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

[LJS22]

What do you guys think about the model3 model mix and the relatively low Model X & S deliveries?
Are the X and S demand declining due to Model 3? Or is Elon focusing on Model 3 production?
I hope the total profit does not decline even though Model 3 is ramping up nicely due to volume decrease in X and S.

I expect the S & X sales will slowly increase overtime. There should be an abundance of 3’s on the road and people like to differentiate themselves so I think there will be more interest in the higher end models as the 3 settles in.

 

[ReflexFunds]

Unless auto market completely collapses (but EV market doesn't) this is not possible. There is no way anyone can build 90x battery capacity in 5 to 10 years.

There are already plans for around 2,000GWh of battery cell factories by 2028 (30 million+ annual capacity). There are currently 91 cell megafactories in the global pipeline, up from just 25 in March 2018. Probably we need to get to c.50m annual EV capacity given the inevitable collapse in ICE car demand. This can definitely be done, it just takes money, and not even very much money relative to other things we spend huge amounts of money on such as the c.$800bn annual fossil fuel capex. The total capex needed over the next 10 years for the entire EV supply chain including mines, plants, cells, car factories etc all built from scratch to get to 50 million annual EV capacity is less than the amount we still spend on fossil fuel capex every single year.

 

[Stars aligned]

Here is my reply ... Troy is assuming ~104k ASP (similar to previous quarters).

Yes but only for S and X. For model 3 it is ~53k. And there was this inventory write down of 80,8mn in Q1 which took at least partially care of the lower ASP for S and X, netting out lower ASP in relation to earnings.

 

[EVNow]

There are already plans for around 2,000GWh of battery cell factories by 2028 (30 million+ annual capacity). There are currently 91 cell megafactories in the global pipeline, up from just 25 in March 2018. Probably we need to get to c.50m annual EV capacity given the inevitable collapse in ICE car demand. This can definitely be done, it just takes money, and not even very much money relative to other things we spend huge amounts of money on such as the c.$800bn annual fossil fuel capex. The total capex needed for the entire EV supply chain including mines, plants, cells, car factories etc all built from scratch to get to 50 million annual EV capacity is less than the amount we still spend on fossil fuel capex every single year.

Where do you see 2TWh factories by 2028 ? Who is financing them (without financing, "plans" are worthless) ?

ps : Apparently comes from Benchmark Minerals Intelligence. Have to check them out and their record.

Battery Megafactory Forecast: 400% Increase in Capacity to 1 TWh by 2028

Here is an interesting 2016 paper by Benchmark Minerals Intelligence : https://s1.q4cdn.com/337451660/file...for-distribution-Lithium-ion-supply-chain.pdf

 

[SoGA Fan Club]

The deployment has started to increase because they were waiting for supercharger version 3 hardware to become available and validated in public trials before wide-scale implementation. Thus I don't think that the first half of 2019 is representative of the expansion rate.

That might would be true, except that almost every supercharger under construction (including the 9 that recently started) are NOT V3.

 

[ammulder]

Unless auto market completely collapses (but EV market doesn't) this is not possible. There is no way anyone can build 90x battery capacity in 5 to 10 years.

There are already plans for around 2,000GWh of battery cell factories by 2028 (30 million+ annual capacity). There are currently 91 cell megafactories in the global pipeline, up from just 25 in March 2018.

I can't keep track of all the battery gigafactory plans. Just in the last day Jaguar/Land Rover asked for one in the UK. Northvolt got $1B for one in Sweden, and plans another with VW in Germany. I am sort of assuming Tesla will have battery lines in GF3 and GF4, and they must have more GFs in the pipe in a 10-year timeframe, right? I have no idea who's building more capacity in China, but it must be happening. Is Panasonic not going to be building more capacity as EVs take off? I mean, that's just scratching the surface. Apparently, competition for resources between upcoming battery factories is looking serious enough that in Tesla's last presentation they talking about getting into mining! An automobile company. Mining!

5 years seems like a stretch but 10 years is a lot of time... I'm not ready to say it's not possible.

 

[traxila]

https://www.nytimes.com/2019/07/05/business/ford-vw-self-driving-electric-cars.html

“They must invest hundreds of billions of dollars in coming years or risk becoming irrelevant. And they face new competitors like Google and Uber“

Hilarious. NY Times and Boudette at it again.

Whole article about Ford and VW alliance for survival, clearly because of Tesla, yet no mention at all of Tesla in reporting.

Write me an article about electric cars and industry turmoil causing alliances and don’t mention Tesla. That is quite a challenge but Boudette pulled it off.

No wonder most investors have no idea what is going on and are left in the dark.

Was thinking the exact same thing. The yellow rag that is the NYT lol. It is the editor, right?

 

[ReflexFunds]

Where do you see 2TWh factories by 2028 ? Who is financing them (without financing, "plans" are worthless) ?

ps : Apparently comes from Benchmark Minerals Intelligence. Have to check them out and their record.

Battery Megafactory Forecast: 400% Increase in Capacity to 1 TWh by 2028

Benchmark are by far the best source I've seen for information on the EV battery supply chain. They have been focussed on EVs for a long time. They verify their information with companies and supply chain sources and don't just take numbers from random inaccurate press reports. Definitely not all of this capacity will be built, there will be many failed financing rounds, execution mishaps etc, but each of these projects are currently working on securing their supply chain.

 

[EVNow]

Yes but only for S and X. For model 3 it is ~53k. And there was this inventory write down of 80,8mn in Q1 which took at least partially care of the lower ASP for S and X, netting out lower ASP in relation to earnings.

Inventory write down in Q1 doesn't help ASP in Q2. It just makes sure margin on s/x doesn't completely tank in Q2.

Old ASP : 105,000
old COGS : 84,000 (20% margin)
Write off : 6,000 (80M/13,000)
new COGS : 78,000
new ASP : 90,000 (15k discount)
new margin : 12/90 = 13%.

 

[EVNow]

Benchmark are by far the best source I've seen for information on the EV battery supply chain. They have been focussed on EVs for a long time. They verify their information with companies and supply chain sources and don't just take numbers from random inaccurate press reports. Definitely not all of this capacity will be built, there will be many failed financing rounds, execution mishaps etc, but each of these projects are currently working on securing their supply chain.

1 TWh ~ 13 Million, 75 kWh cars.

That is 15% to 20% of WW new cars. Looks possible.

I can actually make a prediction : > 90% of all AVs will be EVs by 2020

 

[DrJohnM]

Unfortunately I think this will take longer than you hope. It seems Tesla has been constrained, somewhat by battery shortages, despite investing billions early to build the necessary factory. Yet after several years and billions in investments, Tesla has been unable to even break 1% of the US auto market. It will take some time and significant investment to scale up battery supply chains and factories. As of yet I am not seeing that massive investment. Cars are MUCH larger, expensive and capital intensive than other technologies. I agree it will happen but this is not an easy transition.

I agree that the adoption rate is still slow, however, it is increasing significantly yoy. Looking at a market such a Norway where over 35% of new cars sold are all electric (up 13% from last year) and 29% hybrids. Difficult to model but maybe in 6 years, 1/2 the cars on the road are electric. That must then start having an impact on ICE car refuelling. That then results in a terminal death spiral for the ICE.

I should also add that having an ICE will become less socially acceptable (pressure from children to parents to stop polluting), acceptance of electric will broaden as more adoption leads to greater acceptance.

Even the fact that a country like Norway has such high penetration now, starts to influence other countries as the news gets promulgated.

Considering battery tech development, I expect 2026 is the tipping point and the exponential ICE decline.

 

[HG Wells]

To Boss Short;

Boss, Boss you would not believe the video I just found.
BIG BIG explosion right near a Tesla Supercharger !
If we play our cards right we can make them think it blew up !

SEE
Bash on Twitter


Your Partner in Crime
Chief Editor
Shortsville Times

 

[LJS22]

Ford Beats Tesla, Again

Not sure if it’s been posted. Typically I get a little mad when I see these headlines but I laughed a bit at this one. If the electric car business was an uncertainty then I doubt Ford would invest $500 million in an electric truck company.
Typical stuff about Tesla. Demand is falling, no money.
They mention Tesla’s growth as a bad thing.
Apparently betting on Ford is a superior strategy compared to Tesla...seems like nonsense coming from a professor. What do you guys think?

 

[Fred42]

That might would be true, except that almost every supercharger under construction (including the 9 that recently started) are NOT V3.

How do you know that?

 

[DrJohnM]

Unless auto market completely collapses (but EV market doesn't) this is not possible. There is no way anyone can build 90x battery capacity in 5 to 10 years.

ps : We should also remember most people can't afford new cars. They will continue buying (ever cheaper) used ICE.

You also have to consider the improvement in cell density and also production efficiency improvements. The new Maxwell tech may double (or more) battery density over that period of time and the there is supposed to be a significant reduction in building footprint needed due to the dry battery electrode. If density tripled and footprint went down by a factor of three, you get 9x output from the current buildings. That 90x requirement becomes 10x and then seems far more achievable. You are also projecting out 10 years. Even with the current 7% annual improvement, you get 2x battery density by 10 years (compounded 7%)

Edit - the data sheet on the Maxwell tech says 16x production density increase. The 500wh/kg is assumed to be 2x current. Just these two things give an effective capacity increase on 32x current GF1 output. I do not think that there will be an issue building all the batteries that every car and truck needs to be 100% BEV

 

[ReflexFunds]

1 TWh ~ 13 Million, 75 kWh cars.

That is 15% to 20% of WW new cars. Looks possible.

I can actually make a prediction : > 90% of all AVs will be EVs by 2020

1TWh is from early 2018, the 2028 tally is currently over 2TWh and increasing at a rate far greater than 50% per year.

Many of these projects will fail, but many have local government support/supply chain contracts in place. These projects can quickly be taken over by more competent companies like Tesla if progress begins to stall.

Also, much of the progress in EV tech is increasing the miles per KWh (Tesla has achieved c.40% so far), so I think the average battery is unlikely to be higher than 60KWh, and perhaps a fair bit lower.

One potential easy way to increase the capacity of these factories is density improvements. If a 2170 cell can be increased from 250Wh/kg to 400 Wh/kg, then a current 2170 cell line output increases c.60% in KWh terms. Of course, some of the internal cell components/battery metal production will also have to increase production closer to a 60% rate.

 

[jerry33]

That might would be true, except that almost every supercharger under construction (including the 9 that recently started) are NOT V3.

V3 is really only needed for those places with charging congestion or those places with very cold winters. V2 is just fine for around 80% of locations.

 

[dc_h]

No manufacturers are competing, but ironically Apple is the Android wannabe for smart cars. If they make it, there’ll be lots of monetization for Apple, but like Android, the manufacturers won’t be making much money.

 

[Thumper]

Chubb to no longer insure coal mines or new coal fired generation.
U.S. insurer Chubb pulls back from coal - Reuters

 

[immunogold]

Update from Carsonight regarding battery pack production as of July 4:

“this may well be a scoop:
GF1 is now fully operational using the Grohmann machines, so the battery pack machines being utilized before are superfluous. These are now being sent to China in order to get the Tesla China factory up and running at minimal expense. The plan is that as the China factory generates profits some of those will be plowed into Grohmann machines for China.”

Disqus - Tesla Model 3 production in Gigafactory 3 to hit 3k/week by end of 2019: Chinese officials