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

[Artful Dodger]

I have plenty of "one more thing" ideas. My favourite being a Model 2 rolling off the back. <1% chance.

Yeah, Model 2's still in the concept phase. Elon was on Twitter in September actively recruiting engineers in China for new car design.

The Model 2 design will depend upon the specs achieved on the next generaltion Li-On cells. I suspect Tesla will need $50/kwh and 300 wh/kg energy density to make the Model 2 competitive at the $25K (175k RMB) price point. This could be Tesla China's first big overseas export car by 2025, likely a compact car with 200 mi range from a 32 kwh bty. The world-wide market for Model 2 is staggering.

Then what about a Model 1? A 2030 sub-compact car for $15K? A 2-seater, robo-only (pending FSD approval) ride-hailing city-car w/o a steering wheel, endlessly roaming urban areas? Think Johnny Cab, but without the Recall. Pretty sure Elon hasn't thought too much about this car, yet this seems to be where we're headed (towel-head optional).

Cheers!

 

[mongo]

There are some seriously heavy joists going in to building 2 and the spacing is quite narrow. That second floor must be expected to hold some serious weight.

It's wide clear span and will likely get a concrete floor along with the equipment. Definitely not light!

 

[EinSV]

I don't disagree with your general argument.

I do think that Tesla will definitely sell (or more likely keep) any car it can make if it delivers on Robotaxis. I also think Tesla has a good chance of selling every car it can make even if it doesn't deliver on Robotaxis. I also don't think capital should constrain growth.

However, Elon also has to plan for the possibility this isn't true. Good management always have contingency plans. While I'm sure Elon fully believes he will deliver Robotaxis in the near future, he is still making many business decisions based on the assumption that this never comes to fruition.

I see selling skateboards as one of these contingency plans. If Tesla doesn't deliver on its primary business plan - it still can make a huge amount of profit. If Tesla can't prevent global warming alone - it can still help other people solve it together.

Tesla is the only company in the world that can make highly efficient and affordable EV battery packs and Powertrains. Many many companies in the world can build car body lines, paint shops and assemble cars. If there is ever a possibility Tesla will be capital, labour or demand constrained in its growth in the future, it makes sense to prioritise its capital and available labour on building Powertrains and batteries - other people are capable of building car assembly plants or diverting their current ICE workforce to assembling EVs based on Tesla skateboards. Contingency plans have huge value even if in the end they never have to be put in use. And I don't think building extra battery/powertrain capacity should ever constrain growth of Tesla's full car/Robotaxi production. It will be new capex for new facilities for a new product line. No reason for any cannibalisation of its own vehicle production if they invest enough capex in expansion.

What we have seen so far suggests that ICE manufacturers are not especially skilled at making EVs -- certainly nowhere near at Tesla's level.

Ark's hypothesis is that EV production is sufficiently different from ICE production that EV production will follow an independent learning curve, which means that EV production costs -- not just battery and drivetrain costs -- will fall much more quickly than ICE costs. While it is too early to say they are right, so far the evidence points in that direction:

• Initial Model 3 production had only 25-33% the steps of traditional automaking. Tesla Model 3 Production Has 25–33% The Number Of Steps "Found In Traditional Auto" | CleanTechnica
• Rapidly falling costs quarter over quarter
• Only 1/3 capex/car for GF3 and 1/2 for Model Y v. Model 3 at Fremont

If Ark is right, then it's not all about the batteries and drivetrain -- it is the full vehicle cost that is subject to its own experience curve, independent (or largely independent) of ICE manufacturing.

In order to push down the costs of EVs and accelerate the disruption of ICE, Tesla's best bet is to expand EV production (not just battery/drivetrain production). The rest of the industry is very far behind and still seems interested in ramping up only as fast as forced to by regulations (primarily in China and Europe), while protecting sales of their profit making ICE vehicles.

Since ICE manufacturers are all dragging their feet in ramping up EV production and are nowhere near as innovative as Tesla, Tesla's cost advantage for building EVs -- not just batteries -- should continue to grow with scale.

To disrupt ICE, Tesla would be better off continuing to drive toward their goal of 20M vehicles as fast as possible, rapidly driving down the cost of the most competitive EVs (their own) rather than trying to pull the laggards along.

If for some reason Tesla's battery production capacity gets far ahead of its vehicle production capacity they can use battery production as a cash cow to fund more vehicle production or other new products. But to push the costs of EVs down and accelerate the transition to sustainable transportation they need to scale production of the most compelling EVs as fast as is feasible, not just battery production.

Legacy auto companies can buy batteries and drivetrains in China or Korea from the companies that will probably eventually own many of them.

 

[GaryW]

Why leap to an enormous evil conspiracy theory when there are far simpler explanations at hand?

Is our mainstream press so easily corrupted by the threat of losing in the future some car and oil advertising?

A simpler answer is that the mainstream press gets eyeballs by bashing things.

But to me there is a more basic answer: the editors and reporters who actually control the content of the mainstream media are in the same bubble as other Tesla skeptics. To them, Musk is a hotheaded billionaire producing expensive toys they can’t afford, and generating massive debt that can’t be repaid.

Sometimes the media shapes public opinion, sometimes the reverse is true. See for example “weapons of mass destruction”. They didn’t manufacture that narrative, but they went along with it.

The good news for Tesla: public opinion can change. In Tesla’s case I think it’s already changing, as more and more people sing the praises of their new Tesla car. And if Tesla can string together more than two consecutive quarters of profit, that will change the overriding sentiment of investors.

Did I leap? Does it require a conspiracy for some of the stakeholders to spend billions attempting to influence public opinion? If you run a magazine, and one of your reporters writes an article, and you think it might cost you advertisers, do you still run it?

I suggest that billions will be spent influencing public opinion. These billions will be spent on those who can attract a lot of eyeballs. Especially when the owners of the eyeballs are influenced, in measurable ways, to look more kindly on those spending the billions.

Will this influence promote a social environment more amenable to those spending the billions? The people spending the money certainly think so, or they wouldn’t spend the money.

Edit: wording

 

[jbcarioca]

... But most solar installs tend to optimize for peak production without regard to whether the production happens when the electricity is most needed. This will become more important as solar becomes a larger percentage of total generation.

This is spoken like someone who has actually dealt with the issue. My first complete off-grid project was an island in the Bahamas in the 1980's. Subsequently I have had solar in four other projects in three continents. Since the first one I have had to argue with 'experts' on positioning for the best average and positioning for optimal use. I have learned a lot, but constantly realize how little I really know.

As various Chinese suppliers and Tesla, among many others, advance technologically it seems far easier to position for optimal results. I suspect version 5 or so of Tesla roof will include active directional optimization. We seem to be nearing some major breakthroughs, one of which certainly is the advent of bi-directional panels that are installable to be quite effective sunshades too.

My large question is when Tesla Energy will become as creative and effective in power generation as they already are in storage and system management. That would be revolutionary. Do you have insight on that issue?

 

[winfield100]

This is spoken like someone who has actually dealt with the issue. My first complete off-grid project was an island in the Bahamas in the 1980's. Subsequently I have had solar in four other projects in three continents. Since the first one I have had to argue with 'experts' on positioning for the best average and positioning for optimal use. I have learned a lot, but constantly realize how little I really know.

As various Chinese suppliers and Tesla, among many others, advance technologically it seems far easier to position for optimal results. I suspect version 5 or so of Tesla roof will include active directional optimization. We seem to be nearing some major breakthroughs, one of which certainly is the advent of bi-directional panels that are installable to be quite effective sunshades too.

My large question is when Tesla Energy will become as creative and effective in power generation as they already are in storage and system management. That would be revolutionary. Do you have insight on that issue?

The California wildfires are causing people to move towards solar+batteries. Here's a 3 minute NPR story from this morning:

What Power Outages Means For Solar's Potential
What Power Outages Means For Solar's Potential

Commentator: "Some bought portable generators, but there was a huge spike in interest in another technology: solar panels and home batteries."

Then they go on to explain how well it works.
Commentator: "Homeowners can use them everyday to store solar power, unlike portable gas generators."
Homeowner: "[Generators] are loud, they're dirty, and it also contributes to the problem, in our view, that we're facing, which is Climate Change."

Then they got into economic inequalities and even neighborhood microgrids and Virtual Power Plants.

 

[winfield100]

This is spoken like someone who has actually dealt with the issue. My first complete off-grid project was an island in the Bahamas in the 1980's. Subsequently I have had solar in four other projects in three continents. Since the first one I have had to argue with 'experts' on positioning for the best average and positioning for optimal use. I have learned a lot, but constantly realize how little I really know.

As various Chinese suppliers and Tesla, among many others, advance technologically it seems far easier to position for optimal results. I suspect version 5 or so of Tesla roof will include active directional optimization. We seem to be nearing some major breakthroughs, one of which certainly is the advent of bi-directional panels that are installable to be quite effective sunshades too.

My large question is when Tesla Energy will become as creative and effective in power generation as they already are in storage and system management. That would be revolutionary. Do you have insight on that issue?

was there not an article in the last year about someone with PV panels that had some type of lenticular screen on top, slightly moveable that acted like a 1 or 2 axis tracker at a fraction of the cost?

 

[CorneliusXX]

This is spoken like someone who has actually dealt with the issue. My first complete off-grid project was an island in the Bahamas in the 1980's. Subsequently I have had solar in four other projects in three continents. Since the first one I have had to argue with 'experts' on positioning for the best average and positioning for optimal use. I have learned a lot, but constantly realize how little I really know.

As various Chinese suppliers and Tesla, among many others, advance technologically it seems far easier to position for optimal results. I suspect version 5 or so of Tesla roof will include active directional optimization. We seem to be nearing some major breakthroughs, one of which certainly is the advent of bi-directional panels that are installable to be quite effective sunshades too.

My large question is when Tesla Energy will become as creative and effective in power generation as they already are in storage and system management. That would be revolutionary. Do you have insight on that issue?

At this point I just want to hear the @jbcarioca autobiography. You seem to have lived on most continents, dealt with almost all major automakers, have excellent knowledge of capital markets, and worked on an astounding range of projects ranging from detailed statistical analysis of residual values to off-grid projects in the Bahamas. These days you seem to be chilling out somewhere in Brazil. I think you also mentioned owning a plane too.

It sounds like you have lived a very full life.

 

[SW2Fiddler]

Re: One more thing at Pickup event.

1) I think the Pickup is going to be massive in size. It could be a "smaller", more normal looking pickup will be the one more thing.

Maybe that’s the “one more thing” at the Pickup reveal

I have plenty of "one more thing" ideas.

There is another theory which states that... the Apple acquisition of Tesla has already happened.

 

[KarenRei]

That is how Waymo are using it for their localization which is the core of their FSD project. They do a bitmap of the reflectivity and the hight of the ground and compare the scan with this bitmap. Here they explaining it:

(14min into it)

If you want to dive deeper, most of their localization is based on the work from this paper:
https://stacks.stanford.edu/file/druid:zx701jr9713/JesseThesisFinal2-augmented.pdf

Please don't do this (linking a 26 minute video as a reference). That's really annoying. I did my best and skimmed through the parts that looked like they might possibly contain your reference to them using reflectivity to determine what objects are made of and found nothing to support it - just more of their usual graphics which show no reflectivity-varying features (for example, no lane lines in the LIDAR scans).

If you want to use a video as a reference to something in the future, please be so kind as to give the time offset into the video.

 

[mongo]

If you want to use a video as a reference to something in the future, please be so kind as to give the time offset into the video.

@heltok

And let all be warned that the TMC software strips embedded time positions from the URL.

 

[mrmage]

I don't know much about lidar technology, but I do know:
1) Elon is a pretty smart guy
2) Elon is very familiar with lidar since it is used by SpaceX for landing boosters
3) Elon is very familiar with FSD technology

Given that, Elon doesn't think we need lidar for FSD, so I see no reason not to take his word for it

All this debate between Lidar and non lidar being able to work means nothing to me as an investor. I am positive that using cameras will suffice. There is also no question that lidar can improve safety.

Investments are about time, not just accomplishments, so the questions are: 1. how long will it take for pure vision to work safely enough? 2. How long will it take for lidar assisted vision to work safely enough? 3. What is the incremental cost of lidar when #2 happens?

If it’s 30 years, 10 years, and $3k, that gives a very different investment thesis than 5 years, 4 years, and $20k. If peeps want to debate, debate about time.

 

[KarenRei]

Did I leap?

No; Ziggy says that there's a 73.6% chance that you can't leap until Jim Chanos goes bankrupt.

 

[StarFoxisDown!]

Sure would love some sort of announcement from either tonight or first thing in the morning to bring in buying volume once again. The truck reveal date would work or say a video of the updated Adv Summon that Elon teased in the earnings call...….. but the most impactful would be Giga 3 passed inspections and now ramping

 

[Electroman]

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."

I see 13 people marked this post 'Funny'. That saddens me and it is depressing.

We can think this as a joke that WaPo got this is completely wrong and such, but this type of headlines,

'NHTSA is investigating defective Tesla batteries that catch fire spontaneously'

with a narrative that there is a serious safety issue and your family and kids could be incinerated anytime by an exploding Tesla, has been gleefully exaggerated and repeated by *every* media outfit out there. Prestitutes and scumbags like Kolodny, Mitchell, Hull, Lopez, Grant etc.. have jumped on it to write their own embellishments complete with lies.

And that narrative is getting to Joe and Jane easily, as the main stream media has a very loud and deafening megaphone. It does not matter if Tesla makes the best car in the world, if the public constantly is reminded aka lied to, how unsafe the car is, how unreliable the company is, how soon it can fold with an out of control fraud as the CEO. I have already got messages from my friends worried if it is okay for me to drive my Tesla. And many of them are potential future Tesla owners and have been blown away by how it drives.

It is very very apparent that media has a whole is hell bent on finishing Tesla. They are only interested in writing negative stories and exaggerate them to the hilt. We could keep hitting 'funny' and 'disagrees' all day, but that is not doing ourselves a favor. There has to be another front that counters this media onslaught successfully. Have some respect and admiration to the Twitter warriors who are valiantly countering it, but they can only be so much effective as Twitter has far less reach than WSJ, LAT, NYT, CNBC, BI, BB combined. MSM is a powerful force that can bring down anyone and anything.

Vladimir Grinshpun is one such gentleman who has done an amazing job countering Laura Kolodny point by point on why she is totally wrong on this FUD.

Vladimir Grinshpun on Twitter

 

[JustMe]

At the risk of getting back on topic - I've looked at Tesla's overseas delivery data a bit more closely to compare the rate of shipments in 2019 QOQ. This data is taken from Franco Mossotto's Google Docs spreadsheet: Tesla Carriers. It is estimated that these ships are loaded at about 1000 vehicles per day.

As you can see, in Q4, the rate of vehicle loading per day in Q4 is pretty consistent with the peak rates in Q1-Q3, but they have a significant head start this Q. There are 3 more ships in the schedule for Q4 so far. Based on the average of about 2.4 loading days per ship this year, I project a minimum of 32 vehicle loading days of overseas shipments for Q4. That would beat Q3 by at least a couple of thousand vehicles. But - if they maintain this pace for another month or so - as in previous quarters, they could eclipse the Q3 overseas shipments by more than 20,000 vehicles. If they can pull this off Tesla could easily meet their delivery guidance of > 360,000 deliveries for 2019, even if US sales do not improve from the relatively lower rate reported for Q3. Wouldn't that be nice?

 

[Electroman]

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.

for the first 83 times when you said this, I thought you were wrong. 84th time reading this from you, I am convinced. Legacy dinosaur auto will kill Tesla in a few seconds when they wake up.

 

[Fact Checking]

No; Ziggy says that there's a 73.6% chance that you can't leap until Jim Chanos goes bankrupt.

David Einhorn and Mark BS. Spiegel might go bankrupt: they are short funds.

But Chanos's Kynikos fund is a 2:1 long-short fund, with twice the passive long positions of short positions.

So Chanos is IMHO unlikely to go bankrupt - and unlikely to go away as well, his TSLA short position is maybe 1-2% of his portfolio, which he can probably maintain indefinitely.

Chanos might exit his Tesla short position one day though - maybe around the time Tesla gets added to the S&P 500, in the hopefully not too distant future.

 

[KarenRei]

At the risk of getting back on topic - I've looked at Tesla's overseas delivery data a bit more closely to compare the rate of shipments in 2019 QOQ. This data is taken from Franco Mossotto's Google Docs spreadsheet: Tesla Carriers. It is estimated that these ships are loaded at about 1000 vehicles per day.

As you can see, in Q4, the rate of vehicle loading per day in Q4 is pretty consistent with the peak rates in Q1-Q3, but they have a significant head start this Q. There are 3 more ships in the schedule for Q4 so far. Based on the average of about 2.4 loading days per ship this year, I project a minimum of 32 vehicle loading days of overseas shipments for Q4. That would beat Q3 by at least a couple of thousand vehicles. But - if they maintain this pace for another month or so - as in previous quarters, they could eclipse the Q3 overseas shipments by more than 20,000 vehicles. If they can pull this off Tesla could easily meet their delivery guidance of > 360,000 deliveries for 2019, even if US sales do not improve from the relatively lower rate reported for Q3. Wouldn't that be nice?

View attachment 472754

It's all about Model 3 production rates. That, and that alone, determines how many they will deliver this quarter (within a few thousand due to end-of-quarter inventory uncertainty and S/X uncertainty). Model 3 order backlogs have gotten absurd.

S/X is what needs to be watched with respect to demand. Tesla apparently expects high demand, as they're upping production, according to the earnings call.

 

[defc0n]

David Einhorn and Mark BS. Spiegel might go bankrupt: they are short funds.

But Chanos's Kynikos fund is a 2:1 long-short fund, with twice the passive long positions of short positions.

So Chanos is IMHO unlikely to go bankrupt - and unlikely to go away as well, his TSLA short position is maybe 1-2% of his portfolio, which he can probably maintain indefinitely.

Chanos might exit his Tesla short position one day though - maybe around the time Tesla gets added to the S&P 500, in the hopefully not too distant future.

Einhorn and Spiegel are both “deep value” as well as short? Don’t know the ratio. Impossible to say whether you will go bankrupt long or short or both.