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

[Buckminster]

@DaveT I think you were looking out for this

Our Interview With Tesla President Jerome Guillen, Part Deux | CleanTechnica

Jerome added a note, with great emphasis, that the Tesla Grohmann equipment has created much better machines, dramatically improving the overall manufacturing efficiency of the Model 3. He also said they are building a giant machine using Tesla’s Grohmann sub-division, something he was clearly eager to share but couldn’t yet talk much about. Hmm. He basically just emphasized that it was a “giant, giant, giant machine” that duplicates everything, is modular, is simple on the modular level, and … is gigantic. We’ll all have to wait a bit longer for more information on that.

Loving this - Alien Dreadnought 1.0 for GF3 secured.

What could be meant by "duplicates everything"?

1. Is he saying that the M3 line could be made of say 5 gigantic modules. Each module is identical but capable of performing each of the ~5 tasks in series if provided different s/w or:
2. Is he saying that the ~5 gigantic machines in a line are made of modules that can be reconfigured with different physical machines, or:
3. There is one gigantic machine that is made of modules that can be reconfigured with different physical machines

What would aliens do?

 

[Carl Raymond]

@DaveT I think you were looking out for this

Our Interview With Tesla President Jerome Guillen, Part Deux | CleanTechnica

So Grohmann are working on a giant giant car making machine.

Stamped and cast parts go in, body in white comes out. Just my guess. Other guesses welcome.

 

[LN1_Casey]

Europe's small cars an endangered species

The fundamental problem? The technology required to meet the new regulations will price small cars out of the market.

"New CO2 rules will require automakers to fit thousands of euros of tech to each car," Max Warburton, an analyst at research and brokerage firm Sanford C. Bernstein wrote in a report this spring. "Big cars have the price points and margins to cover these costs. Small cars simply do not. These segments may soon be abandoned by many manufacturers."

This is a ridiculous statement. Smaller car tech is already here to meet CO2 levels; it's called electric. No engine = more space to play. No ICE = no CO2. What's far more likely than EU members adopting larger vehicles is EU members adopting smaller Electric cars.

Put put around in your tiny cars away, EU.

 

[RobStark]

This is a ridiculous statement. Smaller car tech is already here to meet CO2 levels; it's called electric. No engine = more space to play. No ICE = no CO2. What's far more likely than EU members adopting larger vehicles is EU members adopting smaller Electric cars.

Put put around in your tiny cars away, EU.

A micro EV with comparable range to an ICE microcar can't be sold profitably for 12k Euros. It will cost ~18k Euros. Europeans don't want to spend 18k Euros on a microcar. That is the point they are making.

 

[aubreymcfato]

FWIW, I think we should push fair-minded influencers (like Casey) to step up thier game against FUD.
Casey would be perfect, I just tweeted him a suggestion:
Andrea Zanni on Twitter

Be bold and propose something better.

 

[Zaxxon]

FWIW on the 'EVs are bad at trips' front, I did Hawthorne to Vegas in March in a P3D. 4 hours 27 minutes driving. 24 minutes charging in Baker.

And this was leaving Hawthorne with only 88% charge. Had we left with a full charge and cared to optimize drive vs charge time we could have spent only about ten minutes charging and still not pushed it to the point of range anxiety. Total trip used 102% of a 'tank.'

Data via TeslaFi.

 

[Fact Checking]

@DaveT I think you were looking out for this

Our Interview With Tesla President Jerome Guillen, Part Deux | CleanTechnica

Fantastic interview by @ZachShahan, and this bit is very interesting:

"Jerome added a note, with great emphasis, that the Tesla Grohmann equipment has created much better machines, dramatically improving the overall manufacturing efficiency of the Model 3. He also said they are building a giant machine using Tesla’s Grohmann sub-division, something he was clearly eager to share but couldn’t yet talk much about. Hmm. He basically just emphasized that it was a “giant, giant, giant machine” that duplicates everything, is modular, is simple on the modular level, and … is gigantic. We’ll all have to wait a bit longer for more information on that."​

This was one of my pet theories about the Tesla Dreadnought Machine, that they'd break with the production line tradition and go modular:

Key takeaways:

• Elon considers GA4 a.k.a. the "Sprung Tent" a key model to introducing the Model Y. This suggests a fast but gradual ramp-up. This supports a surprise 2019 introduction of the Model Y.
• They want to re-do everything, from body shop, paint shop to general assembly.

Speculation about Model Y production based on re-reading these old statements:

• Elon is gong to unveil a lot of details about the Model Y in March, including the new manufacturing approach.
  
• I believe they'll do the initial Model Y runs in Fremont, and early 2020 or maybe even late 2019 is not impossible for the first production versions of the Model Y. This has numerous advantages:
  • Paint shop can be shared. If initially they'll do maybe 1,000 Model Y's per week then that gives them a lot of time to expand paint shop capacity independently of the Model Y ramp-up.
  • I believe they'll start Model Y with a skeleton body shop and a skeleton general assembly line. Other existing resources can be used and shared: molding shop, existing workforce, stamping machines, etc.
• They could start with a flexible assembly line architecture that allows unlimited, gradual scaling up
• With the Model 3 they ordered hundreds of industrial robots for billions of dollars and for a planned capacity of 10k/week, and when they started the ramp-up then much of the capex was already committed and a forced time table was set for the Model 3 to earn money. This created 'production hell' and the whole bankwuptcy frenzy.
• I believe with the Model Y the focus will be on low-risk, low-capex ramp-up with flexible, modular assembly lines and approaches and only money they already have will be spent. This creates a much lower stress and in the end significantly less expensive ramp-up process as well. The obvious question: is such a design even possible - but if it is even remotely possible according to he rules of physics, industry traditions be damned, I'd expect Elon to try it.
  
• Initial and targeted level of automation is unclear to me. Maybe they'll go for excessive automation this time, but design it from the get go for the car's manufacturing to be easy to automate. Or they'll go for the GA4 approach of a flexible, low capex line with manual labor and learn on the fly. My guess is the former, but I'm not certain about it.

I believe once Tesla unveils that new manufacturing architecture, which IMO will also be created by Tesla Grohmann entirely from scratch (I.e. no reliance on third party industrial robots, etc.). Much lower "lead time" to expand their tooling, Tesla would become "masters of their own destiny", as mentioned on the Autonomy Investor Day.

Tesla might have to be valued more as a software and IP company, which as @TradingInvest recently pointed out the market has not realized yet, because this new manufacturing technology will be so advanced that every industry will want to license it.

This might be as big as FSD.

 

[Thekiwi]

Fantastic interview by @ZachShahan, and this bit is very interesting:

"Jerome added a note, with great emphasis, that the Tesla Grohmann equipment has created much better machines, dramatically improving the overall manufacturing efficiency of the Model 3. He also said they are building a giant machine using Tesla’s Grohmann sub-division, something he was clearly eager to share but couldn’t yet talk much about. Hmm. He basically just emphasized that it was a “giant, giant, giant machine” that duplicates everything, is modular, is simple on the modular level, and … is gigantic. We’ll all have to wait a bit longer for more information on that."​

This was one of my pet theories about the Tesla Dreadnought Machine, that they'd break with the production line tradition and go modular:



I believe once Tesla unveils that new manufacturing architecture, which IMO will also be created by Tesla Grohmann entirely from scratch (I.e. no reuse of Kuka industrial robots, etc.), Tesla might have to be valued as a software and IP company, which as @TradingInvest recently pointed out the market has not realized yet, because this new manufacturing technology will be so advanced that every industry will want to license it.

This might be as big as FSD.

Can you elaborate on what it means to go modular instead of a production line system?

 

[Silentk]

Very positive review in UK

Tesla Model 3 driving impressions - What its like to drive and why you should buy one | Express.co.uk

Edit - Not sure what this means though: “One issue is that because the battery pack is fit into the floor of the car your legs don't get as much support as they would in a petrol car, which could potentially be an issue long distance.”

 

[SPadival]

Fantastic interview by @ZachShahan, and this bit is very interesting:

"Jerome added a note, with great emphasis, that the Tesla Grohmann equipment has created much better machines, dramatically improving the overall manufacturing efficiency of the Model 3. He also said they are building a giant machine using Tesla’s Grohmann sub-division, something he was clearly eager to share but couldn’t yet talk much about. Hmm. He basically just emphasized that it was a “giant, giant, giant machine” that duplicates everything, is modular, is simple on the modular level, and … is gigantic. We’ll all have to wait a bit longer for more information on that."​

This was one of my pet theories about the Tesla Dreadnought Machine, that they'd break with the production line tradition and go modular:



I believe once Tesla unveils that new manufacturing architecture, which IMO will also be created by Tesla Grohmann entirely from scratch (I.e. no reliance on third party industrial robots, etc.). Much lower "lead time" to expand their tooling, Tesla would become "masters of their own destiny", as mentioned on the Autonomy Investor Day.

Tesla might have to be valued more as a software and IP company, which as @TradingInvest recently pointed out the market has not realized yet, because this new manufacturing technology will be so advanced that every industry will want to license it.

This might be as big as FSD.

As long as it is done module by module and not a “bet the company” automated *sugar* show that was Model 3 manufacturing

 

[EVMeister]

Edit - Not sure what this means though: “One issue is that because the battery pack is fit into the floor of the car your legs don't get as much support as they would in a petrol car, which could potentially be an issue long distance.”

I know, I wasn't sure either.

 

[sixela]

Europe's small cars an endangered species

The fundamental problem? The technology required to meet the new regulations will price small cars out of the market.

"New CO2 rules will require automakers to fit thousands of euros of tech to each car," Max Warburton, an analyst at research and brokerage firm Sanford C. Bernstein wrote in a report this spring. "Big cars have the price points and margins to cover these costs. Small cars simply do not. These segments may soon be abandoned by many manufacturers."

ICE car manufacturers have to spend thousands of euros to fit expensive engines with lots of parts. Small cars just don't have the margins to cover the costs.

That guy’s been talking to an Audi rep or executive too much — we've heard one of them toeing the same line in the Netherlands on radio to justify the e-Tron.

Is it true that the smaller of the smallest cars might come under pressure? Sure, but I expect to see cars with smaller batteries and/or leased batteries in due course.

And we've heard the same kind of lamenting about earlier incarnations of the emission standards, BTW. Someone will figure out how to build and sell these, and they'll get to grab the market.

 

[Etna]

Edit - Not sure what this means though: “One issue is that because the battery pack is fit into the floor of the car your legs don't get as much support as they would in a petrol car, which could potentially be an issue long distance.”

They are referring to inadequate thigh support due to the lower floor to seat cushion height.

 

[22522]

Fantastic interview by @ZachShahan, and this bit is very interesting:

"Jerome added a note, with great emphasis, that the Tesla Grohmann equipment has created much better machines, dramatically improving the overall manufacturing efficiency of the Model 3. He also said they are building a giant machine using Tesla’s Grohmann sub-division, something he was clearly eager to share but couldn’t yet talk much about. Hmm. He basically just emphasized that it was a “giant, giant, giant machine” that duplicates everything, is modular, is simple on the modular level, and … is gigantic. We’ll all have to wait a bit longer for more information on that."​

This was one of my pet theories about the Tesla Dreadnought Machine, that they'd break with the production line tradition and go modular:



I believe once Tesla unveils that new manufacturing architecture, which IMO will also be created by Tesla Grohmann entirely from scratch (I.e. no reliance on third party industrial robots, etc.). Much lower "lead time" to expand their tooling, Tesla would become "masters of their own destiny", as mentioned on the Autonomy Investor Day.

Tesla might have to be valued more as a software and IP company, which as @TradingInvest recently pointed out the market has not realized yet, because this new manufacturing technology will be so advanced that every industry will want to license it.

This might be as big as FSD.

I think Fact’s interpretation is probably correct. Lines are typically less flexible hard automation.

My interpretation is Not as well supported.

My interpretation is that the large machines can cover enough distance to pull parts directly off supplier trucks and put them directly onto the vehicle subassembly- thus eliminating all in factory material handling (including feeding and orienting of parts).

The modularity mentioned would be tips and end effectors that allow a standard “I can pick it off the truck” robot to pick and assemble any part.

I think Fact is right, but think that if all in factory material handling disappears you do get effective capital utilization and lowest cost.

 

[LN1_Casey]

A micro EV with comparable range to an ICE microcar can't be sold profitably for 12k Euros. It will cost ~18k Euros. Europeans don't want to spend 18k Euros on a microcar. That is the point they are making.

I think they'd be far more likely to pony up the 6k difference than get a car they literally cant fit anywhere. Micro cars do so well here is because the roads and streets are tiny. A lot of buildings don't have dedicated parking, nor nearby dedicated parking, and so people shuffle onto the already tiny streets to park. A micro car fits significantly better than a larger one.

 

[sixela]

I think they'd be far more likely to pony up the 6k difference than get a car they literally cant fit anywhere.

Or they might go for reduced range, which with better battery tech might in the end not be so reduced.

I know some people with small plug-in hybrids who do manage to get by without using fuel, despite the ridiculously small battery.

 

[AndyH]

Design a desirable product, make lots of it and deliver all over the world. No need to advertise. That takes care of itself like in this UK review. It's done by a younger journalist and he gets it, both the car and the mission behind it.

 

[Fact Checking]

Can you elaborate on what it means to go modular instead of a production line system?

I have no idea what Tesla's plans are, but this is my first principles impression about the topic. First, the status quo:

• The fastest automotive production lines on the planet are over a kilometer long and consist of hundreds of stations, with most of the stations specialized to a single, very small task. Each station has a carefully calibrated time window to perform the step they handle, without slowing down the rest of the production line. They create a new car every 60 seconds or so.
  
• This design can perform very well when designed well and executed conservatively, but has a number of disadvantages:
  • The maximum production capacity of a factory is pretty much set on the design table, years in advance. Each station has a capacity and to improve the throughput of hundreds of stations all stations have to be made faster or more substations have to be added, on a usually cramped production floor.
  • As a result the lead time of capacity expansions is 3-5 years, the time to build a new car factory from scratch. This slows down the design cycle to snail's pace: the previous models are to a large extent cast into stone, and the next model has 3-5 years of lead time, sometimes more. This is why advances in the automotive industry are happening so slowly, and this is why there's so much resistance against change.
  • But there's production disadvantages as well: the whole production line is exposed to failure of a single critical station. If a station goes down unexpectedly then it immediately stops production in the pipeline up to the next and previous 'overflow line' that can buffer half assembled cars. If the outage is so long that later buffer lines drained or previous ones overflow then the production stoppage avalanches forward and backward and stops the entire production, idling the workforce and stopping a billion dollar capital from earning its investment cost. I.e. losses of millions of dollars per hour are possible.
• In software terms the automotive industry's production method is very monolithic. This design choice originates from the original Ford integrated assembly lines 100 years ago, from around 1913:
• 
  
  
• Technological innovations like industrial robots were basically shoehorned into a 1913 factory design. This is similar to the mistake that early steam engine driven factories committed when they converted to electricity: they reused the cramped, high density steam machine factory design which had to be dense due to the physics of the mechanical belt power distribution method, instead of using electricity properly and spreading out their factories. It took about 100 years after the electrification of industry for electricity to be used properly in factory design: big, sprawling buildings with enough space to expand physically, and electricity transported via power lines.
  
• Anyway, Ford's 1913 design was IMO never seriously changed as new technologies become available - I believe in part due to the long lead times, slow iteration frequency and general technological risk avoidance in the automotive industry. If we take the average iteration duration as 5 years, then the automotive industry is only on it's 20th version of its factory design, with evolutionary and not revolution steps along the way. While the comparison is not apples to apples and thus not fair, there's certainly agile software projects that do 20 revolutionary iterations in a single year.

Based on this it's IMO pretty obvious what the "Dreadnought" design should be, roughly:

• Multi-purpose modular work stations: the fundamental unit is a "generic industrial station", made by Tesla Grohmann. This is basically a generalized industrial robot that is designed to change its role flexibly AFTER it has been installed on the factory floor. I'll talk more about this later.
• Utilizing the third dimension: beyond stamping machines that require strong, deep reinforced concrete foundations weighing thousands of tons, most of the stations in a car factory don't have to be on ground level. Why not have 3-4 stories instead of a single story? This not only allows better real estate utilization, but also allows flexible expansion of production via the use of elevators and multiple floors.
• Utilizing two dimensions (horizontal space) more effectively: instead of creating a row of machines that have a set ordering at the design table, I'd create a less dense two dimensional layout initially as well, allowing for future growth.
• Utilizing FSD "EV carts" to move units between flexible work stations: I'd use self-driving EV "carts" that carry the partially assembled cars from station to station autonomously. They'd recharge themselves autonomously as well, whenever their battery levels get too low. Note that self-driving carts could also replace elevator systems (which are single points of failure), instead ramps could be used where the EVs carrying the partially assembled cars could move between floors - like in a multi-story parking garage.
• Automated conveyor system that feeds parts to sub-assemblies and the main assembly line.
  
• Much more parallelism: instead of having a single fundamental major assembly line flow that sub-assemblies feed into, I'd define multi-station 'clusters' of production that receive units in parallel. Any already installed generalized "Grohmann industrial station" could be retooled within a few hours to serve a completely different role: instead of installing a wire harness they could be applying screws or could be fitting windows. This means that if there's an imbalance in the capacity of factory during ramp-up, it doesn't have to be physically modified (or only to a minimal fashion), production capacity could be set aside to improve another workflow. No rails have to be modified and no serial production line gets upset: self-driving EV carts could just re-route their flow utilize the slightly different factory layout.
• Much less manual labor utilized: the Grohmann industrial station is 100% robotic. The main advantage of manual assembly labor is its flexibility - but if this flexibility can be offered at the industrial robot station level, it's a game changer.
• Flexible, gradual ramp-up that has good capital utilization during the ramp-up phase already: because each modular work station is flexible, a new factory with 10,000 units/week final capacity can be ramped up and can already make 1,000 units/week with just around 10% of the capital spent for the full production. The only 'extra overhead' is the large building built - but as we've seen it in Shanghai, large buildings can be built very, very quickly. Also note that even at the 100 units/week stage the factory can already be capital efficient and can expand "itself" without interruption of production equipment: because each station can be programmed to assemble 10% of a car, or just 1% of it, the role of each station can become smaller and more specialized as time goes on and capacity goes up. I.e. you don't have to spend capital, specify, order and wait for hundreds of stations to be built by first parties first, you can literally bootstrap a new factory with a large building and a dozen of work stations to produce ten cars per day or so. The factory will probably be earning money at that early ramp-up stage already! New stations can be installed without disrupting existing production flows - this is inherent in the less dense and autonomously routed and flexibly reconfigurable workflow.
• New stations can also be 'tested' without risking the existing production flow: a couple of units are handled at half speed or a quarter of speed, and the result in QA'd carefully. Note how this spreads out R&D as well: new optimizations can be applied anytime on existing stations as well, there's no pressure to "finalize" the design and put "pens down" at an arbitrary date when hundreds of millions of dollars worth of tooling is ordered. Instead it can all be done gradually and organically, optimizing it as they go.

Pretty much the only drawback that I can see is that this cannot be installed at Fremont where space is at a premium, but requires a large greenfield factory from scratch. The 'carts', the 'conveyor system' and the preemptively less dense installation of modules needs more factory space than is probably available at Fremont. They might still prototype it at Fremont though, as the design will work on smaller and larger scale just as well.

Gigafactory 1 and starting the production of the Tesla Semi on this platform, with low initial capital investment, would be an excellent approach IMHO.

Note that the tight labor market in Reno is not a problem if indeed their new factory design is almost entirely automated: Gigafactory 1 will be the dream job for industrial robot and production engineers, and I expect Tesla to do a super job attracting talent via luxury amenities. It won't really show up in CoGs as the factory scales up it won't have to hire all that much bigger of a workforce.

Basically I expect Tesla's Dreadnought to eliminate "production hell" entirely, by turning the ramp-up of a factory into a largely software space problem. (They might even be able to simulate a full factory, based on the known capabilities of the generalized work stations.)

There's much more to this topic, but this comment is way too long already ...

 

[RFernatt]

They are referring to inadequate thigh support due to the lower floor to seat cushion height.

Yes. My wife has mentioned this in the 3. Depending on height, build, and how you like to sit, it's probably more or less noticeable.

 

[Fact Checking]

Yes. My wife has mentioned this in the 3. Depending on height and build, it's probably more or less noticeable.

Seating height is also one of the main reasons why SUVs are so popular: the seating is a lot higher and the car is easier to get into and get out of.

This is also why the Model Y design of "a taller Model 3" was the right choice IMO.