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

[JRP3]

Of course it needs to be connected to an energy source. It's a big rechargeable battery.

Ship it with a full charge. Instant power, for a while.

 

[JRP3]

Definitely needs an engineered concrete slab over recompacted soil or else the first rainfall and you'll have cave ins. Those megapacks are HEAVY.

Depends on the substrate. Compacted crusher run on stable soil would probably be fine.

 

[UncaNed]

"...60% increase in energy density...."

Can someone explain how this is possibly possible?

Perhaps they put the big white battery containers closer together?

 

[Singer3000]

"New FSD" is only partly deferred since some features are functional. I don't know how much of it they recognize. As for margins, during the earnings call the DB guy asked:

Just first question on the guidance, I know previously there was a target out there of 25% kind of on S and X and Model 3. Just wondering is the updated one is that suggesting that that's no longer in play for the year or kind of what are the implications with today's update?​

Elon Musk
Well, if you factor in the full self-driving option. I think it is in play for the year. We seem to get the features done, make sure they are great, roll them out, and recognize revenue and increase the take rate on full self-driving. There's also – for the existing fleet, there's a very significant opportunity to upgrade the existing fleet to full self-driving. Since mostly he has not purchased this option yet. So there's a significant margin potential for the existing fleet to upgrade to full self-driving, which most of the fleet can. So, yes, absolutely, I think, like long term we are talking 25%, 30%. Not long term meaning like a year. Long term, like, in terms of vernacular that 30% gross margin is I think quite likely.​

Zach and Jerome went on to talk about manufacturing cost reductions, but it's pretty easy to read the above as "forget about 25% until we start recognizing lots of FSD revenue".

Thanks for the glass half empty take. For the glass half full take: there’s a high chance that most of the previously paid-for FSD options will be carried into P&L in the next few quarters as the final NOA features are turned on. I don’t know what milestones the auditor is using but based upon the current sales page for FSD, it’s reasonable to assume they are: Advanced Summon, traffic light and stop sign recognition, and automatic driving on city streets. The company is guiding Q4 this year for these milestones, let’s assume it’s delayed by a quarter or two because, well why not.

As per Reflexfunds analysis, for options already sold, the deferred revenue released to P&L could be in the region of $400m. This does not include FSD options sold between now and the recognition date. Pick a number but based upon the ramping deliveries profile, you’d expect perhaps another $200m odd by the end of the year, based upon the existing take rate?

As guided by the company, there’s a further boost to future P&L and CASHFLOW when the improved feature suite comes online, in the form of a one off upgrade from existing fleet owners and every future vehicle sale hence forth at a higher FSD take-up rate than currently (at almost certainly a higher price too).

Even if the features are switched on in Q4 with all deferred revenue to date recognised in that quarter, we should not be surprised to see FSD contributing >$1bn to operating cashflow and net profit in 2020, with a real shot at completely covering the company wide annual R&D budget of c. $1.2bn. Do your own sums for 2021 when Model Y and Shanghai are likely to have ramped.

Even if we’re a decade away from getting drunk and falling asleep in a steering wheel free car, and even if VW and JLR and everyone else suddenly brings out compelling EVs at the same scale, cost and margins as Tesla can right now... it should be clear that the FSD programme represents a potentially insurmountable moat in allowing Tesla to undercut its competition for the foreseeable future.

 

[Beltsbear]

Does anyone know if Tesla gets subscription fee for providing these type of service?

Almost certainly yes, called maintenance and support. I think people are overestimating how much the 'software' side of the powerpack is. Utilities already know how to use these systems, and batteries do grid regulation far better, but Tesla is not going to make a ton of money on the 'software' side of this one. The profits from the sale of the systems will be juicy enough.

 

[Bet TSLA]

Elon tweeted: "Spooling up production line rapidly. Hoping to manufacture ~1000 solar roofs/week by end of this year."

You know, I have been disappointed so many times now by taking Elon's "hope" messages as meaning something that I pretty much discount them entirely. I'm quite sure he also "hoped" that this milestone would be reached in 2017. I'll believe it when I see it.

 

[Beltsbear]

View attachment 435581

Each one the price of a car.

 

[dakh]

Each one the price of a car.

Oh no, another production ramp. Bear articles about not being able to sell those with profit, bad contribution to the bottom line due to not enough units produced vs. line capacity, produced vs. delivered drama, etc. Brace for another wave of BS unless these things are immediately profitable.

 

[AudubonB]

There are quite a few places that rely on diesel generation for power to remote villages and such - being able to drop in a pre-fab solar plant has quite the market potential I think for this application, I have to wonder how TCO compares to diesel generators once installed cost, fuel cost, fuel shipping, maintenance and all that is factored in... Where I am the energy supply is almost entirely hydroelectric (about 90%) and the balance mostly wind and a bit of biomass but there is about 130MW of these off-grid fossil fuel generators I gather (Our sustainability approach) and our utility is planning on converting those to green power in the next several years - so there's a market example!

Absolutely. Hear, hear!

That is, Here, here!

Unfortunately, as we have discussed at considerable length with Tesla, our climate still is too harsh for a Lithium-ion battery, or bank of Powerpacks, or the Megapack. So it appears that we’ll have to wait a few more quarters until our climate has warmed up enough to make these viable. Shouldn’t take long. We just sweated through the longest, hottest summer here ever - got up to 86ºF / 30ºC - even though this morning finally was down to a pleasant 38ºF / 3ºC.

It probably requires more active cooling or something too.

But...IF they could incorporate an active heating system instead, then, at the cost of significant energy inefficiencies, a Megapack might be able to withstand our still-cold climate.

Definitely can't stack in operation, they clearly have cooling openings in the top.

However it does look like you can stack them for transport. They have the standard container mounting/coupling/etc holes in bottom and top corners. So you probably can treat them entirely as standard shipping containers for transport with zero special handling requirements.

Assuming a worst case scenario of zero mass optimization from building one big thing versus a bunch of smaller ones (despite 60% energy density improvement), and taking ~14 Power Packs and ~2.5 Power Pack inverters and their masses, you come out to around 57,000 lbs. 20' container max gross weight is ~66,000 lbs, so plenty of room. The actual thing could weigh far less due to redundant structures etc that would be eliminated by combining all these into one physical unit - though on the other hand it may need additional structure for supporting / distributing the mass for handling it as a container (not just stacking but standard lifting methods etc) so could go either way, but regardless there's ~9000 lbs of weight capacity left over assuming zero mass savings to start with.

Some good numbers there, but a few corrections: the containers depicted are NOT 20’-ers. They’re 40s or 48s or 53s.

Second, transport-stacking can occur in only two of the three important circumstances. Upon trains, where there’s a maximum of two-high, and on ships/barges. It is not possible to transport containers more than one high over any road systems.

 

[BobbyKings]

Another market waiting:

Movie / Media | Port-Liner

 

[Artful Dodger]

OT: Euro heat wave moving toward the pole: (from Bob Henson via the Wx Undergrd blog)

"The same air mass that led to the sharpest, hottest heat wave ever recorded in northwestern Europe was channeled across Scandinavia over the weekend. Now it’s heading for even higher latitudes. While the North Pole won’t match the 108°F that Paris saw last Thursday, temperatures will be warm enough through a deep enough layer to push melting into overdrive for days, with knock-on effects that could last for weeks."

Heat Wave Heads North: Massive Melting Likely in Arctic | Weather Underground​

Hero picture from the blog post: Arctic ice pack in the Beaufort Sea, Canadian Arctic Basin, recorded by the MODIS instrument aboard NASA's AQUA satellite on July 27, 2019

 

[Doggydogworld]

Some good numbers there, but a few corrections: the containers depicted are NOT 20’-ers. They’re 40s or 48s or 53s.

They look like 20s to me. Less than half the length of the presumably 53' trailer behind the Tesla Semi in the illustration. I could be talked into 24', except it makes no sense to use a non-standard size.

 

[Right_Said_Fred]

So TeslaQ are crying about how this is production number not pre-approved by the sitter. What do you guys think? Another episode of sp rollarcoaster or nothing is going to come out of this?

I’m afraid he’s going to be in trouble over this one as it is a production number that was not published before.

I see issues with points #3 and #5 of the settlement:

“... requiring pre-approval by Securities Counsel of any written communication that contains information regarding any of the following topics:
• the Company’s financial condition, statements, or results, including earnings or guidance;
• potential or proposed mergers, acquisitions, dispositions, tender offers, or joint ventures;
• production numbers or sales or delivery numbers (whether actual, forecasted, or projected) that have not been previously published via pre-approved written communications issued by the Company (“Official Company Guidance”) or deviate from previously published Official Company Guidance;
• new or proposed business lines that are unrelated to then-existing business lines (presently includes vehicles, transportation, and sustainable energy products);
• projection, forecast, or estimate numbers regarding the Company’s business that have not been previously published in Official Company Guidance or deviate from previously published Official Company Guidance;
• events regarding the Company’s securities (including Musk’s acquisition or disposition of the Company’s securities), credit facilities, or financing or lending arrangements;
• nonpublic legal or regulatory findings or decisions;
• any event requiring the filing of a Form 8-K by the Company with the
Securities and Exchange Commission, including:
• a change in control; or
• a change in the Company’s directors; any principal executive
officer, president, principal financial officer, principal accounting officer, principal operating officer, or any person performing similar functions, or any named executive officer; or
• such other topics as the Company or the majority of the independent members of its Board of Directors may request, if it or they believe pre-approval of communications regarding such additional topics would protect the interests of the Company’s shareholders...”

What is missing in the settlement is what happens in case the SEC considers this a violation of the settlement.

 

[EVNow]

I’m afraid he’s going to be in trouble over this one as it is a production number that was not published before.

He said during company meeting that they plan to increase V3 spooling significantly by end of the year. Not sure whether anyone has mentioned a number before.

 

[Beltsbear]

So TeslaQ are crying about how this is production number not pre-approved by the sitter. What do you guys think? Another episode of sp rollarcoaster or nothing is going to come out of this?

How does anyone outside of Tesla know it was not pre approved by the sitter?

 

[kengchang]

DMC_Ryan asked the question @ 4:58 PM · Jul 29, 2019
Musk replied @ 5:54 PM · Jul 29, 2019

At least there's some decent gap...

 

[kengchang]

How does anyone outside of Tesla know it was not pre approved by the sitter?

No one but Tesla knows

 

[MarcusMaximus]

I’m afraid he’s going to be in trouble over this one as it is a production number that was not published before.

I see issues with points #3 and #5 of the settlement:

“... requiring pre-approval by Securities Counsel of any written communication that contains information regarding any of the following topics:
• the Company’s financial condition, statements, or results, including earnings or guidance;
• potential or proposed mergers, acquisitions, dispositions, tender offers, or joint ventures;
• production numbers or sales or delivery numbers (whether actual, forecasted, or projected) that have not been previously published via pre-approved written communications issued by the Company (“Official Company Guidance”) or deviate from previously published Official Company Guidance;
• new or proposed business lines that are unrelated to then-existing business lines (presently includes vehicles, transportation, and sustainable energy products);
• projection, forecast, or estimate numbers regarding the Company’s business that have not been previously published in Official Company Guidance or deviate from previously published Official Company Guidance;
• events regarding the Company’s securities (including Musk’s acquisition or disposition of the Company’s securities), credit facilities, or financing or lending arrangements;
• nonpublic legal or regulatory findings or decisions;
• any event requiring the filing of a Form 8-K by the Company with the
Securities and Exchange Commission, including:
• a change in control; or
• a change in the Company’s directors; any principal executive
officer, president, principal financial officer, principal accounting officer, principal operating officer, or any person performing similar functions, or any named executive officer; or
• such other topics as the Company or the majority of the independent members of its Board of Directors may request, if it or they believe pre-approval of communications regarding such additional topics would protect the interests of the Company’s shareholders...”

What is missing in the settlement is what happens in case the SEC considers this a violation of the settlement.

On the other hand, “hoping to” is not actual, forecast or projection. If I hope to buy a house this year, it doesn’t suggest that I definitely will or even that I likely will, merely that I’d like to. Walking the line a bit, but hopefully the SEC learned from last time that pushing contempt for things that are questionable under the agreement isn’t looked favorably upon.

 

[Mobius484]

Lots of hope. I hope everybody keeps their reasonable pants on tight.

 

[schonelucht]

So TeslaQ are crying about how this is production number not pre-approved by the sitter. What do you guys think? Another episode of sp rollarcoaster or nothing is going to come out of this?

Is there any indication it wasn't pre-approved?