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

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Why is Musk framing this as “Investor” Autonomy Day? And freeing “investors” from driving tyranny? Why not “car owners”? Is he going to propose that we car owners invest in Tesla Network by contributing our cars to the fleet and sharing in the network profits?
Because only investors are invited to the event, and they will be riding in cars that drive themselves for that one day
 
Very nice!

What is the benefit to FCA to form the pool in 2019 already, if the penalties start in 2020 only? Is the 2019 emissions average the basis for the 2020 penalties?

Also, do you have any opinion on how the pooling deal might be structured: neither FCA nor Tesla knows exactly how many ZEVs Tesla is going to deliver in 2019. So how could FCA have paid "low triple digit hundreds of millions of euros" - is it an advance payment perhaps, based on delivery estimates?

More of a benefit to Tesla to receive the cash now as opposed to later. Tesla will almost certainly generate significant amounts of cash from every quarter beyond q1 of this year. I’m sure this was part of the negotiations. But for FCA there’s some benefit to smoothing the payments (ie paying some this year so the payment isn’t as large next year).

The agreement is structured for FCA to pay Tesla cash quarterly. I’m fairly certain it’s predicated on payments being sent to Tesla depending on Tesla achieving certain volume thresholds.

PS - hello. Long time lurker here. Large institutional Tesla holder.
 
Very nice!

What is the benefit to FCA to form the pool in 2019 already, if the penalties start in 2020 only? Is the 2019 emissions average the basis for the 2020 penalties?

Also, do you have any opinion on how the pooling deal might be structured: neither FCA nor Tesla knows exactly how many ZEVs Tesla is going to deliver in 2019. So how could FCA have paid "low triple digit hundreds of millions of euros" - is it an advance payment perhaps, based on delivery estimates?
Did you miss my original post that explains the 2019 situation. Actually all these estimates for potential fines are using NEDC and not NEDC-c numbers. As such they're slight underestimates.

Tesla, TSLA & the Investment World: the 2019 Investors' Roundtable

Relatedly, I saw that FCA emissions have gone up in 2018 relative to 2017, which everyone is using as a baseline by about 3 g/km. Which makes the deal with Tesla incrementally more valuable.

Source:CO2 emissions rise to highest average since 2014, as the shift from diesel to gasoline continues - JATO
 

Found this interesting. EM seems to be heavily pushing AP/FSD.
- Makes AP mandatory with all 3s
- Says will increase FSD from May 1st

So, Tesla
- thinks because what they are going to show on 22nd is so impressive that a lot of people will want to buy FSD
- but, they want them to buy in April itself, so an increase on May 1st

Here is the problem I foresee
- EM can't figure out what kind of thing actually impresses the investors/on-techies
- So, he shows something which might be a technical breakthrough, but the market will just yawn
- Market will not be swayed by anything other than full FSD, IMO
 
Elon really ratcheting up the hype for this thing. Openly saying the FSD price will go up on May 1st...…..one could say what he's going to demo on the 22nd is going to substantially increase the value of it and he's giving everyone a week to buy it before they charge fair value(or what they think is a far value).

Hopefully what they're going to show is as impressive as his confidence right now :eek:
 
One more take on the value of the FCA/Tesla partnership:

After correction by @generalenthu and confirmation from recent WSJ article
Tesla Won’t Solve Fiat Chrysler’s Problem for Long
it appears that "Super-Credits" are still part of the mix on helping EU automakers reach the post-2019 CO2 emission targets. Super-Credits are an attempt to encourage ZEV production and sales by amplifying their effect on emissions dilution for regulatory purposes: ZEVs are treated with a greater weight than one for the years 2020-2022 up to an emissions reduction of 7.5%. This makes these ZEVs extremely valuable from a penalty avoidance standpoint. Super-Credits phase out in 2023.

I've updated my model to show that effect. The set of curves shows the reduction in the FCA/Tesla pool's emission penalties as a function of ZEVs added to the pool (all Teslas since FCA has no ZEVs) for the years 2020-2023. The breaks in the slopes of the curves are where the Super-Credits have achieved the 7.5% emission reduction and ZEVs are back to being counted as a single vehicle.

The table breaks out the penalty reduction value of the ZEVs depending on whether they are under Super-Credit or not. Notice the extremely high penalty reduction value of the first 37,000 EU Teslas in 2020 - €21,000 per vehicle! This compares well with @generalenthu finding, but is now limited to the proper scope of the Super-Credits. Once outside that scope, the Teslas are worth €10,500 per vehicle for as many as Tesla can sell up to ~250,000 vehicle per year, at which point FCA's penalty should be nearly retired.

If this is all correct, it should form the basis for the value of Tesla's participation in the FCA pool.

Assumptions:
FCA Fleet = 912,000 vehicle/yr, FCA Emissions = 120 g/km per vehicle
FCA Emissions Target = 91 g/km per vehicle
EU Emissions penalty = €95 per g/km per vehicle

View attachment 396511
I would argue that not expanding the pool to other automakers is like leaving money on the table. There is an incentive for FCA as a pool manager, and tesla of course to sign up more automakers and get the full credit at the 2X rate. IMO, this is a slamdunk that no money will be left on the table. They're all businessmen and can figure out how to split the pie. If they can't, I'd be happy to help them out for a small 1% fee.
 
Very nice!

What is the benefit to FCA to form the pool in 2019 already, if the penalties start in 2020 only? Is the 2019 emissions average the basis for the 2020 penalties?

Also, do you have any opinion on how the pooling deal might be structured: neither FCA nor Tesla knows exactly how many ZEVs Tesla is going to deliver in 2019. So how could FCA have paid "low triple digit hundreds of millions of euros" - is it an advance payment perhaps, based on delivery estimates?

2019 is a mystery to me. From what I can find in the regs, manufacturers are still bound by the 2015 targets in 2019 and FCA meets those (barely). The pooling rules say that since the FCA/Tesla agreement was signed this year, the pooling could apply to emissions as early as this year. But maybe it was in everyone's interest to lock in early for 2020 - FCA needs Tesla badly and maybe Tesla wanted some cash this year? Just speculation.

Yes, it’s all about the number of Tesla's sold for FCA. Especially those first 37,000 sold in 2020 because of the Super-Credits. That's €780M in penalty avoidance for the pool right there. A reasonable bounty to Tesla would be in the "low triple digit hundreds of millions of euros", I would think. Maybe that was the initial buy-in with more next year depending how EU deliveries and sales go in 2019? Again, just speculation.
 
I agree there will be several players in the AV market, but I think if Tesla gets there first, there are a number of reasons to think it can generate a significant, if not majority, % of the industry's profits over the long term. Of course, the AV car transition will be a huge disruption to the global economy and its very hard to predict how it all plays out.

A few reasons why I think Tesla stands to dominate the market if it gets there first:
  • Autonomous taxi fleets have network effects. The largest fleet will offer the shortest passenger wait time and also likely the
I've been reading Shelby Foote's Civil War: A Narrative trilogy, and just finished a section describing the depredations of the Confederate cavalry general Nathan Bedford Forrest, whose tactical thinking offers a pithy summary of this discussion of the AV market (at least to my mind): "Get there firstest with the mostest"
 
Elon really ratcheting up the hype for this thing. Openly saying the FSD price will go up on May 1st...…..one could say what he's going to demo on the 22nd is going to substantially increase the value of it and he's giving everyone a week to buy it before they charge fair value(or what they think is a far value).

Hopefully what they're going to show is as impressive as his confidence right now :eek:
Atleast the event makes some sense to me now ...
- Improve market sentiment & SP and/or
- Get more people to buy FSD and improve ASP
 
2019 is a mystery to me. From what I can find in the regs, manufacturers are still bound by the 2015 targets in 2019 and FCA meets those (barely). The pooling rules say that since the FCA/Tesla agreement was signed this year, the pooling could apply to emissions as early as this year. But maybe it was in everyone's interest to lock in early for 2020 - FCA needs Tesla badly and maybe Tesla wanted some cash this year? Just speculation.

Yes, it’s all about the number of Tesla's sold for FCA. Especially those first 37,000 sold in 2020 because of the Super-Credits. That's €780M in penalty avoidance for the pool right there. A reasonable bounty to Tesla would be in the "low triple digit hundreds of millions of euros", I would think. Maybe that was the initial buy-in with more next year depending how EU deliveries and sales go in 2019? Again, just speculation.
I explained the 2019 situation in my original post. I think everyone read the second half and forgot the 2019 math. I see @Fact Checking @InstiTes and you asking the same question

I repeat, the payments of 200-300 mm Euro are just for 2019.
 
More of a benefit to Tesla to receive the cash now as opposed to later. Tesla will almost certainly generate significant amounts of cash from every quarter beyond q1 of this year. I’m sure this was part of the negotiations. But for FCA there’s some benefit to smoothing the payments (ie paying some this year so the payment isn’t as large next year).

The agreement is structured for FCA to pay Tesla cash quarterly. I’m fairly certain it’s predicated on payments being sent to Tesla depending on Tesla achieving certain volume thresholds.

PS - hello. Long time lurker here. Large institutional Tesla holder.
Welcome. How do you know the agreement is structured where payments are made quarterly?? Any guess as to what the quarterly payment is? Lastly - are you bullish on the stock?
 
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Let me address the elephant in the room:

What do you guys think will happen if certain jurisdictions permanently disapprove of Tesla's ~$10k FSD solution – let's say because of missing mandatory sensor, lobbying efforts or some other nonsense?

Do we know if Tesla will offer refunds in such cases? If so, when? If not, will customers be able to sue?

(Couldn't find anything related to FSD in Tesla's EULA and the disclaimer on the purchase page is rather vague.)

Edit: Turned out it wasn't Tesla EULA. Can someone please link me to it?
 
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It is now likely that in about 10 days I’m going to do something I’ve never done before in over 40 years of owning cars: I’m going to buy a software upgrade to a car I own (I didn’t opt for FSD when I bought my M3).

The price I will pay for this upgrade is more than I’ve paid Apple for all the iPhones I’ve purchased in the last decade. More than all the software I have purchased for any purpose in the aggregate in my lifetime.

Wall Street: are you paying attention to this?
 
I would argue that not expanding the pool to other automakers is like leaving money on the table. There is an incentive for FCA as a pool manager, and tesla of course to sign up more automakers and get the full credit at the 2X rate. IMO, this is a slamdunk that no money will be left on the table. They're all businessmen and can figure out how to split the pie. If they can't, I'd be happy to help them out for a small 1% fee.
Yup, FC, just say $1Bn a year is gonna happen already - I will believe you!
 
2019 is a mystery to me. From what I can find in the regs, manufacturers are still bound by the 2015 targets in 2019 and FCA meets those (barely). The pooling rules say that since the FCA/Tesla agreement was signed this year, the pooling could apply to emissions as early as this year. But maybe it was in everyone's interest to lock in early for 2020 - FCA needs Tesla badly and maybe Tesla wanted some cash this year? Just speculation.

Yes, it’s all about the number of Tesla's sold for FCA. Especially those first 37,000 sold in 2020 because of the Super-Credits. That's €780M in penalty avoidance for the pool right there. A reasonable bounty to Tesla would be in the "low triple digit hundreds of millions of euros", I would think. Maybe that was the initial buy-in with more next year depending how EU deliveries and sales go in 2019? Again, just speculation.

Better for FCA to lock in certainty now.

Tesla can now raise prices for other manufacturers since there is a limit on the number of credits they will earn.