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

[SarahsDad]

Some reports on twitter of people being unable to pick up a Model X because of a “firmware update” and told to come back in 2-3 weeks.

Dennis Mihalatos on Twitter

▼ Kiel James Patrick on Twitter

...that first twitter thread is in need of some serious pushback by Tesla advocates. Outrageous TSLAQ trolling.

Crazy anti-Tesla (short) comments and falsehoods - I didn’t think there were that many clueless people still around. Just further supports Cathie Wood’s comments from last week (posted here before but worth repeating):

“What we have here is a wonderful wall of worry. The best wall of worry I’ve ever experienced in my career with a stock or with the market”.

https://www.cnbc.com/2020/02/18/teslas-biggest-bull-says-skepticism-is-a-wonderful-wall-of-worry.html?__source=iosappshare|com.apple.UIKit.activity.CopyToPasteboard

Let’s hope TSLA just keeps climbing that wall

 

[KarenRei]

According to that video around the 6minute mark they claim to have reduced costs by 99.999% to $0.01 per cm^3. Im have no expertise here and I am willing to admit I may be making noise for about a big nothingburger.

It's costs per kilogram that are relevant. For all of the hype about graphene cost reduction over the years, it's still many dozens of dollars per kilo.

And it's a moot point really. Nothing can be superior to lithium metal as an anode material (you can't get a higher storage ratio than 100% of the anode mass being lithium, and you're not going to beat it on voltage, either), and we'll hit predominantly-lithium metal anodes well before graphene becomes affordable. In the meantime, increasingly high fractions of silicon are good enough. Silicon in anodes stores lithium at a 15:4 molar ratio (15 lithium per 4 silicon), which is about a 1:1 mass ratio, and much better than that from a volumetric ratio (the huge volumetric change has historically been the primary problem to overcome!)

 

[Highway2Heel]

A very good solid state battery discussion:

Highest energy density all-solid-state batteries now possible

 

[lklundin]

Graphene is way too expensive for me to care about it.

And here I was, still thinking that Diamonds are a Girl's Best Friend.

 

[shrspeedblade]

I’m starting to think it will be similar to the first few deliveries of Giga Shanghai. Many were assuming that Tesla would try to deliver hundreds of cars before the end of the year. But instead it was a dozen or so to employees...

This sounds very similar to the speculation in December concerning Shanghai deliveries, and how many would happen before the end of the year. Some with more accounting knowledge than I pointed out that it would be advantageous to push the deliveries to Q1 which is what happened. It would seem logical that something similar might happen with Model Y out of Fremont, a handful of employee deliveries in March with the first big batches delivered in Q2.

It's the new WHICH QUARTER IS BETTER? factor. At least in the U.S. the Federal tax credit was the old one, and that's probably not coming back as long as my orange 2nd cousin is still in office.

 

[KarenRei]

A very good solid state battery discussion:

Highest energy density all-solid-state batteries now possible

Why are we transitioning from a conversation about graphene into one about solid state cells (another relatively overhyped tech)?

Solid state cell = you're trying to let lithium ions diffuse through a piece of glass as quickly and easily as they can through a liquid, and have the piece of glass as thoroughly contact the active materials of the anode and cathode as a liquid would contact them, in order to be immune from dendrites in lithium metal anodes, except that A) in practice they're often not always immune to dendrites, B) dendrites are not the big problem you have to tackle (disjoint pieces of Li metal surrounded by a SEI is the bigger challenge... e.g. coloumbic efficiency has to be exceedingly high), and C) there's been huge progress in suppressing dendrites via electrolyte changes in the past year regardless.

 

[Highway2Heel]

Why are we transitioning from a conversation about graphene into one about solid state cells (another relatively overhyped tech)?

They aren’t cost effective and they aren’t presently viable. However, I like to keep tabs on what the Fiskers (and others) of the world present as currently viable and competitive. It draws a more stark contrast between cutting edge battery tech and the bleeding edge battery abyss.

 

[Fact Checking]

Two days ago one of the most important and most watched Chinese state TV channels had a prominent segment on Tesla and GF3:

Jay in Shanghai on Twitter​

There's now a translation by a Twitter user on what was said, and there's quite a few interesting nuggets to investors:

• Tesla started working since Feb 10.
• All lines are fully working.
• 2,000 workers (600 newly employed).
• The government provides 10,000 masks, more than 600 rooms for workers.
• Moreover, all companies providing essential materials to Tesla are also working.

Another tweet also said:

• "To make things easier for customers, @teslacn favors #Model3 home deliveries. New protocol requires all vehicle to be disinfected before being handed over to new owners."
• "RayTesla️ on Twitter"

This should address reluctance by Chinese customers to take delivery at a crowded delivery center.

This is huge news IMO:

• The second GF3 shift was also hired, which would double their production.
• The end of December GF3 group photo showed less than 1,000 workers, so the ramp-up is in full swing.
• The Chinese side of Tesla's supply chain was specifically brought up early on February 10 while still about half of companies were shut down due to the statutory quarantine "vacation".

Presumably this also means that they switched to a 2-shift utilization of the factory: 8+8 hours, with 8 hours left for maintenance, on 5 or 7 days per week.

Based on this information I'm now more bullish about Q1 GF3 production and deliveries. In particular the early February hiring of the second shift should help them ramp up.

Edit, there's also this fresh GF3 production data from a Chinese government official:

Breaking: Tesla Giga 3 Shanghai Soon Achieves 12K Monthly Production, Number Will Gradually Rise

Sun Xiaohe, Chief of the High-tech Industry and Technology Innovation Division of the Management Committee of Lingang New Area said, "Tesla Gigafactory 3 Shanghai is expecting to achieve 12,000 monthly production rate soon, and the number will gradually rise."​

12k/month is 3k/week and 144k/year, very close to the 150k/year milestone already.

A bit of a perspective of how huge this is: last summer Adam Jonas was projecting just 35k-40k GF3 sales in China, for the whole of 2020:

Tesla, TSLA & the Investment World: the 2019-2020 Investors' Roundtable

How many units of Model 3 would you expect Tesla to sell in China on a full year basis by 2020/2021?

We expect 35-40k units for 2020, and 60k units for 2021.​

At 12k/month they'd meet that in just a little over 3 months...

If they can reach this in February and sustain it in March then even some of the more bullish GF3 estimates for Q1 I've seen here will have to be raised significantly.

So I was puzzled by this part of the report:

"The government provides [...] more than 600 rooms for workers."​

And Twitter user Ray4Tesla gave a more complete translation:

RayTesla️ on Twitter

"Towards end of the clip, the local official says they have secured a few apartment buildings nearby, all reserved for #Tesla employees. With that kind of unprecedented support for a foreign OEM, Tesla’s future in China is brighter than ever."​

Wow, this indeed shows that the Chinese government's support is not limited to demonstrating unprecedented construction speed for new industrial projects, they also want Tesla to succeed in China in the long run and are providing Tesla with unprecedented active government assistance.

 

[Lessmog]

Why are we transitioning from a conversation about graphene into one about solid state cells (another relatively overhyped tech)?

Ah, this brings me back to the age of 14. My father implied that I was prone to interrupting any long-winded discussion with "But what's all that got to do with mopeds?"

 

[Green Pete]

Yes. I’m worried about the whole market actually. Whether I’ll do anything about it is another question.

Holding my Tesla position firm but I got PUTs in for SPY 10% and 20% down with expiries in April and some stupid PUTs in decemeber for a 66% drop, (the potential for this to happen is near zero but they are so damn cheap why the hell not, worked for me once with the tesla 690 calls in 2021)

Still not advice, just a crazy move by someone who doesn't have a clue what they are doing.

 

[ReflexFunds]

So your estimates are:

• GA line moves 10 cm/sec ± 3 cm
• Distance between cars is 150+469 = 614 cm ± 50 cm

(I added pretty arbitrary confidence intervals.)

This gives an estimated upper and lower bound for observed line peak throughput with two 8-hour shifts working 7 days a week:

• Low estimate: 664/7 = 95 seconds per car, 4,244/week,
• Mid estimate: 614/10 = 61 seconds per car, 6,610/week,
• High estimate: 569/13 = 43 seconds per car, 9,376/week

The GF3 assembly line is much faster than I thought. Any way to narrow down the 10 cm/sec line speed estimate some more? It's the biggest source of statistical uncertainty.

This largely aligns with my post in January below that I suspect all Tesla Body & Assembly lines have ~4.7k per week design capacity on three shifts, but that Tesla hope most can be pushed past design capacity to ~7k per week as they did with Model 3s in Fremont.
So the primary production constraint on future lines is likely to be supplier parts orders, and in particular cell supply.
I think Tesla initially ordered parts to produce 3k Model 3s per week in China, but I would guess they are now aiming to push this on towards 4.7k and this is where the new CATL cells come in. Not only will CATL allow them to push on past 3k per week, but it will also likely allow them to reach 3k per week sooner than would otherwise have been the case (given LG's production ramp takes time).

My guess is that all of Tesla's new production lines are designed for 28 cars per hour or 4.7k per week on three 56 hour shifts.
It makes sense to have a standardised design and get economies of scale in their production line equipment manufacturing.
However, so far I guess Tesla have only ordered supplier parts for 3.4k per week or two 60 hours shifts.
The second shift is reportedly starting at GF3 in mid February.
They likely will increase orders and move to 3 shifts once they have built demand (via word of mouth marketing) to the necessary level.
Model Y should be built in the separate building currently under construction, but may possibly share some parts of the line such as paint shop and stamping. I expect Model Y line will be the same design specs, however they may put in initial orders for ~5k per week supplier parts and aim to rapidly move to 3 shifts for Model Y. MIC Y is likely running around 1 year behind MIC Model 3 production timeline.

This 28 cars per hour design capacity might have been the same design capacity for much of the Fremont Model 3 line (at least for the body line, the most capital expensive part). At Fremont they pushed this equipment past design specs on to 7k per week, so they may be hoping they can push the GF3 lines past their design capacity on to 7k per week eventually too.

So I think Fremont Y line, GF3 3 line, GF3 Y line, GF4 Y line & GF4 3 line may all be 4.7k per week design spec.

However for GF3 Model 3 they are targeting 2 shifts and ~3k per week.
For GF3 Y they are targeting 3 shifts and ~5k per week.
For Fremont Y they are initially hitting 2 shifts and ~3k per week before Paint expansion is complete. As quickly as possible after that (likely within 2020) they will aim to add the 3rd shift and reach ~5k per week and after that they will more slowly push the line past design specs on to ~7k per week.

 

[Cosmacelf]

Holding my Tesla position firm but I got PUTs in for SPY 10% and 20% down with expiries in April and some stupid PUTs in decemeber for a 66% drop, (the potential for this to happen is near zero but they are so damn cheap why the hell not, worked for me once with the tesla 690 calls in 2021)

Still not advice, just a crazy move by someone who doesn't have a clue what they are doing.

If SPY does drop by, say, 10%, you could make some nice money on 66% drop put if you have the courage to sell the put while the market is going down

 

[ZeApelido]

So your second reply makes it clear that you weren't joking - and in that case what you wrote is pretty insulting and dumb.

There's plenty of bulls here who sized their positions based on price, the difference is that @Right_Said_Fred shared his decision and the subsequent buy-in with us, which lowered his overall entry price.

Furthermore, the recent TSLA rise created new wealth of such magnitude that is difficult for many to deal with. If your new wealth is now life-changing you might or might not freak out if you see the kind of price manipulation that happened recently. It takes time to get desensitized to new wealth, and this is an entirely natural process.

I'd hate to see this investor forum devolve into a religious sect where the simple act of selling shares to protect family wealth is seen as heresy and is attacked. Asking critical, probing questions should be the job of every Tesla bull.

So just stop this crap, ok?

I'm totally willing to get desensitized A Clockwork Orange - style for a $5000 share price.

 

[Artful Dodger]

LG Chem supplying for 1,050 vehcles / 54.39 MWh.

八万顷新能源汽车工作团队周报 2020年W6 一、行业信息 1）2020年1月，新能源乘用车批发4.3万辆，零售达到4.12万辆，相对于2019年1月份的走势大幅下降... - 雪球

Got to love Google Translate:

The lowest cost additive is the key to the performance of the electrolyte. Additives are like the seasoning of instant noodles. Without additives, there is no "soul".​

What did Elon say, 'China has some of the best art in the world'? And NOODLES, too!

Now how about some INSTANT NOODLES!

Cheers!

 

[oldTAVguy]

They aren’t cost effective and they aren’t presently viable. However, I like to keep tabs on what the Fiskers (and others) of the world present as currently viable and competitive. It draws a more stark contrast between cutting edge battery tech and the bleeding edge battery abyss.

"It draws a more stark contrast between cutting edge battery tech and the bleeding edge battery abyss." I wish I could have written THIS.

 

[Highway2Heel]

Got to love Google Translate:

The lowest cost additive is the key to the performance of the electrolyte. Additives are like the seasoning of instant noodles. Without additives, there is no "soul".​

What did Elon say, 'China has some of the best art in the world'? And NOODLES, too!

Now how about some INSTANT NOODLES!

Cheers!

Other life cycle items get lost in the shuffle outside the research and academic environment. Solid state holds some level of promise IF you keep it at a constant temperature along with a few other annoyances that get swept under the rug like, oh, the vehicle has to stay constantly plugged in when not in use.

Fisker has made a big bet with backing by Caterpillar. Others have made similar big bets. So, when the media tries to act like there’s this battery race, it’s not a race if everyone isn’t running in the same direction. Some, like Tesla, are making progress toward the finish line. Most others are running backwards past the starting gate wasting money and time and going nowhere but back to the house.

 

[ZeApelido]

I disagree for the following reasons:
They like moats: Tesla has at least 2 generations moat
Capital distribution: same approach, TSLA has not yet ran out of things to invest, thus no dividends, etc.
They invest in foolproof businesses: to me TSLA is one, but it requires at least a good grasp of physics to understand it is one + sw dev.
They derive synergies from some of their investments (e.g. telecom wires alongside railways, geico float, etc). Tsla: lead in battery integration tech -> grid balancing.
Tsla + insurance move would be interesting to watch.
Munger's essay on building a 2T company is very similar in my mind to TSLA story.

So in one of my IRAs brk.b +TSLA. ultimate barbell.

It would be swell if BRK spends that 100b with TSLA to get rid of these peakers plants!

Just a note of perspective, but BRK has underperformed S&P500 over the last 10 years.

 

[Cherry Wine]

Big. Huge. Go Mondays!

But where is the substantiation? I’m not ready to accept this as fact. As pointed out, a lack of manufacturer plates would be the biggest clue and very easy to verify.

 

[ZeApelido]

Graphene is way too expensive for me to care about it.

Since graphene can be made into a single 2D layer from carbon atoms, we can have an invisible battery!

Just like Mercedes, Audi, etc...

 

[Remus]

I disagree for the following reasons:
They like moats: Tesla has at least 2 generations moat
Capital distribution: same approach, TSLA has not yet ran out of things to invest, thus no dividends, etc.
They invest in foolproof businesses: to me TSLA is one, but it requires at least a good grasp of physics to understand it is one + sw dev.
They derive synergies from some of their investments (e.g. telecom wires alongside railways, geico float, etc). Tsla: lead in battery integration tech -> grid balancing.
Tsla + insurance move would be interesting to watch.
Munger's essay on building a 2T company is very similar in my mind to TSLA story.

So in one of my IRAs brk.b +TSLA. ultimate barbell.

It would be swell if BRK spends that 100b with TSLA to get rid of these peakers plants!

His definition of moat might be significant different from yours. Historically Buffet avoid investing in companies that have any meaningful R&D budgets, this is from Fisher's influence. He likes company that suppress competitors using other means such as monopoly position or government relationship, geological location etc.

He was on record discouraging Apple from investing in new industry.

I am in no way denying that strategy has good returns. But comparing to Tesla, kinda like dogs vs wolves.