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

[jbcarioca]

There were three competent, experienced pilots in the AF 447 cockpit, and all of them were trying to avoid the stall as any pilot would, but...

Even with the benefit of perfect hindsight it's hard, and they were the first ones to run into this particular stall scenario...

Actually, you exaggerate the experience levels, although not the conditions. Still the impact of serious disorientation in dark stormy conditions cannot be overstated. My most frightening personal piloting experience was of an autopilot failure at altitude in cloud and turbulence in the middle of the night high above Greenland. Reconciling instrument conflicts with a clogged pitot tube is not easy.

this is really OT, but the lessons of systems complexity and failure modes are important between today and the eventual FSD. There will always be systems failures.

The real lessons of FSD and of FBW are that the error rates accepted easily thirty years ago are inconceivable today. All systems must be far more robust than they were then.

Is anybody ready to go back to Windows 3.0? ...drum brakes? ...ice?

 

[Steve m]

The video is about Bill Gate's last day at Microsoft and he played this video while doing his last CES Keynote

So 2008? Four years before the model S came out? Bill how could you?

 

[Tenable]

Has anyone else noticed that our Model S and X vehicles no longer list the 8 year unlimited mile warranty? Mine has no changed to 120k miles. While I barely manage 8k miles a year If this is not in error I'm fairly upset.

 

[CorneliusXX]

I agree with your points, but we do not know a couple very material components, notably the contractual provisions for robotics and other production equipment. The stated “less that $500 million capex” implies a massive improvement in capes efficiency in GF-3 compared to anything else comparable. Frankly I have little doubt that GF-3 total OpEX and allocated capex will end out reflecting ~25% improved cost per vehicle. My reluctance to project specifics is due to lack of proof, not lack of confidence.

Realistically the most reliable evidence we have of extreme efficiency in GF-3 is the shipment if vehicles from GF-3 last week. That would not have happened were a traditional set of cost accounting constraints to have been applied. Specifically I am confident that a substantial portion of GF-3 total costs will be payable based on volume output rather than the traditional 100% Capex fully allocated upon delivery/installation. Further, the Tesla industrial learning curve seems even faster than we have previously seen. I applaud those brave enough to make estimates, which clearly show unprecedented capital efficiency.

Perhaps as significant as capex is the design efficiency of Model 3, accelerating for Model Y and again for Cybertruck. The total parts count is reducing rapidly on the order of 65% parts for Model 3 vs Model S. Model Y is doing that again. Think wiring, BMS/controllers with parts count more than halved. The increased reliability and construction simplicity further increase both capital and operating efficiency while reducing warranty costs and service overhead. Thus I actually think that GM of mature GF-3 will exceed 30% with current pricing, so I expect continuing price drops as efficiency rises and capacity increases, thus expect GF-3 next phase to come on line as rapidly as did the first phase.

in sum, we are all imagining a steady state when Tesla is continuing to produce something nearly like exponential growth. In sum when GM’s near 25% Tesla will reduce prices rather than improve per unit profits.

I wonder if Tesla has learned their lesson re price cuts after the effects of last year. I believe the price cuts last year were forced due to a hole in demand. I don't think we'll se the same thing in China for some time as the M3 is already competitively priced, there is substantial political and economic support and stage 1 production is relatively low.

Also, substantially reducing prices in one jurisdiction goes against Elon's pricing ethos. Everyone pays the same price with adjustment for tax and shipping.

I think it's more likely that Tesla will extract excess profits for as long as possible from GF3 and reduce prices globally when needed.

Dropping the price

 

[ReflexFunds]

I wonder if Tesla has learned their lesson re price cuts after the effects of last year. I believe the price cuts last year were forced due to a hole in demand. I don't think we'll se the same thing in China for some time as the M3 is already competitively priced, there is substantial political and economic support and stage 1 production is relatively low.

Also, substantially reducing prices in one jurisdiction goes against Elon's pricing ethos. Everyone pays the same price with adjustment for tax and shipping.

I think it's more likely that Tesla will extract excess profits for as long as possible from GF3 and reduce prices globally when needed.

Dropping the price

I think it's almost certain Tesla will lower MIC Model 3 pricing from current levels.
MIC SR+ list price is ¥ 335,800 or $50.6k. This includes 13% VAT, so excluding this the price is $44.8k.
This is the comparable price to the $39.5k list price of the SR+ Model 3 in the US. So MIC is currently priced significantly higher than in the US.
But I don't think this even includes the impact of the China subsidy - in China the Automaker receives the subsidy and not the customer. So in addition to the $44.8k paid by the customer, Tesla will receive ¥25k or $3.5k from the government. This is a total $48.3k or $8.8k more per car than the price in the US.

I think over time the MIC SR+ price will trend down towards the $39.5k US price (which would mean listed at ¥289,000 including VAT) to account for:

• The recent addition to the subsidy list.
• Ramp up of Battery and Powertrain shop in China which will significantly reduce tariffs paid on parts imports from the US.
• Lower production costs as production ramps due mainly to: Less depreciation per car, less staff hours per car, less scrap per car
• Start of production of LR AWD Model 3 in China. Because Tesla has to pay such huge tariffs on imports of these models, it has to price the MIC SR+ artificially high to keep a more balanced price gap between the models.

 

[RubberToe]

(Dec 05 29 2019）Tesla Gigafactory 3 in Shanghai Construction Update 4K
by Jason Yang

The holding lot is almost full. If they don't start moving those cars to customers there will no place else to put them. Also, the area between phase 1 (auto assembly) and the new phase 2 building looks to be under active construction now. Maybe connecting them?

The most surprising new information in the video is the initial grading and preparation of the large formerly unused land parallel to phase 1. It is almost the same size as phase 1.

Anyone have an idea what will be going in there?

 

[Christine69420]

.

The most surprising new information in the video is the initial grading and preparation of the large formerly unused land parallel to phase 1. It is almost the same size as phase 1.

PIC

Anyone have an idea what will be going in there?

In broad terms a copy of phase 1 for production of TMY.

 

[RubberToe]

.


In broad terms a copy of phase 1 for production of TMY.

At the rate they built phase 1, that new building could be done in 6 months. Chinese MY deliveries by 2H2020. Amazing.

RT

 

[RubberToe]

And Teslarati just posted a story about car carriers departing GF3 heading off to stores to prepare for delivery. There obviously is going to be a big splash story about who gets the first delivery. Should be this week I would think.

Tesla Made-in-China Model 3 first deliveries imminent as carriers spotted leaving Gigafactory 3

 

[hobbes]

The holding lot is almost full. If they don't start moving those cars to customers there will no place else to put them.
Anyone have an idea what will be going in there?

Just watched the video, too, and realized it even shows two holding lots: The one in your picture with mostly black cars and after that another with blue cars. All together I count something like 650 cars. There is also one carrier visible so cars are being moved.

 

[JohnnyEnglish]

Some months ago there was discussion (by Jerome Guillen?) of a move to simplifying the underbody manufacture by moving to (initially) two half underbody castings and then a single underbody casting - there was a patent published related to the large multidirectional casting machine that would be required. Does anyone have any information as to whether either the initial step or the second step have been implemented (and if not if there is a timeline for them to be implemented)?

Similar question regarding the simplified wiring. There seemed to be indications this might be implemented for the MIC model 3 in advance of the Model Y in Fremont but have not seen any firm information to confirm that this has occurred.

Perhaps I have been using the wrong search terms but cannot find any reference searching on TMC. Found this on Teslarati The Model Y is an understated Trojan Horse for Tesla's manufacturing ambitions

 

[lklundin]

(Dec 05 29 2019）Tesla Gigafactory 3 in Shanghai Construction Update 4K
by Jason Yang

One apparent, small setback at GF3 is that the row of supercharger stalls that was operating south of the main factory building has been removed, with earth work going on at that location.

It looks like they determined that the East-West passage South of the main factory building has to be moved slightly South, closer to the new building they are putting up.

This pavement removal South of the main factory building had already started when the Nov. 29 video came out, see attachment.

The area seems to be prepared for two other rows of superchargers, and I guess they will get things to work like they want pretty soon.

 

[Words of HABIT]

I find it interesting that Tesla has a reputation amongst non-Tesla owners as being a very expensive, very high-end, very costly luxury product for the wealthy and yet their pricing on items like Premium Connectivity with wireless Internet, streaming music, traffic, satellite maps, streaming video is priced at only $10/month. I have a serious aversion to signing up for things with recurring monthly payments but at only $10/month it's a no-brainer for the functionality received.

A replacement key fob is only $150, and it's hard to beat their prices on things like winter wheel and tire packages (for the equivalent quality wheels and tires), their DC fast-charging network is priced lower than all competitors and even their cheapest base model cars come very well-equipped. I'm not sure where this disparity between perception and reality comes from unless it's due to their long-standing business plan to introduce a very high-end sports car, followed by an expensive sedan and SUV which was to pay for the development of more affordable mass-market cars.

Maybe now that their mass-market products are so affordable, this perception works against them? On the other hand, it helps maintain desirability for their products. But I can't help but think there are hundreds of thousands who erroneously think Tesla's products are out of their reach.

And with the M3 and future cars, replacing a lost key card is only $16 Canadian, including shipping. I just replaced a key card this week. ordered from Tesla on-line, received courier package next day, and it took 30 seconds to remove the lost card and program the new key card by a few taps on the M3 screen and swipes of the centre console. I agree Tesla is definitely not overcharging its Customers and is finding money saving and time saving ways to improve the overall experience of owning one of their vehicles. Always insure you have an extra key card, as you will need a working key card to set up a new key card to replaced lost/stolen card. Key cards are much better than key fobs, as the lost key cards can be programmed out so you never need worry about somebody finding your key card and stealing your vehicle. And they fit better in your wallet.

 

[Words of HABIT]

Bill Gates top stock holding in his Bill & Melinda Gates Foundation Trust is BRK.B Berkshire, which was recently increased.

BRK.B in turn holds stocks in Major US airlines, and 2 oil and gas companies; Occidental Petroleum Corporation and Phillips 66





BILL & MELINDA GATES FOUNDATION TRUST Top Holdings

Berkshire Hathaway Portfolio Tracker

Hardly, with OPC and Phillips 66 at 1.2% and 0.3% respectively of total holdings.

 

[nativewolf]

The holding lot is almost full. If they don't start moving those cars to customers there will no place else to put them. Also, the area between phase 1 (auto assembly) and the new phase 2 building looks to be under active construction now. Maybe connecting them?

View attachment 486021

The most surprising new information in the video is the initial grading and preparation of the large formerly unused land parallel to phase 1. It is almost the same size as phase 1.

View attachment 486029

Anyone have an idea what will be going in there?

If it is typical Chinese company going on's that is where the copycat manufacturer will put up a facility.

 

[nativewolf]

And with the M3 and future cars, replacing a lost key card is only $16 Canadian, including shipping. I just replaced a key card this week. ordered from Tesla on-line, received courier package next day, and it took 30 seconds to remove the lost card and program the new key card by a few taps on the M3 screen and swipes of the centre console. I agree Tesla is definitely not overcharging its Customers and is finding money saving and time saving ways to improve the overall experience of owning one of their vehicles. Always insure you have an extra key card, as you will need a working key card to set up a new key card to replaced lost/stolen card. Key cards are much better than key fobs, as the lost key cards can be programmed out so you never need worry about somebody finding your key card and stealing your vehicle. And they fit better in your wallet.

Yep, go get a replacement key for a lexus, etc. Hundreds.

 

[mongo]

That says bench trial so no jury. This is not a damage case as I remember. It is an interpretation of state law and federal constitutional provisions. Not issues for a jury. I was concerned when Curt said it was for a jury because these.are legal issues. I am not aware of factual issues but in some cases a jury could be empaneled to decide the facts and the court apply the law. However suits of this kind against a state are usually decided by a judge.
Caveat I only recall some of the issues when the case was filed so I may not be up to date
FC can likely update

Case is due to Sec of State denying Tesla's application to open store and repair locations in Michigan due to 2014 eleventh hour law change 'clarification' requiring all such things to be via franchisees.
Original laws were put in place to protected existing dealers from anticompetitive actions by OEMs. As such, OEMs can only do certain things via their franchisees. As Tesla has no franchisees, the laws should not apply to them. However, the previous State administration decided that the laws mean you can only sell/ repair via franchisees.

I'll avoid getting on a soap box at the point, other than to say the current restriction is hurting Michigan financially due to loss of sales tax and the citizens therein in a plurality of ways without any benefit to citizens as a whole. Nor are the meager gains to a select group anything more than a delaying tactic.

Spoiler: bad joke regarding crash

Chances are he had been drinking excessively and just used the Auto-Pilot as an excuse so they wouldn't suspect impaired driving. I mean, how else do you miss a flare in the roadway and flashing lights on the parked trooper's car? Not by "checking" on your dog in the back seat!

Maybe a misquote, "I was chucking up Mad Dog in the back seat?"

 

[Artful Dodger]

The most surprising new information in the video is the initial grading and preparation of the large formerly unused land parallel to phase 1. It is almost the same size as phase 1.

Anyone have an idea what will be going in there?

Yeah, so your "phase 2" isn't really phase 2, it's the "battery workshop".

The empty land now being graded is the actual "phase 2", as seen in this artist rendition of the site plan from early Nov 2019: (buildings outlined in RED are complete)

The bty workshop will be in production at GF3/Shanghai by the time Model Y ramps in Fremont, so the spare capacity in bty packs from GF1/Sparks will be needed at Fremont right away.

Look for continuous facility construction at GF3 until capacity in China is at least 500K/yr. Then knowing Tesla, that capacity will increase AFTER a few revisions, as well as retail price decreases act to increase demand. Its the virtuous cycle, EV edition.

Cheers!

 

[lklundin]

Lora Kolodny joins Ryan and Dana.
Lora Kolodny on Twitter

Reporting on Tesla, future, etc.
Blocked for outstanding reporting.

View attachment 485996


Did Linette survive this round?

Actually, since Linette Lopez seems to be connected to the "unknown third party" to whom Martin Tripp transferred highly sensitive data from Tesla, I could imagine that Elon Musk leaves her free to potentially incriminate herself further.

There is this source:
Elon Musk called the Tesla 'whistleblower' a 'horrible human being' in an explosive email exchange

And now this:
mugen turbo on Twitter
- where is that original source?

 

[Singuy]

Even if it does dip, it will most likely be very temporary. The real question is, are you going to sell premarket based on your concerns? I’m sure not. I have terrible luck timing the market.

Again, I was arguing against a rally, not saying there will be a major dip.

Also I have always argued against timing the market.

And lastly, just staring at this stock daily, there's like a 90% chance where a mandatory morning dip occurs irregardless of news.

I don't trade stocks. I only buy and hold. There are major tax incentives I need to make sure we keep and realize any type of gains for me may interfere with those incentives. For example, if our household income exceeds 315k this year then I pay about 30k more in taxes. Trading stock is one of those ventures where I may win the battle but lose the war scenario.

Also I don't play with options or use margins.