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

[SpeedGoat]

https://www.washingtonpost.com/health/2020/05/04/mental-health-coronavirus/

https://www.washingtonpost.com/business/2020/05/04/financial-distress-among-doctors-hospitals-despite-covid-19-weighs-heavily-economy/

'It would be better to die': Italy's lockdown cost

As predicted, MSM began to focus on the cost of lockdown. Let's see how it plays out Fremont opening timeline.

The MSM is for the most part a bunch of lemmings. They force stories to conform to the narrative... right up to the point where the narrative shifts. Then they go chase the next shiny object.

We are seeing the shift right now. The coronavirus doom story is being replaced by the economic doom story. In the space of 2-3 weeks I expect things to shift from "opening up means people die!!!11one1" to "can the economy ever recover?"

 

[tinm]

The shutdown has done more to reduce emissions than anything. You'd think Elon would be all onboard.

But it hasn't done much to accelerate the transition to sustainable energy, which is the prize Tesla has its eye on. As it should.

 

[uujjj]

The Texas vs. California comments on this thread are ridiculous. California has been supporting Tesla for more than a decade. Texas won't even allow Tesla to sell cars directly.

FWIW car factories in Texas aren't running yet either. Toyota was planning to open the San Antonio plant on May 4, just like Tesla Fremont, but has delayed it to at least May 11. GM's plant hasn't announced anything; it'll probably reopen with other GM plants in mid to late May.

 

[Joe F]

By my calculations, at this rate Elon will have 21 children when he's 88.

Which one is going to run the company?

None of them. It will be Maye Musk. At the rate she's aging, she'll outlive them all.

 

[StarFoxisDown!]

Hm, I think Overlord Musk is hard headed enough to uproot everything he has and move it to somewhere more favorable. Now, I'd say he'd not do it immediately, but if California burns the bridge enough with not allowing Fremont to open, I can see him pushing to close the next GF location and moving the main enterprise there when it opens.

Given how Elon has been known to hold on to any slights or grudges, I think that bridge is already burned. It's sitting at the bottom of the river at this point and Elon is going to stew on this for a while.

I can't see anything major happening until Giga China is fully ramped on 3/Y and Giga Berlin is built and in production of Y and the next Terrafactory is built that will have Cybertruck and Y production. So at least 2 years from now.

But I would actually expect at that point to see stages of divesting from Fremont including rebuilding S/X lines with more automation at Giga 1. Moving Fremont 3 production to Giga 1 with more automation and the new updates to the building process that the Y is getting in Giga China/Berlin. So then only Y production is left at Fremont which would give them space to reconfigure the entire building for maximum efficiency and automation.

It wouldn't be a complete withdrawal from Fremont but it would definitely be a loss for California and definitely a stop to any expansion. BTW I think Giga1 could host future vehicle production because of a couple things. They have space and the new manufacturing lines in 2 years would benefit form further automation and efficiency increases that reduce the number of employees needed. I think Tesla's battery manufacturing breakthroughs will also help ease some of the labor supply and also with the new Terrafactory coming online and Giga China and Berlin making their own batteries, it will help Giga 1 out with battery output.

The benefits of moving S/X/3 production in 2 years to Giga 1 are immense in cost savings

 

[Dwdnjck]

I wonder what was special about the Gene Wilder house? Lab in the attic?

Really impressive door “knockers”.

 

[LN1_Casey]

Given how Elon has been known to hold on to any slights or grudges, I think that bridge is already burned. It's sitting at the bottom of the river at this point and Elon is going to stew on this for a while.

I can't see anything major happening until Giga China is fully ramped on 3/Y and Giga Berlin is built and in production of Y and the next Terrafactory is built that will have Cybertruck and Y production. So at least 2 years from now.

But I would actually expect at that point to see stages of divesting from Fremont including rebuilding S/X lines with more automation at Giga 1. Moving Fremont 3 production to Giga 1 with more automation and the new updates to the building process that the Y is getting in Giga China/Berlin. So then only Y production is left at Fremont which would give them space to reconfigure the entire building for maximum efficiency and automation.

It wouldn't be a complete withdrawal from Fremont but it would definitely be a loss for California and definitely a stop to any expansion. BTW I think Giga1 could host future vehicle production because of a couple things. They have space and the new manufacturing lines in 2 years would benefit form further automation and efficiency increases that reduce the number of employees needed. I think Tesla's battery manufacturing breakthroughs will also help ease some of the labor supply and also with the new Terrafactory coming online and Giga China and Berlin making their own batteries, it will help Giga 1 out with battery output.

The benefits of moving S/X/3 production in 2 years to Giga 1 are immense in cost savings

I think they may not move to GF Nevada, because they're already having issues with hiring people out there. And besides that, the area is just frankly not California's Bay area for the people who would be employed by Tesla's line work. I've no doubt a lot of workers would move over, but I think a lot would remain in California and deprive Tesla of that talent.

I think they'd move certain things to GF Nevada, but not S/X's lines.

 

[igranderojo]

I'm sure I'm not alone when I say I appreciate your in-depth analysis and write ups @Papafox .

Keep up the great work !


Are there any other stocks that you are bullish on either over the long or short haul ?

Yes!
Acrimoto
I do not own Acrimoto stock and I am not a financial advisor.
This is not a recommendation to buy stock.
See "Now You Know" on YouTube episode
Acrimoto shutdown but will reopen.
they are where Tesla was when they first started production.
But I think Arcimoto has a niche market that will explode with demand for delivery vehicles.

 

[bubb]

I don't understand why anybody would support *moving* production out of Fremont when this company has been, is, and will be production constrained for years to come. You also cannot ignore the value of being able to recruit/churn engineering talent in the Bay Area that can either be directly seated at the factory or pop over there to deal with whatever the very same day. This is a conversation for when they are somewhere near demand saturation which is not in sight IMO.

 

[JRP3]

It is logical to assume that Joey Klender might not have done deep due diligence on his post. Hanwha is one of the major solar cell producers in the world:
Hanwha Q CELLS
Through Hanwha Machinery they are highly capable industrial process suppliers and processors. So, a deal to supply QC on final cell production is entirely logical, but the deal is quite likely to be only the first public indication of much more extensive future plans. They are, for instance, among the world's leading heat treatment specialists, whcih can come in handy when dealing with, say, giant sized aluminum castings.

I will wager there is a far broader relationship under way.

Tesla solar has been using Hanwha cells for a while.

 

[StarFoxisDown!]

I think they may not move to GF Nevada, because they're already having issues with hiring people out there. And besides that, the area is just frankly not California's Bay area for the people who would be employed by Tesla's line work. I've no doubt a lot of workers would move over, but I think a lot would remain in California and deprive Tesla of that talent.

I think they'd move certain things to GF Nevada, but not S/X's lines.

Tesla has shown consistently that they can get more production out of fewer works over time as they increase efficiencies and update their manufacturing process. They even have still done this with the S and X. Given that history, I very much expect Tesla to continue that trend with further manufacturing efficiencies and automation that will require less employees for the same level of production.

Battery day is going to have a big impact on Giga 1. I know there's a worker shortage there but what I'm saying is Tesla's continued efficiency gains and automation in manufacturing combined with the battery production breakthroughs they are going to achieve with their new battery production process will alleviate a lot of that labor shortage. I mean, I don't think there will be any Panasonic involvement at Giga 1 in 2-3 years and all of Giga 1 will be Tesla with Tesla level efficiencies.

 

[StarFoxisDown!]

I don't understand why anybody would support *moving* production out of Fremont when this company has been, is, and will be production constrained for years to come. You also cannot ignore the value of being able to recruit/churn engineering talent in the Bay Area that can either be directly seated at the factory or pop over there to deal with whatever the very same day. This is a conversation for when they are somewhere near demand saturation which is not in sight IMO.

Um Fremont is crazy inefficient because it's a mishmash of different production lines that were added at different times. While the Bay Area has great engineering talent, that's not needed for manufacturing line workers. The S/X will need to majorly updated or revamped considering its fundamentally the same line they've had for years. They could easily drop the prices of the S/X by moving production to Giga 1 on the cost savings which would then lead to greater demand for the vehicles.

On a cost basis, it would save a ton of money to move manufacturing out of Fremont. Tons of money. California and the Bay Area is super expensive for manufacturing.

 

[shootformoon]

I am very confused by the rules, especially rule 3.

The testing goal is 200/100k/d. The 7 day average is 28 for Alameda county? So if the current trend keeps going, fewer cases every day and less and less people need/want testing, then the 200/d goal will NEVER be achieved? So the lockdown can go forever because it is so effective and self-strengthening?

On the other hand, it is so easy for telsa to force the end of lockdown, take the deeds in its hand and meet the 5 rules, actually only rule 3 and 5 are not met for the county.
1. buy tests and start testing tsla employees residing in the county NOW. The county has 1.7m population. So tsla only needs to test 3500 employee per day.
2. buy 30 days of PPE and donate to the county medical facilities.

It will only cost several million. Tsla shareholders are losing billions due to the lockdown.

There was a suggestion from the Alameda County health officer that they might consider some easing in a couple weeks if things go well. What that means is anyone's guess but does leave open the possibility of some additional steps being taken before the end of the month (I'm not counting on it but hope springs eternal).

From an article in the SF Chronicle:

Public health officers said it’s possible they will loosen further restrictions before the end of the month....

But those decisions depend on state and regional metrics moving in the right directions, and much of that progress is in the hands of public health authorities — to increase testing capacity, for example, and to hire workers to do labor-intensive contact tracing.

“The effects of these new activities we’re allowing won’t be seen for a couple of weeks — that’s one reason we wanted these indicators, so we could monitor them,” said Dr. Erica Pan, the Alameda County health officer. “If we feel like things are better in a couple weeks, there’s a possibility we could relax some more.”​

Bay Area has 6 criteria for loosening coronavirus restrictions. Here’s where each county is now

 

[copyhacker]

True, but that can be disputed successfully. I did it when I left CA. FWIW, just selling his house will not even come close for Elon, when he is a corporate officer of several companies based in and conducting major business in California. When SpaceX and Tesla both have the majority of their corporate-level activities in California I'd give him effectively zero chance of expatriating himself.

I’d think Mars should do it.

 

[FringeGlock]

I feel for the two boys. I still own a VW, a 1970 type 2 I bought in October 1969. I also own a 535xd BMW, which I really like but gave to my son to use to make room for the model 3. Well, the model 3 is fantastic. 1:22pm the FedEx truck just left 3 packages on my porch, for the model 3. Got to go now.

 

[Driver Dave]

Not many companies could have the CEO say stock too high imo one week, and start the week up the next.

TSLA Long

Nothing can stop it...

 

[jerry33]

Um Fremont is crazy inefficient because it's a mishmash of different production lines that were added at different times. While the Bay Area has great engineering talent, that's not needed for manufacturing line workers.

The problem is that when the designers and engineers are remote, you get the 2013 S' defroster that wouldn't defog the driver's side of the windshield (because the designers never experienced actual winter driving). They need to be together or there will be issues.

 

[bubb]

Um Fremont is crazy inefficient because it's a mishmash of different production lines that were added at different times. While the Bay Area has great engineering talent, that's not needed for manufacturing line workers. The S/X will need to majorly updated or revamped considering its fundamentally the same line they've had for years. They could easily drop the prices of the S/X by moving production to Giga 1 on the cost savings which would then lead to greater demand for the vehicles.

On a cost basis, it would save a ton of money to move manufacturing out of Fremont. Tons of money. California and the Bay Area is super expensive for manufacturing.

I think that is saving pennies to lose dollars. My point about engineering talent has nothing to do with line workers. This factory is "messy" because it has been their laboratory for iterating and innovating in manufacturing. If a fancy robot breaks at a Ford plant, a contractor is called and line workers twiddle their thumbs. If it breaks at Fremont, and it's important enough, they have some of the smartest engineers in the company (and often the CEO) available to drive over within the hour. Once they have some slack they can slow things down there, but we are far from that point IMO.

 

[feigen66]

I am very confused by the rules, especially rule 3.

The testing goal is 200/100k/d. The 7 day average is 28 for Alameda county? So if the current trend keeps going, fewer cases every day and less and less people need/want testing, then the 200/d goal will NEVER be achieved? So the lockdown can go forever because it is so effective and self-strengthening?

On the other hand, it is so easy for telsa to force the end of lockdown, take the deeds in its hand and meet the 5 rules, actually only rule 3 and 5 are not met for the county.
1. buy tests and start testing tsla employees residing in the county NOW. The county has 1.7m population. So tsla only needs to test 3500 employee per day.
2. buy 30 days of PPE and donate to the county medical facilities.

It will only cost several million. Tsla shareholders are losing billions due to the lockdown.

200/100k/d is a strawman goal, even Newsom admitted that in the conference that they did not know how to properly set the number.
My guess is the number will be somewhere in between. All the hospitalized patients will get tests other than the ones having symptom.

Here is what Kaiser just sent out this morning

"Across Northern California, we've tested tens of thousands of patients for COVID-19 so far. At the beginning of the pandemic, we faced national shortages of test kits. Testing needs quickly overwhelmed public health department labs. We had to wait 10 to 14 days for test results — far too long to be useful in determining safe treatment for very sick patients.

In response, our lab teams increased capacity to process more COVID-19 tests of hospitalized and high-risk patients. We rolled out drive-through testing sites to protect our patients and care teams. And soon we'll open a 7,700 square foot lab in Berkeley, which will have the capability to process 10,000 COVID-19 tests from around the region per day.

We're so thankful to the City of Berkeley, our lab teams, and construction partners who've been working day and night to build this lab in just 60 days. This kind of dedication is what helps us care for patients without delay. With this level of testing, we can start to shift from testing only hospitalized and high-risk patients to far more of our members. Large-scale testing is one of the 6 indicators Governor Newsom said is foundational to easing the stay-at-home order in California."

I agree TSLA should just administrate their own test. Their Fremont facility has a fairly big EMS office to do such thing.

 

[LN1_Casey]

I think that is saving pennies to lose dollars. My point about engineering talent has nothing to do with line workers. This factory is "messy" because it has been their laboratory for iterating and innovating in manufacturing. If a fancy robot breaks at a Ford plant, a contractor is called and line workers twiddle their thumbs. If it breaks at Fremont, and it's important enough, they have some of the smartest engineers in the company (and often the CEO) available to drive over within the hour. Once they have some slack they can slow things down there, but we are far from that point IMO.

Yeah, but Fremont formed when Tesla was still a no-name brand. Now, they've got the pick of each graduating class for all of the top tier engineering schools in the States, if not the world.

If they moved their HQ to, say, Austin for the new GF, do you think that those Engineers will all just shrug and find someone nearer in California? Or would they follow the business they believe in, and feel like they can succeed at and make a difference?