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

[Mark's Beagle]

Elon Musk on Twitter

Just left Zeebrugge, now Tilburg, then Tesla HQ in Amsterdam & Oslo tonight to review service in Norway. Exciting to see thousands of Model 3’s on their way to owners in Europe! Elon Musk on Twitter

 

[mongo]

Tesla on Twitter
Good to see that Alien Dreadnought 0.5 is alive and well. Putting on the tires. This is in the Freemont building. Does the tent (for some of the lines) come after this, before this or replace this bit with manual labour?

This is the line in the building, the tent does it manually, likely with lifting assistance equipment. The tent takes a painted body and produces a completed car.

 

[Krugerrand]

OP referred to "a couple years ago" - so used 2 years.

You are right - if you bought before April 2017, you are likely significantly up. My original shares I got in 2011 are up 10x.

But, last ER I made 2.7x with options - even through all the ups and downs after the infamous tweet. This ER I'm significantly down, as of today - that would offset the gains I made between last ER and this ER. That's why my "Not an advice" would be to not play with options using money you can't lose.

I thought he said ‘a few years ago’. Too lazy to scroll back 6 pages and check since I’ve got 12 more ahead of me. If I blink, let alone scroll back there will be 52 pages ahead.

 

[Buckminster]

Tesla Cargo Ship

 

[Fact Checking]

The tent takes a painted body and produces a completed car.

With battery module mated as well?

 

[Krugerrand]

Don’t know how I feel about these rumours of Tesla partnering up with other Auto companies to provide the drivetrain for vans and trucks.

As a human being, this is great news. As an investor, it seems a shame to forfeit such a huge market in exchange for only a couple of grand of profit per vehicle.

This human being wants to see Tesla crush everyone else that ever made an ICE, so I don’t like it either. Fortunately, the decision isn’t mine to make. Cooler heads prevail and stick to the mission. I’ll support those heads having already proven they’ve got this. (But I don’t have to like it and I probably won’t.)

 

[KarenRei]

Great idea to electrify bulk shipping!

A couple of thoughts:

• Business model: I believe it would make sense to approach this issue from the high end as well, just like Tesla approached automotive electrification: instead of bulk cargo, go for really high speed sea delivery, with an electric fleet. Delivery times to Europe and China within 1 week will already favorably compete with air freight - which is a big and lucrative market. A 4x speedup to ~80 mph (radar assisted, of course) would cut delivery times to Europe from 20 days to 5 days and to China from 30 days to ~7 days. 100 mph+ speeds would push things from a safety POV though, but would be even more lucrative - and might allow approaches like a catamaran design, which would lower sea resistance and reduce energy costs.
• Cell longevity is going to be an issue, as the major depreciation factor. The current global commercial shipping fleet's average age is over 20 years. Steel ship hulls can go on forever, and are expected to. How long are the best, most durable cells going to last, and what the degradation curve and how predictable are the failure modes, and is there a continuous maintenance mode that effectively refreshes all cells over the long run?
• Battery module safety: that's a lot of energy stored, many tons of TNT-equivalent, with the nearest fire trucks thousands of kms away. Robust, yet environmentally friendly modes of fire suppression of a battery fire have to be found - probably by compartmentalizing/sealing battery modules where a fire could not escape even if a runaway thermal reaction triggers inside.
• Electric motors have other advantages over diesel motors: the huge engines of the really huge cargo ships can take more than an hour to warm up for departure. With an electric ship the ship is immediately ready for departure the moment the containers are loaded. More 'just in time' logistics are possible with an electric fleet.
• "On the go" recharging: it takes capital investment but it's possible to do recharging "on the go": "recharging ships" which carry nothing but huge batteries, shuttling between cargo ships. The recharging ships would then periodically dock with the off-shore wind farms to recharge themselves. If there's enough of them then the offshore wind farms don't need any battery capacity at all: there would always be a "recharging ship" docked, using up available generated electricity.
• What are the risks of weather patterns with too little or too much wind, and the resulting disruption to available deep sea wind energy? Delivery times must be guaranteed even in the face of hurricanes or doldrums. There must be a fail-safe plan to keep the spice going, probably by having the 'recharging ships' go back to the coast for electricity, or enough solar energy to keep things going in the worst case.

Great commentary.

• Since you'd only ever charge up to 80% or so of nominal capacity (nobody is going to sit around deep sea waiting to charge to 100%), cell lifespan should be excellent. That said, you'd surely expect 1 or 2 battery swapouts over the lifespan of a ship. That said, maintenance on diesel engines over the lifespan of a ship isn't exactly cheap either Tesla powerpack expected lifespans are 15 years.
• Thankfully, the way you put out a li-ion battery fire is... water (and lots of it). Hmm, where could one find a ready supply of water.... Basically, you'd just design every powerpack/megapack/whateverpack onboard to be able to be flooded.
• You could even do more than that re: shuttling power. A ship with a >1GWh battery aboard could literally transport backup power from one port to another, for the costs of ship rents (I worked it out a while ago... it works out to somewhere between a fraction of a cent and several cents per kWh, depending on what ship rents are like at that given point in time - they vary a lot). Also, having multiple ships in a port with GWh battery packs and V2G connections would be a massive grid buffer. We're talking "Buffering entire coastal states / countries".
• Wind/waves and solar tend to run opposite each other at sea, which is why they're a good complement to each other. Regardless, just like shipping is already routed based on weather, routes can also take into account price of power at a given charger, which would be proportional to how much it's generating / has stored and how much it's forecast to have when a ship arrives. More price-sensitive ships would take the cheapest route, while more time-sensitive ships would take the fastest route.

Whenever freight shipping goes electric, it's going to take a LOT of battery cell output to supply it. It's a massive, massive market.

ED: I see above that there's now a thread for this; all replies should probably be redirected there

 

[scaesare]

Tesla will only be a niche player unless it implements a good network of dealers or stores (the latter seems to not be possible) along with a positive communications strategy. It's not enough to have a superior product. You have to put the product in front of potential buyers and effectively communicate with them about it. Tesla doesn't do these things. Tesla cognoscenti are only a small portion of the car-buying public. The 3SR should be a good value, but I doubt that will be enough to support ongoing, good sales numbers. Tesla has accomplished a lot, but I think adjustments are needed for a successful future.

Edited for perspective:

"Tesla Amazon will only be a niche player unless it implements a good network of dealers or stores (the latter seems to not be possible) along with a positive communications strategy. It's not enough to have a superior product. You have to put the product in front of potential buyers and effectively communicate with them about it. Tesla Amazon doesn't do these things like Sears does did. Tesla Amazon cognoscenti are only a small portion of the car-buying goods-buying public. The 3SR books should be a good value, but I doubt that will be enough to support ongoing, good sales numbers. Tesla Amazon has accomplished a lot, but I think adjustments are needed for a successful future."

 

[sparcs]

Hi all,
In short: My Model 3 LR March delivery to Europe/Finland will have HW3.
.

Just don't be upset if it turns out not to be true. I doubt very much any rep is authorized to talk with a customer about HW3 availability.

It's easy to get a customer representative to say what you want to hear. Especially an enthusiastic one who is wanting to please their customer with good news.

 

[lascavarian]

Still, I'd be surprised if they're already shipping with HW3, with no announcement.

Very much agree and I just think that NN/2 early experience programs would be close to the factory.

However, it may be that there is a favorable regulatory environment for testing in some EU nations. I know Pharma companies often roll out in EU nations well before the US due to US heavy regulatory environment.

 

[winfield100]

Physically Unable to Perform....

Good question...... And soon, foretelling of the future...

@Smokey4141
hugz & kizzez 4 U

 

[Buckminster]

Elon Musk on Twitter
Just left Zeebrugge, now Tilburg, then Tesla HQ in Amsterdam & Oslo tonight to review service in Norway. Exciting to see thousands of Model 3’s on their way to owners in Europe!

 

[winfield100]

@KarenRei , great thoughts and this really needs to be shared with a wider audience than just TMC.

I invested quite some of my time these days in an article for @ZachShahan and want to encourage you to consider writing one about the points you made above. Ships are a huge polluting issues on our seas because most of the emissions go down in the water and what they burn is the most dirty oil of all.

Alex on Twitter

P.S. wild thought, actually a ship full of BEVs like Teslas is like a ship full of Batteries. Why don't charge them all up before leaving and use them combined like the ship battery?

Maybe technically a challenge but hey, engineering is magic!

@avoigt
University of Delaware got 38 of the electric mini Coopers from BMW 5-7 years ago to experiment with and made a small circuit board add on so the could do "vehicle to grid" for FCAS experiments with a larger battery bank....

 

[mongo]

With battery module mated as well?

Pack and drive units are mated in the tent also.
I believe the first pic in this article is the pack install point.
https://electrek.co/2018/06/16/tesla-model-3-dual-motor-performance-new-assembly-line/

 

[Fact Checking]

Very much agree and I just think that NN/2 early experience programs would be close to the factory.

HW3 is very likely "100% binary input/output compatible" with HW 2.5 neural networks, IMO.

This makes it much easier to deploy: HW3 produces the exact same output when running the same networks as HW2.5, if fed the same input data (video frames).

Installing HW3 right now avoids the expense of having to upgrade it in the near future, and probably also lowers costs, as Tesla doesn't have to buy Nvidia GPU chips anymore.

HW3 will truly shine once the much larger, more sophisticated FSD networks are released, later this year - and that can be done via an OTA upgrade.

 

[AudubonB]

MODERATOR:

Please place ALL posts regarding Tesla cargo ships here: Tesla Cargo Ship (Thank you, Buckminster).

We are having trouble porting over to there the ones posted here this morning. IF one of those was yours, please go copy-paste your own post over there, after which Moderators will delete the original ones in this thread.

Can I go back to sleep now? Tough night......

 

[VValleyEV]

Their production costs are falling. Have been falling. Will be falling. All conjugations are correct and applicable.

Except perhaps for the “future perfect”.

There was this ridiculous article the other day from a guy who described freezing inside his EV in the winter stuck in traffic, with the heater shut off, trying to conserve range, like a scene out of Apollo 13. Why? Because he set off on a freezing-cold day with only 50km/30mi range remaining. Aka, for a gas car: "I left home with the tank so low that the gas light was on." What was his excuse for doing something so ridiculous? Well, he'd forgotten to charge - aka, "I forgot to get gas the other night." So does he stop at a charger partway through his trip, after the battery has heated up (aka, "stop at a gas station"), just long enough to add another 10-20km? No, of course he does not.

What exactly do people expect? If that had been a gas car he would have been shutting off his idling engine in traffic to save gas, and still would have been freezing cold. It reminds me of all of the "ZOMG what if I had been driving an EV?" concern trolling back when Hurricane Maria hit Florida, when in reality Tesla owners had a breeze of the evacuation, with no problems, while it was gasoline car drivers who struggled to get fuel, were shutting off their cars (and thus AC, on dangerously hot days), and some were even pushing their cars when stuck in traffic to conserve those last drops.

BEST and most entertaining rant on the subject I have seen anywhere. Thank you.

 

[lascavarian]

Installing HW3 right now avoids the expense of having to upgrade it in the near future, and probably also lowers costs, as Tesla doesn't have to buy Nvidia GPU chips anymore.

Agree on I/O compatibility but.... it is not the same board as the NVDA board and it needs testing and validation particularly on such complex software that is hard to even understand.

Working for a medical device company one time and with all the validation and quality systems in play, a vendor sold us a simple chip for use for an important audible alarm. Got all the way into the field when we discovered that in some rare circumstances instead of the pulsing audible alarm we designed, it would start playing the tune to the song, "Home on the Range". No bad results (some hysterically laughing nurses) but a lot of red faces and a rushed field board swap.

I would love to see the new board in the field in action, I just don't think this is how it would happen but I would welcome to be wrong.

 

[anthonyj]

It's absolutely a sin because the BMW 3 series sell at a rate of 33k/month world wide. Tesla can probably make about 25k M3 cars a month. So they need to move this many Model 3s world wide/month at least because Elon guided a demand of 500k Model 3s/year in a recession and they can only make 350k cars in 2019. So I don't see why Tesla cannot at least gather enough demand of 70% of the 3 series in 2019. If Tesla's real reason to reduce the price due to demand issue at current production rate then the Model 3 is not as popular as we think.

I’m saying 25k a month in the USA alone might be unsustainable. Worldwide Tesla can do more than that

 

[Fact Checking]

If they can sell every car they make, why would you expect a price reduction?

Firstly, it's a false narrative to claim that Tesla supporters are arguing that there's unlimited demand: obviously Tesla couldn't sell their cars for $1m each.

Tesla has an addressable EV market which it is serving well, and to which market Tesla can sell every car they make, near the target profit margins. This EV market is growing very fast and Tesla is the dominant EV supplier in its price category.

Even in such a very lucrative market, which market is the envy of every major ICE OEM, there's several good reasons for price reductions:

• To increase margins: some options like Enhanced AutoPilot are 100% margin software features. If a buyer has a fixed budget of say $50k, they might opt for a $49k LR package. If they buy MR for $43k plus $6k EAP then margins for that sale improve by about +$2.5k, or +5% - a huge and somewhat counterintuitive improvement. If MR costs $45k instead, then EAP is outside the budget of the buyer.
• To increase unit count: Gigafactory 1 is near its maximum output of ~27.5 GWh/year. By reducing the price more people will buy Medium Range, which increases units sold - which has secondary advantages like future service revenue, more social marketing, better brand recognition. Higher unit count also increases Fremont utilization, which increases efficiencies.
• To invest into higher future organic demand and increase the addressable market: Tesla marketing is social, word of mouth based. By making the car affordable to a larger group of people Tesla will benefit from network effects and sales of higher price configurations as well.
• To put pressure on competitors: a number of upcoming competitors have announced pricing and specs, carefully tailored to Tesla's previous offerings and price structure. By lowering the price Tesla puts pricing and EV quality pressure on competitors.
• To share efficiency gains with customers: Tesla always communicated their profit margins with a 20-30% target. When margins improved to close to 30% they always reacted with a combination of putting more hardware/software value into the car (larger batteries, better trims, more features, etc.) and/or lowering prices. Tesla also eliminated the referral program recently.
• To absorb the tax credit phase-out: the federal tax credit phase-out was a +$3.5k price increase to many customers - which Tesla wants to partially counteract. Tesla's pricing structure is closely tailored to incentive programs in major markets, in a sweet spot, and when an incentive is reduced the fastest way to keep demand constant sales in the sweet spot is to absorb part of the cost increase.

There's also nothing surprising about any of this: Tesla has been doing these kinds of pricing tweaks for 10 years, and this is the process how Tesla is going to reach the promised $35,000 entry price, by lots of small steps.

(I actually think that Tesla might eventually be able to reach even lower entry prices, which will be desirable once the FSD features are made available. $29,999 for the hardware only might be achievable in a couple of years.)