Welcome to Tesla Motors Club
Discuss Tesla's Model S, Model 3, Model X, Model Y, Cybertruck, Roadster and More.
Register

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

This site may earn commission on affiliate links.
Don't forget the water shortage. It seems very unlikely that further major growth would be possible for Reno. Substantial output increases might be were continuous efficiency improvements materialize. Probably the most important area of improvement needed is reducing need for water. Housing supply increases are obviously easy to do physically, but from whence comes the water supply? Water rights and supply have plagued this region, including Southern California since before I was born. Above all issues California Central Valley agriculture looms large.
The Reno/Sparks area gets it's water from the Truckee River:
Water Rights | Truckee Meadows Water Authority
That cryptic paper illustrates the issue. Zero new construction is possible there without acquiring water rights. Water rights actually do not convey the right to water if there is not enough to go around. The odds of inadeqaute flows from the Truckee River are rising very rapidly:
Science in the Truckee River Basin
Note that the Sierra Nevada snowpack is the primary source for Lake Tahoe which feeds the Truckee River.

Without going into excessive detail there will not be any substantial increase in water rights for GF-1 nor will there be for and major residential projects. Major conservation efforts might allow more growth, but without them any expansion will be self-defeating. There is no real disagreement about the crisis brewing but there is enormous disagreement about how to deal with it.

The first paragraph talked about Southern California only because almost the entirety of California (SFO East and South) and Nevada depends ultimately on snowpack. Wildfires happen due in large part to very dry conditions. Those happen when snowpack is inadequate to feed the rivers, streams and soil.

To be very clear about my opinions, I think both Fremont and Sparks are very challenged to have any substantial growth because of water limitations. The planning horizon for these projects is at least two decades. Thus I expect all significant growth for Tesla to be located in areas that are relatively resilient to climate change.

Is anybody in any doubt about this?
Here's a recent article about the issue, although it speaks almost entirely to the Las Vegas issues:
Water scarcity in Nevada hits 'critical mass,' state director of natural resources says
They are separate aquifers, but water scarcity in the west is a long term issue. The plant should be water neutral. They can capture and recycle anything used onsite. Hosting a larger population requires buying rights from farmers and others who own surplus rights.
 
Merry Christmas to me!

CTorder2.jpg
 
Are people seriously back to the whole "GF1 cannot expand because of water" thing?

1) Truckee water rights are traded on the open market; you just buy them (in perpetuity). Even the most expensive they've ever gotten is eminently affordable to Tesla. They're much cheaper now.

Ag simply cannot compete on water pricing with municupal usage. Period. Ag consumes water by the acre foot (an acre of land flooded to a foot's depth). The value of the crops isn't remotely close to what municipal consumers will pay for that water.

2) Forgetting that, you can also get water via desalination. There's multiple local saline sources, including a nearly limitless one at Pyramid Lake. Even desalination from seawater can be justifiable at high municipal (not ag) rates, but Pyramid Lake is only 1/6th as salty as the ocean. And desalination would ecologically *help* the lake, so long as the waste brine isn't returned to it.

3) Water access can also be gotten via partnerships with local municipalities to fund water conservation and recycling programs.

4) It can even be gotten to some extent via rain catchment off GF1's roof if you have somewhere large enough to impound it. On average, 33500 cubic metres of rain falls on GF1 per year. 27.2 acre feet.

5) Tesla could even afford to truck in water indefinitely (shipped from wetter places, like northern California or further north). During the last big CA drought, it was common for residences to buy water for $0.04-$0.12/gal. Tesla could probably get it on the low end, maybe even cheaper than that. Not limiting.

I'm not sure why we need to keep rehashing this conversation, but apparently we do. So once again: water will not be limiting at GF1. Water would be *cheaper* elsewhere, but every location has its ups and downs, financially.

Merry Christmas to you @KarenRei - and welcome back. :)

PS. I took me a few moments to realize that you weren't referring to some sort of silver-based product...
 
Last edited:
Don't forget the water shortage

According to this article, tens of thousands of acre feet of Truckee River water are available to transfer from agricultural use.

For those unfamiliar, an acre foot of water is the amount needed to flood one acre of land to a depth of one foot. It’s a lot of water. All of the available water is allocated. It would cost 100,000’s of dollars to buy a lot of water. Given the multiple billions involved in the Gigafactory, this doesn’t look to be a blocking issue.

Water Rights | Truckee Meadows Water Authority
 
LR AWD Waiting Room

Got this text now:

We currently expect your Model 3 to be built on 12/31. Please prepare to take delivery at our New Year's Eve Delivery Event at the Tesla Factory (45500 Fremont Blvd, Fremont, CA 94538). More details to follow later this week. We look forward to seeing you on the 31st!

Fresh out of the oven!
 
LR AWD Waiting Room

Got this text now:

We currently expect your Model 3 to be built on 12/31. Please prepare to take delivery at our New Year's Eve Delivery Event at the Tesla Factory (45500 Fremont Blvd, Fremont, CA 94538). More details to follow later this week. We look forward to seeing you on the 31st!

Wow. Can we from this expect record low inventory at quarter's end?
 
Not sure if you guys have seen this yet, but the latest update from China suggest once more they are producing cars like there is no tomorrow, yet deliveries will only start in January.
mic-model-3-gf3.jpg


Tesla China even tweeted today that deliveries will start soon:
Tesla China on Twitter
tesla china twitter.jpg


So this suggests a couple of things to me:
  • I am more and more subscribing to the idea, that this is being done on purpose, in preparation for Tesla's pre-announced, terrible, horrible, no good, very bad Q1. Elon has said for about 2 quarters now, that Q1 will suck - he did not elaborate, but I would think the end of US subsidies, post-high Dutch deliveries/tax change and maybe Model Y production start will eat into deliveries and margins. To balance this, they may want to realize a few extra thousand Chinese sales, that could lessen the blow or even counter the negatives. (both on the books and psychologically as well).
  • However this also means, that they feel comfortable making the 360k target even without any MIC sales.
Any thoughts?
 
Great comment on SA article that symbolizes the tide turning as more and more Teslas get on the road:


"I used to be bearish on TSLA but over the past few months have turned bullish, based on two things, (1) Reading all the SA articles and comparing the bear case to the bull case, and (2) seeing so many Teslas on the road. I used to see one every couple of weeks, but lately there's at least one every time I run an errand. And they appear to perform well, I've never seen one stuck at the side of the road. Yes, this is anecdotal, but seeing them in numbers can be very convincing."
 
Not sure if you guys have seen this yet, but the latest update from China suggest once more they are producing cars like there is no tomorrow, yet deliveries will only start in January.
mic-model-3-gf3.jpg


Tesla China even tweeted today that deliveries will start soon:
Tesla China on Twitter
View attachment 492801

So this suggests a couple of things to me:
  • I am more and more subscribing to the idea, that this is being done on purpose, in preparation for Tesla's pre-announced, terrible, horrible, no good, very bad Q1. Elon has said for about 2 quarters now, that Q1 will suck - he did not elaborate, but I would think the end of US subsidies, post-high Dutch deliveries/tax change and maybe Model Y production start will eat into deliveries and margins. To balance this, they may want to realize a few extra thousand Chinese sales, that could lessen the blow or even counter the negatives. (both on the books and psychologically as well).
  • However this also means, that they feel comfortable making the 360k target even without any MIC sales.
Any thoughts?

I think that Tesla is very likely intentionally delaying the MIC 3 delivery to Q1, to offset the Q1 slump and inevitable FUD people will try to pull then. They’ll constantly whine and complain over Q1 19, and try to extrapolate into this Q1, but then the margins of MIC M3 hit like a popped pimple, and suddenly we’re in the S&P 500 list, and they’re scrambling and Overlord Musk is laughing at his cleverness.
 
Last edited:
Don't forget the water shortage. It seems very unlikely that further major growth would be possible for Reno. Substantial output increases might be were continuous efficiency improvements materialize. Probably the most important area of improvement needed is reducing need for water. Housing supply increases are obviously easy to do physically, but from whence comes the water supply? Water rights and supply have plagued this region, including Southern California since before I was born. Above all issues California Central Valley agriculture looms large.
The Reno/Sparks area gets it's water from the Truckee River:
Water Rights | Truckee Meadows Water Authority
That cryptic paper illustrates the issue. Zero new construction is possible there without acquiring water rights. Water rights actually do not convey the right to water if there is not enough to go around. The odds of inadeqaute flows from the Truckee River are rising very rapidly:
Science in the Truckee River Basin
Note that the Sierra Nevada snowpack is the primary source for Lake Tahoe which feeds the Truckee River.

Without going into excessive detail there will not be any substantial increase in water rights for GF-1 nor will there be for and major residential projects. Major conservation efforts might allow more growth, but without them any expansion will be self-defeating. There is no real disagreement about the crisis brewing but there is enormous disagreement about how to deal with it.

The first paragraph talked about Southern California only because almost the entirety of California (SFO East and South) and Nevada depends ultimately on snowpack. Wildfires happen due in large part to very dry conditions. Those happen when snowpack is inadequate to feed the rivers, streams and soil.

To be very clear about my opinions, I think both Fremont and Sparks are very challenged to have any substantial growth because of water limitations. The planning horizon for these projects is at least two decades. Thus I expect all significant growth for Tesla to be located in areas that are relatively resilient to climate change.

Is anybody in any doubt about this?
Here's a recent article about the issue, although it speaks almost entirely to the Las Vegas issues:
Water scarcity in Nevada hits 'critical mass,' state director of natural resources says

To anyone worried that water shortages could limit Tesla, have you considered desalination? I read once that Israel does a lot of it.

Pipelines for oil and gas have been built clear across continents. Why not pipe seawater to somewhere with abundant solar energy and a place to dump salt with minimal environmental damage (Death Valley?), then pipe the fresh water where you need it. Extracted salt could be processed for minerals such as lithium to help fund the operation. As the cost of solar energy continues to drop, I'd guess such schemes could become viable if they aren't already.

So don't sell your stock just yet over water worries. Have some faith in the kind of engineers who land rockets on ships.

Edit: Sorry, I see I'm the last of hundreds to post this idea. The perils of falling behind in the forum.
 
Last edited:
To anyone worried that water shortages could limit Tesla, have you considered desalination? I read once that Israel does a lot of it.

Pipelines for oil and gas have been built clear across continents. Why not pipe seawater to somewhere with abundant solar energy and a place to dump salt with minimal environmental damage (Death Valley?), then pipe the fresh water where you need it. Extracted salt could be processed for minerals such as lithium to help fund the operation. As the cost of solar energy continues to drop, I'd guess such schemes could become viable if they aren't already.

So don't sell your stock just yet over water worries. Have some faith in the kind of engineers who land rockets on ships.
No one is selling their stock--except for market makers--but housing is a problem as developers haven't stepped up to the plate. This is mainly due to the water issue, which is solvable but no developer wants to solve it. Housing is the number one reason for the labour shortage at GF1.
 
Great comment on SA article that symbolizes the tide turning as more and more Teslas get on the road:


"I used to be bearish on TSLA but over the past few months have turned bullish, based on two things, (1) Reading all the SA articles and comparing the bear case to the bull case, and (2) seeing so many Teslas on the road. I used to see one every couple of weeks, but lately there's at least one every time I run an errand. And they appear to perform well, I've never seen one stuck at the side of the road. Yes, this is anecdotal, but seeing them in numbers can be very convincing."

I don’t know. I’m not convinced this person is particularly bullish and I’m left with the feeling that this person would easily turn bearish again if his piña colada came without the customary umbrella.