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

[KarenRei]

Paging @KarenRei

Standard response to requests to confirm or deny:

 

[CorneliusXX]

EV Sales: Norway January 2018

Model S didn't make the top 20? is this just natural delivery variation?

 

[lascavarian]

I have to wonder if a GM drive unit arrangement is but a prelude to a purchase of factory capacity. TSLA needs to expand into the semi market and a GM arrangement could help. This could get interesting.

 

[RobStark]

Model S didn't make the top 20? is this just natural delivery variation?

According to TMCers in the thread Tesla Europe Registration Stats Tesla delivered 19 Model S in Norway in January 2019.

Model X has outsold Model S for a long time in Norway. Per capita Norway has a lot of used Model S for sale, much more than Model X. Clearly, Model 3 is cannibalizing much more Model S than Model X sales.

I think this is not a variation but permanent until Model S major refresh or all new 2.0.

 

[CorneliusXX]

Benchmark Mineral Intelligence provided the following testimony to the senate last week.

https://www.energy.senate.gov/publi...?File_id=9BAC3577-C7A4-4D6D-A5AA-33ACDB97C233 (PDF Warning)

Their comments on planned battery production are extraordinary. (emphasis mine)

Benchmark Mineral Intelligence is now tracking 70 lithium ion battery megafactories under construction across four continents, 46 of which are based in China with only five currently planned for the US.

When I gave my last testimony in October 2017, the global total was at 17. Only one of these battery megafactories is American owned (Gigafactory 1, Tesla). This, however, was the world’s biggest battery plant and fourth biggest battery producer in 2018.

Since October 2017, planned lithium ion battery capacity in the pipeline for the period 2019- 2028 has risen from 289GWh to 1,549GWh (1.54TWh) in Benchmark Mineral Intelligence’s February 2019 Assessment. This expanded capacity is the equivalent of 23-24 million sedan-sized electric vehicles.

Planning for batteries is already at a quarter of needed global vehicle production, up from 5% of target just 18 months ago (estimate 100m vehicles per year). When you see numbers like this the biggest question I have around Tesla is why aren't they growing faster? They're doing wonderfully well but if 20% of the market is being planned in just 18 months then all the needed production may be planned within the next few years. Tesla is still likely to outcompete many of these planned facilities but surely it is easier to claim a larger stake of production when there is less competition, othewise they will end up competing against battery manufacturers who have already sunk the cost of factory production.

At the beginning of 2019, the US has a minor to non-existent role in most of the key lithiumion battery raw materials and only has a presence in lithium ion battery manufacturing via Tesla. Tesla and its Gigafactory 1 is emerging to be the most strategic US asset in the EV supply chain.

This bodes well for any future downturn. If Tesla is of national importance then a bailout is virtually guaranteed should they get into trouble in the future.

The article provides a very nice high level overview of the battery supply chain with the sources and uses of the major raw materials that are used in battery production. It's well worth a read.

 

[avoigt]

Asking just for information, are you pure German or you have some other roots from not so distant past? Because for me it seems that many Germans can be too proud to buy US car. Or how is your feeling about that?

Fair enough, I am 1/8 German - and am like many others here a relatively recent immigrant.

The answer is probably complicated.

Sure, there is probably some correlation between the buyer's nationality and their chosen car brand also in Germany - and maybe more here than elsewhere.

Still, the country has _many_ immigrants - also from other car producing countries.
Also, the diesel scandal is a quite big deal here, people are typically concerned about the depreciation of their investment in an ICE. Others have already suffered such a depreciation loss, and are not looking forward to buying a German car.

Finally, a lot of people look very close at the cost of ownership, which can work in Tesla's favour - except that the German language sources for such information may not be completely accurate (yet?).

When I am in someone's waiting room I always browse the car magazines. These still treat BEV's as something exotic and typically not something for the average buyer. I guess that is fair, given the actual options for buying a new, competitive BEV today.

A quick google didn't turn up anything, but there must be some research in this.

PS. I should add that the three cars I have bought in my life were all from Audi, A4/6/8. But the times have changed at least for someone like me who follows the technology:

"Vorsprung durch Technik" no longer belongs to a German company.

There are many immigrants in Germany who feel as Germany as if you are living since generations in this country. But for what its worth I am 100% German and the notion that Germany are too proud to buy an American car is often mentioned.

Its true that most Germans are proud of the German Auto industry (still) which is no surprise. To buy an American car is associated with to buy a Ford, Crysler for GM and the association contains many not very friendly assumption and thoughts like bad driving experience, badly build, too big, not responsive with the steering wheel beside others.

Most of those people never drove an American car but I did drive a couple of those and well what can I say its not how I want a car to be. I never forget the feeling driving those - in a negative sense I am afraid. There may be exceptions but well I do actually not feel save in a typical American car driving on a highway for several reasons

If it comes to Tesla, it is build in the US but not considered a part of the negative impression about American cars Germans are used to instead there is more and more acknowledgement and recognition that something very special has been achieved that is quite unique. Also many Germans are very engineering and latest & greatest driven so Tesla does have all of those.

So its somehow like you tell a friends here:

Me "I Bought an American car"

Friend: "What? Are you nuts? Why?"

Me: "Well, its a Tesla the Model3 actually"

Friend: "Gosh, can I drive with you? I heard it's awesome."

 

[shlokavica22]

If strategically placing advertising is what it takes to make the FUD go away, unfortunately that is what Tesla will have to do It is probably cheap in magazines, newspapers. Instead of cars, they can advertise the brand or some do some public interest ads (like about climate change etc). Probably wine & dine reporters. They have to play the game ...

Tesla is where it is now precisely because it didn't play the game.

 

[gora321]

Eduard Grünwald‏ @EduardGrnwald
Delivery dates for german and swiss #Tesla Model 3 customers earlier then expected! Instead of End February/March the delivery already begin this week!

10:35 AM - 11 Feb 2019
Eduard Grünwald on Twitter

 

[Thekiwi]

EV Sales: Norway January 2018

Why does it look so different to December? Where is the Model S?

Edit to add: December the figures were: Model X: 1037 units Model S: 600 units. Above suggests a ~90% fall in sales volume month on month. Is that all model 3 cannibalisation or was there some sort of end of year financial incentive that boosted December figures?

2nd Edit: see replies below - numbers are fairly typical for January deliveries.

 

[FS_FRA]

Tesla selling drive units to GM would be great news and smart for GM.

Adding the Tesla name clearly ads value to the GM EV product at a time when EV adoption needs a shove in the pickup world.

Tesla does not need to dilute its battery supply outside its own uses.

GM can focus on how to do the battery integration with LG (I presume) and EVs advance a considerably faster cause Ford will need to respond.

I think selling Tesla drive units can be an important accelerant to EV adoption. Every drive unit they sell will take an ICE off the road. And drive unit production would seem to respond nicely to the full alien dread naught automation.

I think this an important domino to fall.

...as Bob Lutz has an aneurysm!

 

[Nakata]

What do you guys think of this quote that Jack Richard posted on Gali's youtube video on Maxwell?

I've taken a 10,000 share position in Maxwell. Why? Panicked Hail Mary pass from VW group a possibility. IT would have to be a significantly higher bid. And of course it could also cause Tesla to raise its bid. In the case of Tesla, it's all dilution anyway and the thing is actually accretive for them now. If NOTHING happens but the deal closes, you get a little premium in a back door play into Tesla stock. No possibility at this point that a deal won't happen. Maxwell is very much in play. And I think Maxwell shareholders will prefer a piece of the action via Tesla stock to cash.

 

[Thekiwi]

Tesla selling drive units to GM would be great news and smart for GM.

Adding the Tesla name clearly ads value to the GM EV product at a time when EV adoption needs a shove in the pickup world.

Tesla does not need to dilute its battery supply outside its own uses.

GM can focus on how to do the battery integration with LG (I presume) and EVs advance a considerably faster cause Ford will need to respond.

I think selling Tesla drive units can be an important accelerant to EV adoption. Every drive unit they sell will take an ICE off the road. And drive unit production would seem to respond nicely to the full alien dread naught automation.

I think this an important domino to fall.

when talking EV “Drivetrains” - doesn’t that commonly mean Battery and motor?

I read the story as being GM would be using both Tesla battery and motor.

It seems easier for Tesla to ramp battery production than car production, and higher battery output would also presumably reduce the cost.of battery production, benefitting both margins on Tesla vehicles, along with whatever margin Tesla would be earning on each drivetrain being sold to GM.

Also is a way for Tesla to gain some profits (via GM) in states that don’t allow direct Tesla auto sales.

One wmders if this would also lead to GM partnering on the Supercharger network

 

[avoigt]

Rough google translate of the Manager article sections where the words 'e-tron' and 'Tesla' appear.
View attachment 376367
Posting again because I felt Fwed really did a shitty job of conveying the gist of the article

I did read the full Article in German yesterday (Manager Magazin). Its devastating to say the least but it sounds credible reporting.

So if all of that or even half is true the situation from Audi is much worse than expected. They did shrink (3.5%) already and that seems to continue. The e-tron will be sold but not make the difference they are looking for other than they have a nice BEV. With the numbers released that each car is €3k below target level it will remain a compliance and marketing vehicle only and not sold in masses.

Today Daimler announced the EQC is sold out for 2019 and 2020 when the CEO was asked about the production capacity they did not comment nor release how many cars will be produced. So its the same we have seen before. Its like they try to create the impression in the market they have a nice BEV with high demand but for cost reason do not produce it on a larger scale.

EQC schon vor Marktstart ausverkauft

 

[mrdoubleb]

Stop freaking out guys. Yes, X is outselling S in Norway for a while now and yes Model 3 arriving probably cannibalizes some S sales, but overall the volume is OK for January. 2015 saw 71 cars delivered in the month, 2016 had 105, 2017 had 367 but we had shipping delays from December as far as i recall, and 2018 had 215 cars. 186 for January 2019 is not that bad.

 

[RobStark]

Why does it look so different to December? Where is the Model S?

Edit to add: December the figures were: Model X: 1037 units Model S: 600 units. Above suggests a ~90% fall in sales volume month on month. Is that all model 3 cannibalisation or was there some sort of end of year financial incentive that boosted December figures?

Most of the difference between Dec and Jan is the normal difference between end of quarter and beginning of quarter. Ship heavy first two months then deliver heavy 3rd month of quarter. Although it appears Tesla is going to start smoothing out deliveries moving forward.


The difference between 150 Model X sold in January and 19 Model S sold in January is IMO mostly the result of cannibalization and the fact that Model S has not had a significant refresh in a long time.

Model X will always have unique FWD and front windshield.

 

[Buckminster]

Basically, filling the pipeline with 10K Model 3s in transit is $110M in GAAP profit missing (it shows up in Q2). Q4 GAAP profit was $139M, so use that as the baseline (I expect the allocations to noncontrolling interests to continue for several quarters), so you end up with about $29M in GAAP profit. Small enough it might be negative due to random swings in noncontrolling interest allocation, extra cars in transit, ASP changes, whatever, but yes, a "tiny profit".

Hopefully we get something closer to steady-state deliveries starting in Q2 (split amongst Europe, China, US, etc in a somewhat less lumpy fashion), so we should be seeing $140M+ whatever can be gained by improved cost efficiency, more storage sales, etc.

I am still in disbelief regarding Elon's tiny profit statement. Why should the Q4 be the baseline? - why not Q3?
Vins are high and French M3s are selling at a minimum of $60k when Tesla are closing in on making the $35k version profitable.

 

[WarpedOne]

I am still in disbelief regarding Elon's tiny profit statement.

Never assume you know everything, there are always known and unknown unknowns.

Elon might not lie, but he never speaks the whole truth.
No one ever does.

 

[lascavarian]

I read the story as being GM would be using both Tesla battery and motor.

Yes, it seems to suggest that. But TSLA being battery constrained, I can’t see how that could be unless it is way in the future. We need more than just Tesla making batteries so there is money on the table for battery makers.

This is still speculative so there is a lot of fog to clear away.

I think the Maxwell deal is exciting but I can’t see it increasing production capabilities overnight. Tesla canscale up drive units faster I would guess and maybe add batteries a bit later. Need more fog cleared.

 

[RobStark]

I am still in disbelief regarding Elon's tiny profit statement. Why should the Q4 be the baseline? - why not Q3?
Vins are high and French M3s are selling at a minimum of $60k when Tesla are closing in on making the $35k version profitable.

Because of shipping and no European ZEV credit scheme Teslas sold in Europe are less profitable than those sold in the USA ( and Quebec which also has a ZEV program).

BTW China is implementing a ZEV program modeled on the California one. But BEV must be made in China to qualify for credits subsidies.

* China got an exemption when it entered the WTO as a developing nation in order to discriminate against foreign made products. Japan, Europe, nor the USA could get away with such a scheme.

 

[Hock1]

What do you guys think of this quote that Jack Richard posted on Gali's youtube video on Maxwell?

As a 25,000 share owner of MXWL, I think there is a very definite chance of a competing bid. $219M is insanely low for this technology and the fact that the amount of shares a MXWL holder receives (when the deal is done in Q2), declines if TSLA shares go up in this timeframe. Not a good deal for MXWL holders as it stands. It would not be hard for a competing offer to look a lot more attractive.