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

[st_lopes]

It's been a long time and ongoing vector of attack for Tesla. I've seen enough quality and service issues over the years to know it's not just an isolated incident. As I said too many of these vehicles end up getting media exposure for it to be a rare occurrence. The odds that Munro just happened to get an outlier are rather low.

I didn’t say it was an isolated incident. I asked if you have any tangible data that shows that Tesla’s current quality coming of all lines is disproportionately worse than any other brand.

Or maybe it’s just that nobody makes a video of the honda civic they just bought that has misaligned tail lights?

 

[Bet TSLA]

The problem is because of this, Tesla is started to be positioned as VW of EV. Big volume, inferior quality. Maybe not here, maybe not between you and I, but in China, where they care about this stuff. And sadly, I don't blame them and I don't think it is only going to be China if this problem persist.

I cannot find it now from tweeter, but I remember yesterday Elon tweeted something like "constructive criticism is welcomed." We cannot blindly believe that anything, everything Tesla does is right. That hurts our mission, big time.

That Tesla has "started to be positioned as VW of EV" is your imagination. And you pretending that Tesla has the choice to deliver perfect vehicles or not just by deciding to is ridiculous. They have the choice to deliver what they do, or maybe 3/4 as many perfect vehicles (made up number). So which is better?

I think it's obvious. And I think that they will always be delivering as many vehicles as they can given battery constraints, so build quality will never be the number one consideration. And it shouldn't be. It's a nice to have, far less important than high volume.

This may not apply for the Roadster.

 

[Bet TSLA]

That door was so far out of allignment Sandy was surprised it wasn't binding when opened, and it might not seal well over time. This is not a minor panel gap discrepancy, it was very obvious in the video and would be even more so in person. The out of alignment tail lens might end up leaking. Tesla needs to be better than this, especially at the price point of the Model 3 but really at any price point.

And yet it seemed to work fine. Come back when there's some evidence of malfunction.

Tesla has been having these problems since the beginning, it should have been solved long ago, and at the very least should have been caught by QC.

Yeah. But I think they've had other priorities. Highest volume possible. Good enough rather than perfect.

What percentage of Tesla's deliveries would you like to see them give up in order to be perfect?

 

[Knightshade]

Unless you have QC data that shows Tesla actually has disproportionate QC issues coming off their lines right now, relative to any other brand, we are all just reacting to one YouTube video right now.

Get some real data

Both JD Powers IQS and CRs owner surveys support the idea Tesla has significantly worse quality control issues specifically in Fremont than most other car makers (China supposedly is significantly better)

It's real data- but it tends to be dismissed by certain folks here just as often as any random youtube video (and doubtless there'll be no shortage of disagrees on this post, even though there's nothing here so far but facts).


Personally I find the job posting for the QC guy to set up optical stuff in Fremont, and the poster earlier in the thread who worked in this field mentioning optical is a key to getting this stuff right- as a very good sign Tesla is finally taking whatever is going wrong with QC in Fremont seriously.

 

[Bet TSLA]

Sure, missed by others but ultimately it comes down to the person who did it.

That people’s work has to be constantly checked to make sure they’re doing their job is a problem that exists everywhere. Now we need people to check the people checkers work.

There’s mistakes that can happen and that’s what checks and balances should be for. This, though, is someone not giving a fig.

Disagree. There is no "guy who put the door on" because it's done by robot. And the quality control is done by camera. And it's set to let by what Sandy objected to because it's good enough.

I think the only thing that needs discussion here is what Tesla should do with cars that aren't good enough. Rework is too slow and expensive. Anything that slows down the line costs too much in forgone production. Maybe they should sell them as "scratch and dent" discount items? Maybe they should go to employees at a special price? Maybe they should go to the crusher? Maybe they should turn them into artwork?

 

[Bet TSLA]

It seems the quality of China-made vehicles is superior, though. And those vehicles with fewer cosmetic or perceived quality issues are now going to be dominant in China. I expect quality from the Berlin factory and Austin will be better than Fremont as well. Maybe I'm just overly optimistic here.

Of course it's superior. The factory is the product, and the Shanghai factory is a purpose made product. Fremont is a cobbled together mess, so the vehicles it makes aren't ever going to be as good.

 

[lklundin]

Is it just me or does it look like Tesla are planning to do major increase of the footprint in Shanghai?

Is that enough space for a battery plant? Or semi? Or Model 2?

Slightly different topic, but the canal visible south of GF3 has been made quite a bit deeper - and has now been flooded again.
Some time ago I started wondering if the purpose of this canal work is to allow for barges to transport liquids or sludge or powders (e.g. cell raw materials) from the nearby coast to GF3 - this should be cheaper and faster than via trucks. Here is an older photo,
https://twitter.com/kelvinyang7/status/1276824277984165889

 

[lklundin]

A citizen of the EU can get long exposure to ARK funds like this:
1) Open and fund an account with Interactive Brokers,
2) Buy a call option and sell a put option in the desired ARK fund, both having identical expiry and strike.
3) Profit (?)

The strike price can be selected so the two option's premiums pretty much cancel out - the account will need collateral (cash or other long positions) to cover the exercise.
This is effectively 'synthetic' shares (exploiting the shares vs options equivalence).

I am unsure what happens at expiry (where either the call or the put option will be in the money), whether the shares are actually delivered. In the worst case where this is not possible, the contracts can be rolled to a new expiry date - if need be this can be done indefinitely.

I have learnt that ARK fund call options held in a EU citizen IBKR account and that expired ITM yesterday have caused shares to be delivered to said account. It's unclear why this works but I am hearing no complaints.

So now it's on to step 3)...

 

[CorneliusXX]

here was a huge debacle with lead in paints, infant formula resulting in overgrown baby's head

There are restrictions in Australian supermarkets on how many tins of baby formula you can purchase in one go because of this. Chinese immigrants were clearing the shelves to send it back to China for a huge markup - Apparently there were enough Chinese citizens willing to pay many multiples of the base price for guaranteed quality. It was causing a stir in local papers as locals couldn't buy it. A girl I used to work with back in Oz was making $30k per month doing it. Almost as good as investing in Tesla.

 

[Christine69420]

I stumbled over a youtube of someone being annoyed with the panel gaps on their E class Merc. When I searched for it to show to my brother I could not find it anymore. And I have googled before. So that might be a strategy - poof such videos.

If it's a simple adjustment of a robot to eliminate panel gaps sure just do it.

 

[ammulder]

Can't agree with you here. Those tolerances on the passenger side were simply not acceptable and should never have left the factory floor, especially this far into production. You don't need to be Sandy Munro to see those flaws. It's not just the person who installed the door, and the tail light, it was also the person/people in QC who let it pass, along with anyone along the way who actually looked at the car.

That's fair.

All the same, look at the growth in production from Q2 to Q3 and then again from Q3 to Q4 -- I can easily believe there are some growing pains / corners cut to accomplish that. Hopefully they can take a second to catch up and digest that growth and bring in more QC or at least improve the QC process, whether that means AI or humans or both.

 

[Christine69420]

I have learnt that ARK fund call options held in a EU citizen IBKR account and that expired ITM yesterday have caused shares to be delivered to said account. It's unclear why this works but I am hearing no complaints.

So now it's on to step 3)...

In Norway ARK ETFs are accessible from Nordnet. So I guess it depends on your broker.

 

[st_lopes]

Both JD Powers IQS and CRs owner surveys support the idea Tesla has significantly worse quality control issues specifically in Fremont than most other car makers (China supposedly is significantly better)

It's real data- but it tends to be dismissed by certain folks here just as often as any random youtube video (and doubtless there'll be no shortage of disagrees on this post, even though there's nothing here so far but facts).


Personally I find the job posting for the QC guy to set up optical stuff in Fremont, and the poster earlier in the thread who worked in this field mentioning optical is a key to getting this stuff right- as a very good sign Tesla is finally taking whatever is going wrong with QC in Fremont seriously.

I'm not disagreeing with these statements. In fact, you're highlighting the important part. That Tesla is doing something about it. In other words, this whole topic has no actual bearing on our investment thesis, unless whatever remediation / improvement being put in place doesn't lead to an improvement across those survey sources.

Just speaking from a 2021 Model Y owner perspective... were there fit and finish issues? Yes. Would I have even noticed if it weren't a Tesla and everyone and their mother tells me their fit and finish sucks? No. It actually made me go inspect my 2008 Civic and my in-law's 2016 Kia Sportage, both had visually noticeable panel gap and tail light alignment issues.

In speaking with the head supervisor at the local service center, who had led service centers for several other brands (both luxury and non), was there a disproportionate amount of issues on these cars? No, but because of the reputation and perception, everyone makes a big deal out of things that are entirely within acceptable tolerance of any brand.

For clarity, not saying the Munro example was acceptable, it wasn't. Though I am saying that it should not have left the lot because any basic visual inspection should have flagged that as an immediate remediation requirement.

 

[EVortex]

Tesla could fix the gap issues whether caused by humans or robots. For some reason Elon has not chosen to prioritize the fix high enough to do it. Not sure why they don’t just fix it once and for all, but I trust Elon - I know he has a good reason.

 

[OrthoSurg]

It’s his job to be critical. So no shock he finds things to be critical about. Meh.

If there was a way to track down the worker who put that door on, I’m quite sure they’d be out of a job last week. Hopefully, they’ve since quit or been fired or reprimanded or become more skilled (maybe it was their first day ), orhave decided to do the job properly for which they are being paid.

Personally, I never looked at the panel gaps mon my Model 3. However, I have friend who is a structural engineer and over scrutinized his wife Model 3 and my Model 3. He found out on the left side of my trunk it was making contact between the bumper and the trunk. I would have never noticed, however I understand some people look at that more than I do and they might be lured away from being a Tesla from those panel gaps quality controls.

 

[Carl Raymond]

Energy stocks could pull a Tesla and go parabolic in 2021, Fundstrat's Tom Lee says


"Energy stocks could see a reversal in fortunes this year after a dismal showing in 2020 and stage a parabolic surge like Tesla, Fundstrat's Tom Lee said in a note on Thursday."


It is interesting how Tesla is now being used as an investment by which others are compared.

Are they trying to give us CO2 crisis nightmares? Fortunately I don’t believe a word of that article. Electrification of transport is already booming and won’t stop till the ICE engine is considered a museum item. Fossils may stage a brief last breath recovery, but nobody with any foresight will push traditional (polluting) energy stocks “parabolic”.
It’s like a tug o war with cybertruck on one end and the author on the other.

 

[j6Lpi429@3j]

anecdotally, FWIW my 2015 model S definitely has panel gaps and a few things that are not lining up perfectly. It doesn't really bother me, but I have noticed that when I see a more recent model s (anything post facelift tbh), they do look much more precise than mine.
I have to admit that I'll be pleased that my next car, a model Y, will likely be made in Berlin, not fremont.

I still think one day fremont will be demolished, or sold. Tesla want purpose built factories, not some ICE companies hand-me-downs.

 

[MC3OZ]

Subassembilies likely on the upper floors and feed to the line on the ground floor.

I definitely agree on this, and the general flow of components west to east in GA.

To be clear we are speculating and could be wrong, I'll make this my last post, as I probably crossed over too much speculation 5 posts ago.

If we think back to the tents, they are a horseshoe shape with loading docks on both sides.
At Austin my hunch is they have unrolled the horseshoe to make a single straight-line GA process that flows north to south.

What this means is they can have parallel identical GA lines and parts flowing west to east are used by identical GA stations at each point of the north - south flow.

Considering what I now think might be the big picture, I would have Cybertruck GA lines also running parallel with Model Y lines, my logic here is there may be some common parts used by both. and it is an easier layout to understand.

From my current best guess at the "big picture" if the Cybertruck body is built in the south west corner , it journeys north to get it battery pack and motors, from around the same location as Model Y, then enters GA where Model Y enters after paint. (North)

A reasonable question is did the Austin plans change?

Remember when they were digging the big pit they paused for a while, then the dug it out more.

At the time I thought - Are they adding more stamping?

Because if they got it wrong and dug the wrong size hole initially, it could only be because they reconsidered the logistics.

It is possible Model Y GA was moved from East to West when they decided to expand stamping, (assuming they did).

The obvious question is - Why?

Both Berlin and Austin have at least 8 casting machines there are 2 possibilities:-

1. 2 castings per car, 3,000-4,000 cars per day.
2. 4 castings per car - 1,500-2,000 cars per day.

I think 2 castings per car is the likely best use of casting.

I think Berlin may have more casting than it actually needs for Model Y, they will build a separate Model 3 process as phase 2, and most probably transport the castings within the factory.

My impression is Austin is bigger than Berlin, that may translate to a longer line, broken down into more individual steps, and a faster rate on the slowest non-duplicated step - Say Berlin 1 Min, Austin 20-30 seconds.

So while it is just speculation, if there were factory design changes at Austin, it may be an attempt to lift daily peak production.
This kind of flow uses more land, and perhaps slightly more equipment, but the higher rate of production may make it worthwhile.

 

[ifish]

Is there some functional, as opposed to cosmetic, problem with these minor build issues? Does anybody care other than manufacturing wonks? My guess is that almost nobody even sees these details. I know I would be irritated for about five minutes and then never even notice it again.

And the fix is obvious and no doubt being worked. There are tiny variations in stamped parts, and everything else. Probably the mega casting reduces one area of variation. Clearly there must be automatic choosing going on, where a part that's slightly out of spec gets mated with another that is also slightly out of spec in a way that will compensate rather than exaggerate the problem. The fastening points, whether they be bolts or welds no doubt have a little wiggle room which can be exploited to true things up as well. It just has to be implemented properly, and that means not by people eyeballing things. This is how you make manufacturing better.

I'm quite sure those passenger side problems were deemed acceptable because they work just fine. And I notice that there was comparison only with perfection, not with how similarly priced cars typically are delivered. Doesn't seem reasonable to me. Did you notice how perfunctory Sandy was about perfection on the driver's side? He expected perfection.

So ask yourself about what the mission is: how is it served by slowing things down to achieve perfection? I think what you always want is to be as fast as possible while being good enough, and working on getting better in all ways. But cosmetic perfection deserves to be way down on the list of necessities. It's a nice to have, but good enough will do.

I agree with you, I personally would never have noticed that gap (thats a nitpickers obsession) it seems like people always need something to complain about

 

[shrspeedblade]

I agree with you, I personally would never have noticed that gap (thats a nitpickers obsession) it seems like people always need something to complain about

It's what they complain about when you are building a car they said was impossible 10 years ago!