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

[Antares Nebula]

Welcome, Robot Overlords. Please Don’t Fire Us?
Smart machines probably won’t kill us all—but they’ll definitely take our jobs, and sooner than you think.
Welcome, Robot Overlords. Please Don’t Fire Us?

 

[Antares Nebula]

In this afternoon's WaPo:
https://www.washingtonpost.com/tech...fficials-probe-alleged-tesla-battery-defects/

"According to a letter last week, the National Highway Traffic Safety Administration is evaluating a petition to investigate potential defects in Tesla batteries, particularly those for Model S and X vehicles produced for model years 2012 through 2019.


An attorney filing a class-action lawsuit on behalf of Tesla owners brought the petition to the agency’s Office of Defects Investigation, citing an “alarming number of car fires” that appeared to be spontaneous."

Russ Mitchell on Twitter
"Note: NHTSA informs me that the Tesla fire inquiry is technically not an “investigation” but rather a “defect petition.” To avoid argument over plain-English definitions, we are changing the language in our story from “investigation” to “probe.”

 

[Steve m]

So what is an alarming numbe

In this afternoon's WaPo:
https://www.washingtonpost.com/tech...fficials-probe-alleged-tesla-battery-defects/

"According to a letter last week, the National Highway Traffic Safety Administration is evaluating a petition to investigate potential defects in Tesla batteries, particularly those for Model S and X vehicles produced for model years 2012 through 2019.


An attorney filing a class-action lawsuit on behalf of Tesla owners brought the petition to the agency’s Office of Defects Investigation, citing an “alarming number of car fires” that appeared to be spontaneous."

So what is an alarming number?

 

[anthonyj]

I thought the Same about Jim Chanos. He's only 61! and this picture is over a year old View attachment 472252

It's this $TSLA thing, man. I'm 26 and looking like 50

 

[Remus]

There's a social side to this that might happen fast - I suspect it's going to be slower.

you never know. Mobile payment took China by storm and nobody predicted it. It is very hard to believe that a country where people almost exclusively rely on cache, no debt/credit card, no personal checks, can leap to mobile payment in such an astonishing speed.

 

[cliffski]

On the 'problems between now and FSD' topic... I'd like to remind everyone of something that is not relatively rare (tree fallen in road) or only in rural locations (super-narrow roads, unusual animals alive/dead in road, people on horses...), but something super commonplace and unhandled...

roundabouts

For US drivers, that seems a really rare thing. For someone in England... these are maybe 50% of road junctions. We use roundabouts EVERYWHERE, and when 2 or 3 cars reach them at *exactly* the same time, its often a matter of facial-expression recognition and super subtle and fast driver negotiation without any visible signals...as to who goes first.

This is not an *unsolvable* problem for a self driving car, but its a problem I don't think anybody seems to even have on their radar yet, and a 'self driving' car that cant fluidly and safely handle a roundabout is just useless in the UK.

 

[Antares Nebula]

It's this $TSLA thing, man. I'm 26 and looking like 50

Lol! So true. We need Tesla Anonymous.

 

[Cartegena]

European registration data is slowly available.
As Tesla managed to register almost all vehicles from last quarter before the end of September, the first month will be comparatively weak (prepare for Antons SA article). However, quarter to date more cars (more total loading days of ships) are on the way to Europe and the first ship arrived a few days ago. We should see higher figures in November and December.
As I was going through the registration data, I found a unknown registered Tesla in Netherlands (no S, X or 3).
Does someone has an idea what could be going on? Model Y for showroom or EU type classification? Or simply a mistake by someone in a registration office?
Link to the data (page 8): https://www.bovag.nl/BovagWebsite/m...Verkoopstatistieken-oktober-2019.pdf?ext=.pdf

Is that a misprint? For first 10 months of 2018, 5,631 models S & X registered versus 424 for the same period in 2019?

 

[Skryll]

Is that a misprint? For first 10 months of 2018, 5,631 models S & X registered versus 424 for the same period in 2019?

And 13,000 model3, don’t forget

 

[StealthP3D]

My likelihood estimation of this? 10%? 50%? 90%? It’s really hard... Just by Elon I would say 75%. By share price 0%. By wisdom of crowds 5%. From demos 50%. I will weight these together into my own estimate which is 20%. Yes that is high. But imo I don’t think most people have really grasped the magnitude of what I wrote above...

My investment in TSLA is rather large and it's not predicated on FSD at all - that's just the potential frosting on the cake. ARK invest typically provides valuation estimates not including FSD as well. I would say almost all investors here would still be invested without any possibility of Tesla's turning into robotaxis.

However, I do think the potential of FSD sweetens the pot well above the current situation (which is still pretty sweet with Tesla currently having the best Autopilot capability by a large margin). And the "step-change" from hardware 2.5 to 3.0 is potentially huge and not well understood by the investing community. When Tesla had FSD investor day much of the investment community said "Ho-hum" but, being financial types, I'm not sure they got it. And since then, Tesla has not really been hyping the new capabilities that will be enabled by the new hardware.

My intuition tells me they are quietly developing the software to drive HW 3.0 and it will be a shocking improvement, even to FSD believers. That when they release the first software that is capable of taking advantage of HW3.0, it will be such a shocking improvement in capabilities that even the shorts will realize how wrong they had been. They will be caught with their pants down, the worst day of their lives. None of this is guaranteed, far from it. But it sure does sweeten the potential reward of a TSLA investment in a way that's hard to ignore. The share price will reflect this step-change in capability long before it is approved by regulators.

The reasons I believe HW 3.0 will be a *huge* jump in capability, beyond Karpathy's public statements that it will, has to do with the way neural nets work and the fact that HW 3.0 is the first processor optimized for that duty while HW 2.5 is simply adapted to FSD. And the fact that the FSD team is currently training HW 3.0 using the billions of miles of AP camera footage that was already filtered and sorted to train HW 2.5. HW 3.0 can process, in real time, neural nets that are *seven times larger* than HW 2.5 is capable of. That's huge. The results of all this development work will not filter gradually into the public eye, it will happen suddenly with a new software release, probably in Q1 2020. The "feature complete" release scheduled for the end of this year is not that exciting if it's not the version optimized for HW 3.0. It's simply the distraction before the real fireworks begin.

Be prepared for some fireworks when Telsa releases the first HW 3.0 optimized updates. Whether this leads to robotaxis in short order is anyone's guess but I'm betting it will put Tesla squarely in the driver's seat in the race to FSD. While my investment in TSLA is not predicated on FSD, it certainly provides a huge opportunity to excel in a manner completely unanticipated by the short-sighted and unimaginative naysayers.

 

[Artful Dodger]

If there is a 10% chance that Tesla takes 10% of that market, it implies a $40B value. Which is about what I dare to hope for.

I think you're doing your statics wrong. If your central estimate for Tesla's market share is 10%, then its best estimated value is $400 billion.

There is always a distribution of probabilities, ie: reaching >10% market share should be equally likely as reaching <10%, if you're choosing your estimated value correctly.

But then discounting that value further is incorrect. It just means your don't have confidence in your central estimate. Again, the proper way to handle uncertainty in an estimate with with a confidence interval ie: you could say you're 95% confident that Tesla's market share would fall between 5% and 15%.

But again, that doesn't change the central estimate, only widens the range of likely outcomes.

hth. Cheers!

 

[StarFoxisDown!]

My investment in TSLA is rather large and it's not predicated on FSD at all - that's just the potential frosting on the cake. ARK invest typically provides valuation estimates not including FSD as well. I would say almost all investors here would still be invested without any possibility of Tesla's turning into robotaxis.

However, I do think the potential of FSD sweetens the pot well above the current situation (which is still pretty sweet with Tesla currently having the best Autopilot capability by a large margin). And the "step-change" from hardware 2.5 to 3.0 is potentially huge and not well understood by the investing community. When Tesla had FSD investor day much of the investment community said "Ho-hum" but, being financial types, I'm not sure they got it. And since then, Tesla has not really been hyping the new capabilities that will be enabled by the new hardware.

My intuition tells me they are quietly developing the software to drive HW 3.0 and it will be a shocking improvement, even to FSD believers. That when they release the first software that is capable of taking advantage of HW3.0, it will be such a shocking improvement in capabilities that even the shorts will realize how wrong they had been. They will be caught with their pants down, the worst day of their lives. None of this is guaranteed, far from it. But it sure does sweeten the potential reward of a TSLA investment in a way that's hard to ignore. The share price will reflect this step-change in capability long before it is approved by regulators.

The reasons I believe HW 3.0 will be a *huge* jump in capability, beyond Karpathy's public statements that it will, has to do with the way neural nets work and the fact that HW 3.0 is the first processor optimized for that duty while HW 2.5 is simply adapted to FSD. And the fact that the FSD team is currently training HW 3.0 using the billions of miles of AP camera footage that was already filtered and sorted to train HW 2.5. HW 3.0 can process, in real time, neural nets that are *seven times larger* than HW 2.5 is capable of. That's huge. The results of all this development work will not filter gradually into the public eye, it will happen suddenly with a new software release, probably in Q1 2020. The "feature complete" release scheduled for the end of this year is not that exciting if it's not the version optimized for HW 3.0. It's simply the distraction before the real fireworks begin.

Be prepared for some fireworks when Telsa releases the first HW 3.0 optimized updates. Whether this leads to robotaxis in short order is anyone's guess but I'm betting it will put Tesla squarely in the driver's seat in the race to FSD. While my investment in TSLA is not predicated on FSD, it certainly provides a huge opportunity to excel in a manner completely unanticipated by the short-sighted and unimaginative naysayers.

To keep it really quick, I definitely agree that there's software running on Hardware 3.0 that does complete FSD right now at a disengagement rate that is much better than most think and would surprise a lot of people. I don't think its perfect by any means but I think it's very far along. I've said before, I don't expect any major FSD advancements until they start requiring Hardware 3.0 to use certain features.......which at that point oh boy there will be fireworks

 

[Remus]

On the 'problems between now and FSD' topic... I'd like to remind everyone of something that is not relatively rare (tree fallen in road) or only in rural locations (super-narrow roads, unusual animals alive/dead in road, people on horses...), but something super commonplace and unhandled...

roundabouts

For US drivers, that seems a really rare thing. For someone in England... these are maybe 50% of road junctions. We use roundabouts EVERYWHERE, and when 2 or 3 cars reach them at *exactly* the same time, its often a matter of facial-expression recognition and super subtle and fast driver negotiation without any visible signals...as to who goes first.

This is not an *unsolvable* problem for a self driving car, but its a problem I don't think anybody seems to even have on their radar yet, and a 'self driving' car that cant fluidly and safely handle a roundabout is just useless in the UK.

Oh I went through lot of those when vacationing in France. They're much easier than highway ramps in New Jersey.

 

[heltok]

I think you're doing your statics wrong. If your central estimate for Tesla's market share is 10%, then its best estimated value is $400 billion.

There is always a distribution of probabilities, ie: reaching >10% market share should be equally likely as reaching <10%, if you're choosing your estimated value correctly.

But then discounting that value further is incorrect. It just means your don't have confidence in your central estimate. Again, the proper way to handle uncertainty in an estimate with with a confidence interval ie: you could say you're 95% confident that Tesla's market share would fall between 5% and 15%.

But again, that doesn't change the central estimate, only widens the range of likely outcomes.

hth. Cheers!

I used a Dirac delta function mostly to prove a point and for mental frameworks. Doing complete pdfs would be too much work and too easy to argue against But yes you are right and it likely would be a conservative expected value. If I was 95% confident of 5-15% of that $5T market I would be way too optimistic. But then again Elon has said game set match, so who knows. Can’t wait for HW3 networks, FSD take rate increases and robotaxi dominance going Heaviside! =)

 

[EVNow]

Be prepared for some fireworks when Telsa releases the first HW 3.0 optimized updates. Whether this leads to robotaxis in short order is anyone's guess but I'm betting it will put Tesla squarely in the driver's seat in the race to FSD. While my investment in TSLA is not predicated on FSD, it certainly provides a huge opportunity to excel in a manner completely unanticipated by the short-sighted and unimaginative naysayers.

You can make an educated guess on what features they are working on from what we have seen and what Tesla and Musk have said.

With FC we should expect City NOA, with the kind of error we got freeway NOA. Moreover we should not expect a lot of city scenarios would be handles.

Tesla is looking to cover certain features, like traffic lights, at 6 nine levels rather than a lot of features at two 9 levels.

Investment community should wake up when they realize with city NOA, Tesla is on par with Waymo but globally instead of in a few places. But who knows what the market will do ....

 

[Singer3000]

Tesla licensing power train/battery to other auto manufacturers... ugh no thanks. This only makes sense if Tesla has reached the ceiling of market penetration for its brand. Which it clearly hasn’t.

Galileo speculating that GF4 will be co-funded by a German auto in return for a share of the skateboard production. If Tesla’s capex needs are ahead of its cashflow generation, I’m ready to chip in for a secondary offering.

This could be a historic mistake for the company. Hope they don’t go there. Far better to just pickup the BMW badge etc... in a few years when they fail.

Licensing out the skateboard for now should be restricted to niche market segments that Tesla don’t have the time to pursue. City buses, trains, mining sector yellow goods. Not passenger vehicles...

 

[Artful Dodger]

TESLA MODEL S PLAID SPIED TESTING ON THE NURBURGRING

Some hot takes for the video:

• 1st ever vid of a Plaid S at full speed** down the Döttinger Höhe straight
• Anyone want to estimate the Plaid S top speed as demonstrated in this video?

Alrighty then, since nobody has stepped up with a estimate, I used Google Maps and my best guess for the end points of a segment of the back straight, measured at 1.29 km. Then in the Youtube video, that segment took 16 seconds for the Blue S Plaid Prototype.

Doing the math, that's approx. 295 kmh, or 180 mph. Yowsah. That'll work.

@SpaceCash

Spoiler: Take my MONEY!

 

[EinSV]

Tesla licensing power train/battery to other auto manufacturers... ugh no thanks. This only makes sense if Tesla has reached the ceiling of market penetration for its brand. Which it clearly hasn’t.

Galileo speculating that GF4 will be co-funded by a German auto in return for a share of the skateboard production. If Tesla’s capex needs are ahead of its cashflow generation, I’m ready to chip in for a secondary offering.

This could be a historic mistake for the company. Hope they don’t go there. Far better to just pickup the BMW badge etc... in a few years when they fail.

Licensing out the skateboard for now should be restricted to niche market segments that Tesla don’t have the time to pursue. City buses, trains, mining sector yellow goods. Not passenger vehicles...

Finding comfort in the idea that Tesla might sell skateboards to legacy auto is like finding comfort in the idea of Tesla being bought by Apple. Fundamentally misunderstands the dominant position Tesla enjoys in the new EV industry.

 

[SpaceCash]

Alrighty then, since nobody has stepped up with a estimate, I used Google Maps and my best guess for the end points of a segment of the back straight, measured at 1.29 km. Then in the Youtube video, that segment took 16 seconds for the Blue S Plaid Prototype.

Doing the math, that's approx. 295 kmh, or 180 mph. Yowsah. That'll work.

@SpaceCash

Spoiler: Take my MONEY!

View attachment 472301

I'm gonna be honest, this is actually "too much"
The spoiler, I mean.

 

[ElectricOrgan]

Batteries? They certainly won't be able to buy them cheaper than Tesla can make them, and they certainly won't have the same specs. If they're smart they would be begging Tesla to sell them their batteries but that wouldn't help in the short term since Tesla can barely make enough now to keep up with their own cars let alone provide enough for any significant ramp by another manufacturer. So they are forced to rely on inferior tech from other manufacturers that also can't make enough. There is no way out for them without spending HUGE amounts of money and then they STILL won't have the pack technology to compete with Tesla on price or specs. They have backed themselves into a corner they very well may not be able to get out of.

Dan

Absolutely none of that is really correct. At this moment in time, Tesla has the best battery technology available. But in just a few years that can easily change. There is no reason to believe Tesla can ramp up car production while major companies 20 times their size can't ramp up battery production.

The major auto makers will spend HUGE amounts of money on designing the best batteries because they CAN. They have the money and will spend it because they are realizing they can make good EVs or they can become the 21st century Kodak.

You also need to realize that a small difference in battery technology won't make such a large difference in sales. Cars are sold through marketing. Small differences in technology are easily mitigated.