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Let's take a moment to marvel at this:
- Tesla is expanding Fremont's production capacity.
- Building out the Kato Road facility
- Significantly expanding Shanghai
- Building a new facilty in Austin
- Building a new facilty in Berlin

..and

- they are not funding this with a Capital Raise
- they are not funding it with Debt
- they are not drawing down their Cash on the balance sheet.

Tesla is funding all this with cash generated from Operations. Yep, the company that "loses money on every car it sells", generates enough cash each quarter from operations to fund this massive expansion.
Even after funding all these Capital Expenditures, they still have cash left over (Free Cash Flow). In fact, since Q2 2020, they will have generated Free Cash Flow of $4.4B by Q2 2021.

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Unappreciated how important this point is.

Most of the modern auto OEMs need to go to the capital markets just to maintain steady state operations with 0% revenue growth. Many of them are bloated with debt and servicing costs eats up more than 100% of cash flow.

Now they need even more money to fund EV switchovers.
 
Cathie Wood told me this is how Wright's Law works. 😂

Actually it is but this is not the best example of Wright's law because high end cars have too limited of a market to fully demonstrate Wright's Law in action. The new Model S &X have been re-engineered and that involves re-investment. So the price goes up. As those investments are amortized over time, prices will come back down. The net result is a much better products (now) with falling prices over time.

Short-term fluctuations do not negate the overall trend and the overall trend is best seen on the components like the batteries, motors and controllers, not the entire car, especially a $140K car with small potential market share.
 
China demand never was down, so your statement should have been "If China demand WERE significantly down. A statement contrary to fact requires past conditional. Since this is a very common error, even among many native English speakers it is good to correct that use because it is often necessary when describing FUD.
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Noted, but fact is Q2 China deliveries were 11% lower than Q1 (and the March - June comparison shows -20%). Not down 50% like the FUD said, but still down a little bit.
 
Are you comparing them when similarly equipped, or are you comparing the cheapest, unoptioned, ID.4 to the cheapest Model Y?
Comparing the 77kWh ID.4 to the LR Model Y. Given how crazy complicated German car options / extras are and how different Teslas' equipment list is, I think it is pretty futile to try to compare exactly like for like. I once spent hours for an article on BMW 3 series, Mercedes C lass, Audi A3/4 vs Model 3 and it was a pointless effort.
 

They're exporting ~33% of vehicles produced in Shanghai (quite a bit to Europe, right?)? That's...quite a lot for a factory that they said would be built to fully service the Chinese market, and the factory isn't even up to the full planned capacity yet.


We expect construction to begin in the near future after we get all the necessary approvals and permits. From there, it will take roughly two years until we start producing vehicles and then another two to three years before the factory is fully ramped up to produce around 500,000 vehicles per year for Chinese customers. Tesla is deeply committed to the Chinese market, and we look forward to building even more cars for our customers here.

So why are they exporting nearly 1/3 of vehicles produced on a ~360k annual run rate?

If it's to supply more in Europe, that, imo, tells me Giga Berlin is much farther behind schedule than what's out there. Otherwise, why send vehicles to a market that will have its own factory in ~3-6 months?

If it's not, why are they ok with losing market share in China (assuming local demand is there)?
 
Has this been shared from the City of San Jose about their Boring Loop project proposal?


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You can see all (20) the proposals at the following including preliminary evals spreadsheet as of Aug 2020. A new report is due out in Aug 2021.
It would be awesome if TBC could get a chance to build it out.

 
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“ Ford clearly borrowed a few ideas from Tesla: panoramic fixed-glass roof, unconventional door handles, vertically oriented center display. While these highlights aren't particularly original, Ford managed to make the cabin design feel fresh without resorting to gimmicks or trying to pass off cost-cutting measures as innovation the way Tesla does. And unlike in, say, a Model Y, there's no learning curve for driving a Mach-E. The gear selector doesn't double as the cruise-control switch, like it does in Teslas. There's a simple instrument cluster in the driver's line of sight.”
Yes, it took me months to learn to push down once for Drive, push down twice for Autopilot. Or is it the other way around? I still get confused about that. :rolleyes:
 
If it's not, why are they ok with losing market share in China (assuming local demand is there)?
There is demand in Europe and China. Either lose demand in China or Europe...pick one. Tesla chose to ship to Europe.
Otherwise, why send vehicles to a market that will have its own factory in ~3-6 months?
Maybe EV credits are more lucrative in Europe than in China. I am not sure what the answer is but I don't think it is demand. The decision to ship to Europe was determined months ago, you don't suddenly decide to pivot to Europe on a whim, there is much planning when exporting to other countries related to regulatory requirements and logisitics. With constained production, I believe Tesla needs to focus on keeping the EU market strong and has time to grow the China market in time.
 
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I have found Tesla_China_Analyst to be relatively accurate. I am certain he has a source within Tesla Shanghai.
When asked why were Tesla local sales "locked" at xxx deliveries with still a few days left in the Qtr (he had tweeted the June number on June 24), he did not state that it was related to Demand. He stated production and logistics:
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I would speculate that there are a mixture of issues leading to Shanghai exporting more now. First and most FUDy would be lighter Chinese demand. That might be the case, but really hard to say where demand fully lies there at the moment. Once the full product lines are up and running (including the 25k Model), we might have a real idea where Chinese demand fully stands with Tesla. I don't believe this to be the case, but not outside the realm of possibility. First glance it looks a bit light in Q2, but other reasons could be easily playing into that. On those other reasons... they can simply get more for 3/Ys in Europe than they can in China. That bit of extra margin might be making it worth it. Which the delays in Berlin might be triggering some of this (internal projections on profitability when there are upward pressures on parts cost). Tesla likely wants to get more recognition in Europe and demonstrating the demand there. Along with that, they can put some extra pressure on German authorities by simply showing they can import the Y instead of exclusively building it in Berlin.
 
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Anyone know if the European Model Y and the Chinese Model Y are exactly the same? The charge port differs doesn't it? Anything else? Just to illustrate that the choice to go with European or Chinese productionis decided some time (how long is some - a week/month/quarter ?) before production happens. So yeah if they are shipping to Europe from China I'm guessing this was decided in late Q1.
 
I’m convinced Team Tesla executed a 3-d chess fork tactic. With one move (MIC MY to Europe) they attacked VW EV sales (the cartel revelations make this especially sweet) AND German bureaucracy (GigaBerlin delays resulted in Chinese-produced MY rather than German).

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Did you say what I think you said!
So half of your idea is that Elon is sticking his finger in the German bureaucracy's eye by bringing in Model Y's that were made in China to sell in the place of the Model Ys that were supposed to be selling from the Berlin Gigafactory.
I think you think good.
 
Or maybe they're building the sales pipeline and enthusiasm in Europe by sending more cars there, in preparation for the Berlin factory coming on line. For a company that doesn't advertise, the word-of-mouth sales ramp up takes longer, and starting now to build it makes sense... plus making sure the logistics pipeline starts to grow smoothly.
 
Maybe EV credits are more lucrative in Europe than in China. I am not sure what the answer is but I don't think it is demand.
They exhausted pent-up Chinese demand for the Y LR. Otherwise they wouldn't have launched Y SR in China. But SR uses LFP and they have a contract with LG for NMC. So they export some NMC Ys to Europe. They may simultaneously reduce 3 SR exports to Europe, freeing up some LFP supply for more Y SR in China.

It's quite the balancing act.
 
They're exporting ~33% of vehicles produced in Shanghai (quite a bit to Europe, right?)? That's...quite a lot for a factory that they said would be built to fully service the Chinese market, and the factory isn't even up to the full planned capacity yet.




So why are they exporting nearly 1/3 of vehicles produced on a ~360k annual run rate?

If it's to supply more in Europe, that, imo, tells me Giga Berlin is much farther behind schedule than what's out there. Otherwise, why send vehicles to a market that will have its own factory in ~3-6 months?

If it's not, why are they ok with losing market share in China (assuming local demand is there)?
I stated this a year ago...
The growth strategy of Tesla is such that they will take cars that could be sold locally (at the time I think we were discussing fremont) and use those cars to "seed" other markets. By those models appearing in the other markets demand is created. Without advertising this seems to be one of the few ways to increase sales into the future at a desired scale.
MIC Model Ys will create a healthy market for GigaBerlin, even if GigaBerlin ramps up very fast.
 
NPR - hour ago: GM Is Recalling Almost Half A Million Pickups Because Their Side Air Bags Can Explode

Excerpt:

Documents posted Friday by U.S. safety regulators say the air bag inflator can rupture or the end cap can fly off on both sides of the trucks. Documents say three inflators ruptured in 2015 Silverados last month, one in Florida and two in Texas. All three trucks were unoccupied at the time, and GM says it has no reports of injuries.
 
They're exporting ~33% of vehicles produced in Shanghai (quite a bit to Europe, right?)? That's...quite a lot for a factory that they said would be built to fully service the Chinese market, and the factory isn't even up to the full planned capacity yet.




So why are they exporting nearly 1/3 of vehicles produced on a ~360k annual run rate?

If it's to supply more in Europe, that, imo, tells me Giga Berlin is much farther behind schedule than what's out there. Otherwise, why send vehicles to a market that will have its own factory in ~3-6 months?

If it's not, why are they ok with losing market share in China (assuming local demand is there)?
SR+ Model Y in China (cheap LFP cells, sourced locally, likely very high margins)
LR Model Y in Europe to whet the whistle (more Teslas experienced, more demand follows).

Create a buzz, youtube/magazines & later "China vs Berlin Model Y - we test..." type articles/videos. waves of promotion, all for free!

Also shipping/port capacity seems stretched for various reasons, so export highest specs to Europe while China partially switches to SR+ (driven miles generally low in China).

Another 1200+ being delivered to Australia, Singapore & Israel out of the normal delivery wave (made in June, delivered in July), I suspect because of the shipping/port problems - Tesla will be getting ships while they can

Edit: Has a car carrier HGV (road) limit been reached? Shuttling to port quicker than long distance in-China deliveries? I thought China might use trains, but perhaps routes/costs aren't great. Ships generally thought of as cheaper transport than rail or road but cars may be different & shipping routes much longer.
 
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