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Ford seals its fate .... its business plan in ironic contrast to Tesla.

‘No advantage’ to having battery plant, Ford says
A Trefis analysis from January concluded that Tesla’s Gigafactory is paying dividends. The study, published in Forbes, estimated the automaker’s battery costs fell 45 percent from 2016 to 2019, an average drop of $7,000 per vehicle.

But Ford argues that its reliance on suppliers also could reduce prices.

“It gives us the ability to access the latest technology and innovation across multiple suppliers,” Thai-Tang said. “So I know exactly what the state of the art is from the Korean suppliers, the Japanese suppliers, the Chinese suppliers, and I’m able to compare notes across them maybe better than they can. And then, of course, we have the competitive tension with dealing with multiple suppliers, which allows us to drive the cost down.”

Despite its insistence that the supply base is prepared, Ford has said tight battery supplies would limit the upcoming Mustang Mach-E to 50,000 vehicles globally in its first year of production.

Still, the company is hesitant to lock itself into a certain type of battery, with Thai-Tang citing Toyota Motor Corp. as a cautionary tale.

“They invested to vertically integrate nickel-metal hydride batteries for their hybrids,” he said. “And after spending over $1 billion to do that, the technology shifted to lithium ion, and they were among the last to switch over. I don’t want to put Ford in that position.”
[end excerpt]
What Ford missed is that the nickel-metal hydride batteries relied on patents from Texaco who forbade them to be used in vehicles (with the Toyota exception for the Prius and even then limited battery size). Other than that, batteries are basically just chemical containers and the chemicals can be changed without a lot of alteration to the manufacturing equipment.
 
Ford seals its fate .... its business plan in ironic contrast to Tesla.

‘No advantage’ to having battery plant, Ford says
A Trefis analysis from January concluded that Tesla’s Gigafactory is paying dividends. The study, published in Forbes, estimated the automaker’s battery costs fell 45 percent from 2016 to 2019, an average drop of $7,000 per vehicle.

But Ford argues that its reliance on suppliers also could reduce prices.

“It gives us the ability to access the latest technology and innovation across multiple suppliers,” Thai-Tang said. “So I know exactly what the state of the art is from the Korean suppliers, the Japanese suppliers, the Chinese suppliers, and I’m able to compare notes across them maybe better than they can. And then, of course, we have the competitive tension with dealing with multiple suppliers, which allows us to drive the cost down.”

Despite its insistence that the supply base is prepared, Ford has said tight battery supplies would limit the upcoming Mustang Mach-E to 50,000 vehicles globally in its first year of production.

Still, the company is hesitant to lock itself into a certain type of battery, with Thai-Tang citing Toyota Motor Corp. as a cautionary tale.

“They invested to vertically integrate nickel-metal hydride batteries for their hybrids,” he said. “And after spending over $1 billion to do that, the technology shifted to lithium ion, and they were among the last to switch over. I don’t want to put Ford in that position.”
[end excerpt]
This lays to rest any notion Ford will survive as a stand-alone company.
 
There is strong evidence that China is looking after China's interests see MIC 2025. Made in China 2025 - Wikipedia

It isn't really spelled out in detail there, but China wants to eliminate oil imports that is why Green Energy and Green Vehicles are on the list.

I don't think Russia is bold enough to meddle in Chinese politics, but the are happy to meddle in US, UK, European, Australian etc politics to slow the decline of the Fossil Fuel industry... The Murdoch media empire is following a similar agenda, because their interests currently align.
It is most unlikely that a Chinese media outlet that would dare to criticize the party line, or would stray from the party line...

Currently China and Tesla have a similar alignment of interests both want to accelerate clean energy and transport, for different reasons, Chinese reasons relate mainly to self interest....

While China and Russia are in different camps on energy, their interests may align on other issues.

IMO Tesla and China will win a stunning victory accelerating clean energy and transport, how long the alignment of interests will last is hard to judge, currently Tesla and China need each other, and both want the same outcome....

The world will be a better place when the clean energy and transport transition is complete, US, UK, Europe and Australia will be less divided, however China is likely to emerge as a very dominant player in economic, technological and military terms.

The hope for the future is that the Chinese leadership becomes less combative and more cooperative and/or that the rest of the world becomes more united. The hope is also the Climate Change is not too bad and future generations can handle the problem.

For now getting clean energy and transport done is the priority, and I welcome Chinese help.

USA has to go through a de-empire phase. The UK has been through this process and although painful to some, it has to be a better way of living. The nostalgia does cause problems and is probably prevalent in some other countries such as Russia/USSR.

I often wonder about Belgium, Netherlands, France, Denmark etc and their attitudes to their de-empiring. That's off topic, but I think for investors in Tesla - there has to be consideration of macro / geopolitical risks and opportunities, especially as pro/con attitudes in media translates into political/policy/economic/market effects such as subsidies,taxes and restrictions on ICE.

It seems to me that Tesla is building a world (and not a USA company) that is close to being a movement. Elon has a lot of understanding of the world outside USA and he's lived through momentous and oppressive times in South Africa.
 
Car & Driver clickbait article title: The Adjustment Factor Tesla Uses to Get Its Big EPA Range Numbers

While the title makes you think Tesla is doing something nasty, in truth, it's the OTHER companies that are using the "secret adjustment factor":



This is worded to make it sound like Tesla is taking advantage of some secret loophole, when in fact Tesla is running all the actual tests while other companies are taking advantage of the "30% rule" to avoid having to run additional tests. So, the article is completely biased and backwards in how it characterizes what's going on, even if it's covering the facts properly.



Finally, admitting the truth.

My main take-away from this article is that the other OEMs don't care about how well their EV offerings sell. That is, they have opted to not run some EPA tests that would probably show them with a higher efficiency than the 30% opt-out the EPA provides. Why would they do this except to save a little bit of money at the expense of selling more vehicles?

For what it's worth, every ICE car has to go through all five tests for emissions testing.

There's three ways to report fuel efficiency:

Vehicle-specific 5-cycle method: This is what the EPA would actually prefer, and it uses the results of all five test cycles.
Derived 5-cycle method, using slope/intercept: This is what, since 2017, has been the minimum required for ICE cars using the derived 5-cycle method (and it's worth noting that some cars are required to use the vehicle-specific method), but has been available for longer. Essentially, this provides a scaling of 2-cycle results to be comparable to 5-cycle results, but there's assumptions in this that may not be true. The 30% rule being removed from consideration in 2017 is because of the slope/intercept values changing and the resulting 30% value no longer being accurate as a result.
Derived 5-cycle method, using 30% rule: Since 2017, only PHEVs in charge depleting mode, BEVs, and FCVs can use this.

There is a reason to use the 30% rule other than testing cost (I don't know if BEVs have to go through all five cycles, because they don't have tailpipes to have emissions): if your car is an outlier and the 30% rule is actually favorable to your car.

The derived 5-cycle methods are meant to simulate taking into account the three new tests' effect on efficiency - Cold FTP (FTP-75 but run at 20 °F instead of the usual 68-86 °F), SC03 (which includes a 95 °F air conditioning test), and US06 (which includes high speed and more aggressive driving).

So, let's say a car has uniquely poor aerodynamics - it'll get hit harder on US06 than the EPA expects. Let's say a car has uniquely good winter heating efficiency - it'll do better on Cold FTP than the EPA expects. That affects the real-world efficiency relative to the derived methods by a lot!
 
Its gonna go RED.
Early morning sale.
There was little doubt in my mind TSLA would march back down sometime this morning after the exuberant burst in early premarket. My wild guess over the weekend was today would be flat to negative with no news.
Not yet... But what a swing. 477 to 443, a magic 170$ from high to low.:eek:
Maybe the percentage swings will be a bit extreme as the market adjusts to the split price.
 
Many of the comments on SA are pretty amusing in response to a post-AAPL and TSLA split article. For example:

"I love smooth jazz too. Love Apple too. Also scared away from Tesla all these years.

But I'm gonna be different and strike out on Monday. I'm gonna throw all caution to the wind and buy my very first Tesla shares. The roller coaster ride may make me sick, but hey, at least it's exciting."

"Can’t wait until the morning. I’m buying the crap out of Tesla!"

"And don’t forget SpaceX, the Solar and home battery businesses, and the LA tunnel for transit."

"Excitement?
I'd call it fear for me.
Apple will drop.
Tesla will fly"

"Any benefit of the split is far and away in the 60% rise since the announcement. Tesla is undervalued possibly by 10x if they can execute the most aggressive plan for any large company ever. If they can't it will likely go bankrupt trying or go down 80%+."

"Some stocks make you money, TSLA and APPL make you rich."
 
What Ford missed is that the nickel-metal hydride batteries relied on patents from Texaco who forbade them to be used in vehicles (with the Toyota exception for the Prius and even then limited battery size). Other than that, batteries are basically just chemical containers and the chemicals can be changed without a lot of alteration to the manufacturing equipment.

Are nickel-metal hydride batteries better?

Does this mean that Texaco actually have some value or will patents expire soon?

Best to buy patents (if needed) when Texaco is liquidated so that the liabilities can be avoided.
 
Food for Thought ... from @JPR007 ... makes a case justifying a SP of $3442 in 2020 (thread).

https://twitter.com/jpr007/status/1299926974056423427

And this still assumes that growth in 2021 and 2022 will be 50%. It seems to me that growth in both years will be 100% (so greater than 1 million production in 2021 and 2 million in 2022). This we can predict reasonably accurately from the progress in Shanghai, Berlin and Austin and that Tesla will be production constrained with Model 3, Model Y and Cybertruck, especially with expected cost reductions due to economies of scale, learning curve and localised production.

If we assume higher growth for the next two years then reverting to 50% growth, then we get his predictions pulled forward by about 1.5 years, to mid 2026.

What this means for the share price is that the discounted price would be above $2000 at 10x P/E multiple, at higher multiples (a case can be made for 50x P/E multiple) this could lead to share prices all the way up to $10,000.

This seems incredible, perhaps I have made a mistake (?!?!).

@JPR007 seems to have a math error.

500k * 1.5^9 = 19M vehicles sold in 2029, not 2028. It’s possible Tesla planned 600k for this year (we’re still hitting 500k with shutdown).

But 600k * 1.5^8 = 15M cars in 2028, so that still doesn’t work.

It would take 60% growth to make it by 2028. If I’m correct, that would mean one additional year of discounting back to present vale. I don’t believe he specified his discount rate?

The bigger the company the harder it is to maintain huge growth rates. I wonder if Tesla plans > 50% growth early and tapering down to lower rates later in the decade, to maintain a 50% average through the decade? It certainly looks like 2021 and 2022 might see 100%!

Also selling 20M vehicles at $40k ASP in today’s dollars would be a very difficult feat.
 
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Are nickel-metal hydride batteries better?

Does this mean that Texaco actually have some value or will patents expire soon?

Best to buy patents (if needed) when Texaco is liquidated so that the liabilities can be avoided.
No, they aren't better (at least not the ones that made it to production), but they never really got a chance due to the patent owner and there have been too many developments in other chemistries for them to catch up now. However, the patent did do what Texaco wanted--slow the adoption of battery powered cars.
 
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