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

[KarenRei]

Who goes to a dealership to repair a tire? This conversation confuses me.

 

[SOULPEDL]

Single data point:
For years it seemed like I had the only Tesla on the road in Ohio.
Yesterday, while driving my wife to Cleveland Hopkins airport, forty miles away, I was pleasantly surprised to encounter a Model X in front of me. After the dropoff I was over taken my a Model 3 with temporary plates. Stopping at Whole Foods I saw two Model Ss in the parking lot.

Things are looking up.

That's 5 data points including yourself

 

[Fact Checking]

If memory serves me right, he also said that they will target the next ramp-ups to be very fast. I don't remember where I heard/read that, but it was in the last couple of months I think.

IRC he said the mistake was to try to automate too much things from the beginning, and it ends up being slower than it could have been.

So with more conservative target and smaller steps, Model Y could be ramped up faster than Model 3 did.
They are expected to share a lot of components, at least they don’t need to go through the battery pack hell again.

So I went down the memory lane and extracted past statements from Elon about their Model Y plans:

May 2018 ER conference call:

David Tamberrino - Goldman Sachs & Co. LLC

Okay. Maybe taking my next question in a different direction. What is your timeline for launching the Model Y and have you begun to spend for this? Or that only begin to start hitting the P&L from an R&D and a CapEx perspective in 2019?

Elon Reeve Musk - Tesla, Inc.

It will only start to become significant in 2019.

David Tamberrino - Goldman Sachs & Co. LLC

Okay. So all of the CapEx spend for this year is associated with Fremont Model 3 Gigafactory?

Elon Reeve Musk - Tesla, Inc.

No, no, please don't take it literally. I said it will only start to become significant next year. It's not zero right now, but it's not a big number. It's not a big number relative to our revenue.

Deepak Ahuja - Tesla, Inc.

In the early days of product development anyway there's not much CapEx. CapEx becomes...

Elon Reeve Musk - Tesla, Inc.

Yeah.

Deepak Ahuja - Tesla, Inc.

... as you committed to equipment and equipment starts to become in-house.

Elon Reeve Musk - Tesla, Inc.

Yeah. Although, it is remarkable, like, although the amount of money spent in the beginning is really quite low, it begun with development ... program, decisions made at beginning of the development program have massive implications for future CapEx. So it is better to spend a bit more time making the right design decisions and really thinking through the producibility of product, before racing ahead with CapEx decisions.

There's no question we could have made the Model 3 much easier to produce than we have. Model Y, I think Model Y is going to be a manufacturing revolution. It will be, I think, incredible from a manufacturing standpoint, because we do not want to go through this pain again. Yeah.

[...]

Alexander Eugene Potter - Piper Jaffray & Co.

Okay. Very interesting. Last one. You mentioned earlier you think the Model Y production is going to be a true sort of production revolution. If you had to do the Model 3 over again there are some things that you would've changed, and you hope to incorporate those learnings into the Model Y. What specifically would you do? Or what specifically would you plan to do?

Elon Reeve Musk - Tesla, Inc.

Well, I think – let's save that for another time. Like, we'll talk about that when we unveiled the Model Y. But it's really going to be dramatically better. The design and production system, I think, really will be next level.

​

August 2018 ER conference call:

John Murphy - Bank of America Merrill Lynch

I mean, is that replication of that simplicity why you think Shanghai could be that much less costly and that then Model Y capacity might be that much less costly to add?

Elon Reeve Musk - Tesla, Inc.

Yeah, Model Y is sort of a whole separate thing but it's definitely one of the elements that convinced us that we can scale up quickly and at low CapEx in Shanghai, where we do an improved version of GA4. And then, we're also figuring out how to make the paint shop a lot simpler and general assembly a lot simpler. And after this call, I'm headed back out to the...

Jeffrey B. Straubel - Tesla, Inc.

Body shop.

Elon Reeve Musk - Tesla, Inc.

The body shop and making the body shop a lot simpler.

Jeffrey B. Straubel - Tesla, Inc.

Making it a lot simpler.

Elon Reeve Musk - Tesla, Inc.

Yeah, we can really simplify the body shop, man. Wow. And there's a lot that we can really easily improve like design to manufacturing and changing some of the joining approaches that we use and actually making the car lighter, cheaper and better and actually stabler. Yeah, it's really, ... safe already, but yeah.
​

Elon also talked about the Model Y design in the Q1 2017 conference call, but I think many of those details are probably obsolete, except perhaps the ditching of the 12V battery and the low voltage wiring, and a general reduction in wiring length through smart wiring.

We also know that Tesla patented a new cable connector that is easier to manipulate via robots:

Tesla patents new type of cable easier to manipulate by robots in move to automate production​

Key takeaways:

• Elon considers GA4 a.k.a. the "Sprung Tent" a key model to introducing the Model Y. This suggests a fast but gradual ramp-up. This supports a surprise 2019 introduction of the Model Y.
• They want to re-do everything, from body shop, paint shop to general assembly.

Speculation about Model Y production based on re-reading these old statements:

• Elon is gong to unveil a lot of details about the Model Y in March, including the new manufacturing approach.
  
• I believe they'll do the initial Model Y runs in Fremont, and early 2020 or maybe even late 2019 is not impossible for the first production versions of the Model Y. This has numerous advantages:
  • Paint shop can be shared. If initially they'll do maybe 1,000 Model Y's per week then that gives them a lot of time to expand paint shop capacity independently of the Model Y ramp-up.
  • I believe they'll start Model Y with a skeleton body shop and a skeleton general assembly line. Other existing resources can be used and shared: molding shop, existing workforce, stamping machines, etc.
• They could start with a flexible assembly line architecture that allows unlimited, gradual scaling up
• With the Model 3 they ordered hundreds of industrial robots for billions of dollars and for a planned capacity of 10k/week, and when they started the ramp-up then much of the capex was already committed and a forced time table was set for the Model 3 to earn money. This created 'production hell' and the whole bankwuptcy frenzy.
• I believe with the Model Y the focus will be on low-risk, low-capex ramp-up with flexible, modular assembly lines and approaches and only money they already have will be spent. This creates a much lower stress and in the end significantly less expensive ramp-up process as well. The obvious question: is such a design even possible - but if it is even remotely possible according to he rules of physics, industry traditions be damned, I'd expect Elon to try it.
  
• Initial and targeted level of automation is unclear to me. Maybe they'll go for excessive automation this time, but design it from the get go for the car's manufacturing to be easy to automate. Or they'll go for the GA4 approach of a flexible, low capex line with manual labor and learn on the fly. My guess is the former, but I'm not certain about it.

 

[MarcusMaximus]

Who goes to a dealership to repair a tire? This conversation confuses me.

Tesla has roadside assistance that includes flat tires(they take the whole wheel to the service center and give a loaner wheel in the meantime). They’re supposed to let you know whether the tire can be repaired or needs to be replaced and ask for authorization to do it.

 

[Singuy]

I've a different perspective.

General media hasn't bought into EVs. They still think they are - expensive & not practical. They think of it as niche. These are generally non-auto journalists.

Once you understand this perspective, the rest follows.
- When a competitor comes, Tesla sales will suffer because, being a niche, overall EV market is limited
- Once the backlog is gone, where will the demand come from ?
- etc

Auto journalists can't believe Tesla can be better at EVs than established OEMs. They think, as soon as established OEMs start making EVs seriously, Tesla can't compete.

The best part about all this is, legacy auto makers cannot and will not take EVs seriously. They cannot afford to pump billions into an infrastructure that self implodes their ICE business in the billions. I still think the only serious Tesla competitor is another Tesla like company (like BYU). Legacy car makers will always be behind. Who would a "seal team programmer" work for? Toyota/GM where you have plenty of red tap to get anything done and no one takes you seriously or Tesla who champions your work because you are task to build the future of transportation?

All these legacy car maker announcements are just lip service, hoping to take potential Tesla buyers away using their own brand loyalty, or for the shareholders from abandoning ship and jumping to TSLA. You know and I know, time and time again their EV cars always come up short in major ways.

 

[Unpilot]

Tesla has roadside assistance that includes flat tires(they take the whole wheel to the service center and give a loaner wheel in the meantime). They’re supposed to let you know whether the tire can be repaired or needs to be replaced and ask for authorization to do it.

I assume you have escalated this?

 

[sweter]

It's very tempting to play the volatility now, but I'd been 50/50 successful with it in the past. So a note to self: HOLD.

Well... I wrote this and sold 109 shares 5 minutes later at $323. Then set a buy order at $280 expiring tomorrow. It triggered today giving me 125 shares. So I got 16 shares for free, that's $56,000 in 2028 money... Or a free EAP on my incoming 3 shortly Not bad for a few clicks.

Maybe get your own clue and don’t buy a car from an OEM that doesn’t have a SC within a distance that is comfortable for you. Seriously. You made the choice to buy, Tesla didn’t make you buy the car. For such a self-proclaimed smart guy, that was a stupid thing to do. Your complaint is of your own making. No sympathy.

Well, you kinda prove his point though, don't you?

"According to Markets Insider’s weekly track of data, a net 15,870 Robinhood users added Tesla to their portfolio in the past week, making it the most-added stock on the app over that time. Tesla now has 97,404 Robinhood shareholders, ranking 20th among all stocks on the platform."​

Interesting trend. A very large percentage of Millennials is protected from MSM based FUD, because they do not watch TV and don't read the usual news sources.

Millennials will also more likely to make the obvious "the Model 3 is to Tesla today what the iPhone was to Apple 10 years ago" observation.

They (we) do however track stocks on iPhone Stocks app which has a feed from SA, Barrons and all the others. And they (we) never read articles, just headlines.

 

[brian45011]

Interesting effort from Galileo Russell and Say to get retail shareholders a platform to ask questions on the conference calls:

[Edit: To clarify, Russell has been in contact with Tesla regarding this, and while they haven't committed to do it, he thinks that they are likely to do so.]

The annual share-holders' meeting with questions from the audience every quarter? Priceless!

 

[MarcusMaximus]

I assume you have escalated this?

Yep, filled out the executive escalation box thing and noted Im also a shareholder concerned about service issues hurting the brand.

 

[Right_Said_Fred]

Who goes to a dealership to repair a tire? This conversation confuses me.

Not only does the conversation confuse me, I'm also wondering why it is being held in this topic. There are other topics to discuss service complaints.

 

[Krugerrand]

It's possible, but Elon did say that the very fast Model 3 product cycle was a mistake, which they don't want to repeat again.

They do have the problem of not enough factory space at Fremont - and Model Y production at any other location in the U.S. has very low probability IMHO.

?

Link to quote please. I don’t recall him saying any such thing and it makes no sense since he wants to populate the planet with EVs last year. He also wants to do multiple vehicles per year, instead of one every couple of years.

 

[MarcusMaximus]

Not only does the conversation confuse me, I'm also wondering why it is being held in this topic. There are other topics to discuss service complaints.

Probably should have made it more clear: I’m using my own anecdote as additional support for neroden’s position that service is/is going to damage the brand. I see it as a major source of risk.

 

[Fact Checking]

They (we) do however track stocks on iPhone Stocks app which has a feed from SA, Barrons and all the others. And they (we) never read articles, just headlines.

So when it comes to Millennials my faith in humanity is stronger: it's the first generation who grew up lead-free, and also grew up while being exposed to a barrage of "don't believe your own lying eyes" online pranks, scams and doctored photos on a daily basis. That improves critical thinking skills in those who have an aptitude for it.

But yes, the iPhone stocks app SEO hack that shortz somehow seem to be paying for through some channel is annoying and probably has a negative effect.

Any large TSLA bull who wants to invest a few ten thousand dollars into a feed of CleanTechnica, Teslarati, InsideEV and the occasional Electrek articles to show up on the iPhone stock app and trace and fix this distortion?

 

[SOULPEDL]

Not only does the conversation confuse me, I'm also wondering why it is being held in this topic. There are other topics to discuss service complaints.

Agree, so I was joking. Someone was thinking because there were more Tesla cars then the company must be doing better and called it "One Data Point". So I just clarified. Jeeze...

 

[Fact Checking]

Yep, filled out the executive escalation box thing and noted Im also a shareholder concerned about service issues hurting the brand.

TBH I'd be incredibly mad with them after such an experience: the whole POINT of roadside assistance packages is to assist, at a loss if need to be, not to cheat you with obvious feet-dragging (in the transparent hope that you will go away and get your tire fixed elsewhere), and with stealth charges. Not giving service is one thing that's annoying enough, but wasting the time of the customer and making him unhappy is like totally backwards...

Roadside assistance packages are basically insurance policies where 90% of the time they are not needed at all - but when they are needed the customer should come first.

 

[neroden]

I actually disagree with this. While it’s VERY inconvenient for some very small set of people, that set of people is, well, VERY small. How many people are likely to drive through some random bit of North Dakota in a Tesla?

Anyone driving from Seattle to Minneapolis, Montana to Wisconsin, or going south from Manitoba. Lots and lots, in other words.

Look, this ain't Alaska (which probably should not have Superchargers). It's on the way.

 

[SOULPEDL]

Who goes to a dealership to repair a tire? This conversation confuses me.

I'm actually confused...
OT - I did.

 

[SOULPEDL]

Probably should have made it more clear: I’m using my own anecdote as additional support for neroden’s position that service is/is going to damage the brand. I see it as a major source of risk.

Service vs growth is actually a contender question in the Shareholder SAY contest. Likely on topic then especially as it was worded on SAY.

 

[EVDRVN]

So when it comes to Millennials my faith in humanity is stronger: it's the first generation who grew up lead-free, and also grew up while being exposed to a barrage of "don't believe your own lying eyes" online pranks, scams and doctored photos on a daily basis. That improves critical thinking skills in those who have an aptitude for it.

But yes, the iPhone stocks app SEO hack that shortz somehow seem to be paying for through some channel is annoying and probably has a negative effect.

Any large TSLA bull who wants to invest a few ten thousand dollars into a feed of CleanTechnica, Teslarati, InsideEV and the occasional Electrek articles to show up on the iPhone stock app and trace and fix this distortion?

You don't live in the Bay Area, if you did you would not say that

 

[Todd Burch]

Ask your doctor if you're healthy enough for Tesla.