Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

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

This site may earn commission on affiliate links.
Very interesting news! But it is hard to know what it means for sure without knowing how many CFTC relays each Model 3 has and if CFTC is currently the sole supplier.

Combined with Jerome's email this seems highly suggestive that Tesla is ready for a sustained 10k per week Model 3 production between Fremont and GF3. The timing suggests GF3 is on track to ramp to 3k per week very quickly.
Agreed, there was also the plans to increase the battery cell production in June by Panasonic.

Other possible hints are the change of the base colour from black to white which apparently is less work for the paint shop. However it could also just be a cost cutting measure.

All comments coming from suppliers and insiders are hinting at more than just an incremental increase in production.

If we see more suppliers announcing increases in order size things could get very interesting.
 
Last edited:
  • Informative
  • Like
Reactions: BBone and kbM3
There’s a ship at pier 80, it looks like Tesla will unwind the wave by starting shipping to Europe earlier in the quarter, and stop shipping earlier in the quarter so that there’s less inventory in transit at the end of the quarter.

In Q1 they also had the first ship at pier 80 on the 11th. The only unwinding we have is that there is ample LR inventory in all European markets that started shipping in Q1. The sales we'll see in July will more or less reflect 'steady state' demand for that configuration up to the point that some combinations become scarce again (like white interiors). We saw exactly the same in early Q2.
 
New factory, new layout, new crew, new country, new language. There's enough variables in the China equation without unnecessary changes when there's so much at stake.

Fremont is safer and easier to experiment with. And a heck of a lot closer to key personnel.
Agreed. hopefully he knows it`s harder for him to sleep on the GF3 factory floor than in Fremont or at GF1.

On that note, when we talk about setting up GF3 and the risks involved, it is important to note how difficult such a work transition is on the human/expertise side. Tesla is a young company, many of their processes are not mature yet even at home at the main factory and they have a limited number of tenured experts.

There is a good chance, that some of the upcoming products will pose unforeseen manufacturing challenges at Fremont and GF1 and you add GF3 as complexity on top of that. They will need to expat many of their key people to China for months if not years to make sure they duplicate the company culture and get product out the door as well. That is why I am also OK with putting GF4 on the backburner - doing 2 factories in parallel would be foolish even if they had the money to do so.

This is also why Carsonight`s rumor/scoop about moving the "old" battery module line from GF1 to GF3 makes so much sense. Let`s incubate new technologies and machinery (new Grohmann module maker) at the home base first - if sugar happens, it is easier to fix it. Imagine a Model 3 production start-up kind of problem where Elon and key staff would have had to fly to China and spend months there...
 
Schonelucht:
The only unwinding we have is that there is ample LR inventory in all European markets that started shipping in Q1.

Do you have a link for this ample LR inventory?
EV-CPO lists 14 cars in Switzerland and notnihg else.
I'm "hagling" with my DS to find a suitable car for me... his last was "take this car with a tow hitch or take another 3 week wait for the next vessel".
 
It makes sense for them to build one of these lines at Fremont in Q4 2018 so they can fine tune and sort out problems before building multiple versions of it at Shanghai. They also need to switch all existing Model 3 lines at Fremont to this new 3/Y line that is more automated. Model Y production at Fremont in Q4 2018 is an old prediction of mine since late 2018. At the time, Fremont looked unlikely too. See the reaction here.

Building the Model Y in Fremont has been speculated about for a long time, including guesses about how Tesla would approach it:

Note that I can see four low capex methods to make space at Fremont for Model Y production:
A fourth, high capex method is to build new buildings at Fremont:

Tesla-Map-Fremont.jpg


The blue areas are still available expansion areas I believe - but those would have longer lead time than the re-purposing of existing factory floor space, and would cost significantly more.

Anyway, I think the chances have now increased that Tesla might be able to build the Model Y at Fremont. The other option would be to do it at the Nevada Gigafactory.

Which is pretty close to what's been happening for the past few months: new warehouse at Lathrop is close to coming online, there's a mystery ~50% reduction in Model S/X production and persistent rumors of retooling going in at Fremont, plus GF1 isn't expanding and doesn't have the space.

What I find disingenuous and intellectually dishonest is you now claiming good deliveries prediction accuracy purely based on end of quarter predictions, at which "prediction" you arrived in the final day of the quarter when various internal delivery status reports were already leaked and everyone and their dog was already spreading whisper numbers as various leaky entities within Tesla were trying to shape expectations.

The intellectually honest way for you to make predictions now would be to compare your current Q3 predictions to your prediction track record 2 weeks into Q3'18, Q4'18, Q1'19 and Q2'19 quarters.

Your early Q2 predictions were awfully off, and hiding behind "I'm data driven" is basically just a poor excuse for lack of seasonal adjustment methodology to your estimates: of course Tesla delivers a lot more vehicles in the final month of the quarter, they did so for the last 10 quarters - so if you are "data driven" based on extrapolating current VIN registrations and survey results you'll always under-estimate deliveries, for 90% of the quarter ...

So @Troy, please own up to your inter-quarter prediction track record as well.
 
The sales we'll see in July will more or less reflect 'steady state' demand for that configuration up to the point that some combinations become scarce again (like white interiors).

I'm pretty sure July demand is only measuring just a fraction of organic, steady-state demand, because there sure was quite a bit of demand pulled forward from July into June, due to the various demand levers Tesla pulled in Europe too.

August might be more representative of steady state European demand: pull forward effects will have faded, but any Q3 demand levers won't have an effect yet.
 
This is also why Carsonight`s rumor/scoop about moving the "old" battery module line from GF1 to GF3 makes so much sense. Let`s incubate new technologies and machinery (new Grohmann module maker) at the home base first - if sugar happens, it is easier to fix it. Imagine a Model 3 production start-up kind of problem where Elon and key staff would have had to fly to China and spend months there...

There's numerous advantages of shipping the "old" battery module assembly lines from Reno to Shanghai:
  • it makes space for any Maxcell technologies at GF1 - or for further Panasonic expansion, without the expense and lead time of construction work:
  • gigafactory-construction-2014-nov-4.jpg

  • it is also a nice capex saving trick as well: instead of writing off the old lines prematurely they can use them in Shanghai and not spend on new lines either,
  • plus the biggest problem with the old lines was that they were labor intensive (full automation failed and they had to bring in line workers) - and in China line worker labor is about 30% of U.S. labor costs.
I.e. this should not just make space and reduce capex, but reduce CoGs and improve margins straight away, even in early phases of the Shanghai ramp-up.
 
Last edited:
My read is that Tesla was preparing to sign local cell suppliers as a contingency, but they knew they were making progress on persuading China to remove its battery cell white list for local supply. This white list was removed last month which I think opens the door to supply GF3 fully with Panasonic cells from GF1 or the Japan S/X factory.

Exactly, and let's spell out the biggest implication of that: if the car and the battery pack is made in China, and the cell supply is on the whitelist, then Tesla customers will be able to receive the full 100% EV incentives that local EV producers receive. Those are direct price incentives, not tax incentives, so they are immediate and help demand even more than regular tax incentives.

Plus Tesla would be able to earn the full, maxiumum ZEV credits within China, with their superior range, and gascar makers would be forced to purchase them from Tesla, because the mandatory quota that gascar makers need to meet to be able to sell cars in China was just raised significantly. Does anyone know what exact consequences gascar makers are facing if they don't meet the Chinese ZEV quotas: is it a fine, or an outright sales ban? If it's an outright ban then Tesla might even be able to sell ZEV credits in China beyond 100% face value ...

While some of those incentives are being wound down next year, Tesla should be able to make use of them in the first few critical quarters of Shanghai ramp-up.
 
Do you have a link for this ample LR inventory?
EV-CPO lists 14 cars in Switzerland and notnihg else.

Yes, EV-CPO is notorious for stricyly following what Tesla wants to show and that is only a very limited selection of what is available. Move to any of the other trackers to get a better feel for inventory. But I must admit that I don't really follow Switzerland. Being out of the EU zone may make a difference? Over here, it's fairly trivial to get a car delivered next week if you order this week. For example the last delivery report in the Dutch subsection is from a guy who ordered July 5th and will pick up tomorrow for a blue AWD with hitch.

I'm "hagling" with my DS to find a suitable car for me... his last was "take this car with a tow hitch or take another 3 week wait for the next vessel".

Is tow hitch the sticking point?

edit : worldwide there are about 15 000 Model 3s in inventory.
 
Last edited:
  • Disagree
Reactions: neroden
I'm pretty sure July demand is only measuring just a fraction of organic, steady-state demand, because there sure was quite a bit of demand pulled forward from July into June, due to the various demand levers Tesla pulled in Europe too.

I should have specified earlier, my apologies. I was only looking at Model 3 for that statement. I agree S/X there was some pull forward and there are a lot of people waiting for Raven. But for Model 3 I am not aware of a lot of demand levers that would have pulled stuff forward?
 
OT:
FYI - Very cheap. 2-year old seedlings, (about 12") cost about $350 USD/ bundle of 1,000 trees. One person can manually plant 800-1,000 trees in a day with a tree bar or hoedad. My personal record is 800 White Pines in a day, and I'm no athlete. This "planted a tree in Mom's memory" business isn't gonna do it.

If you know where I can get 2-year-old seedlings for $0,35/tree in Iceland, by all means, please let me know ;) (we have VAT and more expensive labour) I might be able to do cheaper than $2/tree from some of the Hveragerði supppliers, or in greater bulk. But buying ~300 a time in Reykjavík costs nearly $2 per tree for conifers. Also, the rate at which one can plant trees varies greatly on the tree size and ground type. In the degraded grassland when planting small seedling trees I have to clear grass around them so that they get sufficient light, which is time consuming. In some areas the soil is easy to work, while in others rocks make more work out of it. And in boggy areas when planting e.g. tamarack, or on steep slopes, getting around can be more difficult.

But I agree, you need to plant trees at scale to make a difference. I was just pointing out that funding reforestation does legitimately sequester carbon at scale. Carbon remains trapped in forests so long as they remain intact as forests.
 
Last edited:
Exactly, and let's spell out the biggest implication of that: if the car and the battery pack is made in China, and the cell supply is on the whitelist, then Tesla customers will be able to receive the full 100% EV incentives that local EV producers receive. Those are direct price incentives, not tax incentives, so they are immediate and help demand even more than regular tax incentives.

Plus Tesla would be able to earn the full, maxiumum ZEV credits within China, with their superior range, and gascar makers would be forced to purchase them from Tesla, because the mandatory quota that gascar makers need to meet to be able to sell cars in China was just raised significantly. Does anyone know what exact consequences gascar makers are facing if they don't meet the Chinese ZEV quotas: is it a fine, or an outright sales ban? If it's an outright ban then Tesla might even be able to sell ZEV credits in China beyond 100% face value ...

While some of those incentives are being wound down next year, Tesla should be able to make use of them in the first few critical quarters of Shanghai ramp-up.

If they do not meet their NEV credit requirement they can not get any new model approved for sale. I think they might be moving to a fine system in the future though.

By the way with the lower subsidies, probably the biggest regulatory support for EVs in China is through easier access to permits for EVs in cities.
This is about to become significantly more powerful because China is now recommending all local restrictions are removed for EVs.
This can effectively act as a full ban on new ICE cars in large cities - 5 year waiting list for an ICE car permit, vs no permit required at all for EVs
 
If they do not meet their NEV credit requirement they can not get any new model approved for sale. I think they might be moving to a fine system in the future though.

By the way with the lower subsidies, probably the biggest regulatory support for EVs in China is through easier access to permits for EVs in cities.
This is about to become significantly more powerful because China is now recommending all local restrictions are removed for EVs.
This can effectively act as a full ban on new ICE cars in large cities - 5 year waiting list for an ICE car permit, vs no permit required at all for EVs

We could see quite a sales surge if the EV license plate limits are removed in Beijing! There are currently 3.4 million people waiting to buy cars for 0.1m annual permits.

“The quota for new energy vehicles available to car buyers in Beijing will remain at 60,000 in 2019, the same as last year, said Beijing Transport Commission on Wednesday. The quota for gasoline-powered cars will stay unchanged at 40,000.
Beijing introduced a license plate lottery system in 2011 to curb the growth rate of new automobiles. Under the system, potential car buyers have to participate in a lottery every two months for a purchase permit.
As of December 2018, more than 3 million people have registered with the lottery system to get a purchase permit, with the odds of winning a plate at 1 in 500.
While the quota for license plate has dropped from 240,000 in 2011 to 100,000 last year, the quota for new energy car has increased from 20,000 in 2014 to 60,000 as the city turns to electric vehicles to ease air pollution.
As of December 2018, more than 400,000 people have applied to buy a new energy vehicle. With the quota available this year, some applicants need to wait eight years to get plates.”​
 
Building the Model Y in Fremont has been speculated about for a long time, including guesses about how Tesla would approach it:



Which is pretty close to what's been happening for the past few months: new warehouse at Lathrop is close to coming online, there's a mystery ~50% reduction in Model S/X production and persistent rumors of retooling going in at Fremont, plus GF1 isn't expanding and doesn't have the space.

What I find disingenuous and intellectually dishonest is you now claiming good deliveries prediction accuracy purely based on end of quarter predictions, at which "prediction" you arrived in the final day of the quarter when various internal delivery status reports were already leaked and everyone and their dog was already spreading whisper numbers as various leaky entities within Tesla were trying to shape expectations.

The intellectually honest way for you to make predictions now would be to compare your current Q3 predictions to your prediction track record 2 weeks into Q3'18, Q4'18, Q1'19 and Q2'19 quarters.

Your early Q2 predictions were awfully off, and hiding behind "I'm data driven" is basically just a poor excuse for lack of seasonal adjustment methodology to your estimates: of course Tesla delivers a lot more vehicles in the final month of the quarter, they did so for the last 10 quarters - so if you are "data driven" based on extrapolating current VIN registrations and survey results you'll always under-estimate deliveries, for 90% of the quarter ...

So @Troy, please own up to your inter-quarter prediction track record as well.

Stats with bias is of no use ;)
low numbers - Shorts win
mediocre numbers - Troy wins
slightly bullish - VA wins
extremely bullish - 007 wins

cheers!!
 
Yes, EV-CPO is notorious for stricyly following what Tesla wants to show and that is only a very limited selection of what is available. Move to any of the other trackers to get a better feel for inventory.
...
Is tow hitch the sticking point?

You may call it a sticking point ... I didn't order it a month ago nor do I need it now but if I want delivery next week I must take it or wait on the next shipping in a few weeks.
In whole Austria there are 4 M3LRD M3 new inventory. The offered black M3 with a tow is not listed anywhere.
 
Context is everything. Example: I own land that's been degraded by a millennium of overgrazing; while in ancient times it surely was home to birch forest, today it's 50% poor grassland and 50% gravel barrens (well, and some iron bogs, but they're good and shall remain boggy). The canyon slopes are subject to landslides as a result of the degradation. Simple restoration of the soil by fertilizer (it's highly phosphorus and nitrogen deficient), manure, or seeding leguminous plants can increase the amount of carbon in the soil (and overland) dramatically in 5-10 years or so - about 10t/ha aboveground and ~120t/ha underground to the gravel barrens, somewhat less for the poor grasslands. Reforestation (taiga species) would add another ~80t/ha aboveground and ~50t/ha underground over several decades. So long as the biome remains "forest", the carbon sequestered will not decline, as new trees replace ones that die - indeed, mature trees would continue to seed the barrens around them, expanding their groves and continuing to lock up more carbon. So long as grasslands are not allowed to become overgrazed again, their carbon, too, will remain locked up.

I have 8ha. That's a lot of carbon sequestration potential just from restoration and reforestation - something like 2000t when all is said and done. Honestly, the only thing that stops me from doing more is how much money I have to sink into things like soil restoration or buying seedlings. Even the smallest conifer seedlings I can get are ~$2 each, which would mean tens of thousands of dollars in reforestation costs. If I want larger trees that get the job done sooner, they're even more expensive. I've already spent many hundreds of dollars on fertilizer, and probably need to spend thousands more to get phosphorus up to normal. And whether I do nitrogen from synthetic fertilizers, paying for dozens of manure spreader truckloads, or legume planting, that too will come with a significant price tag.

Or to put it another way... cash does sequester carbon.

(On that note, if anyone wants to sequester some carbon, you're more than welcome to support restoration or reforestation plans on my land - I'd do all the grunt work, and send photos of your plants ;) Realistically, though, I expect this to just be a project that I slowly fund myself over the course of decades)

Very cool. Thanks for all of your sequestration! I've thought for a while now that a neat implementation of carbon pricing would be to pay farmers for the amount of carbon sequestered per hectare. Carbon farming, if you will, financed by a carbon tax of some kind. As you describe, it is a vast, untapped resource, and although large amounts of cash can speed the process, a lot can still be accomplished with a little time and smart, ecologically-informed management practices. The benefits would be multitudinous, ranging from carbon sequestration to habitat restoration and soil regeneration. Farmers would gain an income stream that would help mitigate the disappearance of subsidies that support cultivation of biofuel crops, and they'd be seriously boosting the fertility of their soils at the same time, preserving yields even while they spend less on expensive synthetic inputs (mostly derived from fossil fuels). It would be a modern version of the soil conservation movement that grew out of the Dust Bowl era, and could be a good way to get rural America onboard with climate change mitigation goals.

Relevance to investors? Well, I suppose Tesla could provide the renewable energy systems these folks would need, and with their newfound prosperity they could afford them.
 
Last edited:
Heh. Yeah... if ARK's price predictions with full self driving came to pass quickly, I would have a *lot* of money to work with. I don't consider it plausible.


Yeah, Model S demand had been flat for a few years (around 50K/year) and some of it was pulled forward from Q1 to Q4 of last year (definitely) and some of it may have been converted to Model 3 demand (this is unclear, maybe not). The rest of it was production and logistics constraints, though.

It is really a waste of time to worry about demand based on delivery numbers, IMO. Demand has never been Tesla's major problem. Tesla has had lots and lots and lots of production, delivery, and servicing problems. Also, if I am gonna worry about demand, I am going to look at the fundamentals of demand: what would cause people to not buy the car? So I worry about the customer service issues, which have been causing people to not buy the car, and I follow what's happening to that. I don't think we get any demand information out of delivery numbers at this point.

I agree completely with last parargraph.....FWIW: I view Model 3's quality as superb and despite the high shipping numbers, M3 has not been the cause of service issues (which I've been fortunate to not have experienced in either Naples or North Carolina).
 
  • Like
Reactions: neroden
Context is everything. Example: I own land that's been degraded by a millennium of overgrazing; while in ancient times it surely was home to birch forest, today it's 50% poor grassland and 50% gravel barrens (well, and some iron bogs, but they're good and shall remain boggy). The canyon slopes are subject to landslides as a result of the degradation. Simple restoration of the soil by fertilizer (it's highly phosphorus and nitrogen deficient), manure, or seeding leguminous plants can increase the amount of carbon in the soil (and overland) dramatically in 5-10 years or so - about 10t/ha aboveground and ~120t/ha underground to the gravel barrens, somewhat less for the poor grasslands. Reforestation (taiga species) would add another ~80t/ha aboveground and ~50t/ha underground over several decades. So long as the biome remains "forest", the carbon sequestered will not decline, as new trees replace ones that die - indeed, mature trees would continue to seed the barrens around them, expanding their groves and continuing to lock up more carbon. So long as grasslands are not allowed to become overgrazed again, their carbon, too, will remain locked up.

I have 8ha. That's a lot of carbon sequestration potential just from restoration and reforestation - something like 2000t when all is said and done. Honestly, the only thing that stops me from doing more is how much money I have to sink into things like soil restoration or buying seedlings. Even the smallest conifer seedlings I can get are ~$2 each, which would mean tens of thousands of dollars in reforestation costs. If I want larger trees that get the job done sooner, they're even more expensive. I've already spent many hundreds of dollars on fertilizer, and probably need to spend thousands more to get phosphorus up to normal. And whether I do nitrogen from synthetic fertilizers, paying for dozens of manure spreader truckloads, or legume planting, that too will come with a significant price tag.

Or to put it another way... cash does sequester carbon.

(On that note, if anyone wants to sequester some carbon, you're more than welcome to support restoration or reforestation plans on my land - I'd do all the grunt work, and send photos of your plants ;) Realistically, though, I expect this to just be a project that I slowly fund myself over the course of decades)

Now there's an actual solution, plant more trees. So infuriating seeing all of these "climate change" taxes go to the general treasury (looking at you Heathrow in London and now CDG in Paris). Use the billions in Euros collected and plant more trees. No more efficient CO2 scrubbers than trees and plants.

And since this is a stock thread, let me bring back around. Its 8:22 AM Central Time and Tesla SP is 238.92.
 
Last edited: