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

[Artful Dodger]

Warren Redlich makes the case for a 'Tesla Giga Osaka' announcement within a year

Tesla now has Gigafactories in 3 of the 4 largest car markets on Earth:

1. China
2. N. America
3. Europe
4. Japan

Cheers!

P.S. this whole extended talk by Warren is well worth the time (esp. @ 1.25x)

 

[Favguy]

Warren Redlich makes the case for a 'Tesla Giga Osaka' announcement within a year

Tesla now has Gigafactories in 3 of the 4 largest car markets on Earth:

1. China
2. N. America
3. Europe
4. Japan

Cheers!

P.S. this whole extended talk by Warren is well worth the time (esp. @ 1.25x)

He can make the case, but I just can't see the Japanese allowing this at all. It would be a huge threat to the domestic car industry that they know is already in deep trouble. Japanese government is also deeply corrupt and very much influenced by big Japanese auto, much more so than elsewhere.

 

[Artful Dodger]

He can make the case, but I just can't see the Japanese allowing this at all. It would be a huge threat to the domestic car industry that they know is already in deep trouble. Japanese government is also deeply corrupt and very much influenced by big Japanese auto, much more so than elsewhere.

No more likely than Germany was 3 years ago. Then recall that the former Chief Investment Officer of Japan's Gov't Pension Investment Fund (the largest sovereign wealth fund in the World) was appointed to Tesla's Board of Directors in Spring 2020:

Hiro Mizuno | Tesla Investor Relations​

Japan needs to stay relevant. Toyota isn't going to lead them there. Japan needs Tesla. It's a simple truth that Japan is COMPETING for the next Giga Factory with the likes of Beijing, Seoul, and Bengaluru.

My money's on Japan.

 

[BioSehnsucht]

I'm not sure the savings in building "locally" in Japan are worth it, versus doubling down in China. The total market is 4~5M a year in Japan, a bit over 1M in South Korea. For it to make any sense they'd be targeting to build 1-2M for a given factory I would expect, and since they're unlikely to grab 20-40% of the domestic market (I'd be surprised if they hit 10% even with a smaller "Model 2"), this seems like it would rely on shipping cars anywhere - just like they would from South Korea (similar problems to Japan but even smaller domestic market), vs just adding on to China. Plus I'm not sure there's any available land of the right contiguous shape and size to build a GF in Japan or South Korea.

Even Australia would be mostly exporting if they built there (similar size domestic market to South Korea, looks like), but at least there's the advantage of plenty of land and locally sourced Lithium.

It probably makes more sense to keep adding factories in China to cover the rest of that region of the globe. New factories are probably going to be places like North and possibly Central/South America, the EU (possibly including the UK, if they can sort out the Brexit complications to vehicle production / exports), and maybe someplace like India (but they have lots of issues for foreign companies, etc).

If we're mostly concerned with "high availability" of factories via the method of "redundant governments" (i.e., trying not to put all eggs in one basket aka China), then I would pick Australia over South Korea or Japan any day of the week.

 

[UnknownSoldier]

I would not build anything in China ever again unless the government could make actual assurances they won't close the entire country down every time there is a pandemic. Continuing to add critical manufacturing assets in a country run by this government is absolute lunacy.

Giga Bangalore never looked like such a good idea until today.

 

[Baumisch]

If we're mostly concerned with "high availability" of factories via the method of "redundant governments" (i.e., trying not to put all eggs in one basket aka China), then I would pick Australia over South Korea or Japan any day of the week.

I'd vote for redundancy over concentration no matter which country we're talking about.

(nice Nickname btw)

 

[ZachF]

I'm not sure the savings in building "locally" in Japan are worth it, versus doubling down in China. The total market is 4~5M a year in Japan, a bit over 1M in South Korea. For it to make any sense they'd be targeting to build 1-2M for a given factory I would expect, and since they're unlikely to grab 20-40% of the domestic market (I'd be surprised if they hit 10% even with a smaller "Model 2"), this seems like it would rely on shipping cars anywhere - just like they would from South Korea (similar problems to Japan but even smaller domestic market), vs just adding on to China. Plus I'm not sure there's any available land of the right contiguous shape and size to build a GF in Japan or South Korea.

Even Australia would be mostly exporting if they built there (similar size domestic market to South Korea, looks like), but at least there's the advantage of plenty of land and locally sourced Lithium.

It probably makes more sense to keep adding factories in China to cover the rest of that region of the globe. New factories are probably going to be places like North and possibly Central/South America, the EU (possibly including the UK, if they can sort out the Brexit complications to vehicle production / exports), and maybe someplace like India (but they have lots of issues for foreign companies, etc).

If we're mostly concerned with "high availability" of factories via the method of "redundant governments" (i.e., trying not to put all eggs in one basket aka China), then I would pick Australia over South Korea or Japan any day of the week.

Xi is taking China down the same path Putin is taking Russia. Tesla already IMHO has too many eggs in the China basket and it might come back to bite us if Winnie the Pooh gets his fifis hurt after Elon tweets the wrong thing and decides to confiscate Giga Shanghai outright.

I think people here severely underestimate the probability of CCP related black swans. Xi is changing China for the worse at a rapid pace.

 

[mongo]

I would not build anything in China ever again unless the government could make actual assurances they won't close the entire country down every time there is a pandemic. Continuing to add critical manufacturing assets in a country run by this government is absolute lunacy.

Giga Bangalore never looked like such a good idea until today.

So, to misquote Lloyd, is your position: "I don't want to sell anything, buy anything, or process anything [in/ from/ to China]. I don't want to sell anything bought or processed, or buy anything sold or processed, or process anything sold, bought, or processed, or repair anything sold, bought, or processed [in/ from/ to China]." ?

 

[Singuy]

Man you guys are ridiculous. I can pull up people saying "thank god we have giga shanghai, F California" when California went into full lockdown for what looked to be indefinitely. Now everyone is like "F China".

I honestly feel like this is probably the smallest blimp for Tesla. The Chinese will work double or triple time after the lockdown is over. These are the hardest working people I know and will make up the difference and they are expected to. I am not talking about Giga Shanghai either, but for all related supply chain. The amount of suffering the Chinese can endure just to get ahead in life Westerners doesn't even know. I have seen buildings full of 20-40 people living in a 1500 squareft apartment trying to save money and get ahead working 14 hour days in China. I have yet to meet a Chinese immigrant in the US who are not wealthy because we all know the amount of poor living standard and hrs work people are willing to endure to create their wealth. I lived through it with my parents and everyone in our community did exactly the same...like not turning on the A/C in FL, everyone having 3 different jobs, no going out to eat, living with roommates, had bugs and roaches in our apt..I had fleas growing up...etc etc.

 

[ZachF]

Man you guys are ridiculous. I can pull up people saying "thank god we have giga shanghai, F California" when California went into full lockdown for what looked to be indefinitely. Now everyone is like "F China".

I honestly feel like this is probably the smallest blimp for Tesla. The Chinese will work double or triple time after the lockdown is over. These are the hardest working people I know and will make up the difference and they are expected to. I am not talking about Giga Shanghai either, but for all related supply chain. The amount of suffering the Chinese can endure just to get ahead in life Westerners doesn't even know. I have seen buildings full of 20-40 people living in a 1500 squareft apartment trying to save money and get ahead working 14 hour days in China. I have yet to meet a Chinese immigrant in the US who are not wealthy because we all know the amount of poor living standard and hrs work people are willing to endure to create their wealth. I lived through it with my parents and everyone in our community did exactly the same...like not turning on the A/C in FL, everyone having 3 different jobs, no going out to eat, living with roommates, had bugs and roaches in our apt..I had fleas growing up...etc etc.

Chinese people are awesome.

Their leader is a horrific SOB though unfortunately, and is directing all that hard work to terrible ends.

 

[Singuy]

Chinese people are awesome.

Their leader is a horrific SOB though unfortunately, and is directing all that hard work to terrible ends.

The leaders are not investing billions into the Pacific and Africa for economic prosperity for themselves just so they can crash everything like what Russia became. One thing is blatantly obvious is that the Chinese leadership cares a whole lot about the economy as they see this as real power in current times. The truth is always somewhere in between. The thought of having zero covid just to look good while people riot on the streets is a stupid look and it's an embarrassment. The healthcare infrastructure in China most likely couldn't handle even 0.01% of the sick from Covid. Bench sitting IV treatment is like a thing in China as beds are very limited and this was before a pandemic. My parents run in and out of the hospital most of their lives and it's a busy cluster F in there at all times. I still remember my mom got a bench to sit even though she was in so much pain she couldn't even move. One of the problem is people there ONLY want to seek out medical help from the well known established hospitals while some small newer hospitals are less busy.

 

[nativewolf]

He can make the case, but I just can't see the Japanese allowing this at all. It would be a huge threat to the domestic car industry that they know is already in deep trouble. Japanese government is also deeply corrupt and very much influenced by big Japanese auto, much more so than elsewhere.

I second this. I can't see Japan inc going for this. In fact ...the opposite.

 

[InTheMiddle]

Man you guys are ridiculous. I can pull up people saying "thank god we have giga shanghai, F California" when California went into full lockdown for what looked to be indefinitely. Now everyone is like "F China".

While I haven’t been a participant of what you’re describing on this forum, I have observed the same but do not view it as ridiculous at all; rather, it is a sign of consistency and non-hypocrisy. The action taken is what is being judged for rightness or wrongness, not the government taking the action. When “Govt A” was taking an action that some here disagreed with and “Govt B” was not, those people decried A and cheered B because of the actions taken. When those two governments switch and now B is doing the action that some forum participants here previously decried, I would absolutely want / expect those forum participants to change their commentary r.e. “Govt A” and “Govt B”. (Obviously no two scenarios / set of actions are exactly identical, but at times they are similar enough to compare, of course.) The alternative to what you call “ridiculous” would be people who always cheer / decry the same government regardless of actions, and that never works out. People should all judge the actions taken (by governments, people, companies, etc) and not blindly / consistently cheer the same entities regardless of the actions they take that they decried others for taking.

 

[AudubonB]

Concocting Inventory

The Census Bureau provided some updated inventory estimates about wholesalers, including its annual benchmark revisions. As to the latter, not a whole lot was changed, a small downward revision right around the peak (early 2021) of the supply shock which is consistent with the GDP estimates for...

alhambrapartners.com

TLDR: inventory build is happening in US - > due to lower consumer demand -> however, Fed is unnecessarily hawkish and end up raising rates into a recession.

If we see a couple months of lower Inflation readings, we should stop seeing “ I propose 10000000 point hike at next Fed meeting” by ppl like Bull(****)ard. This will basically change complete narrative that is making markets sell growth stocks to buy stocks like Costco and Walmart. Growth stocks may come back in favour.

Edit:

One more link with more data.

Speaking Volumes Rather Than Fast Rate Hikes

The price illusion. It is causing enormous confusion and difficulty, making the global economy out to be something it really isn’t. In fact, the whole situation is being viewed backward. What’s presumed from this is a red-hot economy causing consumer prices to skyrocket. In such a scenario,

alhambrapartners.com

A typically useless anecdatum follows:

With a sheet of 1/2" ply well north of $50, and a measly 2x4 stick above $8, I can attest that one reason inventory may be building is because I refuse to pay those prices.
The point, of course, is that price elasticity of demand, in the short run, just might be a lot higher than suppliers - or the Fed - may have been calculating. It was not long ago a 2x4 went for less than a dollar.

 

[kbM3]

This is the first iteration of 4680s:

• Likely not pushing performance
• Could be software limiting in addition
• Possible that not all battery day features fully employed
• Many post battery day features inbound (Jeff Dahn etc. hasn't been sitting around the past 2 years)

Once this are realised they will likely feature in a M3P and MYP with improved performance.

View attachment 792011

We know they implemented cell-to-vehicle integration which alone is supposed to lead to a 14% range increase.

So the same energy content should yield much more weight loss from this one improvement alone.

 

[JRP3]

I can pull up people saying "thank god we have giga shanghai, F California" when California went into full lockdown for what looked to be indefinitely.

It's quite reasonable to appreciate the benefits of manufacturing in various parts of the world while at the same time not wanting to increase manufacturing concentration in a specific country. Nuance.

 

[WVCS]

Weekend OT.

Hello @BioSehnsucht - You received compliments from @ Baumisch for your screen name. I looked up the word sehnsucht and Google Translate converts it to "longing" and "nostalgia". What indeed does the word biosehnsucht convey? Is it nostalgia over a cleaner planetary environment of the past or yearning for an ideal environment in the future? Is the term just your own coining or is there a broader movement in Germany / Europe around this?

 

[MartinAustin]

We know they implemented cell-to-vehicle integration which alone is supposed to lead to a 14% range increase.

So the same energy content should yield much more weight loss from this one improvement alone.

Also, they're tabless. Tabless allows for spending a lot more time at 250kW. (or higher)

4680 Teslas are going to spend a lot less time at Superchargers

 

[wws]

No more likely than Germany was 3 years ago. Then recall that the former Chief Investment Officer of Japan's Gov't Pension Investment Fund (the largest sovereign wealth fund in the World) was appointed to Tesla's Board of Directors in Spring 2020:

Hiro Mizuno | Tesla Investor Relations​

Japan needs to stay relevant. Toyota isn't going to lead them there. Japan needs Tesla. It's a simple truth that Japan is COMPETING for the next Giga Factory with the likes of Beijing, Seoul, and Bengaluru.

My money's on Japan.

A couple more reasons to consider Japan:

1.) Panasonic is already building battery cells for Tesla in Japan. Yes they are 18650s. But it would be easy for Tesla to build an 18650 pack for Model 3/Y. It would also allow the Fremont Model S/X line to move to 2170 or 4680 cells.

2.) Dedicated RHD manufacturing. Could directly export them to Australia/NZ, India, UK, etc. Even South Africa!

 

[Singuy]

It's quite reasonable to appreciate the benefits of manufacturing in various parts of the world while at the same time not wanting to increase manufacturing concentration in a specific country. Nuance.

If we are just looking at how Tesla looks at wanting their factories to function like an integrated circuit, China is the ultimate nirvana. You have cheap raw material from China and now Russia, cheap energy, cheap labor, abundance of well qualified workers, chip suppliers within the country, and biggest car market. Notice Tesla only brags about Shanghai having 90% of their supply chain localized and not any other giga factories. You can see it in the numbers. New Chinese EV start ups are losing way less money per car than American ev start ups, and their path to profitability is much much sooner.

Government risk? Yeah sure but you can't have this mission statement of Teslas but are afraid a little bit of uncertainty.