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

[Maitri982]

Unless I’m totally off base, isn’t that chip actually made in China currently? Tesla even tried to get an exception to the tariff rules for exactly that reason, as I remember.

EDIT: It appears I was totally off base.

Au autonomy day they said made in texas

 

[DaveT]

This is nonense.

(1) Tesla has already built a global supply chain and can simply reuse it. China's "made in China" content requirements which apply to Tesla are not really significant enough to change that. Tesla will continue importing certain parts to China, probably including their self-driving chip (making it at a second fab doesn't make sense to me)
(2) Tesla makes so many of their own parts that the main things they buy -- rolls of steel, rolls of aluminum, raw plastic pellets -- are commodities which are straightforward to line up.
(3) Many of their suppliers are, of course, already in China.
(4) They have been lining up this supply chain for the Shanghai Gigafactory since before the factory was approved, so they've had plenty of time.

Now, you have drawn the wrong conclusion. But there is a correct conclusion. Tesla will have to build a *lot* of factories inside that Shanghai factory:
-- metal casting (copying Lathrop in the US)
-- seat construction (copying the Page Ave. factory in the US)
-- pack construction (copying the Sparks Gigafactory)
-- and of course body, paint, and final assembly (copying Fremont)

It's substantially more than a duplication of Fremont. Much of this should be able to go in parallel, I should hope... but odds that *something* will hit a major delay are high.

Well, I'm just relaying what I heard from the guy in charge of the factory... more specifically, they need to shore up an entire local supply chain with mostly new suppliers and that it's very complex and time-consuming.


A lot of your points are really just speculation. Namely,
"(1) Tesla has already built a global supply chain and can simply reuse it. " - sure they could reuse it but what if it's not economical to do so? What if the economics are clear that a local supply chain is far superior?

"(2) Tesla makes so many of their own parts that the main things they buy -- rolls of steel, rolls of aluminum, raw plastic pellets -- are commodities which are straightforward to line up." - Sure Tesla makes a lot of things themselves but they also rely on plenty of suppliers.

"(3) Many of their suppliers are, of course, already in China." - but aren't most of Tesla suppliers not in China?

"(4) They have been lining up this supply chain for the Shanghai Gigafactory since before the factory was approved, so they've had plenty of time." - What if the bulk of efforts to line up the new supply chain started with the factory approval? Is that really enough time?

 

[jerry33]

What happens to the calls if Apple or anybody else buys TSLA? We are probably at a point where this needs more consideration than in the past.

Depends on who buys it (though I don't consider it very likely).
1. Saudi's or another car company: Factories shut down, EV stops forever everywhere but China.
2. Apple: Future development stops (other than putting Apple Play in the car). When all the profit is milked out, production stops. Price is raised so gross profit is 40%.
3. Google or Amazon: Tesla continues as a brand. Some development takes place but nothing earthshaking.
4. A Chinese company: Your guess is as good as mine, but there won't be any sold in the U.S. for some time.

 

[Zaxxon]

FWIW, from the price adjustment department. I woke up at around 4 AM today California time and saw that the S/X had received price drops. About 8 hours later, my account, and as far as I can see from other postings on TMC everyone else's account with an S/X on order, reflect the adjustment. This seems to me to be a vast improvement over how adjustments to in-process orders like this were handled in the past.

Caveat: while I'm following several threads and have seen confirmation from a bunch of other folks, this should still be considered anecdotal.

 

[anon]

Have patience. It appears that the regulatory issue was fixed and a few people who live very close to the factory got their deliveries. Everyone else is going to take at least a week, and it hasn't been a week yet.

I hope this is what happens, but they could have been moving cars across the country while working out the regulatory stuff - no need to leave the entire inventory at the factory - and that's why I had imagined there would be more deliveries by now.

 

[printf42]

All inventory S and X has free supercharging

It appears short term demand is an issue once again.

All inventory S I can see are pre raven.
Cheapest S LR is 78k with 335mile range, it actually has higher per mile range price than new builds at 85k with 370 miles range.
If they don’t throw in something, I can’t see why people will buy them.

So, not surprised at all they are trying to dump old inventories.

 

[Tenable]

Just to note: they also increased prices of Model 3 and the full self driving package recently(and made Autopilot mandatory, effectively increasing base price of all their cars).

And the free supercharging is only for inventory S/X, which is all pre-refresh.

I mean, yes, they increased FSD by 1k. But they also include AP now, which was 3k, so thats a net negative 2k. Not to mention the massive amount of overall price slashing that has occurred recently.

 

[bdy0627]

I'm less sure. Why choose the 4" screen you have to hold constantly instead of the 15" screen that's already *right there* in front of you? That goes double if you're wanting to play/watch something with friends in the car with you.

People use their phones/etc on the go right now because, by and large, there's no other, better screen that can be used in that fashion.

You've got a point. I wasn't thinking about wireless game controllers, which there undoubtedly will be.

 

[kbM3]

Yeah, I'm not finding any quotes from Tesla directly regarding Model 3s off the line in September for Shanghai. All I see is speculation from "sources".

@neroden Are you sure Tesla said they expect Model 3s to come off the line in September for Shanghai?

My recollection is that he said it at the last earnings call.

Did you check the transcript?

 

[KSilver2000]

Literally every other carmaker in the world would be making the same adjustments.

True. Almost every car maker increases prices with every model year by couple hundred dollars. And they cut prices through sales.
But, never do they go up, down, up, down, this often in a given year. Tesla’s model of full price sales (although that’s not really the case as we all see) is a double-edged sword as someone mentioned above—if you need to keep adjusting it. Full price sales didn’t work out for Scion. In another industry, it didn’t work out for JC Penny.

 

[DaveT]

My recollection is that he said it at the last earnings call.

Did you check the transcript?

I didn't see anything about cars coming off the line in September from Q1 earnings call.

But Q1 earnings call did have this:

Colin Langan

As a follow up, you’re still targeting the China facility ramp by the end of the year. Are you still confident in the 3,000 per week? And do you have a battery supplier yet that’s getting pretty close to the point?

Elon Musk

Yes, the Shanghai Gigafactory progress is going incredibly well. Tesla the execution of our team underground there. I get daily e-mails with Tesla picture from one day to next from Tom who leads the Gigafactory program. And so, we’re obviously discussing or getting updates 7 days a week. So, I mean, I’m in that Gigafactory e-mail. So, in terms of execution, of course, the production grows as fast as the [indiscernible] item. That’s very important to bear in mind. So, we have 99% of things in good shape can make the car. So, with respect to that said, it looks like we’ll reach volume production at the end of this year with, let’s say, more than 1,000 cars a week, maybe 2,000 from Shanghai Giga at the end of this year. That’s what it looks like to be the case right now. If it’s not at the end, it will be shortly thereafter. And then we expect to have multiple sales flyers for Shanghai Giga.

 

[TheTalkingMule]

True. Almost every car maker increases prices with every model year by couple hundred dollars. And they cut prices through sales.
But, never do they go up, down, up, down, this often in a given year. Tesla’s model of full price sales (although that’s not really the case as we all see) is a double-edged sword as someone mentioned above—if you need to keep adjusting it. Full price sales didn’t work out for Scion. In another industry, it didn’t work out for JC Penny.

Sure they do. MSRP doesn't change much, but buyer/dealer incentives change constantly based on a million different factors.

 

[viridi]

Wow! CNBC sinking to new lows. Just had perma-bear Gabe Hoffman on spouting his anti-Tesla crap w/o any real challenge (the lead in, of course, was the Jonas $10 call) - "Tesla going to zero." "Model 3 horribly built." "Quality so bad that car washes refuse to wash the car because of thin paint and the panel gaps (fear of water leaking into the car)." Where is the SEC on this short seller? This guy says anything he wants without backing up his assertions, and without challenge from CNBC. I own a Model 3 - best car I have ever owned. I have none of the issues about which Hoffman spews.

 

[TheTalkingMule]

CNBC with some breaking news......the paint and panel fit are bad!!!

How can they put this nonsense up there with a straight face? Hilarious.

 

[AlexS]

We don't really have an insight on likely Model 3 deliveries, because it essentially depends on Model 3 production, more than half should be headed overseas, and all the good leak sources have been dried up by Tesla. I don't believe that AlphaHat or SecondMeasure has any insight into overseas deliveries, and we seem unable to count the number of cars per ship. I'm inclined to expect lower numbers, but theoretically if they made it to 6000/week right at the start of the quarter and didn't build up inventory in transit (they're supposed to be building up inventory in transit), they could deliver 80,000. Obviously I don't expect this.

Model S/X can be produced at 2000/week. If Raven is selling like hotcakes and delivering entirely to California, you could theoretically see 16000 Ravens + 4000 older cars in Q2 and get to 20,000. I do not consider this plausible (I don't think Raven is *that* popular and I think it would have to be delivering to a lot of places outside California where it'll still be in transit at the end of June).

Absolutely not possible. the numbers you are referring to are best case scenario production numbers.no way they can deliver all produced cars. My estimate for production is around 90k

BTW they didn't made 6k M3s/week at the start of the quarter.

 

[hcdavis3]

Wow! CNBC sinking to new lows. Just had perma-bear Gabe Hoffman on spouting his anti-Tesla crap w/o any real challenge (the lead in, of course, was the Jonas $10 call) - "Tesla going to zero." "Model 3 horribly built." "Quality so bad that car washes refuse to wash the car because of thin paint and the panel gaps (fear of water leaking into the car)." Where is the SEC on this short seller? This guy says anything he wants without backing up his assertions, and without challenge from CNBC. I own a Model 3 - best car I have ever owned. I have none of the issues about which Hoffman spews.

Saw that. F Gabe. I can’t recall a more clueless idiot. Gabe going to bridge abutment, which is effectively zero.

 

[MarcusMaximus]

I mean, yes, they increased FSD by 1k. But they also include AP now, which was 3k, so thats a net negative 2k. Not to mention the massive amount of overall price slashing that has occurred recently.

They also increased the base price of the car by $2500 when they included AP...

 

[EVDRVN]

Saw an X today with dual motor badge and MFG plates.

 

[Tenable]

They also increased the base price of the car by $2500 when they included AP...

Did they? I don't recall, in that event perhaps I'm mistaken and its a net +500 positive. Given that it also forces 100% of buyers to pay for AP I'd be very happy with that. Unfortunately, the massive overall price reductions still are what they are.

 

[MarcusMaximus]

Did they? I don't recall, in that event perhaps I'm mistaken and its a net +500 positive. Given that it also forces 100% of buyers to pay for AP I'd be very happy with that. Unfortunately, the massive overall price reductions still are what they are.

Easiest way to check: look at SR+ Model 3 cost. It was a memorable $37,000 when they first released it. Currently at $39,900(+2500 from AP and +$400 from recent price increase).