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

[MP3Mike]

He claims to have tested 1000s of Teslas. How's that possible? That's $100M worth of cars.

It doesn't have to be destructive testing. They could rent a Tesla on Turo for a day and "test" it by taking measurements of panel gaps, paint thickness, or many other things. They can hook up to the CAN bus and check battery health, etc.

Shoot you could walk through a Tesla storage lot and test paint thickness on cars...

 

[Artful Dodger]

Are you saying the price can't go down to $15k in 5 years ? For eg., can a Chinese company make a $15k car with 200 mile EPA range in 5 years ? Or are you saying Tesla won't have a $15k car with 200 mile range ?

Personally, I think you're correct that Tesla will eventually move into the large global market for sub-compact cars at the $15K price point.

Firstly, a "lower cost vehicle than the Model 3" was mentioned specifically in Master Plan - Part Deux: (published on Tesla's blog on July 20, 2016)

Master Plan, Part Deux

Expand to Cover the Major Forms of Terrestrial Transport

"Today, Tesla addresses two relatively small segments of premium sedans and SUVs. With the Model 3, a future compact SUV and a new kind of pickup truck, we plan to address most of the consumer market. A lower cost vehicle than the Model 3 is unlikely to be necessary, because of the third part of the plan described below."​

Later, Elon twice hinted that a compact Tesla could be coming in 3-5 years in comments he made during the June 2018 AGM Q&A session and his August 2018 video interview with MKBHD. This likely refers to a hypothetical $25K 'Model 2', to be introduced no sooner than 2023.

This last part "unlikely to be necessary" (highlighted from MP-pt2 above) refers to the successful wide deployment of FSD/robotaxi. However, these products are NOT mutually exclusive with cheaper cars. I would purchase FSD with a sub-compact Tesla "Model 1" due to the extra utility. Elon has hedged his bets, and left open the possibility.

The remaining unknowns, the technical feasibility, is perhaps the easiest. Indeed, a version of Moore's Law is almost certainly at work with EV battery costs, and with Tesla's manufacturing abilities (due to robotics).

A 200-mile rge light-weight city car would NOT require a 54KWh bty like the 3SR+ (which has 20% more rge than that). Indeed, the SR+ itself appears to use 122/148 KWh/km or ~18% less than the 3LR rwd, while only having the lower curb weigh in its favour (as per Bjorn's early testing)

A 27 KWh pack and sub-compact dimensions easily put a "Model 1" into the required 85 Wh/km consumption target required to achieve a 200 mi rge rating. 'Maxcells' of 5 years from now could be approaching 500 Wh/kg while retaining Model 3 LR charge rates, life cycles of 2x current products, and costs of 50% measured by $/KWh.

Do the math, and that's a sub-120 pound battery pack that costs $1,350 at wholesale. That's about 11% of the wholesale cost of a $15K retail car that still retains a 20% margin. The secret sauce for more profits? If needed, targeted averting / SaaS leveraging that large screen and their captive audience.

Ultimately, it is up to Toyota et.al to choose to compete, but to date we've seen no signs they're willing to produce a compelling compact EV, or to even TRY to retire their gasoline-powered Corolla line. For this reason alone, and the simple fact that FSD will be equally compelling on a 'Model 1', I believe Tesla will produce a $15K compact car by 2030. And I believe that product will eat the lunch of any large automaker of gasser sub-compacts who refuses or fails to produce compelling EV alternatives in volume.

Cheers!

 

[Artful Dodger]

Elon’s Gulfstream landed in Victoria BC today. About a month ago he flew to Wyoming. My theory is he’s looking for mines to secure battery materials. I don’t have any evidence, it just seems like something he would do.

BC government is in Victoria. Probably negotiating a deal on a new deep water port for all the ships that Tesla is gonna need to ship new cars into the lower mainland...

... or maybe he's just taking his boys to the Sooke Music Festival. Vancouver Island is a mighty fine place to spend a weekend at this time of year!

Cheers!

 

[RobStark]

It doesn't have to be destructive testing. They could rent a Tesla on Turo for a day and "test" it by taking measurements of panel gaps, paint thickness, or many other things. They can hook up to the CAN bus and check battery health, etc.

Shoot you could walk through a Tesla storage lot and test paint thickness on cars...

https://jalopnik.com/mercedes-parent-company-daimler-dismantled-a-rented-tes-1820961392

 

[SpaceCash]

https://jalopnik.com/mercedes-parent-company-daimler-dismantled-a-rented-tes-1820961392

Wow. That article made me mad. Daimler is scummy AF

 

[kengchang]

Or bring back free SC, once in a while, when they want owners to upgrade.

Still, makes me wonder why they are doing it now. Raven hasn't brought in the expected orders ?

Raven S/X doesn't have Standard Range, that's probably half of the order at least.

 

[MarcusMaximus]

Wow. That article made me mad. Daimler is scummy AF

I like the obligatory devils advocate guy in the comments claiming Daimler did nothing wrong. There’s always someone who has to be that guy.

 

[Buckminster]

His company's clients are mainly VC companies and hedge funds. I gather his team do car tear downs and quality inspections but also collect survey data. Presumably his GF3 visits were accompanying a large Tesla shareholder on their site visit.

I'd guess he runs an in depth due diligence research house/reverse engineering firm, focussed on engineering heavy companies. He says he is a "scientist with a doctorate in nuclear engineering as well as a doctorate in aerospace engineering from highly reputable organizations"

I'll caveat that there is nothing to confirm all his comments are not just made up, but he seems legitimate to me.

Some interesting comments on Tesla:

". I have one small team that specializes in cosmetic and visual/appearance concerns."

"my firm largely works for investors. Mainly hedge funds and VC firms. So much of the specifics is actually their IP.
I have obtained approval to talk in general terms from 3 of my clients, but I'm under NDA's for most stuff.
We collect all kinds of automotive consumer data via surveys and thru organizations we collaborate with."

"Don't think there has been a single Model 3 fire caused by the car in ANY way, including crashes. S & X vehicles likely to get the same pack modifications. Fire will soon be 10x-50x less likely that other vehicles IMHO."
"Have it on good authority that the refresh will have the Model 3 pack design which is nearly fireproof. Get an S then if you are worried. Pack version "E" is on the updated S. We are waiting on a donor to tear down - the E pack may be updated already. If so, the fire risk is ~ 0."

"I could be wrong here, but it's been suggested to me by "people close" that Tesla is wanting to shed the additional cost of having a cell supplier. The pack is the largest cost part of the car. Panasonic has a markup. Make your own cells, save whatever profit Pana was charging."

"I post this because my company does extensive survey work. While I agree with your assessment of complaints, and our own survey data reflects this, Tesla has some kind of magic working. Customers generally own more than one Tesla, or replace their Tesla with another one. So while our survey data and others confirms the complaint levels, it definitely doesn't correlate with customer loyal or satisfaction in any notable way. We don't see this very often, so it's definitely noteworthy. Most companies would kill for this TBH."

"Some points I would differ on would be: 1) Panasonic vs Tesla isn't unhealthy. Panasonic will have plenty of buyers of their cells regardless. 2) Tesla has fairly huge resources for cell tech via SpaceX."
"I know quite a few materials engineers, chemistry experts and more at SpaceX. Their teams of metallugists and many other disciplines are among the best in the world and highly inventive and creative. I have people older than me that say they are the best they've EVER seen."

"Tesla's cell tech is better than most, but I probably wouldn't call it a moat. Their advantage is more in the management systems and control logic, and the greatest advantage is in their total system integration of everything."

"I'll say my company is NOT located "conveniently" and dozens of my employees own Teslas."

"Has the chance to visit both Fremont and China/Shanghai recently. Much of Munro's suggestions have already been incorporated at Fremont. China factory is significantly different but won't suffer the same issues Fremont did first pass. But China may surface a lot of new ones..."

"We have had dozens of people inspect hundreds of Model 3's in the wild. Our data matches Lutz's observation. Gaps and paint are now def world class. Early ones were awful."
​

Some other auto industry comments:

"Having had a close look at i3 manufacturing, BMW did an absolutely horrific job with many aspects of the i3 program. The design wasn't appropriate, the line was far too costly and complex, but the worst was they made a car no one wanted. BMW's fail was their own here."

"Dealers actually spend the bulk of the advertising costs - depending on mfg some 4 to 6%. While the OEM isnt losing this, it does get passed to customers and does cut into margins one way or another. The OEM kicks in another 2-4% for an overhead of 6 to 10%."

"Having a supply chain is part of the problem. Existing carmakers are probably going to have to shed their suppliers to compete on price. Cars cost more than necessary because there are 4 to 8 layers of suppliers all adding their own markups..."

"The Germams will struggle with speed. Yes they can manufacture well. But I am extremely skeptical of their ability to pivot quickly. And by quickly I literally mean pivot over 4 to 10 yr timeframes."
​

 

[Thekiwi]

Personally, I think you're correct that Tesla will eventually move into the large global market for sub-compact cars at the $15K price point.

Firstly, a "lower cost vehicle than the Model 3" was mentioned specifically in Master Plan - Part Deux: (published on Tesla's blog on July 20, 2016)

Master Plan, Part Deux

Expand to Cover the Major Forms of Terrestrial Transport

"Today, Tesla addresses two relatively small segments of premium sedans and SUVs. With the Model 3, a future compact SUV and a new kind of pickup truck, we plan to address most of the consumer market. A lower cost vehicle than the Model 3 is unlikely to be necessary, because of the third part of the plan described below."​

Later, Elon twice hinted that a compact Tesla could be coming in 3-5 years in comments he made during the June 2018 AGM Q&A session and his August 2018 video interview with MKBHD. This likely refers to a hypothetical $25K 'Model 2', to be introduced no sooner than 2023.

This last part "unlikely to be necessary" (highlighted from MP-pt2 above) refers to the successful wide deployment of FSD/robotaxi. However, these products are NOT mutually exclusive with cheaper cars. I would purchase FSD with a sub-compact Tesla "Model 1" due to the extra utility. Elon has hedged his bets, and left open the possibility.

The remaining unknowns, the technical feasibility, is perhaps the easiest. Indeed, a version of Moore's Law is almost certainly at work with EV battery costs, and with Tesla's manufacturing abilities (due to robotics).

A 200-mile rge light-weight city car would NOT require a 54KWh bty like the 3SR+ (which has 20% more rge than that). Indeed, the SR+ itself appears to use 122/148 KWh/km or ~18% less than the 3LR rwd, while only having the lower curb weigh in its favour (as per Bjorn's early testing)

A 27 KWh pack and sub-compact dimensions easily put a "Model 1" into the required 85 Wh/km consumption target required to achieve a 200 mi rge rating. 'Maxcells' of 5 years from now could be approaching 500 Wh/kg while retaining Model 3 LR charge rates, life cycles of 2x current products, and costs of 50% measured by $/KWh.

Do the math, and that's a sub-120 pound battery pack that costs $1,350 at wholesale. That's about 11% of the wholesale cost of a $15K retail car that still retains a 20% margin. The secret sauce for more profits? If needed, targeted averting / SaaS leveraging that large screen and their captive audience.

Ultimately, it is up to Toyota et.al to choose to compete, but to date we've seen no signs they're willing to produce a compelling compact EV, or to even TRY to retire their gasoline-powered Corolla line. For this reason alone, and the simple fact that FSD will be equally compelling on a 'Model 1', I believe Tesla will produce a $15K compact car by 2030. And I believe that product will eat the lunch of any large automaker of gasser sub-compacts who refuses or fails to produce compelling EV alternatives in volume.

Cheers!

Interesting post.

I don’t see Tesla going all the way to $15k, but who knows what happens. Is it harder to get to that level while still maintaining types of car that gets a 5 star safety rating? Also might not match the brand (you don’t generally see the companies with the best brands/margins competing at the bottom end of the market in many industries, but sometimes a massive volume leader can maintain margins at the lower prices).

 

[Fact Checking]

He claims to have tested 1000s of Teslas. How's that possible? That's $100M worth of cars.

He said 100s, not 1000s, and he said "inspect":

"We have had dozens of people inspect hundreds of Model 3's in the wild. Our data matches Lutz's observation. Gaps and paint are now def world class. Early ones were awful."

Inspections are non-destructive and even a very thorough one can be performed within a few hours, using rented/loaned cars. Doing this is certainly within the capabilities of the largest Tesla investors.

 

[Bet TSLA]

"We have had dozens of people inspect hundreds of Model 3's in the wild. Our data matches Lutz's observation. Gaps and paint are now def world class. Early ones were awful."

I wonder how early you have to go for "awful". My December 2017 Model 3 was perfect upon delivery and still is. VIN 2300, so pretty early. Anecdotal evidence of course.

 

[sparcs]

He said 100s, not 1000s, and he said "inspect":

Inspections are non-destructive and even a very thorough one can be performed within a few hours, using rented/loaned cars. Doing this is certainly within the capabilities of the largest Tesla investors.

There was a later batch of posts on twitter that covered both the paint shop at GF3 and overall paint quality at Tesla. It seemed like a big claim that he would be testing at this level even if it's just paint. How do you even get easy and cheap access to thousands of Teslas for a detailed exterior paint inspection? Tesla hadn't even produced all that many vehicles until recently and still relatively rare overall.

SoylentBrown on August 2nd: " I've posted this many, many times now and I hope @Tesla will be more proactive. While my firm has tested literally thousands of Tesla vehicles and while the vast majority have excellent paint thickness, batches made in the early days of Model 3 were highly variable."

 

[dc_h]

This guy is a Tesla bear?

This bear seems to be sh*tting in Bavarian woods.

 

[Artful Dodger]

Interesting post.

I don’t see Tesla going all the way to $15k, but who knows what happens. Is it harder to get to that level while still maintaining types of car that gets a 5 star safety rating? Also might not match the brand (you don’t generally see the companies with the best brands/margins competing at the bottom end of the market in many industries, but sometimes a massive volume leader can maintain margins at the lower prices).

There is no exponential that "Expands to Cover the Major Forms of Terrestrial Transport" without passing through the $15K price point. Much like the exponential that builds FSD through a succession of '9's it depends upon the level above it.

Once Tesla leads the $25K tier of automotive sales, its business plan requires it to expand into the larger sales volume segment at the next lower price point to continue growth. It does this by lowering its production costs faster than the drop in unit ASP. Tesla has already demonstrated it can do this with the Model 3 in 2019Q2. ASP declined, yet GM per vehicle increased because their costs to produce new Model 3s fell even faster than the drop in unit price.

In terms of safety, I think that is a strawman argument. A future Tesla 'Model 1' doesn't need to be the safest car on the road; it needs to be the safest car in its class. If there's anyone that thinks Tesla can't build a <1,000 kg car that is safer than a Ford Escort, I think they don't know Tesla...

Cheers!

 

[Solar Aussie]

So Netflix is our enemy too? Jeez. What is it? Tesla vs the World?!

I saw the mention of Tesla in Netflix The Great Hack but I assumed it was the fact that mapping is via Google Maps and thus big data has some leakage from Tesla to Google. Maybe if Apple Maps improve worldwide and Apple were to form a cooperative arrangement with some sharing with Tesla - the privacy which Apple maintains is its differential feature could prevent leakage of Tesla big data into the covert social profiling

 

[RobStark]

 

[Tslynk67]

Anton's really jumped the shark here!!!

 

[SPadival]

Anton's really jumped the shark here!!!

View attachment 437597

I am as genuinely shocked as Antoon was when the Audi shitron accelerated 0-60 at a grandmotherly 5 seconds

 

[EVMeister]

I am as genuinely shocked as Antoon was when the Audi shitron accelerated 0-60 at a grandmotherly 5 seconds

You're too generous with your rounding (5.5 seconds). Although from his seizure in the car, looks more like 1.5 seconds. Imagine him in a... Tesla. Would he just close his eyes and pretend it's not happening?

 

[pyromatter]