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

[Featsbeyond50]

Bernie Madoff and Martha Stewart

Really? Throwing Martha in with the likes of Bernie? Is there more to the Martha Stewart story than I'm aware of?

What I remember is she got a call from her adviser and made an in the moment decision to sell. Many, maybe most of the people would have done the same. When she was convicted, she could have appealed but she didn't, she reported to jail. More honorable than most, in my opinion.

 

[LYTRIDR]

According to the USDA here: US Acreage Usage by Crop the US as a whole planted 92,692,000 acres in corn for 2021. That's a 2% increase over last year according to the research.

Then you look at how much of that was used for fuel supplement. That can be found here: US Corn Portion used for Fuel Ethanol. It has dropped just a little bit in the last year but it's up to 5.05% of all corn produced.

I hope this is not too far off topic as I do believe that contrasting current energy systems to the EV system is core to TSLA long term performance, but I believe you are mis-stating the information in the linked chart "US Corn Portion used for Fuel Ethanol." The Y axis is "Billions of Bushels" of corn with ~15 billion bushels of production and ~5 billion bushels used for ethanol which would translate to 33% not 5.05%.

Cross checking various sites including this visual capitalist and ethanol producers seems to yield similar results. Ethanol consumes a HUGE number of acres. Also @Gigapress noted EROI on various renewables including wind and solar is super important, and looking at EROI on biofuels like ethanol is an important lens to evaluate the usefulness of the energy source. While there is much controversy (especially in the corn belt) on how the EROI is calculated. Most studies I've seen show an extremely small EROI for corn ethanol. This study shows an eROI of 1.040 and these show EROI of 1.28 and .76 before adding the residual value of animal feed.

Solar on the other hand shows an EROI (though again highly variable based on geography and type of technology) shows an EROI of 9.1-9.7.

Ramez Naam has a very nice blog entry discussing EROI.

 

[Artful Dodger]

FSD how much?

https://twitter.com/x/status/1536559703240605697

James Douma's latest FSD comments got tossed with the crypto backwash... Let's get them back in Main, +Elon's reply:

jimmah on Twitter: "I just had a 2hr FSD drive on winding mountain roads that was transcendent. It was perfect. Not good: PERFECT. Smooth, controlled, assertive, COMFORTABLE. Better than human. Oh man this is really happening . Bravo AP Team. Bravo @elonmusk" / Twitter

jimmah on Twitter: "@arctechinc @elonmusk I couldn’t believe it. The whole time I was driving it I couldn’t even believe how good it was. Just amazing." / Twitter​

​

Elon Musk on Twitter: "@jamesdouma In that case, you will really love 10.13" / Twitter​

 

[2daMoon]

Bob's razor: "Never attribute to malice or stupidity that which is adequately explained by greed."

Who is Bob?

/jk

 

[MABMAB]

James Douma's latest FSD comments got tossed with the crypto backwash... Let's get them back in Main, +Elon's reply:

jimmah on Twitter: "I just had a 2hr FSD drive on winding mountain roads that was transcendent. It was perfect. Not good: PERFECT. Smooth, controlled, assertive, COMFORTABLE. Better than human. Oh man this is really happening . Bravo AP Team. Bravo @elonmusk" / Twitter

jimmah on Twitter: "@arctechinc @elonmusk I couldn’t believe it. The whole time I was driving it I couldn’t even believe how good it was. Just amazing." / Twitter​

​

Elon Musk on Twitter: "@jamesdouma In that case, you will really love 10.13" / Twitter​

I'd like FSD to quit stopping halfway through UPLs, right where oncoming traffic will blindside the driver in the bleeding seat!

 

[The Accountant]

Do we have first cut estimates from @The Accountant or anyone else for Q2. I vaguely remember discussion about some estimates but dont see anything in the quarterly financials thread. I suppose Q2 will be gnarly because of added depreciation from Austin and Berlin. Not sure how the expense for non-production days at Shanghai will counted. Are these workers on hourly + overtime pay? How about those who could not work due to covid restrictions?

Anyways, curious to see if we will do more in EPS than Q2 2021, that will keep the march going towards a lower TTM PE.

I posted my preliminary estimates for Q2 in the post below.
My Preliminary Q2 EPS estimates here

I have not provided the detailed Income Statement yet in the quarterly financials thread as I am waiting to get a better grasp on deliveries.
My estimates of $2.01 GAAP and $2.36 Non-GAAP include 255k deliveries and have nothing for the Bitcoin impairment or FSD revenue recognition.
My sense is that deliveries will be higher than 255k.

Estimates for Q2 are very difficult to calculate due to the factors you highlighted.

 

[MadScientist23]

I hope this is not too far off topic as I do believe that contrasting current energy systems to the EV system is core to TSLA long term performance, but I believe you are mis-stating the information in the linked chart "US Corn Portion used for Fuel Ethanol." The Y axis is "Billions of Bushels" of corn with ~15 billion bushels of production and ~5 billion bushels used for ethanol which would translate to 33% not 5.05%.

Cross checking various sites including this visual capitalist and ethanol producers seems to yield similar results. Ethanol consumes a HUGE number of acres. Also @Gigapress noted EROI on various renewables including wind and solar is super important, and looking at EROI on biofuels like ethanol is an important lens to evaluate the usefulness of the energy source. While there is much controversy (especially in the corn belt) on how the EROI is calculated. Most studies I've seen show an extremely small EROI for corn ethanol. This study shows an eROI of 1.040 and these show EROI of 1.28 and .76 before adding the residual value of animal feed.

Solar on the other hand shows an EROI (though again highly variable based on geography and type of technology) shows an EROI of 9.1-9.7.

Ramez Naam has a very nice blog entry discussing EROI.

My apologies, for some reason when reading the notes on the corn usage I got the % in my mind and that translated to the calculations. It appears you are correct and even more of this is used for Ethanol than what i had calculated, like over 6x more. Good catch.

 

[bkp_duke]

I always thought this re charging issues among competition". As if nobody could figure out a card transaction or something. "Is it plugged in??

The Verge kinda lays out the Ford issue.

Ford recalls nearly 49,000 Mustang Mach-Es over battery safety issues

The order affects over 48,000 vehicles

www.theverge.com

"The malfunction involves a potential overheating of the vehicle’s battery high voltage contactors, which can lead to the vehicle failing to start or losing power while in motion. "

(Edit: Heat problem... oh correction, maybe that's even worse, they may need to reduce power overall, then replace eventually to fully recover. Yikes!)

Tesla had a similar issue early on with the Model S. I've personally replaced 2 sets of HV contactors within the battery pack (salvage cars, Tesla would not touch them). Tesla moved on to a much higher-quality HV part (made by a company called Gigavac) and hasn't had issues since.

 

[The Accountant]

Exactly. It could be a $25 sensor that was tested in the lab, approved, sub-contracted out for production, but found to not be good enuf for real world daily experience.

Good point.
May be one of the reasons why Tesla is slow walking the 4680 production. They may be able to ramp quicker but taking something from pilot production to mass production can bring a lot of unexpected results. So instead of a 3 step ramp they may be taking a 4-6 step ramp to reduce risk of glitches in real world experience.

 

[Singuy]

"Lucid and Rivian, unless something changes, will go bankrupt. They have to get their cost down or join the grave yard with other car companies" -Elon Musk

 

[bkp_duke]

To be fair Tesla had contactor issues in the early Model S packs too... The question becomes why is the contactor overheating? Are they just defective? Is the problem that the pack holds in too much heat, or the cooling system is insufficient? Are they undersized?

Contactors are not cooled. They are basically just big switches, and if they are not sized properly the resistance of all that current going through the contactors burns them out. This is why Tesla stopped using Tyco contactors in the Model S early on, and "upgraded" to Gigavac contactors.

This is my old 2013 P85 (now sold) and what the contactors looked like. Fortunately Tesla monitors these in software and gives you a warning that they are failing (but it is cryptic), so you are not stuck on the side of the road. Replacement requires you to drop the pack, crack open the back of it, and replace said devices (all with HV precautions). Had a good friend that was experienced in this back in 2018, so I drove the car 2/3 across the country to work with him to replace them.

My gut tells me something similar is happening with Ford, and this won't be a cheap fix. Especially if the contactors are built into the pack.

 

[OrthoSurg]

Ford issues stop-sale of electric Mustang Mach-E crossovers due to potential safety defect

Ford says the issue with the Mustang Mach-E crossovers could cause the vehicles to become immobile.

www.cnbc.com

At least it is getting some press. Still the irony abounds. This will likely require "dealer service", and F stock is up. If Tesla had a similar issue, it would already be fixed with an OTA upgrade, but their stock would be "down on a recall".

Yep, game is rigged. Rigged by big oil.

Yesterday during a conference I was talking to a sports med guy in his early sixties who was talking about TSLA stock dropping but being one of the greatest company out there. I was silent while he was speaking. He was answering to the pharmaceutical rep who said their stock was down hard. Then the sports med guy starts talking about all the good aspects of the Tesla car. He said his son is always talking about it but he never talked to someone who had actually owned one. Then I started talking of my Model 3 I have been driving since 2019, then about my 2021 Model Y. He said he hesitated between the Polestar and the Tesla, after we spoke he said he was going for the Tesla no doubt.

Always feels good when someone was in between and you push them just a little bit and they fall on the right side.

About TSLA, I have mixed feelings when the SP is going down. I feel like it’s an opportunity to be buying more if it goes in the 600s and I am super happy to grab shares like I did at the 650 mark but I am equally happy when the stock goes to a more reasonable value. On the other side I am clueless when I type Nio stock and I see +16.39% while TSLA is 2.45%. I thought smart money would flow back into profitable market leading companies.

 

[ZeApelido]

It was a general moaning about dumbassery in general. IQ keeps dropping with each generation it seems.

I heard Duke only accepts perfect IQ scores of 100.

 

[Discoducky]

I always thought this re charging issues among competition". As if nobody could figure out a card transaction or something. "Is it plugged in??

The Verge kinda lays out the Ford issue.

Ford recalls nearly 49,000 Mustang Mach-Es over battery safety issues

The order affects over 48,000 vehicles

www.theverge.com

"The malfunction involves a potential overheating of the vehicle’s battery high voltage contactors, which can lead to the vehicle failing to start or losing power while in motion. "

(Edit: Heat problem... oh correction, maybe that's even worse, they may need to reduce power overall, then replace eventually to fully recover. Yikes!)

Hmm, how could overheating contactors be an issue in only half of vehicles, but over the entire shipped population? I'd expect this to include all vehicles. Only a running change would result in a difference in builds and Ford doesn't do that. This seems indicative of either Ford being told by a 3rd party about engineering details or Ford is just trying to minimize damage by only recalling those vehicles that they have had customer issues with.

"Ford says 48,924 Mustang Mach-E vehicles sold in the US are affected by the problem — nearly half of the estimated 100,000 vehicles produced during that time."

 

[bkp_duke]

Hmm, how could overheating contactors be an issue in only half of vehicles, but over the entire shipped population? I'd expect this to include all vehicles. Only a running change would result in a difference in builds and Ford doesn't do that. This seems indicative of either Ford being told by a 3rd party about engineering details or Ford is just trying to minimize damage by only recalling those vehicles that they have had customer issues with.

"Ford says 48,924 Mustang Mach-E vehicles sold in the US are affected by the problem — nearly half of the estimated 100,000 vehicles produced during that time."

Could be an issue if they uses different vendors for the contactors, and one vendor's contactors are seeing premature failure (honestly, these should last 20+ years if sized and built right).

 

[Ogre]

Hmm, how could overheating contactors be an issue in only half of vehicles, but over the entire shipped population? I'd expect this to include all vehicles. Only a running change would result in a difference in builds and Ford doesn't do that. This seems indicative of either Ford being told by a 3rd party about engineering details or Ford is just trying to minimize damage by only recalling those vehicles that they have had customer issues with.

"Ford says 48,924 Mustang Mach-E vehicles sold in the US are affected by the problem — nearly half of the estimated 100,000 vehicles produced during that time."

Big question I have is whether this affects the Lightning ramp up.

 

[ZeApelido]

Hmm, how could overheating contactors be an issue in only half of vehicles, but over the entire shipped population? I'd expect this to include all vehicles. Only a running change would result in a difference in builds and Ford doesn't do that. This seems indicative of either Ford being told by a 3rd party about engineering details or Ford is just trying to minimize damage by only recalling those vehicles that they have had customer issues with.

"Ford says 48,924 Mustang Mach-E vehicles sold in the US are affected by the problem — nearly half of the estimated 100,000 vehicles produced during that time."

Only U.S. versions relied on Jim Farley's Callahan Auto for contactor parts.

 

[bkp_duke]

I heard Duke only accepts perfect IQ scores of 100.

Ironically (or not), this is a real problem, and one we can blame on the oil/gas industry and their usage of tetraethyl led in gasoline. The problem is still ongoing because the aviation industry still uses leaded fuel for it's anti-knock qualities.

Study: Lead exposure from gas shrank IQ scores for half of Americans

Those born before 1996 were particularly impacted

www.ny1.com

(long, but worth a watch)

 

[Snerruc]

Really? Throwing Martha in with the likes of Bernie? Is there more to the Martha Stewart story than I'm aware of?

What I remember is she got a call from her adviser and made an in the moment decision to sell. Many, maybe most of the people would have done the same. When she was convicted, she could have appealed but she didn't, she reported to jail. More honorable than most, in my opinion.

As I recall, the FBI couldn’t get Martha on a real charge, so they got her on lying to the FBI. Be careful if being interviewed as a misspeak could become lying.

In-post Mod edit: “Martha Stewart” is not a topic, not even an off-topic, for this thread. Most especially when the poster who first alluded to her so easily could have found all necessary information with a quick ‘net search.
No more.

 

[Gigapress]

Solar on the other hand shows an EROI (though again highly variable based on geography and type of technology) shows an EROI of 9.1-9.7.

Ramez Naam has a very nice blog entry discussing EROI.

Nice post! I would note that the study cited is from 2017 so the EROI for solar is likely even better now, due to continued improvements in some of the same factors the authors discuss:

• Cell longevity/degradation
• Amount of silicon ingot (and other materials) consumed per Watt of capacity
• Cell efficiency

Additionally, the embedded energy of the labor and capital required is also improving. For instance, as both transportation and construction site power shift from gas and diesel to electricity, energy efficiency improves. Imagine Tesla Semis and Cybertrucks on site instead of Peterbilt trucks, F-250s and diesel generators.

However, running the electric arc furnaces to melt quartz at 1715 Celsius in order to obtain molten silicon for ingot formation is the most energy-intensive step in the entire solar panel lifecycle. Since electricity today mostly comes from inefficient thermal power plants (gas, coal, nuclear) that waste about 2/3rds of the primary energy as heat, the energy ultimately required for the furnaces will be roughly 3x less in the future when derived primarily from solar cells. Just as growing plants use energy production from their leaves to power creation of yet more leaves and more offspring which will make their own leaves, we will use solar panels to power creation of yet more solar panels and more solar panel factories. With SiO2 being 59% of the Earth’s crust and ample solar irradiance available (especially if Starship makes space-based solar economical someday) I have not identified any practical physical limit to this process for at least several more orders of magnitude of growth.

The authors criticize the inclusion of storage in the solar EROI calculation, but even that is improving dramatically, at least for Tesla:

• Shorter material supply chains
• Maxwell dry electrode deleting the solvent evaporation ovens
• Better manufacturing yield / Reduced scrap
• Better longevity
• Etc.

Very good times ahead for the solar industry, and for companies who make the world’s best stationary batteries.