines, dramatically improving the overall manufacturing efficiency of the Model 3. He also said they are building a giant machine using Tesla’s Grohmann sub-division, something he was clearly eager to share but couldn’t yet talk much about. Hmm. He basically just emphasized that it was a “giant, giant, giant machine” that duplicates everything, is modular, is simple on the modular level, and … is gigantic. We’ll all have to wait a bit longer for more information on that."​

This was one of my pet theories about the Tesla Dreadnought Machine, that they'd break with the production line tradition and go modular:



I believe once Tesla unveils that new manufacturing architecture, which IMO will also be created by Tesla Grohmann entirely from scratch (I.e. no reliance on third party industrial robots, etc.). Much lower "lead time" to expand their tooling, Tesla would become "masters of their own destiny", as mentioned on the Autonomy Investor Day.

Tesla might have to be valued more as a software and IP company, which as @TradingInvest recently pointed out the market has not realized yet, because this new manufacturing technology will be so advanced that every industry will want to license it.

This might be as big as FSD.

I believe this giant machine will be used for the production of the semi and pickup. Future generations of other Tesla's will follow. They won't look like traditional cars, like the trucks won't look like anything that came before it.

 

[MarcusMaximus]

Well, it depends on what sort of gas station it is -- where it's located.

Already, the profit margin on gas averages under 2% -- many gas stations actually lose money on gasoline. It just brings people into the convenience stores. Now, convenience stores aren't going anywhere -- they remain popular. The people who rush in, pay for gas, and leave are an annoyance to convenience store owners. They want people who will plug in, and come buy a hamburger or a sandwich, and eat it. On my trip back from Toledo with my new used Tesla, I stopped at a Sheetz and they got business from me -- good business. (And at a Cracker Barrel, and at a Meijer's, both of which ended up with me walking off with purchases.)

The key thing is location. Along a road trip route like an expressway, the chargers are an attractant which will bring business into their convenience store rather than someone else's who doesn't have chargers. Their business was already coming from road-trippers, and it still will.

However, gas stations which aren't located at expressway exits or on other road trip routes have a bigger problem. Many of these urban or suburban stations depended on the "commuter" traffic buying a coffee or a banana. The commuter traffic has no reason to stop to charge -- they charged at home, or at work. Other convenience stores or coffee shops without gas pumps or chargers may become more attractive. The urban ones are already closing and the suburban ones will follow.

True, though a lot of the big ones(Shell, Chevron, Mobil, etc) rely on both. Moving to only servicing long distance routes would dramatically cut the size of their business.

 

[Oil4AsphaultOnly]

Whenever I see someone here recommending selling puts, I cringe. There are many on this board who do not really comprehend options and the risks involved in using options. ONLY sell puts if you are willing to buy the underlying shares at the indicated strike price. IMO, since I have been here (2 years), several posters have made this mistake and are no longer with us. In my career as a broker I saw several situations where "investors", as a result of assignment, were on the hook for more money than they had. Paying for years. NG.

You mean that you know of several who didn't know what they were doing? I sold puts just fine thanks, and I'm sure others do as well. True, it's not for everyone, but that's why the selling of options requires an elevation of your margin trading capabilities above and beyond the ability to purchase options.

 

[wipster]

You're an excellent thinker.

https://images.app.goo

The main reason that electricity providers are going to solar is speed of deployment. They don't need to plan ten or more years in advance to add capacity. The typical time is three years from plan to online. This not only makes them more responsive to conditions, but it saves them a butt load of money. (Note: butt is a measure of volume).

So how many cubic feet (or footsies) in a butt load and does a butt load include both cheeks?

 

[CorneliusXX]

I'm pretty sure Grohmann (especially as part of Tesla) will do a more thorough job of testing than the module assembly sub-contractor that reportedly didn't take into account part to part color variations (sorry, can't find link to this).

Get the entire thing working at the design site, then disassemble, ship, and reassemble at the factory with the team that made it. No extra pieces, no knowledge loss, no excuses.

This is the stealth euro gigafactory.

Regulator: So Mr Ghromann, why are there a thousand vehicles a day coming out of your facility?

Mr Ghromann: Umm, testing. should be finished by 2030.