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

[Sancho]

I much prefer focusing on long-term developments instead of obsessing over the short-term but having credible info that Model 3 production is above 6000 cars per week -- versus the 4582 per week Bloomberg estimates -- is still useful information and dramatically affects the bottom line, including margins.

Yes, but to what end? We can agree that for us longer term investors it’s meaningless whether Tesla hits 6000 this quarter or next quarter. And for short term “investors”, how has any production announcement worked out for you so far?

We feed the shorts when we focus on production or demand. These issues are FUD-bait. We only win by demonstrating how innovation drives margin.

 

[KarenRei]

...so $35-40k for what's essentially a 3MRD, when $35k is the target for a 3SR?

I don't see that as plausible, unless Tesla's found some sort of massive breakthrough to get the SR RWD Model 3 down to $25-30k.

Agreed, I seriously doubt this. They're not going to outprice / outspec Model 3. Model 3 would have to be dramatically improved if they want to price / spec Model Y like that. Building a Model Y will always be significantly more expensive than Model 3 for a given set of specs, due not just the larger weight, but the higher energy consumption as well.

 

[scaesare]

No, billion / milliard / thousand million.

Typo corrected, thanks.

I was just pointing out that the poster said they were approaching that, when they had already exceeded...

 

[jbcarioca]

No, billion / milliard / thousand million.

so now the only question remaining is: what is an 'autopilot mile'?

 

[KarenRei]

Yes, but to what end? We can agree that for us longer term investors it’s meaningless whether Tesla hits 6000 this quarter or next quarter. And for short term “investors”, how has any production announcement worked out for you so far?

We feed the shorts when we focus on production or demand. These issues are FUD-bait. We only win by demonstrating how innovation drives margin.

Couldn't agree more. It's margin growth that keeps making the shorts eat their... shorts. They keep failing to realize how much it's growing, and how long it's going to keep growing (for a given ASP).

 

[ZeApelido]

The Tesla Show crew apparently has Model Y spec rumors. No mention of seating count or falcon wing doors.

- AWD only
- $35-$40k base price
- 250+ mile base model
- Autopilot HW 3.5 (with the possibility of a Tesla-designed Radar system, more cameras than current AP, no LIDAR)
- L4 FSD-ready from launch

Guess a whole bunch of model 3s are already outdated for FSD then.

 

[gringotuanis]

@Matias might want to reconsider about "It is impossible for the production to start in six months in China"
This is certainly a matter of definition and the Shanghai mayor explains how they'd do it, beginning with CKD or Complete Knocked Down) as in a kit complete in all respects so that final assembly happens near the destination. That has been used for many decades in situations where tax policies, freight costs or other factors made that a wise decision. Aircraft builders do something similar (Boeing, Airbus, Embraer, etc.) nearly all motor vehicle manufacturers have done that, some as long ago as the 1910's. Tesla has done it at Tilberg too.

There is that video on YouTube of Chinese building a train station in like 24 hrs. If anyone can build hyper fast, it's the Chinese.

 

[1101011]

OT

In The Economist, it is speculated that more energy is used in the construction of housing, than in the subsequent use of the structure-

Why more buildings should be made of wood

Brings to mind the parallel question with respect to automotives: Is more energy used in the materials/construction than in the lifetime use of a vechicle?

 

[KarenRei]

Brings to mind the parallel question with respect to automotives: Is more energy used in the materials/construction than in the lifetime use of a vechicle?

And the answer is no. Any other questions for which the answers have already been extensively studied in peer-reviewed research?

 

[Fact Checking]

so now the only question remaining is: what is an 'autopilot mile'?

I guess it's the obvious definition: "Autopilot miles is vehicle miles driven with Autopilot activated"?

 

[22522]

Guess a whole bunch of model 3s are already outdated for FSD then.

The Model 3s with FSD can be brought along with paired cameras at each mounting location.

 

[Matias]

@Matias might want to reconsider about "It is impossible for the production to start in six months in China"
This is certainly a matter of definition and the Shanghai mayor explains how they'd do it, beginning with CKD or Complete Knocked Down) as in a kit complete in all respects so that final assembly happens near the destination. That has been used for many decades in situations where tax policies, freight costs or other factors made that a wise decision. Aircraft builders do something similar (Boeing, Airbus, Embraer, etc.) nearly all motor vehicle manufacturers have done that, some as long ago as the 1910's. Tesla has done it at Tilberg too.

Yes. Tesla in Tilburg puts Model S/X car minus battery and battery back together after they have first been built and then disassembled in U.S. after quality control test. This is to avoid 10 % import duty for cars in E.U. But no one says that because of this Tesla is producing cars in Tilburg. But yes, if you want to define that that is car production, Tesla can produce cars in six months in China...But that doesn’t increase Tesla’s production, because the cars have already been first built and then dissembled in th U.S, but it can indeed reduce taxes.

 

[EinSV]

Yes, but to what end? We can agree that for us longer term investors it’s meaningless whether Tesla hits 6000 this quarter or next quarter. And for short term “investors”, how has any production announcement worked out for you so far?

We feed the shorts when we focus on production or demand. These issues are FUD-bait. We only win by demonstrating how innovation drives margin.

Future projections are as much subject to FUD as current info and harder to disprove since they are inherently speculative. But I personally prefer to focus on the long-term since I think that’s where the greatest opportunities are.

I think many people have missed that operating margins for the only business that has scaled to a meaningful extent (auto) are already in about the 10-12% range and IMO are likely eventually heading to ~15-20% even before accounting for the Tesla Network. Combined with ~50% revenue growth for the foreseeable future and the product pipeline, the prospects over the next 5-10 years are incredible IMO.

I do think it is worth maintaining a reality check based on how things are progressing. 6K/week production with only AWD/P for Europe and Asia — with operating margins likely exceeding 10% for the auto business — suggests to me that all systems are progressing in a very positive way and risks are being reduced along the way.

 

[wipster]

It is impossible for the production to start in six months in China.

Are we talking real time or Elon time?

 

[Buckminster]

Are we talking real time or Elon time?

What's the difference?

 

[Chickenlittle]

Musk has numerous times been over optimistic about time tables. You have been here long enough to know that. I could use harsher words, but I think that it is obvious to anyone, that Musk timetables are always overly optimistic.

Don’t believe me, use your own brains. Production starts in six months in a factory that is not even built yet?

Yup. Can’t compare your experience here or Europe to China. Environmental impact done ground prepared 6 month building permit and Chinese behind Tesla’s plan with exceptions granted to tesla. Going to install copies of already existing lines with no need to develop new process. Would not bet against time line

 

[2virgule5]

What's the difference?

3 months maybe, 6 months definitely

 

[jbcarioca]

I guess it's the obvious definition: "Autopilot miles is vehicle miles driven with Autopilot activated"?

So would I but I think I recall a definition that meant vehicle miles of cars that were autopilot equipped because of suggested passive features. I really do not know, therefore the question.

 

[jbcarioca]

Yes. Tesla in Tilburg puts Model S/X car minus battery and battery back together after they have first been built and then disassembled in U.S. after quality control test. This is to avoid 10 % import duty for cars in E.U. But no one says that because of this Tesla is producing cars in Tilburg. But yes, if you want to define that that is car production, Tesla can produce cars in six months in China...But that doesn’t increase Tesla’s production, because the cars have already been first built and then dissembled in th U.S, but it can indeed reduce taxes.

Mostly we agree but those Tilburg cars count as EU. Believe me, please, that I understand CKD does not create incremental production capacity. It absolutely will be so defined as Chinese production. Nobody expected actual complete manufacturing in China in less than two years AFAIK, but I’d never want to underestimate determined manufacturer/regulator cooperation. I’ve seen too much ‘magic’ to think tradition makes a precedent in this case, or anything involving China.

 

[mongo]

...so $35-40k for what's essentially a 3MRD, when $35k is the target for a 3SR?

I don't see that as plausible, unless Tesla's found some sort of massive breakthrough to get the SR RWD Model 3 down to $25-30k.

It's not a 3 though. Depending on the level of advancement for Y: wire harness is practically gone, 12V battery and related systems are gone, motor costs reduce with the volume, R&D expense recuperation is less than 3, manufacturing line cost is less due to lessons learned from 3, plant overhead is less if utilizing GF1 along with reduced parts shipping costs.
Body assembly itself may be revolutionary. Market size may be larger reduced per unit fixed cost share.
Each vehicle line will be more efficient $$$ than the previous.