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

[Fact Checking]

Fact Checking found the citations. The paint shop saboteur was much better at covering his/her tracks than Tripp was, and presumably was a different person.

While Tripp was fired in May of 2018 and the paint shop incident happened in August, in principle it might also have been Tripp with a 'dead man switch' malware, should Tripp not have access to the systems anymore.

Note the timing:

• Tripp lost access on May 14 or 15
• the paint shop incident happened on August 18

That's 97 days of delay - very close to a 100 days dead-man-switch if Tripp lost access a couple of days before he was interviewed. (They'd probably have observed/investigated him first.)

But yeah, entirely different incident might also have been the case. If Tripp exfiltrated gigabytes of proprietary data he might also have sold access to Tesla's factory systems.

(Or not - all of these are allegations that haven't been proven in a court of law.)

 

[Boomer19]

So, fair warning for people watching market action this week. We've had honest-to-goodness bear raids over July 4th week before. It's a preferred time for bear raids because the markets close at 1 PM on Wednesday and are closed all of Thursday. Lots of people take long holidays. This makes Wednesday and Friday low-volume days, prime targets for bear raids. Mon-Tue, today and tomorrow, might see a bear raid too, but it's more likely to be timed for Wed & Fri.

If you see a big bear raid this week, it'll probably stop (well, go back to the normal level of manipulation) next Monday when normal trading resumes. This is not the week to have margin loans.

indeed. will be interesting to see if g20 outcome and decent deliveries are able to offset any raids.

what would be added positive is any news of some big boys stepping up to table via filings or just plain ‘leaks’

if nobody added 180-220 then that’s not great, and we can be treading for a while. but i’d have to think some were loading up. we’ll see

 

[Tslynk67]

A couple of random observations regarding Q2 deliveries:

• Tesla China was pulling demand levers like crazy in the first two months of Q2, but none in June AFAIK.
• While China is much of a black box, the bullish interpretation is that they probably had customers matched up for all the Q2 inventory.
• No significant demand levers were pulled in Europe in Q2 AFAIK, other than discounts on pre-Raven inventory S/X units.
• In the Netherlands the final week of deliveries in June wasn't nearly as crazy as the final week of March:
• View attachment 425174View attachment 425173
  
• The crazy wave of Q1 was spread out over 4 weeks, with an actual reduction in the final week of June.
  
• In Norway there's a similar picture for the final weeks of Q2:
• View attachment 425175
• In Norway too the final week was lower than the second-to-last week - which suggests deliberately timed delivery peak to well before the end of the quarter.
• The bullish interpretation would be that Netherlands didn't have much Model 3 inventory unspoken of, or at least that all intended deliveries were completed in Q2.
  
• All the leaked Tesla internal "motivational messaging" were related to North America deliveries, with today's leak suggesting that they were 'very close' to the quarterly record with 1 day left from the quarter:
  • Tesla is 'VERY close' to record deliveries - Electrek
• (Fair article from Fred.)

To me this suggests that there were no unexpected logistics hick-ups in Q2 in any of the three major regions, and that I'm cautiously optimistic that we could be looking at a quarter with record deliveries higher than the 90,700 of Q4'18.

Demand is very high in Europe. Anecdotally, in 5 years of being a Tesla owner, I never had anyone in my non-Tesla circle of friends and contacts buy a car, in June there were three that took delivery - M3LR, MS 75D, MX100D.

As well as that, in discussion with non-owners, the narrative is switching away from "nice cars, can't afford", to "I'm thinking about it and am doing the maths to see if it's feasible.

Quite a shift IMO.

 

[Hock1]

Small correction -- I believe Tesla's allegations that the paint shop code at Fremont was sabotaged were regarding a *separate* sabotage incident attributed to another, unknown saboteur, and not necessarily to Tripp, who was in Nevada. (Yes. There were probably two saboteurs.)

Fact Checking found the citations. The paint shop saboteur was much better at covering his/her tracks than Tripp was, and presumably was a different person.

So. Do we know a) where in the litigation process, the case against Tripp is and, b) Has the paint shop saboteur been identified?, charged?
Thanks.

 

[neroden]

So. Do we know a) where in the litigation process, the case against Tripp is and, b) Has the paint shop saboteur been identified?, charged?
Thanks.

I am not paying attention to the Tripp litigatoin.

As far as we know nobody has identified the paint shop saboteur, not in public anyway -- I assume they're no longer employed by Tesla.

 

[jerry33]

All this talk of "hubris" at GF3 is at best wilfully ignorant, at worst deliberately deceptive.

To add to @FC's comments, one should consider that with the initial ramp of M3 in Fremont, they initiated a load of new techniques, over-automated, many of the ideas just didn't work well and were subsequently either downgraded to manual or totally revised. During the journey they setup the famous tent and simplified things even further - with ideas as obvious, in hindsight, as using gravity to roll the cars along the line.

Trying new things often doesn't work. Not trying new things is worse.

 

[Tslynk67]

Trying new things often doesn't work. Not trying new things is worse.

I think they should start with what they have a Fremont, then evolve - unless, of course, a no-brainer opportunity exists, or is discovered during the factory setup.

 

[DrKenneth]

Give me a break!

Your last statement is completely ingenuous. They already had the factory up and complete. Come on dude, at least put your comments in context. Geeze.

Dan

Maybe I wrote that a bit poorly. I meant exactly what you said, the factory was already up and running and it still took 6 months to get going. Now they are still building the factory and want to get meaningful production in the same timeline: by the end of the year. I don't think they will. I am not disputing anything involving next year or there after.

This time it's different because they scaled back their ambitions by an order of magnitude: they are going from the current ~500k/year at Fremont with an incremental increase of +150k, which is a +30% increase only.

Electroman was predicting volume production in early Q2 and (near) full capacity before the end of the year. You replied to him: "What kind of problems do you expect at GF3, which would delay volume production by 6 months?" who which to me implies that you think that Tesla will have meaningful volume this year and will be full capacity in Q2. I don't think going from a dirt field to volume production in 12 or to full capacity in 15 months is scaling back ambitions.

 

[jerry33]

I think they should start with what they have a Fremont, then evolve - unless, of course, a no-brainer opportunity exists, or is discovered during the factory setup.

I thought that was what they were doing in GF3. I was referring to the previous attempts.

 

[SPadival]

Business Insider's German cousin is out with some fresh paywalled FUD

Tesla Model 3: Liefer-Chaos, verärgerte Kunden, mangelhafte Autos

 

[heltok]

Last time Tesla said they were very close to achieving profit they were several hundred millions ahead moneywise but a few days to go timewise. So I would not be surprised if Tesla was very close, ie 24h away from achieving a record and not necessarily close in quantity ie a few hundred cars to go.

 

[brian45011]

So I suspect the sabotage (or botched malware attack) did happen, and they suspected Tripp but couldn't link it to him.

Anyway, I think the sabotage angle was, fortunately, just a minor factor - most of the big delays in the Model 3 ramp-up were self-inflicted by Tesla.

Sometimes after a careful root cause analysis a different explanation is found.
Was SpaceX’s Rocket Sabotaged?

Inside Tesla’s Audacious Push to Reinvent the Way Cars Are Made

Mr. Musk doesn’t have an office at the plant, but Tesla says he has been sleeping there — on the floor in someone else’s office, or on a couch — while working to streamline Model 3 production. At 3 a.m. on Thursday, the time Tesla made him available for a telephone interview, he said he was trying to fix a glitch in the part of the plant where the Model 3 is painted. “The carrier that the car is on is coming out of the paint booth slightly too fast for the sensor to recognize it, and it’s tripping the sensor even though everything is fine,” he explained.
Tesla engineers are trying to reprogram the sensor so it can operate at the accelerated pace. For now, he said, “we have somebody standing there just pressing the ‘O.K.’ button to restart it.”​

 

[mongo]

Electroman was predicting volume production in early Q2 and (near) full capacity before the end of the year. You replied to him: "What kind of problems do you expect at GF3, which would delay volume production by 6 months?" who which to me implies that you think that Tesla will have meaningful volume this year and will be full capacity in Q2. I don't think going from a dirt field to volume production in 12 or to full capacity in 15 months is scaling back ambitions.

Tesla's recent guidance was production in Q3 and volume in Q4, or Q1 at the latest So Q2 is a 4-6 month slip.
Tesla, Inc. (TSLA) Q1 2019 Earnings Call Transcript -- The Motley Fool

So, in terms of execution, it's outstanding, but of course, the production goes as fast as the slowest item. That's very important to bear in mind. So, we have 99% of things in good shape, but 1% is missing you still can make a car. So, with respect to -- that said, it looks like we'll reach volume production at the end of this year with, let's say, more than 1,000 cars a week, maybe 2,000 from Shanghai Giga at the end of this year. That's what it looks like to be the case right now. If it's not at the end, it will be shortly thereafter.

https://ir.tesla.com/static-files/b2218d34-fbee-4f1f-ac95-050eb29dd42f

If our Gigafactory Shanghai is able to reach volume production early in Q4 this year, we may be able to produce as many as 500,000
vehicles globally in 2019. This is an aggressive schedule, but it is what we are targeting. However, based on what we know today, being
able to produce over 500,000 vehicles globally in the 12-month period ending June 30, 2020 does appear very likely.

 

[Hock1]

I am not paying attention to the Tripp litigatoin.

As far as we know nobody has identified the paint shop saboteur, not in public anyway -- I assume they're no longer employed by Tesla.

The reason I am interested in the Tripp case is that, IMO, a deposition of Tripp would ultimately produce some interesting names (co-criminals) up the food chain.

 

[mongo]

Sometimes after a careful root cause analysis a different explanation is found.
Was SpaceX’s Rocket Sabotaged?

An out of spec part failure (was it an accident?, another SpaceX supplier was falsifying inspection reports) is different than finding code that was changed along with logs of the changes being made. (see also Jurassic Park: white rabbit)

The random fires may or may not have been nefariously induced.

 

[SPadival]

The reason I am interested in the Tripp case is that, IMO, a deposition of Tripp would ultimately produce some interesting names (co-criminals) up the food chain.

OT: My twitter id makes an appearance in one of the exhibits submitted by Tripp

 

[TheMrX]

Here's the allegations in the Tesla vs. Martin Tripp court case (in Document #1):

Docket for Tesla, Inc. v. Tripp, 3:18-cv-00296-LRH-CBC - CourtListener.com

"Tesla has only begun to understand the full scope of Tripp’s illegal activity, but he has thus far admitted to writing software that hacked Tesla’s manufacturing operating system (“MOS”) and to transferring several gigabytes of Tesla data to outside entities. This includes dozens of confidential photographs and a video of Tesla’s manufacturing systems. "

"The improper means used by Tripp to acquire and disclose Tesla’s trade secrets include:

a. Breaching specific provisions of the Proprietary Information Agreement;
b. Writing software to hack Tesla’s MOS;
c. Exfiltrating confidential and proprietary data from Tesla’s MOS for the purpose of sharing the data with persons outside the company;
d. Sending third parties a confidential code or “query”;
e. Taking and sharing with third parties dozens of photographs of Tesla’s manufacturing systems;
f. Taking and sharing with third parties a video of Tesla’s manufacturing systems; and
g. Attempting to conceal electronic evidence of his misappropriation and disclosure of trade secrets."

[...]
​

If those allegations are true (they might not be), the pattern is at minimum industrial espionage, and sabotage for profits isn't an idea far removed, especially considering his TSLAQ affiliations.

I didn't find the paint shop connection though, and since Tripp was employed at GF1, it would be difficult but not impossible to imagine him understanding the paint shop code and procedures to launch successful sabotage. Note that there was a very interesting increase in paint quality last summer, and paint sabotage would be a particularly nasty variant as it requires a very expensive recall. So I don't exclude the possibility.

Edit: found the paint shop sabotage allegation, it's in a NYT article quoted by @EinSV:

TSLA Market Action: 2018 Investor Roundtable

"At 6:30 a.m. on Aug. 18, three robots in the paint shop at the Tesla factory in Fremont, Calif., started malfunctioning. The incident forced a production halt on the Model 3, the key to the company’s future.

Made aware of the stoppage, Mr. Musk went to the factory and worked into the night. The problem was resolved, but Tesla reached a troubling conclusion: The robots had been infected with malware in an act of industrial sabotage. And though they could not prove it, executives suspected they knew the culprit: a rogue employee, working at the behest of short-sellers."​

So I suspect the sabotage (or botched malware attack) did happen, and they suspected Tripp but couldn't link it to him.

Anyway, I think the sabotage angle was, fortunately, just a minor factor - most of the big delays in the Model 3 ramp-up were self-inflicted by Tesla.

Cross posted this in ''Model 3 paint wearing off'' Thread.

 

[Artful Dodger]

To me this suggests that there were no unexpected logistics hick-ups in Q2 in any of the three major regions

There appears to have been a homologation issue for the SR+ in Switzerland. Tesla seems to have dealt with the issue effectively, primarily by relocating those vehicles to Germany and un-assigning VINs to any customers that could not take delivery by the end of Q2. I think that's why Elon flew to Europe last week.

Edit: here's the source ( paging @avoigt )

Alex‏ @alex_avoigt Jun 30

The rather high level of new SR+ available in

for immediate purchase and delivery are likely due to the homologation delay that caused Tesla to redirect all vehicles that has been scheduled for

into other countries. Tesla confirmed officially that redirection.

1 reply 0 retweets 19 likes
​

 

[Fact Checking]

Sometimes after a careful root cause analysis a different explanation is found.
Was SpaceX’s Rocket Sabotaged?

Please, forensics of software intrusion/sabotage is often far more reliable than SpaceX's herculean task of putting together AMOS-6 "Humpty Dumpty" Falcon 9 and root-causing what its failure was, which rocket didn't simply fall from a wall but exploded/conflagrated with the energy equivalent of about one thousand tons of TNT which destroyed not just the rocket, but burned for hours which also destroyed the launch pad, including many of the various ground telemetry computers ...

I never took the AMOS-6 sabotage allegations seriously, you have to be completely out of your mind to try to shoot a rocket deep inside a U.S. Air Force base in Florida exactly when it was preparing for a static fire, also there was very little motivation to do it. (Also, had there been any willingness to do it by any entity, a software space attack against SpaceX would have been far less risky and wouldn't have resulted in an indictment of many counts of attempted murder either.)

Both motivation and tools to accomplish industrial sabotage against Tesla's Fremont factory are far more accessible, and as a publicly traded company the payment can simply be extracted from public markets.

 

[Artful Dodger]

(Or not - all of these are allegations that haven't been proven in a court of law.)

... primarily because Tripp is hiding out in Romania to evade the lawsuit and trial (no US extradition treaty).