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

[TheTalkingMule]

....however I think the fastest transition to EVs will occur when people know that EV supply will be there to meet the needs of customers - and that is helped by subsidies.

And how does that work? Tesla has a standing order for any and all battery cells that can be produced by anyone, and this is the sole limit on production for 2022 and the reason another 2 gigafactories aren't breaking ground today.

How will an EV subsidy in that environment increase EV supply?

Not that I have a problem with even a terrible EV subsidy. Even this one. Even with the union nonsense. It makes EVs cheaper and that may be helpful in a few years to make sure all non-believers are killed off and that oil subsidies don't provide a lifeline to ICE.

It's not gonna make more EVs tho.

 

[ABCTG]

Agreed 100% 12/10 in China = 12/9 in US

For the record, Sawyer's Tweet twitter.com /SawyerMerritt/status/1468615730434383878
and the original video link on Weibo m.weibo.cn/u/3615027564#&video

Edit: translation of Chinese Titles from The Wolf of Sesame Street @buzzyal

1. In-house research
2. Precision
3. In order/In line
4. Efficiency/productivity
5. Go GIGA, let's expose the "excellent" theory/law of Shanghai Giga Factory
6. 12/10, released soon, "special/tesla" coming soon

Tweet author added:
Please note on the last line in chinese is a bit tricky as coming soon is usually "敬請期待". Tesla replace the "敬" word with "特". 特 in chinese is the first word of Tesla (特斯拉), and it can also mean special (特別). So expect maybe a special tesla? tesla 2 perhaps?

View attachment 742021

Could this be related to the new expansion to be built next to the vehicle loading area?

The new phase of expansion will begin this month, and the location will be on the east side of the new car parking lot. Perhaps next year, the production capacity of GF3 will be Tesla's highest plant.

Right next to the parking lot of the new Tesla car, it is currently waiting for the ground to be compacted.

 

[perwis]

Model Zero. Nothing matters.

S3XYZ

 

[StealthP3D]

Pre orders are great when you need to make sure you can fill the channel with orders before you start production, but at this point it’s clear the demand is there.

Tesla pre-orders were never to prove demand, Tesla has been confident of demand and known what price points they need to hit on all their offerings without taking pre-orders. Sure, it's one more data point that strengthens their analysis but the primary reason for revealing new models well in advance is for publicity. It gets people thinking, planning and saving for their transition to EV so the buyers are ready when the car is. It also gave early notice to legacy auto they had better get off their EV duffs.

I think the new compact will be no different but I'm not sure of that because sometimes strategies change. Tesla could decide at any point they are no longer going to give the legacy manufacture an early peek at what is coming down the pike because those manufacturers have decided to become irrelevant. That there was a time when it was a good idea to nudge them in the right direction but now it's too late, they are no longer useful in the transition to electrification, they are even slower than Tesla assumed, now it's time to kill them.

To be clear, Tesla will likely continue announcing new models well in advance but, if they stop doing this, if they spring the compact on us at the last possible moment, that's how you will know Tesla has decided legacy auto's time has come. Now it's a fight to the death and there will be no question who will remain standing. Not even the smallest doubt of who will be the victor.

 

[willow_hiller]

没有
Méiyǒu

Don't want to get pedantic, but that's literally "have not."

零 is a better translation. "Líng"

More like "zero" "null" "nil" and "nothing."

 

[hitchhiker]

How do you say nothing in Chinese?

I don't speak Chinese, so I often say nothing in Chinese.

 

[Dancing Lemur]

Model Zero rumors > stock split rumors

But…I agree that it’s unlikely Tesla China unveils the new model this week. There’s just more chance of that than the Nothing that’s happening on 12/9-10, depending on your side of the International Date Line.

We don’t talk a lot about the folks managing China (or know much about them), but they are absolutely killing it. China is responsible for an outsized piece of the profit pie compared to Fremont. Their capacity expansion, line efficiency, and local parts logistics are printing money for Tesla (and us). Here’s to those unsung heroes, and I hope they are appropriately compensated.

Maybe they’ll announce that the China design facility is totally up and running and will show the new model at some point in the future, but if they do so now, it would be on the order of Apple “One More Thing” magnitude.

And a much bigger deal than Hertz.

 

[Lessmog]

Don't want to get pedantic, but that's literally "have not."

零 is a better translation. "Líng"

More like "zero" "null" "nil" and "nothing."

OT:
Reminds of the pocket travel parlor translating "no thanks" as "I already had a cup".
It's all in the context, innit?

 

[thx1139]

In case anyone has any confusion about how Elon feels regarding BBB…

https://twitter.com/x/status/1468685044239814666

So took a quick look at the study and the here are some key things.

• PWBM estimates that H.R. 5376, the Build Back Better Act, as written would increase spending by $2.1 trillion over the 10-year budget window and revenue by $1.8 trillion, for a 10-year deficit of $274 billion.

So hmm this says increase debt by $274 billion over 10 years. Well how does debt increase by 24%? Well it presents an alternative scenario where all the temporary measures (EV tax credit is one) are made permanent. Also reading the text GDP falls because more people will have healthcare and wont have to continue to work until they drop dead to maintain healthcare. Also the debt increases by 24% in 2050.

• In an alternative, illustrative scenario in which all temporary provisions in H.R. 5376 are made permanent, spending would instead total $4.6 trillion over the 10-year budget window. In this scenario, by 2050 federal debt increase by 24.4 percent and GDP would fall by 2.9 percent relative to current law.

People are owning Elon after this post by pointing out temporary provisions that indeed did go away including the previous $7500 tax credit for buying Teslas.

 

[Accident]

D-bag reporter on CNBC now talking about last winters issues in Texas. Let's see if they mention storage....

Lol.....pretty damn accurate. Basically the state has done nothing and they're hoping BBB infrastructure spending will pay for all their incompetence.

Ripped "independent" Texas for not taking action. Suggested $200M for generators would be cheap and at least keep the power on for water pumping, etc....

Maybe something other than 1985 solutions will be considered around 2030. Zero mention of battery storage.

Tesla has a 100 MW battery storage project in Texas and there is currently a total of 1164 MW of installed battery capacity in the state.

There are multiple projects that have already been approved and it's expected that by the end of 2022 the total battery capacity to surpass 4000 MW which might make Texas the leader on battery capacity.

Most of the new energy installed capacity comes from wind power near the coast which has been more constant and requires less energy storage to avoid the "duck curve"

 

[FS_FRA]

Don't want to get pedantic, but that's literally "have not."

零 is a better translation. "Líng"

More like "zero" "null" "nil" and "nothing."

I’ll be sure to chastise Google translate appropriately

 

[JRP3]

In case anyone has any confusion about how Elon feels regarding BBB…

https://twitter.com/x/status/1468685044239814666

I'm no economist and have not studied this specific topic but his concern about debt seems misplaced, specifically considering MMT, (Modern Monetary Theory).

 

[jhm]

These item's are not mutually exclusive. People can delay purchasing an ICE, but only for so long if there is no EV alternative. I think you are focusing on medium term impacts rather than long. The best thing in the long term is for EV production to ramp as fast as possible so the "delay" dip doesn't get unwound at a future date.

I'm not saying the current subsidy is well planned, or that I agree with it in it's current form - however I think the fastest transition to EVs will occur when people know that EV supply will be there to meet the needs of customers - and that is helped by subsidies.

I'm simply trying to redirect the emphasis. I'm calling for an end to ICE production in 5 years, which is merely consistent with net zero by 2030. That pretty short term, but if accomplished automaker would ramp up EV production very fast. The long-term impact is that we still have a chance at 1.5 degree climate change.

Biden is now calling to phase out ICE production by 2035. That is way too slow to hit net zero by 2050. ICE vehicles made in 2035 will still be spewing CO2 all the way out to 2060.

 

[CorneliusXX]

I have no desire to get into a full-blown discussion of the net result of this kind of legislation

Then don't write a 500 word reply .

As just one example, if it causes GM to ramp small battery hybrids into the millions and sell them profitably at low prices, like hotcakes, because they will be super cheap with a large subsidy and a small battery, it will not only increase traffic pollution as more people are able to afford to drive to work in their own ICE (cheap PHEV) car, but it could also cause an inefficient manufacturer that would have otherwise folded to remain in business. This manufacturer has an ICE production capacity measured in millions of units per year which will be subsidized to continue cranking out ICE vehicles, hybrids and gas guzzlers alike. All brand new with 10-15 year lifespans. Subsidies create market distortions that make the market less efficient at responding to the needs of the market. This is only one negative impact of many that I can see.

I've also said I don't like the current version of subsidies - for the very reason you mention - but this response is again limited. Subsidies do drive change. GM might pump out crappy hybrids, but the incremental exploratory nickel miner who couldn't get funding now can because the demand story is improved, the company making cast parts for drilling machines now looks to enter the EV segment, the startup that has an interesting ideal for a more efficient way of concentrating lithium now gets funding - and on and on it goes. You are looking at the first order effects and not the secondary and tertiary effects. The net effect of subsidies on this grand scale will be to accelerate investment in and production of EV's - which will does accelerate the ultimate transition to EVs.

If non-auto industry people (like most of us on TMC) saw this transition coming years ago, then those in the industry who resisted it (and are still resisting it in a back-handed way) should be left to pay the price for their delay and pass the reins to companies with the foresight to be responsive to market needs. This is why capitalism is so good. Further, every automaker had equal access to the original tax credits for their EV customers. The new bill doesn't even grant that!

I don't want these jerks to succeed any more than you do - however there is only an end to ICE when there is enough EV's to satisfy demand - anything that accelerates that is a good thing.

It's not a problem for the American auto fleet to age while EV and battery production volumes rise to meet the needs. Indeed, it will be an environmental disaster to have millions of newer, perfectly useable ICE cars that no one wants because they became uneconomic to operate, are slow and clumsy, and smell toxic. Let's let the ICE cars that have already been built wear out, the companies who built them go bankrupt, and those companies who demonstrated innovation, foresight and good planning can take over the reins. We need competence running the critical infrastructure that is our auto-manufacturing industry, not subsidized, bloated incompetence.

It is not a problem for a few years, people can put up with older vehicles for a while - but there is a limit - the more certain path to the transition is to accelerate investment in and production of EVs. Those ICE vehicles will get scrapped at a younger average age if there is EV supply to meet demand (particularly with the excellent cost decline curves of batteries outcompeting used ICE vehicles). People will keep buying new vehicles and if there aren't EV's to buy then they will buy ICE vehicles - regardless of the environmental disaster.

I'm far from a person who disagrees with all subsidies, subsidies really can be used to encourage behavior that benefits us all, but they need to be used very judiciously. It doesn't mean subsidies are good if they subsidize production of things you believe in. It's actually complicated. And the proposed subsidies were proposed for the wrong reasons which is a good clue that they won't have the result I think you want.

I do hear your argument - but from what you have said, I disagree that the lack of the proposed subsidies (while not removing oil and gas subsidies) would accelerate the ultimate transition to EVs. It's highly unlikely that people will continue to drive their ICE vehicles into the ground while waiting for an EV - Remember that will all of Elon's ambition he only hopes to reach 20% market penetration by 2030 - where is the other 80% going to come from? If these are the only subsidies on the table then it is better to get them than not.

 

[jhm]

Innovator's Dilemma is real.

https://twitter.com/x/status/1468649148459143170

Lemme guess. 200k Lightning per year is enough reg credits so that Ford can keep selling over a million gas and diesel trucks each year till 2035.

 

[thx1139]

I'm no economist and have not studied this specific topic but his concern about debt seems misplaced, specifically considering MMT, (Modern Monetary Theory).

Especially since it is for 2050 if everything made permanent. EV credits permanent, solar panel programs permanent, etc. etc. Also I dont see if it is saying it is in 2050 dollar value or 2021. If it is 2021 that is no big deal at all. So what if debt us 24% more, how much is national net worth at the time. it baffles me that Elon is against spending to combat climate change. Also as I said before a big part of the reason it goes up 24% is people working less and people retiring. Isnt he also trying to replace workers with robots. Cant people also be OK with people retiring rather then working until they drop dead.

 

[CorneliusXX]

And how does that work? Tesla has a standing order for any and all battery cells that can be produced by anyone, and this is the sole limit on production for 2022 and the reason another 2 gigafactories aren't breaking ground today.

How will an EV subsidy in that environment increase EV supply?

Not that I have a problem with even a terrible EV subsidy. Even this one. Even with the union nonsense. It makes EVs cheaper and that may be helpful in a few years to make sure all non-believers are killed off and that oil subsidies don't provide a lifeline to ICE.

It's not gonna make more EVs tho.

My thoughts are as follows. And it should probably be my last comment on the subject before it derails the thread.

Tesla has a standing order, but not every OEM does. If I was a supplier and I knew one company would purchase my supplies I might consider investing in R&D and production, however if I knew that 5 OEMs were going to be clamouring over what I produce then I'd definitely invest.

It's the marginal impact that I think will have the largest effect - turning researches/manufacturers/miners that were sitting there thinking EV work is a decent option compared to the other items they could invest in into a core focus. Many researches/manufacturers/miners will already be interested in working on EVs but if the % of them increases from 50% to 80% due to more certain demand for their products then the net result will be to accelerate the transition.

 

[thx1139]

Lemme guess. 200k Lightning per year is enough reg credits so that Ford can keep selling over a million gas and diesel trucks each year till 2035.

Problem is people wont continue buying the gas and diesel vehicles. To me the 2035 number is talking point. S curve will make it so that people wont want gas or diesel in 2035 and the collapse of new gas and diesel vehicles will make it so that gas and diesel stations will collapse causing people to get rid of them even sooner.

 

[MP3Mike]

Lemme guess. 200k Lightning per year is enough reg credits so that Ford can keep selling over a million gas and diesel trucks each year till 2035.

200k isn't per year, that is the total for 3 years... (I think their current plan is 40k in 2022, 80k in 2023, and 80k in 2024.)

 

[H Mak]

Now THAT is what I call a ramp! Thanks for compiling this @The Accountant. I love tables like this that demonstrate a clear trend. So much more useful than dwelling on a single month. To go from producing 20 odd thousand cars at the start of the year to 50 odd thousand at the end is very, very impressive.

And another thought. At that rate, Shanghai's final figure will be not that far off the production figure for the whole company last year.