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

[seldon]

Tesla says GF3 battery module production will be online this year, concurrent with stamping, joining, paint and final assembly. In theory they could send GF1 cells to Shanghai, but there's no reason to send packs. Unless they've changed plans again, of course.

Instead of theorizing a huge stash of packs somewhere, common sense says the 6k/week reports were simply wrong.

I agree that it seems unlikely Tesla would stockpile packs. However, based on news and comments from Elon and JB over the last few quarters regarding grid solutions and ramp in TE, it seems possible that the reported 6K/week pack production and potentially excess capacity from low TM production are going into TE products. Some of the new battery/pack lines that were installed in Q4 are likely for TE. We could be in for much higher revenue from TE than people are expecting. The low margins will be resolved with higher production and economies of scale ultimately reaching at least 25%.

 

[RobStark]

Auto dealers losing money on operations, NADA says

 

[wnorris]

I agree that #1 alone won't be considered success - it would just be warmed up hype. But even if it's just a presentation there might be some new, interesting pieces of technical information volunteered, since Elon, Andrej Karpathy and Pete Bannon will be there as well.

I'm reasonably certain we'll see #2, i.e. we'll see real life demonstrations of the new HW3.0 neural networks with all sorts of not yet demonstrated FSD features like stop sign and traffic light recognition.

I'd consider the Autonomy Day 100% success if they also demonstrate left turns and right turns in city traffic as well.

Bonus points for any demonstration of Tesla Network functionality...

There should be two key success factors to the 22 April demonstration.

1) Technical progress showing where they are at and why they are leading in the race for FSD
2) Tesla Network - they need to show how this will work and more importantly show how it will make money for Tesla and owners

I would say each of the above is equally important.

Curious if anyone else would like to see Tesla bring the Tesla Network to life early with an Uber/Lyft-like model to start. They could offer incentives on the Model 3 to operators to get them on-board. Eventually when FSD rolls around the operator can just deploy the car. It would be a way to get more Tesla on the road, generate revenue from Tesla Network, and ensure they are in pole position once regulators approve FSD.

 

[vigleik]

TSLA was a lot more exciting last year when it was going up every day.

@JRP3

Sorry you disagree, but here is my source.
There is no exact calculation for how much electricity it takes to drill, transport and refine a gallon of gasoline, but the accepted amount is around 8 kWh.

That’s 8 kWh of primary energy, not electricity. If you want to make it into electricity you’ll get something like 37% of that.

 

[Sean Wagner]

Also, I would like to hear the reactions within FCA when people hear that significant amounts of money is been paid to Tesla.

You'll want to check the gestures... meanwhile, PSA and Renault need to read up on
https://www.amazon.fr/Haddock-illustré-Lintégrale-jurons-capitaine/dp/2203017198/

The tome of Captain Haddock's profanities. One of those is "Capitaine de bateau d'lavage", which I took to be a made up insult until an exhibition of very early French photography at the Metropolitan Museum of Art in NYC where I actually saw one of those boats for washer-women depicted, moored in the Seine. Fascinating.

I'm beginning to better understand the rumors last year of VW snooping around Tesla.

Fingers crossed - would the Tesla-FCA deal represent a kind of poison-pill defense?

This probably also figured in GM leaving Europe - they had no ready-made EV...

A genuine question, what is it about the advertising industry that concerns you so much?

...

Why do I get the feeling that if Tesla launched some low key targeted advertising next month, you’d be the first to say what a genius Elon is for doing it and why it was such an obvious move?

I hope indeed that "orthodoxies" here can be challenged - it's important for staying productively engaged.

For instance, I think it still serves to project turnover onto vehicle sales. Rarefied air makes for apparently large oscillations. That said, I also think current dips constitute opportunities for very-longs [which is how I look at things].

While I'm at it, one of the commenters really worth listening to on the FT [Marcdoc] had this to say pertaining to ride-sharing apps: Subscribe to read | Financial Times

Quoting him: "The likely fate of companies like Uber/Lyft/Drivr/etc. is that a coming unicorn writes an app to dummy-call all the different ride services/Taxi companies, harvest the results and quote the user current response times and fares, so they can choose the service that suits them best - reducing the providers to commodity status."

Edit: Elon is a Genius, so say we all!

 

[VValleyEV]

From my 2, cars sold, there is something that can be improved if TSLA started marketing. This has to do with perception and decades of brainwashing.

The spartan and spaceship interior reminds ppl of really cheap cars in the good old days. The simplistic look doesn't immediately bring about a futuristic feel as people has no reference to go back on to what can be considered an "iphone look" in cars. Decades of marketing push by automakers have trained people to equate cluttered interior and more "stuff" to luxury vehicles.

The front nose cone without a grill. Same thing as above. It's a style that needs getting used to. I find that the car is easier to be accepted if you walk your friend up from behind or the side and show them the interior first. Only show the front after having firmly established "why" the styling is done in a certain way to convey a futuristic feel.

I think there is something to be said for a “elegant simplicity” pitch, contrasting chrome-laden and cluttered boxes with simple and beautiful designs. The Studebaker Avanti comes to mind for a positive roll model, at least the exterior. Bad examples abound. Think “Continental Kit”. For an ad, keep it generic, with sketches.

Or maybe most of us are already sold on elegant simplicity for the exterior, but still expecting an airline cockpit inside, with a zillion buttons and switches for independent systems that have no idea how to talk to each other.

 

[SebastianR]

About the necessity to file an 8K:

Legally, I don't know. I still think that payments this quarter under the pool (if any) will be minimal.

I agree.

Let's check and see what the market says:

FCAU up 2.2% today, TSLA down 0.6%. go figure. SMH.

I.e. Market thinks this doesn't change much for Tesla. I think this was important to FCAU as it saves them literally billions of USD over the coming years and it shows a (credible) way to manage their otherwise horrible EU emissions problem.

I'm quite happy that only TSLAQ folks are screaming bloody murder over the FCAU deal: to me that cash is welcome and a great addition to TSLA but (hopefully) not determining the fate of Tesla going forward. Only TSLAQ folks would think this is required to "save the company".

 

[aubreymcfato]

A silly question:
the shorts pay an interest every day on their borrowed stock? how much is it?

 

[Tslynk67]

Just for the record, CNBC now has a -0.53c EPS consensus for Q1 - was +0.21 a week or so ago

 

[mongo]

I've been staying out of this conversation, but I just want to note is that what Elon said the chips do is health checks, not voting. E.g. you periodically run tests to look for flipped bits or processor errors, and if one core fails its health test, you disable it. The cores don't run the same input all the time and compare the output to make sure it matches; they run different input, hence HW3 gets its capability halved (20x -> 10x) if a core is disabled.

Also: since this is a neural net being simulated, the occasional minor error should not be catastrophic; it'll just "noise up" the system and decrease it's net effectiveness - the larger the neural net, the smaller the effect a malfunction will have.

Capacity halves after failover:

"The Tesla Full Self-Driving Computer now in production is at about 5% compute load for these tasks or 10% with full fail-over redundancy"

5% load total
Or
10% load with full fail over redundancy
Not: 10% load after failover.

Full failover mode uses twice the resources to do the same job.
That means everything is being done twice, in parallel, to verify consistency.
Yah, not voting since that would require 3 in parallel, but rather lock step like is common on automative safety critical hardware.
http://www.ti.com/microcontrollers/hercules-safety-mcus/overview.html

Bit errors are only minor if they occur in the early layers of the NN (and then only if the error is in the data portion). If you drop a high level bit in the classification layer, you could ignore a real object. If you alter a bit in the driving policy, the car could go the wrong way. If you alter a bit in the coefficient table, you could saturate (of potentially overflowing overflow) the output. If the failure is in the HW and not coefficients, multiple multiple error could result.

Heath status via self checks would require injecting full coverage test data (multiple test cases for full bit/ HW coverage) streams at a faster rate than a bad bit would result in vehicle misbehavior. Either with known test results, or by injecting the same data on both cores and comparing. It would also require verifying all internal calculations, not just final output.

Lockstep identifes any influential bit flip or logic errors instantly and puts the system into fault mode. NoA is running on AP2.x (10% of HW3 single core) so they could go to four copies of a half size NN (8 copies of something double the size of current) for limp to safety mode and still have redundancy to potentially determine which core (or half core) has the fault.

 

[SO16]

Pound on climate change and how oil/gas is affecting the planet.

No. That alienates half the US population. Overseas, that may work better.

In the US, just focus on the performance.

 

[jerry33]

Going to have to disagree based on the number of people telling me how modern and clean the interior is.

Plus actual use of a Tesla vs the Germans - the interior of the Tesla is way more functional. It doesn’t fight you with the complexity of a thousand buttons placed randomly about the cabin with little integration with your phone other than CarPlay.

Finally there is no greater luxury feature than Autopilot.

The first time I sat in a Bolt, my reaction was "Oh, it's like a flip phone, you have to turn to page 175 of the manual to find out how a particular feature works". The Leaf Denise drives is the same way. Very hard to navigate through. She doesn't use 90% of them because their just too complex. Now I'm not a big fan of the way V9 hides things, but it's still easier to navigate than the thousand button and then a menu approach.

 

[Mars ☰mperor]

A genuine question, what is it about the advertising industry that concerns you so much?

Why are you so sure that direct leasing is a superior demand stimulant under all circumstances? It carries an upfront cashflow penalty for one thing. Why are you so certain that advertising in existing large markets is a worse idea than opening up in new and potentially challenging markets, with the SG&E that comes with that (e.g. unscalable service infrastructure, management overstretch, fresh jurisdictional risk and analysis, other idiosyncratic cultural or regulatory challenges etc...)? Or that the R&D spend and downtime in production to upgrade the motors for a marginal performance improvement is definitely worth it?

I, for one, also consider advertising the last resort, which we might never see.

We all know Elon's stance on this, and I do think most ads are manipulative (Toyota's self-charging slogan, German's clean diesel campaign, so disgusting...), albeit a few are impressive.
And I'm sure if ever Tesla are "forced" to make ads, they are going to be great mesmerizing ads, and they sure will be honest.

But isn't it much much more impressive if Tesla can prosper without ever choosing to advertise?
Think about it, it would be such an honor: the only major company on earth that never advertises.
Isn't that a much much bigger talking point, which itself is the best "advertisement"?

It is another classic Elon's thinking.
Nobody has ever even thought of doing that because no one thought it possible.

Tesla has come such a long way without ads, I am confident word of mouth is enough more than ever with more and more happy Tesla customers every day.

 

[Mars ☰mperor]

Why do I get the feeling that if Tesla launched some low key targeted advertising next month, you’d be the first to say what a genius Elon is for doing it and why it was such an obvious move?

Now that's called prejudice.

 

[bhtooefr]

Unfortunately, CARB uses the range on the UDDS cycle when calculating how many ZEV credits are earned for sale of a vehicle. It is true that the formula 0.01 x range + 0.5 would yield 2.88 if they used EPA range, but the sale of a single Bolt actually earns the cap of four credits or something near it. Someone can look up the actual value for the Bolt, but the UDDS range is generally 30%-50% higher than the EPA range, so you end up with roughly 0.01 x 238 x 1.4 + 0.5 = ~3.83

UDDS range for the Bolt is 364.4 miles, so it'd be at 4.144 credits (if not capped at 4).

Maxwell offer extended to 15 May.

https://t.co/Q7dQskcrGa?amp=1

Looks like in 11 days, 969,264 net shares were tendered.

Completely OT (but interesting)...

I was just watching a commercial for the GMC pickup with the fancy tailgate.

It reminded me that a friend mentioned his friend was getting the pickup, but delivery was delayed because the tailgate was stolen on the dealer's lot. The dealer told him the replacement tailgate cost $9,800.

OT as well: and this is why I hate how modern pickups have such an emphasis on being lifted to ridiculous levels, making them worse for actually carrying cargo. Old pickups didn't need a $9800 tailgate just to get into the bed...

 

[saniflash]

A silly question:
the shorts pay an interest every day on their borrowed stock? how much is it?

If I trust my IB report, it's surprisingly little - 0.04% per day ~ 14.4% annualized (360d, non-compounding)

 

[shlokavica22]

A genuine question, what is it about the advertising industry that concerns you so much?

Why are you so sure that direct leasing is a superior demand stimulant under all circumstances? It carries an upfront cashflow penalty for one thing. Why are you so certain that advertising in existing large markets is a worse idea than opening up in new and potentially challenging markets, with the SG&E that comes with that (e.g. unscalable service infrastructure, management overstretch, fresh jurisdictional risk and analysis, other idiosyncratic cultural or regulatory challenges etc...)? Or that the R&D spend and downtime in production to upgrade the motors for a marginal performance improvement is definitely worth it?

Why do I get the feeling that if Tesla launched some low key targeted advertising next month, you’d be the first to say what a genius Elon is for doing it and why it was such an obvious move?

Short answer- ads add cost to the end product. TSLA's priority is to drive the prices down and make them affordable to significantly larger population asap. In the long term this is the best solution for both customers and investors.
The marketing industry might not like that, but that's the reality- they are just another industry being disrupted by Elon/TSLA.

 

[Sean Wagner]

And I'm sure if ever Tesla are "forced" to make ads, they are going to be great mesmerizing ads, and they sure will be honest.

Some excellent Tesla ads have already been made by our unusual suspects.

 

[SO16]

Going to have to disagree based on the number of people telling me how modern and clean the interior is.

Plus actual use of a Tesla vs the Germans - the interior of the Tesla is way more functional. It doesn’t fight you with the complexity of a thousand buttons placed randomly about the cabin with little integration with your phone other than CarPlay.

Finally there is no greater luxury feature than Autopilot.

I just received 2019.8.5 and used NOAP without user confirmation through multiple interchanges, passing people, etc. I had a grin on my face for the entire time. Freaking awesome.

 

[Vitold]

There should be two key success factors to the 22 April demonstration.

1) Technical progress showing where they are at and why they are leading in the race for FSD
2) Tesla Network - they need to show how this will work and more importantly show how it will make money for Tesla and owners

I would say each of the above is equally important.

Curious if anyone else would like to see Tesla bring the Tesla Network to life early with an Uber/Lyft-like model to start. They could offer incentives on the Model 3 to operators to get them on-board. Eventually when FSD rolls around the operator can just deploy the car. It would be a way to get more Tesla on the road, generate revenue from Tesla Network, and ensure they are in pole position once regulators approve FSD.

AP might be just feature complete by end of the year. Hopefully they learned from old FSD fiasco and they will manage expectations and will not do any thing flashy until AP is ready.

I think presentation will be rather advertisement for FSD and to bring awareness of it to wider audience rather than showing their technological advances and making promises of Tesla Network.