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

[Christine69420]

Bjørn Nyland aka Teslabjørn just released this video from where he and some friends set a new World Record distance driven with an EV in 24 hours. In a Tesla Model 3 LR.

Spread the word!

 

[1101011]

BTW, when ecotality was trying to install charging stations, they had approached Starbucks (IIRC). Star bucks wasn't interested - they preferred more foot traffic than staying customers.

Explains their new interest in drive up windows.

A case in point: locally a small Starbucks is moving into a equally small space across the street- partially to update, but functionally to add the drive in.

 

[CorneliusXX]

Oooh, interesting. Tesla's avoiding converting non-Chinese currency to Chinese currency, and is starting China off with "old generation" equipment which will hamper any Chinese attempts to steal Tesla's trade secrets. All makes sense... implies that cells will go directly from somewhere-which-is-not-Nevada to Shanghai, interestingly.

Some other smart moves involved here. The major problem with the old machines was that they were too slow. They will be just fine for the ramp-up phase in Shanghai, during which everything else will be going slowly so they won't have to go that fast.

They can definitely be configured to make SR+, the only question is whether it will be cost-effective (the other problem was that these machines had too high a cost structure). COGS for the early Model 3s out of Shanghai may be elevated, until the Grohmann machines are bought out of Chinese profits.

I wonder: the capitalization rules for Chinese subsidiaries requires that the parent inject a certain amount of capital into the company over the 10 years after incorporation. Are they allowed to inject the capital in kind, in the form of equipment? If so, this is a clever way to avoid trapping cash in Chinese renminbi.

I wonder if the COGS for the old machines is labour related, if so there might not be as dramatic a difference between the old and new lines once relatively cheap Chinese labour is considered.

 

[Fred42]

As we're discussing Maxwell and VW Group's current and future offerings, I've got a nice little side-project that some of you may or may not like.

There's a thread over in the UK part of TMC about Model 3 leases, so many of you would have no reason to go there. But if I could draw your collective attention to it - M3 Leasing. As you can see the discussion has moved on from focusing on leasing the Model 3 to "VW will outcompete Tesla in a few years". To many of us learned folks here, that's clearly something which facts and available evidence doesn't back up. And I've tried to express some reasons why, but I think some here are much better at articulating this. So if you fancy being a teacher to some over on that thread, feel free.

For Tesla to prevail in Europe they will need a richer product portfolio than they have talked about to date and European GF's, which seems to be stalled.

 

[dhrivnak]

Tesla had 1.12% US market share in 2018 and is within couple hundred units of 1% US market share in 2019. Given US deliveries are always backloaded I am very confident Tesla will break 1% again.

U.S. Auto Sales Figures by Brand

Remember “cars” only represent about half the consumer vehicles sold.

 

[1101011]

V3 is (supposedly) cheaper to operate ...My guess is that at some point in the future when they do finally start upgrading V1/V2 to V3 (not for quite some time yet - possibly a few years) they would repurpose them as urban chargers (vs throwing them away).

My conversation with the Tesla employee from Riverbend (AKA Gigafactory 2) current intent is to not replace any V2, manufacturing V3 strictly for new installations.

 

[Navin]

For Tesla to prevail in Europe they will need a richer product portfolio than they have talked about to date and European GF's, which seems to be stalled.

Cough cough no way. Cough cough Norway

 

[CorneliusXX]

The factory is looking great in the sun. The images from the inside are amazing. two weeks ago the internals looked almost empty, now there is so much material in there you can hardly see the floor.

 

[Navin]

Sunday / Fudday challenge:

How can one of the usual media suspects (Lora, Dana, etc) blame this recent gas explosion on Tesla?

Bash on Twitter

 

[RFernatt]

I'm also kind of amazed why VW or Panasonic didn't bid up Maxwell, but I'm not complaining: this technology is now in very good hands.

I've pondered that as well. One theory is that Maxwell's DBE is an important piece of the puzzle, but not all of it and Tesla (Dahn) holds the other. If I have chocolate and you develop peanut butter, then I know that these really need to be put together! Others, who only see peanut butter, are just meh...

 

[green48]

Just bought my first Tesla! These sentry mode/autopilot videos were a major selling point for me

 

[Icer]

This VW Ford deal is what I hoped to see from Tesla.
Common platform for many body types, standardized batteries.

Ford To Share Volkswagens's MEB Electric Vehicle Platform | CleanTechnica

When? Later. Still some breathing room for Tesla
I admit i am surprised at how slowly the competition is to catch up.
Seems to continue to be 2 years away.
Same as the last 4 years.

China shifting to FCV?
Maybe not, but doing both, at least.
Hydrogen makes sense for Buses, Semis, heavy equipment.
China's central planning could enable a big infrastructure push.

China Switches Over to Hydrogen Fuel Cells, and Toyota Delivers the Tech

 

[brian45011]

Inventory write down in Q1 doesn't help ASP in Q2. It just makes sure margin on s/x doesn't completely tank in Q2.

Old ASP : 105,000
old COGS : 84,000 (20% margin)
Write off : 6,000 (80M/13,000)
new COGS : 78,000
new ASP : 90,000 (15k discount)
new margin : 12/90 = 13%.

Couldn't some of that write down have been allocated to used vehicles and energy products?

Finished goods inventory included vehicles in transit to fulfill customer orders, new vehicles available for immediate sale at our retail and service center locations, used vehicles and energy storage products. [10Q]

Service and Other gross margin in Q4 declined sequentially to negative 39%. Total gross loss of Service and Other increased compared to Q4. This increase is primarily attributed to used car inventory revaluation and reduction of ASP relating to new car pricing actions [8k]
​

What's the explanation of $80.4 million write-down on the Cash Flow Statement, but:

We write-down inventory for any excess or obsolete inventories or when we believe that the net realizable value of inventories is less than the carrying value. During the three months ended March 31, 2019 . . . , we recorded write-downs of $64.2 million . . . in cost of revenues.?
​

The "new car pricing actions" not only adversely affected used car prices (revenues) but it also increased the likelihood of vehicle returns from resale value guarantees to purchasers and residual value guarantees to leasing "partners."

 

[Prunesquallor]

For Tesla to prevail in Europe they will need a richer product portfolio than they have talked about to date and European GF's, which seems to be stalled.

Tesla “prevails” in Europe if sustainable transportation prevails. I believe I’ve heard that there are European automobile producers. All Tesla has to do is shame them into producing EVs that people want to buy.

 

[vigleik]

Remember “cars” only represent about half the consumer vehicles sold.

The tables in the link are for consumer vehicles, not cars. (Nowhere does the link mention cars.)

To check this, note that Ford is at about 600K/quarter in the link, and they hardly sell cars at all these days so that has to include light trucks and SUVs.

Or you can skin this cat another way: just google us car sales 2018 and you’ll find that they were about 5.5M cars plus 11.8M light trucks and SUVs, for a total of 17.3M vehicles. Tesla sold 252K vehicles world wide, with approximately 200K in the US. And 200K is more than 1% of 17.3M.

 

[EVNow]

Couldn't some of that write down have been allocated to used vehicles and energy products?

Yes, I was just trying to show what would happen if it was all to new inventory that was sold in Q2.

Old ASP : 105,000
old COGS : 84,000 (20% margin)
Write off : 0
new COGS : 84,000
new ASP : 90,000 (15k discount)
new margin : 6/90 = 7%.

 

[ReflexFunds]

Tesla has held its 3rd jobs fair in China with work reportedly starting in 1 month. Looks like everything still on track for production. Given Tesla is moving its old battery module/pack machines from GF1 to GF3, I presume we will soon start hearing of GF1 staff moving to China to aid with staff training and the production ramp.

Tesla accelerates opening of production facility to ease delivery pressure - Global Times

Tesla held the fair to recruit technical staff such as production supervisors, installation and repair technicians, quality inspectors and others for the new Shanghai plant.

A Weibo user named AichilumiantiaoMT complained that the pay being offered by Tesla is "not as good as expected."
"Maybe because it is Tesla, everybody has high expectations for its pay," the user said.
The person also disclosed that the Tesla Gigafactory 3 offers monthly pay of about 9,000 yuan ($1,305.77) for a production supervisor. The wage does not include accommodation, which is usually the case with other companies, according to insiders.
The average monthly salary of 8,765 yuan for urban jobs in Shanghai in 2018, according to data from the Shanghai Municipal Human Resources and Social Security Bureau.

Some conflicting comments on Tesla's pay with another source saying wages are good relative to BMW -
Chao Zhou @realChaoZhou

"New source is telling 30-50% higher than what’s on BMW in China."

 

[mongo]

Hydrogen makes sense for Buses, Semis, heavy equipment

I'm not so sure about that.

Electrolysis (the green way of getting H2) is inefficient.
H2 from CH4 (or other feed stock), might as well use the feed stock via the existing combustion engine.
In field refueling of heavy equipment?
H2 requires 4x to 10x the storage volume.
Few transportation fuels surpass the energy densities of gasoline and diesel - Today in Energy - U.S. Energy Information Administration (EIA)
Then you still need to convert the drivetrain to electric. If using Fuel Cell, you have no regen ability, and you need a battery pack anyway to handle the peak load (500kW+) unless you size your fuel cell for continuous duty (and it handles load changes well). So now you are running a parallel fuel cell, battery, 600+ HP electric motor powertrain.

Then there are the safety issues. No one sees a Hydrogen fire, it generates UV, not IR. It collects in the ceiling of your garage. Requires inspected 10k psi storage tanks.

Hydrogen Compared with Other Fuels | Hydrogen Tools
https://h2tools.org/bestpractices/hydrogen-compared-other-fuels

 

[RobStark]

Remember “cars” only represent about half the consumer vehicles sold.

The market isn't 8.4M cars June YTD plus trucks.

That is the entire market.

 

[EVNow]

I wonder if the COGS for the old machines is labour related, if so there might not be as dramatic a difference between the old and new lines once relatively cheap Chinese labour is considered.

China labor is 25% of the US labor cost. Interestingly similar to IT cost difference between US & India.

Manufacturing labor costs per hour: China, Vietnam, Mexico 2016-2020 | Statistic
​

In 2018, manufacturing labor costs in China were estimated to be 5.51 U.S. dollars per hour. This is compared to an estimated 4.45 U.S. dollars per hour in Mexico, and 2.73 U.S. dollars in Vietnam.​

United States Average Hourly Wages in Manufacturing | 2019 | Data | Chart

Wages in Manufacturing in the United States decreased to 22.03 USD/Hour in June from 22.04 USD/Hour in May of 2019. Wages in Manufacturing in the United States averaged 9.41 USD/Hour from 1950 until 2019, reaching an all time high of 22.04 USD/Hour in May of 2019 and a record low of 1.27 USD/Hour in February of 1950.​