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

[steak&chicken]

Bloomberg - this morning: Bloomberg - Are you a robot?

Headline: Tesla Target Hiked 30% by Piper Sandler Based on China Potential

Piper Sandler is the name for the recently merged Piper Jaffray and Sandler O'Neill. Their chief technical analyst is still Craig Johnson who was a regular guest of mine on my old TV show. He sends me complimentary copies of his weekly newsletter. I was pleased earlier this week when post-merger I still received his letter. On 2013 JAN 28 in that letter he recommended Tesla Motors. I had not then heard of it, but did deep research before buying more and more of it each day that week.

I watched the interview with Piper analyst Alex Potter and came away very impressed with his knowledge of China and felt like he really understood Tesla and its potential. I think he's even more bullish than even his raised $553 price target but want to save some ammo.

 

[capster]

It feels like how when you are driving on the highway at very high speeds for a long time, and then have to slow down to 60, you feel like you aren't moving at all.

Especially after having spent seemingly forever in heavy traffic before getting that burst of speed.

 

[capster]

I just have difficulty in seeing how a robotaxi would be feasible for a week or two vacation.

Rent for the whole two weeks? Maybe expensive initially, but when there are plenty on the road maybe not so bad.

Hmmm, maybe I should make that second CT reservation.

 

[Bobfitz1]

I'm taking Musk's comments about China having skilled engineers. at face value, if they can design, they can build, and if the target is a low price, they probably do it better than anyone

Sorry if someone has pointed this out already.... a China design center will have plenty of engineering challenges for a less costly and probably smaller car than M3 or Y, but they won't be starting from a blank sheet of paper. The drivetrain would I think be at most an iteration of the last one built for M3 and Y. Sure, that underlying advanced design will be resized for Model 2 (4) but that is a more manageable engineering task than making a fully new design that is improved in a number of ways.

IMO the low cost of the new EV will be driven by a number of factors. In no particular order: Lower battery cell cost, less raw materials due to smaller size, lighter weight. Greater automation reducing labor cost. Design improvements coming for most/all future Tesla's, along the lines of the new wiring module, which saves a great deal of wire and labor. Having the new, lower cost model partly designed by a new China Design Center will have a number of benefits, but lower cost of the eventual product won't necessarily be the most important of them.

 

[Mich]

this is funny.

 

[lklundin]

That might sound good in theory; I don't know if it'll work in practice. There are videos on youtube of how ro-ro's get loaded. At this level of detail, from what I could tell, the process is that 8-10ish drivers hop in a car and drive them into the ship in a reasonably short parade, with a van following them in. At some point in the ship, the van stops and gets itself turned around. Meanwhile the cars get lined up and parked, with their drivers walking (jogging, running) back to the van while a team in the ship straps each car down. The van fills up, and drives back out of the ship to take the driving team back to the cars where they hop in and drive the next batch in.

The point being that having the cars at the ramp ready to go in might not be much of a time savings at all - it would save the incremental driving time of the van from the bottom of the ramp to where the next batch of cars are parked and that's about it. It would not save the time for drivers to walk out of the ship and out to the cars, as they don't do that.

That's why platooning with a human driver in front (that I tried to outline) will work well. Let's say the ro-ro has decks with lanes of 40 cars each. Then on land the driver hops in the first car in a row of in principle up to 40 cars and just drives to the end of the lane - with all the cars behind him just following his car. If he stops, they stop, when he goes again, they go.

How card can that be given the current AP capability?

 

[Zaxxon]

Tangentially related: Nissan announced their 2020 Leaf pricing today. It's clear that the current-gen Leaf is a workable vehicle solely due to its remaining eligibility for the $7500 tax credit, at least in the US. $34k for the 40 kWh SV?

The comments are illuminating, consisting largely of people either mentioning that at these prices a Tesla is a much better choice, or 'well, in a couple years you can buy one for $15k.'

 

[Unpilot]

this is funny.

I''m pretty sure Lutz is actually dead...and that is just a robot version of him talking.

 

[jerry33]

Tangentially related: Nissan announced their 2020 Leaf pricing today. It's clear that the current-gen Leaf is a workable vehicle solely due to its remaining eligibility for the $7500 tax credit, at least in the US. $34k for the 40 kWh SV?

The comments are illuminating, consisting largely of people either mentioning that at these prices a Tesla is a much better choice, or 'well, in a couple years you can buy one for $15k.'

Not counting the $7500, I paid as much for Denise's Leaf as I would have paid for an LR AWD 3--if they had been available at the time. The Leaf is no bargain.

 

[ZsoZso]

I think you and @KarenRei are right that even in a FSD world there are compelling reasons for personal car ownership. You both summarize the reasons why I still want to have my own car in the future if I can. But, instead of keeping two cars, I might just keep one. I think robotaxis will make folks think more carefully about how large of a personal car fleet they really need, and I bet that a lot of them will opt to trim it down if they decide they can get by with fewer.

Exactly my view as well. Currently, in my family we have 4 cars (both kids are drivers and do their separate daily commutes): Model S, Model 3, Mitsubishi iMiev, Subaru XV (3 EVs 1 gas). With Robotaxi based cheap ride shares it will not make sense to keep cars for daily commutes, but it still makes sense to keep 1 for family weekend trips / skiiing etc. when we need to haul our stuff and would prefer to keep some in the car when we are out for our activities. But we would certainly not own 4 cars, 1 for sure (a cybertruck that is reserved) or maximum a 2nd one if kids have separate weekend destination needs, but that's already questionable if better served by a robotaxi.

 

[Fredneck]

Not counting the $7500, I paid as much for Denise's Leaf as I would have paid for an LR AWD 3--if they had been available at the time. The Leaf is not bargain.

I met a guy who has a 50 mile Leaf he bought for only $5,000. He drives it on long trips by hitting every fast charger he can find as well as level 2 chargers and complains how expensive Electrify America chargers are. While he is not a boon for EVs in general, he is a walking billboard for the longer range available in the model 3. But you have to admit a $5,000 car is pretty inexpensive. Now if he would just use it for the trips it is designed for.

If he could use the Tesla network in another five... no, ten years he could stop every 49 miles and charge.

 

[Fredneck]

Exactly my view as well. Currently, in my family we have 4 cars (both kids are drivers and do their separate daily commutes): Model S, Model 3, Mitsubishi iMiev, Subaru XV (3 EVs 1 gas). With Robotaxi based cheap ride shares it will not make sense to keep cars for daily commutes, but it still makes sense to keep 1 for family weekend trips / skiiing etc. when we need to haul our stuff and would prefer to keep some in the car when we are out for our activities. But we would certainly not own 4 cars, 1 for sure (a cybertruck that is reserved) or maximum a 2nd one if kids have separate weekend destination needs, but that's already questionable if better served by a robotaxi.

While Musk is big on the idea of robotaxis, it is an idea that will take significant time to bring to market in a way that covers a lot of territory. Of course it will take comparatively little effort to cherry pick the domain of conventional taxis and the Uber like services. So it will be many years before people in the burbs give up their Vs, E or otherwise.

 

[jbcarioca]

Sorry if someone has pointed this out already.... a China design center will have plenty of engineering challenges for a less costly and probably smaller car than M3 or Y, but they won't be starting from a blank sheet of paper. The drivetrain would I think be at most an iteration of the last one built for M3 and Y. Sure, that underlying advanced design will be resized for Model 2 (4) but that is a more manageable engineering task than making a fully new design that is improved in a number of ways.

IMO the low cost of the new EV will be driven by a number of factors. In no particular order: Lower battery cell cost, less raw materials due to smaller size, lighter weight. Greater automation reducing labor cost. Design improvements coming for most/all future Tesla's, along the lines of the new wiring module, which saves a great deal of wire and labor. Having the new, lower cost model partly designed by a new China Design Center will have a number of benefits, but lower cost of the eventual product won't necessarily be the most important of them.

You are missing the point, I think. Numerous people have discussed platform engineering, including me. The Chinese designs will follow sound industrial practice, by designing maximum practical parts commonality, specifically including a "skateboard". There will not be "a model'. There will be a product line, with a number of models including probably a sedan, an SUV, a Crossover, a pickup a minivan and perhaps several of each. If suitable arrangements can be made there will be badge-engineered product for others too. Don't be so restrictive and the economics suddenly become compelling for modestly priced vehicles.

Why? Fixed cost absorption vastly reduces the cost, even when variable costs are a less scalable quantity. That is also why multiple brands share quite similar architecture and share every component they can share without damaging their positioning.

Perhaps the best example is the VAG design philosophy. Check it our. They do lots of things wrongly, but not this! Numerous engine parts are shared from VW Fox to Lamborghini and Bugatti. They're designed with shared dimensions and specifications as much as practical. That allows them to make tiny volume Bugatti and Bentley as well as Fox et al without totally destroying economics. Tesla does that now with motors, as I described in an earlier post and has others have done more eloquently than do I.

Please don't think there will be 'a China designed cheap model'. There will be a broad array, plus factories to build components for all, and factories worldwide to assemble and manufacture parts and vehicles.

BAIC has just done that for GM, with the results already visible in new gains in market share in a number of markets.

These have already been discussed here and elsewhere so I will not repeat them.

It is only to emphasize again that Tesla is far beyond thinking of single models. They announce single models and promote single models. The design and build multiple models using parts in various models (from Plaid Model S to Space X rocket fins) and build factories to support the range.

 

[Nocturnal]

YouTube survey just now, which of these cars will you buy for your next car? Forester, CRV, CX-5, RDX...

LOL, you may want to work on that algorithm YouTube. Did you not notice the massive Tesla content I consume?

Tangentially related: Nissan announced their 2020 Leaf pricing today. It's clear that the current-gen Leaf is a workable vehicle solely due to its remaining eligibility for the $7500 tax credit, at least in the US. $34k for the 40 kWh SV?

The comments are illuminating, consisting largely of people either mentioning that at these prices a Tesla is a much better choice, or 'well, in a couple years you can buy one for $15k.'

I didn't realize they were that expensive. Why would you ever buy one?

 

[Zaxxon]

YouTube survey just now, which of these cars will you buy for your next car? Forester, CRV, CX-5, RDX...

LOL, you may want to work on that algorithm YouTube. Did you not notice the massive Tesla content I consume?

I didn't realize they were that expensive. Why would you ever buy one?

Cause, for example here in Colorado, that means you can pay 'sticker' and get the absolute base for $20k. Or the mid-trim Plus for $28k. And Nissan buyers generally don't pay sticker. But once that $7500 is gone, and it's a straight-up choice between an SR+ 3 and any of these Leafs (leaves?)? Not a chance. Nissan will either need to have a big price cut at the ready, or new Leaf sales in the US will drop off a cliff.

 

[DurandalAI]

YouTube survey just now, which of these cars will you buy for your next car? Forester, CRV, CX-5, RDX...

LOL, you may want to work on that algorithm YouTube. Did you not notice the massive Tesla content I consume?

I didn't realize they were that expensive. Why would you ever buy one?

Tesla didn't pay for advertising, thus they are not eligible to be on that list.

 

[ZeApelido]

That's why platooning with a human driver in front (that I tried to outline) will work well. Let's say the ro-ro has decks with lanes of 40 cars each. Then on land the driver hops in the first car in a row of in principle up to 40 cars and just drives to the end of the lane - with all the cars behind him just following his car. If he stops, they stop, when he goes again, they go.

How card can that be given the current AP capability?

I'm not platooning if this guy is behind me

 

[TradingInvest]

Starts from 2021, Tesla will sell almost one million vehicles a year, and continue to increase 50~80% each following year.
If shorts manage to keep the stock below 500 in longer term, Tesla will have enough cash to keep buying back stock. Shorts either have to let the stock go up, or let Tesla cancel stock at low price. It's a tough game for shorts.

 

[Fredneck]

Starts from 2021, Tesla will sell almost one million vehicles a year, and continue to increase 50~80% each following year.
If shorts manage to keep the stock below 500 in longer term, Tesla will have enough cash to keep buying back stock. Shorts either have to let the stock go up, or let Tesla cancel stock at low price. It's a tough game for shorts.

There is no reason on earth Tesla would want to buy back stock. That takes cash and cash is the precious commodity for a growing company.

 

[Fredneck]

Lol, Elon said engineering is "the closest thing to magic that exists in the real world".

The car doesn't need a wheel rim if the stator replaces its function. Electro magnetc suspension in what use to be the tyre.

I'm talking REAL blue-sky *sugar* here, not the timid milquetoast approach preferred by fragmented organizations who's vision is limited by quarterly results.

So what's the next major component for Tesla to take vertical? It's the pneumatic tire. There's a thousand+ dollars of costs to examine for every car produced. What's next?

Spoiler: The $64K Question:

Will it work on Mars?

Cheers!

You can picture anything you want. Actually ways to make things work is a bit tougher. Tesla can blue sky all day long, but there needs to be results that help with the products and the profit.