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

[shootformoon]

1. Ok, good point cooking is not the right word. But you changed my words and attacked it.

2. Yes, let's all care about global demand, it is not in the projected growth rate due to mostly FUD. FUD works in a lot of places, not only NA.

Sauce/ cooking?
If Fremont were going to be > 3k export then GF3 displaces/ replaces 3k of Fremont capacity. If world demand is 10k, then peaking Fremont at 7k with minimal capEx is the wise choice.

I care about global demand, if Tesla can sell everything they make, what does it matter how many are NA bound?

 

[Nocturnal]

EV's can't completely fix anything but don't think the pollution from burning fields isn't related to ICE consumption. India produces significant amounts of ethanol for blending with gasoline and it's made from sugar cane. The cane fields are burned every harvest and the problem is so bad Indian farmers have higher rates of respiratory issues directly attributable to the burning of the fields.

So, yes, India transitioning away from ICE will most certainly reduce field burning and air pollution.

Isn't it amazing how many global ills are connected to ICE?

You can include half the wars of the past 100 years into that list as well.

 

[mongo]

1. Ok, good point cooking is not the right word. But you changed my words and attacked it.

2. Yes, let's all care about global demand, it is not in the projected growth rate due to mostly FUD. FUD works in a lot of places, not only NA.

Please explain how I changed your words, because I did not intend to and do not understand how I did. Nor did I intend to attack them, so I apologize for giving that impression. I do not agree with my understanding of your words, it may well me I am misinterpreting what you are writing.

Elon Musk: "zero concern" Tesla will achieve 10k/week unit production rate by 2018 year end
ridiculous none sense? My fault, it was a 2017 roadmap, not 2018.

Is your position that FUD caused the difficult ramp up of the Fremont Model 3 lines and GF1 lines?
Do you understand the point that instead of spending CapEx on Fremont to boost production (per original plan), Tesla spent it on GF3 to increase production?

 

[jerry33]

"In 5 years Model S, X and Roadster will be considered niche cars and have little effect on the company's overall financial health, thus will have little impact on stock price."

Convince me I'm wrong.

Dan

It depends on how much halo effect they give. I'd suggest that they have quite a large halo value which increases demand for the entire lineup of cars and other products. You can't just say their only contribution is the amount they bring in.

 

[M3Rider]

EV's can't completely fix anything but don't think the pollution from burning fields isn't related to ICE consumption. India produces significant amounts of ethanol for blending with gasoline and it's made from sugar cane. The cane fields are burned every harvest and the problem is so bad Indian farmers have higher rates of respiratory issues directly attributable to the burning of the fields.

So, yes, India transitioning away from ICE will most certainly reduce field burning and air pollution.

Isn't it amazing how many global ills are connected to ICE?

I didn't drill down into what exactly is being burned, but sugar cane is being burned in poor countries before being harvested(manually, so sharp leaves don't cause cuts). In U.S. it's harvested by machinery, so burning is not needed.

When I read article about that smog, it said fields are being burned in preparation for the next year, so this did not sound like harvesting the sugar cane.

There's actually an interesting episode on sugar cane in season 2 of Rotten on Netflix.
It's a great show about the life cycle of some of the produce we consume, very educational.

Also, Mars season 2 just came out, also highly recommend.

 

[StarFoxisDown!]

Not to get too off topic but the Nio trading action is such a joke. The combo of Nio and Mobile adds absolutely nothing in value. Is MobileEye going to absord Nio's losses cause last time I looked Nio has negative gross margins on every vehicle they sell with no way of improving their manufacturing because guess what...….they don't manufacture didly squat.

 

[elasalle]

Walmart withdraws complaint against Tesla solar panels
Walmart Inc. WMT, +0.70% has withdrawn its complaint against Tesla Inc. TSLA, +0.73% over solar panels that the retailer said were faulty, according to a Monday filing in the New York courts. The document does not specify a settlement, monetary or otherwise

 

[shootformoon]

1. Let's move on away from our misunderstandings.

2. The logic is, in Elon's original roadmap, fremont has no problem producing 10k/w m3 in fremont. And the fact they are adding ga5 for MY proves that it had space to add capacity. The difficult ramp up is the past. Tsla has the production capability now and if 2019 q1/2 order flow was much stronger, I believe 2019 mid year they would've built the ga5 for m3. GF1 also could've added some cell lines.

3. Again tesla has 6b in the bank, and ga5 is low cost. Choosing between ga5 and gf3 is the scarcity mind, due to the low demand growth thanks to FUD.

Please explain how I changed your words, because I did not intend to and do not understand how I did. Nor did I intend to attack them, so I apologize for giving that impression. I do not agree with my understanding of your words, it may well me I am misinterpreting what you are writing.



Is your position that FUD caused the difficult ramp up of the Fremont Model 3 lines and GF1 lines?
Do you understand the point that instead of spending CapEx on Fremont to boost production (per original plan), Tesla spent it on GF3 to increase production?

 

[ggr]

Sauce/ cooking?
If Fremont were going to be > 3k export then GF3 displaces/ replaces 3k of Fremont capacity. If world demand is 10k, then peaking Fremont at 7k with minimal capEx is the wise choice.

I care about global demand, if Tesla can sell everything they make, what does it matter how many are NA bound?

Capacity at Fremont is a finite resource. It makes sense to me to make GF3 to make a tried and true product closer to its market, and reserve the space at Fremont to tool up to make Model Y.

 

[mongo]

1. Let's move on away from our misunderstandings.

2. The logic is, in Elon's original roadmap, fremont has no problem producing 10k/w m3 in fremont. And the fact they are adding ga5 for MY proves that it had space to add capacity. The difficult ramp up is the past. Tsla has the production capability now and if q1/2 order flow is much stronger, I believe 2019 mid year they would've built the ga5 for m3.

3. Again tesla has 6b in the bank, and gf3 costs less than .5b and ga5 is also low cost. Choosing between ga5 and gf3 is the scarcity mind, due to the low demand growth thanks to FUD.

1.

2. Fremont was only going to by 10k per week after adding more equipment. The original install was expected to by ~5k per week, when they reached that they would parallel the bottlenecks. The ramp took longer than expected and the trade situation changed. Additionally, they saw the ability to get the original line to > 5k and possibly 8k without much additional cost. The ramp delay also pushed things closer to the Y release which could impact 3 sales. Net result was to move forward on GF3 making 3s instead of taking up more space in Fremont and potentially investing more in equipment than they would get in return (if previously line do 7-8 k, and you add new line, it could make other sections the bottle neck so your amortized cost is less good).

Had they expanded 3 in Fremont, they would not have a place for Y now.

3. Tesla did not 5 billion in the bank at the time, they raised ~$2.4 billion in May of this year, ~5 months after groundbreaking on GF3 and ~7 months after buying the lease.

There is a limit to steady state 3 demand, so overcapacity to meet short term demand is not a good option.

 

[sparcs]

1. Let's move on away from our misunderstandings.

2. The logic is, in Elon's original roadmap, fremont has no problem producing 10k/w m3 in fremont. And the fact they are adding ga5 for MY proves that it had space to add capacity. The difficult ramp up is the past. Tsla has the production capability now and if 2019 q1/2 order flow was much stronger, I believe 2019 mid year they would've built the ga5 for m3.

you have this entirely wrong. They have changed and adapted plans a lot as they learned from the Model 3 ramp. They shifted to China after the model 3 ramp because it was easier to do so. The cost and difficulty to make 10k a week out of Fremont was a lot higher than making a new factory in China. Especially with China rolling out the red carpet.

After they made the GF3 china decision, the default plan for Y was at GF1. They figured out a way to make space available at Fremont to squeeze in Y, but it wasn't a simple process and relatively recent decision. A lot of this likely came about due to the lessons they learned in the construction of GF3.

 

[skivi]

Not to get too off topic but the Nio trading action is such a joke. The combo of Nio and Mobile adds absolutely nothing in value. Is MobileEye going to absord Nio's losses cause last time I looked Nio has negative gross margins on every vehicle they sell with no way of improving their manufacturing because guess what...….they don't manufacture didly squat.

I bought some shares in the 1.70 range, i understand you. For me it doesn't matter which company, i give Support in general for good Electric Vehicle Companys the faster we change the better for our Environment. Of course i have always my biggest Position in Tesla.

 

[shootformoon]

I agree tsla is making the best of a non ideal situation. But again, my point is the demand situation could;ve been better.

I also agree any marginal increase than the current demand won't change the current capacity roadmap. But imagine the order flow was 1.5* higher in the 2019 q1/2, tsla would not try to increase m3 production capacity? In this case you are underestimating the agility of tesla. And don't tell me without effective FUD, 1.5* order flow is impossible.

1.

2. Fremont was only going to by 10k per week after adding more equipment. The original install was expected to by ~5k per week, when they reached that they would parallel the bottlenecks. The ramp took longer than expected and the trade situation changed. Additionally, they saw the ability to get the original line to > 5k and possibly 8k without much additional cost. The ramp delay also pushed things closer to the Y release which could impact 3 sales. Net result was to move forward on GF3 making 3s instead of taking up more space in Fremont and potentially investing more in equipment than they would get in return (if previously line do 7-8 k, and you add new line, it could make other sections the bottle neck so your amortized cost is less good).

Had they expanded 3 in Fremont, they would not have a place for Y now.

3. Tesla did not 5 billion in the bank at the time, they raised ~$2.4 billion in May of this year, ~5 months after groundbreaking on GF3 and ~7 months after buying the lease.

There is a limit to steady state 3 demand, so overcapacity to meet short term demand is not a good option.

 

[hobbes]

Sorry if this was discussed earlier today, didn´t find anything in a quick search.
https://electrek.co/2019/11/05/tesla-need-manufacturing-license-china/

Seems we can only expect production output from GF3 Shanghai *next year*, according to Denholm. So that would mean all the employees and manufacturing equipment won´t make any money until then - any estimates whether this will put profitability in danger?

 

[ReflexFunds]

Sorry if this was discussed earlier today, didn´t find anything in a quick search.
Tesla is still in need of a manufacturing license in China, hopes to get it by end of the year - Electrek

Seems we can only expect production output from GF3 Shanghai *next year*, according to Denholm. So that would mean all the employees and manufacturing equipment won´t make any money until then - any estimates whether this will put profitability in danger?

She didn't say anything about next year? She just said she hoped to get the sales approval this year, which could mean next week or late December. But in the mean time they can produce cars, start to ramp up the lines and stockpile production.

Back in June production license and sales license qualification were both targeted for November. They got their production license ahead of schedule in October but still some paperwork left before they get the sales license qualification. I don't see why it won't be soon though.

 

[woodisgood]

Anyone know what exactly the hang-up is on the sales approval for GF3? Seems everything was fast-tracked, now all of a sudden there's some red tape?

 

[StarFoxisDown!]

She didn't say anything about next year? She just said she hoped to get the sales approval this year, which could mean next week or late December. But in the mean time they can produce cars, start to ramp up the lines and stockpile production.

Back in June production license and sales license qualification were both targeted for November. They got their production license ahead of schedule in October but still some paperwork left before they get the sales license qualification. I don't see why it won't be soon though.

Yeah the way I understand it is they need the license to sell the cars they've manufactured. There's nothing stopping them from stockpiling the cars.

The main risk would be if they made like 2,000-3,000 cars and then China came back and said we want you to change how you manufacture and thus those cars already made would be invalid. I have a hard time seeing Tesla making that mistake given how close Tesla and the China government are.

 

[hobbes]

Yeah the way I understand it is they need the license to sell the cars they've manufactured. There's nothing stopping them from stockpiling the cars.

The main risk would be if they made like 2,000-3,000 cars and then China came back and said we want you to change how you manufacture and thus those cars already made would be invalid. I have a hard time seeing Tesla making that mistake given how close Tesla and the China government are.

The bloomberg article quotes Denholm as saying

“We’re working with the local government to get our manufacturing certification, which we hope we will be able to get by the end of the year,” Denholm said.

Bloomberg - Are you a robot?

This doesn´t sound as if it is only about sales.

But you´re right, by the end of the year could mean any time between now and Dec 31. However, still doesn´t sound as if she is very certain they´ll even get it by end of the year. Very strange to me that after everything went so perfectly smooth so far with GF3, authorities now suddenly start slowing things down.

 

[humbaba]

Not to get too off topic but the Nio trading action is such a joke. The combo of Nio and Mobile adds absolutely nothing in value. Is MobileEye going to absord Nio's losses cause last time I looked Nio has negative gross margins on every vehicle they sell with no way of improving their manufacturing because guess what...….they don't manufacture didly squat.

Nio was always a fail. It was hyped here (in the US investor market, not here at TMC ) as being the "Chinese Tesla" which never made any sense as their business plan was pretty much nothing like Tesla's. Then reality set in with the proposed factory not becoming reality, losses no longer being hidden by creative accounting, and so on. Interestingly, this played out rather like TSLAQ's fantasy about $TSLA.

Given the prior hype for pump and dump don't expect any legs for the latest round. While I'm no prophet and Nio might survive the best hope they had was China propping them up, but the Chinese government hasn't been persuaded by the hype and pipe dreams, instead backing Tesla.

While the current bump can be profitable for someone it is in no way an indication of future profitability. Contrast this with $TSLA where Q3 report demonstrated profitability in a sustainable way. Naturally, if the shorts prove correct and there is no demand then Tesla will slowly wind down production. But the indications are that expansion is needed and it is being done (GF3, GF4 in talks).

Say no $NIO and yes to $TSLA

 

[Bobfitz1]

VW wants a carbon price. The times are changing quickly.

VW CEO Diess says batteries are better than hydrogen, calls for carbon price - Electrek

How strange is it that Diess says he's all in for electrification and commits to reducing VW emissions by 30% in next five years,
yet also says he is committed to reducing it to zero over the following 25 years! That doesn't strike me as a very aggressive time frame!

"At Volkswagen’s ceremony celebrating the start of ID.3 production, CEO Herbert Diess made several comments on the electrification of the industry. In particular, he stated that batteries, as opposed to hydrogen, are a quicker and cheaper way to reduce automotive industry emissions. He also called for a price on carbon and committed to reducing his company’s fleet carbon emissions by 30% by 2025, and to zero carbon by 2050."