A healthy 2% up in pre-market, but what gives with $NIO at 21%??
Nio in talks with Hefei govt on 10 bln yuan funding, car plants
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A healthy 2% up in pre-market, but what gives with $NIO at 21%??
Perhaps EC6 production location and HQ relocation rumors.A healthy 2% up in pre-market, but what gives with $NIO at 21%??
I read this as 300 test drivers not 300 bugs. Not that it would matter much, considering the whole mess.
Indeed - the editing period is over, I've asked moderator help to fix my mistranslation. I should have realized that a bug rate of 300/day is way too high ...
Manager Magazin, a leading German business publication with excellent sources at the Volkswagen board, at VW, Porsche and Audi high level leadership, and at the two biggest shareholder families, the Porsches and Piëchs - has just published a bombshell article.
They are reporting about the cluster-sugar that the Volkswagen ID.3 has become, with a rich supply of anonymous insider sources from within the ID.3 project.
Here's an English translation posted to /r/teslainvestorsclub, it's long but worth reading the whole thing:
More Problems at Volkswagen [translation from Manager Magazine "Volkswagen – Showdown in Hall 74"] : teslainvestorsclub(I have slightly improved upon the what I assume was a machine translation of Reddit user jandetlefsen. I have access to the original article in German which is behind a paywall, and the translation is accurate as far as I can tell.)
The start into the electrical age is getting very bumpy for CEO Herbert Diess. More than 10,000 technicians are currently trying to solve the problems of the showcase project ID.3. There are already signs of the first personnel casualties.
Location: Volkswagen plant Wolfsburg, Hall 74, 8.30 a.m.
Every working day, software experts, engineers and top managers meet here for a half-hour morning round. Head of Development Frank Welsch (55) is a regular participant, as are Christian Senger (45), Member of the Board of Management for Digital Affairs, and Thomas Ulbrich (53), who is responsible for electromobility. Suppliers send top people. Almost all the board members were there; sometimes Volkswagen boss Herbert Diess (61) comes himself and shows the importance of the morning round.
Because even if the ID.3 marketing slogan ("Now you can") has been suggesting for months that it's about to start - the e-mobile is not ready for the masses. Many at the top of the company doubt that it will be ready by summer as planned.
If it goes wrong, the ID.3 could destroy careers, theoretically even that of Herbert Diess. New drivetrain, new software and electronics architecture: ID.3 stands for the transformation to an electrical and technology group. It is Diess' very personal project. The VW group CEO also manages the VW brand.
All the more important is the rescue round. This is where the technical problems are discussed, this is where orders are placed which are then processed by ID.3 teams throughout the group. More than 10,000 technicians and engineers are currently working on ID.3, including external developers, our sources in Wolfsburg say. They have just brought in hundreds of additional experts, top people from Audi and Porsche, for example; they are flown in on Mondays and out again on Fridays.
When Chancellor Angela Merkel (65) personally came to Zwickau at the beginning of November 2019 for the start of production, it looked as if everything was going according to plan. Only the cars are rolling, at the moment, according to the production schedule, there are a good 50 of them a day, stupidly parked. The software does not work as it should.
The basic architecture was developed too hastily, say VW experts, system parts often don't work with each other and have bugs. At some point in the next few months, when the quality is high enough, the green light will be given for the [new] software to be installed on the cars that were already built.
Did Diess want too much too fast? In addition to the electric drive, a completely new software organization was necessary? The Porsches and Piëchs, major owners and actually Diess' most important allies, have never really been convinced of their protégé's electric focus. Now they are getting restless. In small group discussions they expressed their displeasure, they say.
Employee boss Bernd Osterloh (63) and the IG-Metall parliamentary group remind internally that the VW group missed out on billions in 2018 because of the delayed changeover to new emission regulations - and now fear similar things in terms of CO2 penalties. The group must save 30 grams of CO2 per car in order to achieve the EU targets, as Herbert Diess himself recently said. 30 grams, that would be a fine of around ten billion euros in 2020. Indisputable.
Without the ID.3 CO₂ fines cannot be avoided. Purely electric vehicles will still be counted twice this year [under the 'SuperCredit' rules]. VW would have to sell 100,000 ID.3s in 2020 to meet the targets; this is how they originally calculated. They have now reduced this number; 80,000 must also be enough. The E-Golf and E-up, both of which have a compromising electric performance and are both in deficit, are supposed to make up for the shortfall a bit. Both are currently being squandered with high discounts. This speaks more for panic than for trust in ID.3.
Audis e-tron and Porsche's Taycan could also help, because the CO2 emissions are calculated for the group in Brussels. But there is a catch there too. Audi has already lowered the forecasts for the e-tron. They wanted to sell their electric SUV and a spin-off in 2020 up to 70,000 times. In the meantime, the scenarios have reached a good 40,000; battery experts consider this figure to be wishful thinking, which is how big the battery crisis is.
LG Chem supplies too few battery cells and is constantly reporting new production problems. Batteries from Samsung, which are to be added in the summer, do not yet have the necessary quality. Audi and Porsche, whose Taycan uses cells similar to those of the e-tron, are battling to make up for the low capacity. The matter went to the group board of directors. Porsche boss Oliver Blume (51) won.
Herbert Diess had an idea of how difficult the start into e-mobility would be. He said at a top management conference in January that compliance with the limit values for supplying, building and selling cars with batteries was "perhaps the most difficult task Volkswagen has ever had to face.
The problems are everywhere. They just postponed the Taycan delivery in Germany again for several weeks. The Ionity charging station joint venture, also supported by Volkswagen, is nowhere near as far as promised. And the teams responsible for the next electric VW ID.4 - scheduled to start at the end of 2020 - are urgently waiting for the people who now have to save the ID.3; a cascade of postponements is in the offing.
But the real battle will be fought in Hall 74. In the afternoon at 4 pm, the ID.3 rescuers will meet for the second time every day. What problems have they solved, what has remained open, where do they need to step up their efforts again? They are working in a disciplined manner on the electrical front, almost militarily, as contributors tell.
The hundreds of test drivers who are on the road in the evenings and at night report new bugs every morning in Hall 74; up to 300 would do it every day, says one of our sources who is participating in the meetings frequently. Negative scenarios of a delay of three to a maximum of twelve months are already circulating, which Diess' people dismiss as "complete nonsense".
But what to do if it doesn't work? Then it will have personnel consequences below the CEO level.
With foresight, Diess has expanded the VW brand board of directors to a council of eleven. In the event of a major ID.3 delay, he could fire various board members. Welsch, Head of Development, has been joined by Chief Technology Officer Matthias Rabe (57), who could take over. Another digital board member is also being sought, according to our sources at Wolfsburg. Herbert Diess has installed a firewall - at least as far as his CEO position is concerned.
(Cc: @avoigt)
Note the countless number of red flags:
Anyone who knows how good software projects looks like recognizes in what a mess Volkswagen is: their software team is at Wolfsburg, being flown in weekly from other projects such as the ID.4, but their factory is in Zwickau, spewing out 50 new ID.3's every day, only to be parked in open air parking lots ...
- Sources indicate of an additional delay of 3-12 months, on top of the summer deadline.
- hundreds of test drivers (VW employees driving the ID.3) on the road, 300 new bugs being reported on a daily basis
- VW is cannibalizing their other development teams, such as the ID.4, E-Tron and Taycan teams. Software developers are flown in from their regular workplaces (where their homes are) on Mondays and they fly back on Friday. Those must be some super happy software developers browsing Tesla's GF4 list of jobs right now ...
- Note the low production rate of the ID.3 of only 50 per day, almost 4 months after the pompous "start of production" last year. That's 350/week, 1,400/month, 4,550/year ...which falls far short of the 80,000 ZEV units VW needs to make in 2020 to avoid 10 billion Euros of fines. BTW., maybe @Prunesquallor can explain that figure: how can 80,000 units save VW 10 billion euros? That's €120,000 per ZEV unit made - that sounds ridiculously high.
- Note the tidbit explaining the E-Tron production reduction: internally Audi and Porsche was fighting about battery supply, and the Porsche CEO won the infighting and the E-Tron got scaled down and the Taycan is getting the battery supply ...
- Sources at the shareholder families Porsche and Piëch expressed (anonymous) unhappiness with Diess as well. Those shareholders could depose Diess, if they wanted to.
- Diess has restructured the board to have "scapegoats" he could fire - but the responsibility for a ID.3 failure would squarely rest on his shoulders.
Every "ID.3 crisis group" working day begins with a 30 minutes meeting. Remember what Elon said about the pointlessness of meetings and the necessity of high-rate innovation to happen in flat meritocracies? It's all true ...
Thread on reddit with email for model y deliveries. Commenters saying earliest available date is march 15!
Model Y delivery emails have begun! : teslamotors
I suspect VW will make the transition to EVs. They are putting in the most capital and effort compared to all the other ICE companies. This period is their equivalent of Tesla's production hell. A lot of the criticisms above could have been applied to Tesla during the M3 ramp. Diess has the right idea about the direction of the auto market, and the advantage of a good relationship with Elon, which could come into play further down the road. Even if they are delayed by a year or 2, so long as they are ahead of the rest of the industry in terms of switching to EVs, then they are in a strong position. In terms of their software problems, I think should be able to put out something adequate for a first attempt.. eventually. The weakness of VW software is not going to stop them selling EV's, given the rising demand for EVs, and lack of competition.
Their ID3 is actually a good looking car - kind of like an EV Golf. It's designed as an EV from the ground up, rather than retrofitted. It's somewhat smaller/lighter so it should get a decent range compared to EV SUVs. Overall, I think it will sell pretty well, and save VW a huge amount in fines, and I quite like VW's chances of surviving the transition to EVs, at least compared to the other ICE companies.
What is surprising is that reservations placed as late as last month (Feb 10) are reporting receiving this email.
Note that at this point they are probably soliciting delivery availability feedback in the U.S., for the final two weeks of March - presumably with a heavy focus on the west coast, due to shipping delays. To do so they'd probably send the email to pretty much everyone who have ordered a Performance Model Y in the U.S., and deliver only to those that indicate availability in the time frame and location that allows delivery by the end of the quarter.
All of these are strong filters:
If we apply these we get maybe 1-2% of all reservations - which I suspect explains why they sent the email to all U.S. Model Y Performance reservation holders.
- "Performance" units are usually ~5% of Model 3 sales,
- U.S. is 50% of Tesla sales,
- west coast delivery is less than 50% of Tesla sales,
- willing to pay and sort out all paperwork in short order is a filter as well.
I’m a professional quant trader and I support this message. If Rentech is buying that much Tesla stock that means their forecasts are saying that the stonk price was ridiculously undervalued in Q4. These guys are the best in the business at finding alpha.
are they definitely all colors too? I'd expect them to only do a single color run first, to make it even simpler.
I'm a little bit worried about CATL. What if CATL has done some magic (and owns the patents) and is leading the next gen battery chemistry and/or pack technology?
I'm sure you all disagree. But can you calm me down?
At this stage I think probabilities are:
- >95% Tesla will use CATL cells
- >90% chance Tesla will use CATL LFP cells
- >80% chance Tesla will use CATL LFP Prismatic cells. (Prismatic cells are the optimum format for lower energy density chemistry, while cylindrical are optimum for higher energy density, but only if the pack hardware & software can assemble/handle them affordably)
- If the above is true, ~50% if these will be whole CATL modules or whole CATL cell to pack design.
What is unclear is:
- If this will be for the SR+ Model 3 or for a new SR lower range China specific version?
- If these packs will be cheaper (in $ per KWh) than Tesla's SR+ packs made at GF1? (I'm very skeptical about this, I think on the whole CATL packs are likely to be more expensive, however I expect Tesla got a great deal, and possibly -ve margin for CATL)
- Will charge rate be as high? (I think unlikely)
- Will battery life be as high in miles (Maybe similar, possibly higher cycle life cancelled by smaller battery meaning more cycles per mile)
I think the key rational of this deal for Tesla is:
I think the rational for CATL is:
- Accelerate ramp up of GF3 production without using cells produced in GF1. This will allow them to ramp faster than LG can ramp its new 2170 cell lines. It will also likely allow them to ramp faster than the NMC811 supply chain can ramp cathode powder production.
- Establish a relationship with CATL, who will likely be the leading third party battery supplier. This relationship can be leveraged to accelerate short term production again in the future and to complement Tesla's in-house cell production.
- To reduce raw material risk and establish that Tesla can make cells without Nickel and Cobalt if needed (even if the cars are likely inferior).
- Find a use for overcapacity which resulted from Chinese EV companies falling far short of production targets and delaying EV programs over the past year
- Establish a relationship with the leading EV company and leading battery purchaser. This is beneficial both for future business opportunities and for short term share price.
I do not think CATL, Panasonic or LG cells will be a focus on battery day.
I expect Elon to run through the deals and say how Tesla has established relationships with all the key battery cos and how it can accelerate supply whenever they hit cell bottlenecks, but I think the real focus will be on Tesla's in-house cell design which I expect to account for the vast majority of new capacity going forward.
This is normal. Historically it's happened on every new Tesla model. Tesla builds in batches, and if you happen to match an early batch, you get your car first.Been a long time lurker, but posting on a second account to save my bookmark because I'm like 4000 posts behind.
I just received my Model Y delivery notice! Earliest delivery date is March 15. I ordered a Model Y Performance with FSD. I ordered months after the reveal, so I'm not anything close to first in line.
Manager Magazin, a leading German business publication with excellent sources at the Volkswagen board, at VW, Porsche and Audi high level leadership, and at the two biggest shareholder families, the Porsches and Piëchs - has just published a bombshell article.
They are reporting about the cluster-sugar that the Volkswagen ID.3 has become, with a rich supply of anonymous insider sources from within the ID.3 project.
Here's an English translation posted to /r/teslainvestorsclub, it's long but worth reading the whole thing:
...
Employee boss Bernd Osterloh (63) and the IG-Metall parliamentary group remind internally that the VW group missed out on billions in 2018 because of the delayed changeover to new emission regulations - and now fear similar things in terms of CO2 penalties. The group must save 30 grams of CO2 per car in order to achieve the EU targets, as Herbert Diess himself recently said. 30 grams, that would be a fine of around ten billion euros in 2020. Indisputable.
Without the ID.3 CO₂ fines cannot be avoided. Purely electric vehicles will still be counted twice this year [under the 'SuperCredit' rules]. VW would have to sell 100,000 ID.3s in 2020 to meet the targets; this is how they originally calculated. They have now reduced this number; 80,000 must also be enough. The E-Golf and E-up, both of which have a compromising electric performance and are both in deficit, are supposed to make up for the shortfall a bit. Both are currently being squandered with high discounts. This speaks more for panic than for trust in ID.3.
Audis e-tron and Porsche's Taycan could also help, because the CO2 emissions are calculated for the group in Brussels. But there is a catch there too. Audi has already lowered the forecasts for the e-tron. They wanted to sell their electric SUV and a spin-off in 2020 up to 70,000 times. In the meantime, the scenarios have reached a good 40,000; battery experts consider this figure to be wishful thinking, which is how big the battery crisis is.
......
- Note the low production rate of the ID.3 of only 50 per day, almost 4 months after the pompous "start of production" last year. That's 350/week, 1,400/month, 4,550/year ...which falls far short of the 80,000 ZEV units VW needs to make in 2020 to avoid 10 billion Euros of fines. BTW., maybe @Prunesquallor can explain that figure: how can 80,000 units save VW 10 billion euros? That's €120,000 per ZEV unit made - that sounds ridiculously high.
10,000 people working on fixing bugs. That must be absolute horror. How do you even coordinate between so many people? A team of a few hundred engineers and developers would probably make more progress.