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

[EVNow]

She's talking about a Camry-class BEV with 200 miles of range.

Not sure about that.

I take it as an example of ICE prices remaining flat vs falling EV prices.

ps : For $15k they should be able to make Versa/Honda Fit kind of EV with 200 mile range.

 

[Antares Nebula]

My reading of the new deal is that SEC will not directly go to court without first talking to Musk's lawyers first. They will explain how 1000/wk is within guidance of 1GW / year.

Anyway, puts are indeed very expensive as a hedge.

Yes, I was thinking about this. Last time, the judge reprimanded the SEC for filing suit so quickly without first mediating with Tesla/Musk. So my guess is, this time, they will be more patient and engage in dialogue before moving to file suit. Perhaps they may even reach a constructive accord (one can hope!). Also, it is entirely possible that Musk did follow procedure this time and check with counsel before tweeting.

Last time, the time between Musk's tweet and SEC suit was less than a week. I would be very surprised if this time around it did not take longer to hear anything from SEC or Tesla about this. And like you said, the 1000/wk is within guidance of 1GW / year. Though I'm not certain whether that is sufficient; the solar roof is a more premium product with higher revenue than solar panels. Separate disclosure may be required.

Anyway, it will be difficult hedging any downside risk with this via puts because timing of any SEC news will likely be different this time around.

 

[mongo]

Yes, I was thinking about this. Last time, the judge reprimanded the SEC for filing suit so quickly without first mediating with Tesla/Musk. So my guess is, this time, they will be more patient and engage in dialogue before moving to file suit. Perhaps they may even reach a constructive accord (one can hope!). Also, it is entirely possible that Musk did follow procedure this time and check with counsel before tweeting.

Last time, the time between Musk's tweet and SEC suit was less than a week. I would be very surprised if this time around it did not take longer to hear anything from SEC or Tesla about this. And like you said, the 1000/wk is within guidance of 1GW / year. Though I'm not certain whether that is sufficient; the solar roof is a more premium product with higher revenue than solar panels. Separate disclosure may be required.

Anyway, it will be difficult hedging any downside risk with this via puts because timing of any SEC news will likely be different this time around.

The SEC settlement doesn't mean Elon cannot tweet anything new about Tesla. Only that he needs to have it reviewed first. If he did, the 1GW thing is irrelevant. Really doubt anything will come from this. Especially since they had been talking of GF2 ramping since last year.

and obtain the pre-approval of an experienced securities lawyer employed by the Company (“Securities Counsel”) of any written communication that contains information regarding any of the following topics:
• the Company’s financial condition, statements, or results, including earnings or guidance;
• potential or proposed mergers, acquisitions, dispositions, tender offers, or joint ventures;
• production numbers or sales or delivery numbers (whether actual, forecasted, or projected) that have not been previously published via pre-approved written communications issued by the Company (“Official Company Guidance”) or deviate from previously published Official Company Guidance;
• new or proposed business lines that are unrelated to then-existing business lines (presently includes vehicles, transportation, and sustainable energy products);

 

[ReflexFunds]

She's talking about a Camry-class BEV with 200 miles of range.

The entire Camry drivetrain - engine, transmission, exhaust, starter motor, cooling system, etc. is about $4k. A BEV powertrain - motor, gearbox, inverter, wiring and such is about 3k. Might get down to 2k by 2025. Just to reach cost parity you need a 2k battery pack. That's $40/kWh at the pack level. That's below the raw material cost.

A $15k BEV Camry is a fantasy even if the battery pack costs $0.00. If you want to talk about a noisy Chinese 200 mile NEDC econobox with crappy suspension, tires, steering, seats, etc. then 15k might be within reach.

Do you have a good source for $4k? I have ICE equivalent powertrain costs at around $6.5k. Transmission, cooling, exhaust, fuel system, other etc - $3-3.5k. Base engine $3-3.5k.
This will increase in future as new emission/pollution limits are introduced.

For Model 3 I have powertrain (ex battery pack) costs currently at $4.5k (BMS, charging, motor, inverter, DC-DC converter, gearbox, cooling, cables etc). Most of these should follow experience curves lower as EVs continue to scale, but some specific components already have huge cumulative production volume from other applications so EV growth will be less of a demand step change and these will reduce in production cost at a lower pace.

The raw material cost per kwh is not a fixed quantity. Lithium Carbonate, Nickel Sulphate etc are not really raw materials but high value add components whose total market size will increase by multiples or even orders of magnitude, leading to experience curves (which act due to economies of scale, process improvement through experience and increased R&D budgets in-line with industry revenue) and production cost reductions as we have seen for all mass produced technological products.

Also, parts of cell R&D are focussed on requiring less kg of active cathode per KWH, and other R&D is focussed on using less expensive materials in the cathode composition - such as for example substituting Nickel and Cobalt out for Manganese. So even at current prices the raw material cost per kwh will reduce.

But I agree its not obvious we will get a step change in these in the short term and I don't think the above Camry equivalent price forecasts/timelines are realistic.

 

[EVNow]

Anyway, it will be difficult hedging any downside risk with this via puts because timing of any SEC news will likely be different this time around.

I've been thinking about Leap call + Leap put. If the SP goes down by $20, roll puts down by $20 and calls by $20.

Can adjust the # of calls vs # of puts depending on where you think the SP will be in a few months.

 

[dc_h]

I agree with his comparison between robotaxis vs human driven ride services. For the foreseeable future, people are so much better than computers for driving passengers.

That’s why I think roborentals are where it will be for the next 5 years. Anyone who thinks Tesla can jump straight to robotaxies should review the progression of enhanced summon.

Enhanced summon is so slow and tentative that only people who can’t walk to the car (eg it’s raining) would use it. Once inside, they’d rather drive than let summon take them further. Summon + human driver = roborental or robo car sharing.

When summon is so good that you want it to also drive out the parking lot, that’s robotaxi behavior: summon + car driving. Obviously summon < summon + car driving, so the easier service is roborental / robo car sharing.

Maybe right, but hard to tell where we are on the path. Developments like this tend to progress in increments and bursts. When the neural net code for the new chip rolls out we could see a rapid improvement in FSD. Improvement on FSD chips should be transferable to v2 and 2.5 chipsets as well. Feature complete could be two years or more from a production solution, but it could be faster then you think.
Maybe we’ll know more when v10 comes out. Improved summon is needed for sure. Summon with yips is counterproductive to the Tesla and autopilot brand.

 

[Sean Wagner]

I have a new hero! I love the way George Hotz thinks.

This was really interesting. He makes it not difficult to follow at all, and thoughtless obstacles between doing useful engineering are not his thing either. There's some good commentary to reflect upon. One thing I really liked is how he mentioned and described their management of driver expectations. I think that's very important, while his prediction that Tesla would shift to driver attention monitoring by camera also bears consideration.

Second "trouvaille" in these pages was SoylentBrown (@BrownSoylent) | Twitter, someone who's evidently doing lots of hands-on [parts apart] global research and due diligence on EV manufacturers for some big guns There's a plan to methodically track Tesla's GF3 production quality improvement by regularly purchasing cars and disassembling them, for instance.

 

[Sean Wagner]

Trump can't stop Ford from making BEVs anymore than it can stop Tesla from making BEVs.

Bad product plans from Detroit are their fault and nobody else's.

7 years after Model S and 4 years after Model X debut, Mercedes is still making money selling S Class,CLS Class,GLS Class and G Wagons.

I wouldn't expect an immediate collapse of the $60k plus ICE Truck market anytime soon.

Even convincing ~250k F Series buyers to switch or hold off for another BEV truck per year is going to be tough.

Commercial buyers will be the easiest to convince but those are the trucks with the lowest margin.

I could write a multi-page response, so obviously haven't quite figured out how to condense things sensibly and usefully for this thread.

Do recall Elon talked about the option to build a conventionally styled pickup if the sci-fi surprise falls through. My point is that Model 3s are becoming more prevalent and facilitating follow-on EVs' market entry - while I doubt many traditional manufacturers have an EV product cycle [hurrr] in place that promises to move fast enough to deal with their margin erosion.

Financially, Toyota and VAG are in a league of their own, and the latter is actually beginning to gain some market exposure and a chance to learn on the job with a bevy of real products. I've said for a while that the electrification leaders among the classics have a chance at scaling fast enough for survival - it's probably even harder to get it right than navigating Tesla's expansion.

Government can help to concentrate minds with consistent policies and smart incentives. The fight for consistency is one of the dramas we're seeing in the US, while Tesla could still be severely damaged by completely useless, resurrected trade disputes with long time partners [expressly excluding China here] - we had good deals ready for ratification with both Pacific rim countries and the EU.

I'll continue to read your comments attentively.

 

[EVNow]

Second "trouvaille" in these pages was SoylentBrown (@BrownSoylent) | Twitter, someone who's evidently doing lots of hands-on [parts apart] global research and due diligence on EV manufacturers for some big guns There's a plan to methodically track Tesla's GF3 production quality improvement by regularly purchasing cars and disassembling them, for instance.

What I don't understand is how is he getting into GF3 - apparently with Tesla's knowledge - while essentially doing some spying for competitors.

 

[Sean Wagner]

What I don't understand is how is he getting into GF3 - apparently with Tesla's knowledge - while essentially doing some spying for competitors.

He's not. The way I understood it they'll be buying their "samples". And since he's looked at the competition too, this spells out really big money doing very sensible due diligence.

 

[Artful Dodger]

Would Electrek be FUDing up the "unsustainable" aspect if Tesla had simply announced a $1,5k price cut on S/X?

Yes.

 

[Artful Dodger]

He's not. The way I understood it they'll be buying their "samples". And since he's looked at the competition too, this spells out really big money doing very sensible due diligence.

Perhaps you missed this comment from @KarenRei where he implies that he's been inside the new paint shop at GF3/Shanghai? Here's a text version of his tweet: (which makes it 'searchable' on TMC)

SoylentBrown‏ @BrownSoylent Aug 2

Replying to @BrownSoylent @Tweetermeyer and

Just got back from China and tho I can't share details I can tell you the paint shop there is incredibly well designed. I should say: it's been thoughtfully engineered to minimize or eliminate issues stemming from poor human oversight. Let's see how it plays out though.
​

Cheers!

 

[Causalien]

He's not. The way I understood it they'll be buying their "samples". And since he's looked at the competition too, this spells out really big money doing very sensible due diligence.

Smells like a large buyout. But since that's off the table, maybe someone is weighing partnership potential.

 

[brian45011]

I'm a little confused. What part of this is actually dumb ?

"Our most important assumption is [demand for] electric vehicles, given the battery-cost declines and the new chemistries coming out of Tesla. We believe the average electric-vehicle price will drop below the average auto price in the next two years. In five years, a Toyota Camry will still be around $25,000, but a 200-mile-range electric vehicle will probably be $15,000."
​

Are you saying the price can't go down to $15k in 5 years ? For eg., can a Chinese company make a $15k car with 200 mile EPA range in 5 years ? Or are you saying Tesla won't have a $15k car with 200 mile range ?

ps : A long time back I coined my own "evnow's law", which said the EV range will double every 5 years for the same price. Between 2011 (74 mile Leaf) and 2016 (230 mile Bolt) - for similar price we got 3 times the range.

Those who subscribe to Cathie's expectation about Tesla should probably concentrate their investible capital in TSLA rather than ARK's ETFs.

 

[brian45011]

ps : A long time back I coined my own "evnow's law", which said the EV range will double every 5 years for the same price.

KInd of like Hibben's Razor?

 

[Causalien]

Conversely, a Generalist is someone who knows less and less about more and more until, eventually, they know nothing about everything

Jon Snow.

 

[EVNow]

KInd of like Hibben's Razor?

Apparently you cut off my next sentence or didn't even bother reading.

Between 2011 (74 mile Leaf) and 2016 (230 mile Bolt) - for similar price we got 3 times the range.​

 

[EVNow]

He's not. The way I understood it they'll be buying their "samples". And since he's looked at the competition too, this spells out really big money doing very sensible due diligence.

He is doing it for "clients".

Smells like a large buyout. But since that's off the table, maybe someone is weighing partnership potential.

He has no background in manufacturing. And he is talking about "2 of my clients".

ps : I still think it would make a lot of sense for Microsoft to invest in Tesla (for FSD). But they already invested $1B in OpenAI - not sure whether its a precursor or that's about it.​

 

[jerry33]

Those who subscribe to Cathie's expectation about Tesla should probably concentrate their investible capital in TSLA rather than ARK's ETFs.

Yes, most of it. But there are some other stocks that might do really well in the ARK portfolio.

 

[Sean Wagner]

Before I sign off, the decision to massively scale Tesla's battery output will determine its trajectory for years and has left me very satisfied. This is a monumental task and a great fit for the enterprise's problem solving skills. It doesn't take a genius to know extra capital should come in handy.