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

[Tronguy]

Ground is so soft in Florida that when you screw pile the supports go through the Earth and you still end up with another factory in China.

OK, we're all having fun picking on Florida. But under the soft stuff what one has in Florida are ancient coral skeletons, due to the gulf stream washing over the place in eons gone by.

With the water rising and all, that'll likely start up again. And we'll have the replica of a Great Barrier Reef, but south of Georgia!

 

[MP3Mike]

Whole mars certainly doesn’t agree. Hopefully he has some of the details incorrect.

https://twitter.com/x/status/1556381392585515014

I think he is correct at least to a sense. It eliminates the credit for expensive vehicles, i.e. Lucid, Rivian, etc. It eliminates the credit for cheaper vehicles, ie. the Model 3 RWD. And it put an income cap that eliminates a lot of people that buy new cars often and puts their old one in the downstream market. And phases it out over time for vehicles where they don't move the supply chain to approved countries. (Where there probably isn't currently enough capacity to do so even if they wanted, and would likely raise the price of the vehicles possibly disqualifying them.)

Then on top of that the bill also opens 60 million acres a year to oil and gas leasing. (Unless that was taken out in the draft today.)

But in the end it might be good for Tesla, as it puts them on a more level playing field with everyone else.

Here is what Senator Merkley told me about it in response to my email to him:

I’m pleased that the legislation includes provisions on all of these priorities, as well as adopting the concept I introduced to create bonus tax credits for renewable energy projects built with prevailing wages. Unfortunately, the bill also opens 60 million acres a year to oil and gas leasing. This is a high price to pay, and one that I will work to unwind, but the impact of these and some other giveaways to fossil fuel companies in the bill are dwarfed by the massive incentives for new renewable energy deployment.

 

[GOVA]

Looks like it passed the Senate. Now the wait for all or any changes to the bill... the insulin cap was blocked fyi. But you know what we're waiting on...

Senate passes Democrats' sweeping climate, health and tax bill, delivering win for Biden

The bill's passage is a significant achievement for Democrats as they look to maintain their hold on Congress in the November midterm elections.

www.cbsnews.com

I've missed the effective date. Any chance for this being retro-active?

 

[Usain]

Whole mars certainly doesn’t agree. Hopefully he has some of the details incorrect.

https://twitter.com/x/status/1556381392585515014

You need to read the full thread to see what Whole Mars is talking about.

We've known about the PHEV thing. Yes, it's stupid that a 7kWh battery can get you $7500 off. But it remains to be seen if consumers want to buy those cars, even with the discount.

Whole Mars' rant about protecting dealerships is probably wrong. As far as I can tell, Tesla and others who sell direct should qualify as dealerships under the law.

I wouldn't blame the senators who voted for it. How many of them know the details of this and how it will play out? Even the EV fanatics on this board aren't sure. If we could find out who came up with the text of the bill we could then make inferences about their motivation.

 

[Singuy]

Ground is so soft in Florida that when you screw pile the supports go through the Earth and you still end up with another factory in China.

Guess you guys all missed the memo that Musk already said there will be a mega starship factory in FL.

 

[thesmokingman]

I've missed the effective date. Any chance for this being retro-active?

Still waiting on final details.

 

[damonbrodie]

Guess you guys all missed the memo that Musk already said there will be a mega starship factory in FL.

It makes sense to build Starship there if they are flying from there. Florida has a large eco system from the past 50+ years of that industry in that location. Lots of skilled workers in that field and suppliers are established.

Same argument is used for why they won't be building a car factory there instead of a location with skilled workers, suppliers etc are present.

 

[Usain]

Still waiting on final details.

I just looked at the bill that passed the senate. From my reading, the effective date is still for vehicles placed into service after December 31, 2022.

See page 401, line 21:

https://s3.documentcloud.org/documents/22128148/inflation_reduction_act_of_2022.pdf

 

[SageBrush]

But Tesla doesn't have to do it all themselves, they just set the specs and the $$.

I like your arguments. I'm going to firmly straddle the 'maybe' spot. 4680 benefits from DBE, cutting out the middle-man, home grown innovation, and vertical integration. I know that the Chinese LFP groups are stiff competition so we'll see how it plays out.

 

[traxila]

Another Asian location outside of China makes the most sense.

Singapore have free trade agreement with USA?

 

[Fred42]

Another Asian location outside of China makes the most sense.

Singapore have free trade agreement with USA?

The United States has free trade agreements in force with 20 countries. These are:

• Australia
• Bahrain
• Canada
• Chile
• Colombia
• Costa Rica
• Dominican Republic
• El Salvador
• Guatemala
• Honduras
• Israel
• Jordan
• Korea
• Mexico
• Morocco
• Nicaragua
• Oman
• Panama
• Peru
• Singapore
• USMCA

 

[mongo]

I have a $250 'reservation fee' in on a Fisker Ocean. they emailed today implying that a reservation fee that became a non-refundable deposit before the bill passed would be grandfathered into the previous $7,500 credit (emphasis mine below):

Fisker is reacting quickly by extending to our US reservation holders the invitation to enter into a firm commitment to purchase their Fisker Ocean and confirm their trim level now. This may allow Fisker customers to take advantage of the existing $7500 federal tax credit scheme for which they may qualify under the Transition Rule if the Inflation Reduction Act is enacted*.

* On page 386, of the August 6, 2022 draft, a ‘Transition Rule’ allows a qualifying taxpayer that entered into a written binding contract for a qualifying vehicle prior to enactment of the Inflation Reduction Act, and takes delivery of such vehicle after enactment of the Act, to elect to treat the vehicle has having been placed in service on the day prior to enactment of the Act in order to take advantage of the current $7500 tax credit structure. Please note that Fisker is not providing legal or tax advice regarding whether you will be eligible for any tax credit by placing your order now. Further note that the Inflation Reduction Act has not been passed as of today’s date and remains reported in draft form. Please consult with your tax professional to determine whether you would qualify for any federal tax credit under the Transition Rule and do not rely upon the availability of such tax credit when making your purchase decision.

Does anyone know if this 'Transition Rule' made it into the final bill?

Yes, it did

RANSITION RULE.—Solely for purposes of the application of section 30D of the Internal Revenue Code of 1986, in the case of a taxpayer that—
(1) after December 31, 2021, and before the date of enactment of this Act, purchased, or entered into a written binding contract to purchase, a new qualified plug-in electric drive motor vehicle (as defined in section 30D(d)(1) of the Internal Revenue Code of 1986, as in effect on the day before the date of enactment of this Act), and
(2) placed such vehicle in service on or after the date of enactment of this Act, such taxpayer may elect (at such time, and in such form and manner, as the Secretary of the Treasury, or the Secretary’s delegate, may prescribe) to treat such vehicle as having been placed in service on the day before the date of enactment of this Act.

 

[MC3OZ]

Yeah, when did Elon say Tesla would make 4680s with LFP cathodes? Or more importantly, why would they? Partners already have leading-edge tech in LFP (ie: BYD Blade, CATL MP3), and the is no shortage of supply of capital, raw materials, or capacity: The LFP 4680 issue was addressed in this video 7 months ago:

No, Tesla Will Not Be Making 4680 LFP Batteries | The Tesla Economist (Jan 18, 2022)

Tesla does not need to move into the LFP production space: it's moving fast on it's own. I expect Tesla has already purchased at least half of this planned future volume:

2025: CATL's 1200 GWh Planned Capacity // + Tesla Cell Supply Forecast | The Limiting Factor (Nov 17, 2021)

It's high-nickel, high-performance for the future of 4680s. I expect Tesla will have an aviation ready 4680 cell in 10 years.



See above. Tesla goal is to obtain a massive supply of batteries at a good cost. The best way to do that is through competition. When Panasonic was too slow/unwilling to invest in further production in Nevada, Tesla started the 4680 project (remember when Tesla bought Maxwell Systems? That was way back in Feb 2019 - that's how long of a lead-time is involved with scaling new technologies).

Tesla still isn’t getting enough batteries from Panasonic - The Verge (Apr 11, 2019)

Now, due to this 'prompting' by Tesla, Panasonic is building a $5B battery factory in Kansas:

Panasonic to build EV battery plant for Tesla in U.S. state of Kansas | (Jul 14, 2022)

That's how you get top performance out of your suppliers. Single-sourced 2170 cells? Buy more from LG. Need better prices on LFP? Buy from BYD and CATL. Best tech wins in the virtuous cycle. But Tesla doesn't have to do it all themselves, they just set the specs and the $$.

Cheers!

The only reason to make 4680s with LFP or LFP/Manganese, would be if that cell format was required for a structural pack.

Otherwise an LFP based pack needs to provide structure in other ways, which will probably add some weight.

We hear that LFP/Manganese can apparently approach the energy density of NMC, with many of the advantages of LFP, but with less Lithium.

Overall LFP/Manganese seems to have most of the advantages of LMNO, and might even be better.

I would classify LFP/Manganese as iron based.

I think Jeff Dahn currently has a interest in why NMC has a longer cycle-life than LFP, specifically what causes the degradation of LFP cells.
Is Jeff just curious, or has Tesla asked him to investigate?

 

[Electroman]

why NMC has a longer cycle-life than LFP, spec

I thought it is the other way. LFP can be deep charged to 100% and the cell does not degrade and lose capacity for a long time.

 

[Cosmacelf]

They put wheels in tennis shoes, also some factories have employees using roller skates, so not a bad idea. I take it your talking about using them in Optimus right?

I hope you are using “tennis shoe” in a colloquial sense. Actually playing tennis with wheeled shoes would be … interesting.

Then again, they have this game so who knows.

https://twitter.com/x/status/1554915485094920194

 

[dhanson865]

Another at Texas would be a good option. Does another factory necessarily have to be another location?

Elon answerd that, 12 locations for 12 gigafactories. I can grab the video for that if you need to see it.

âï¸ 12 sites for 12 gigafactories

45 seconds · Clipped by Doug Hanson · Original video "Tesla, Inc. 2022 Annual Meeting of Stockholders" by Tesla

youtube.com

There is a question about 2/3 the way through this 45 second clip from the back of the audience that you won't be able to hear clearly. Elon laughs and says "a dozen sites" as an answer to that question which was probably something about having more than one gigafactory in the same general location.

Whatever the question in the middle is, the question on the screen + Elon's answers seem to be clear to me that it'll be separate sites/locations for each gigafactory.

 

[Usain]

An interesting side-effect of the bill. It looks like used EVs are not subject to the mineral sourcing requirements.

All used Teslas will be eligible for a $4000 tax credit on January 1st. The only catch is that the buyer must have an AGI under $150,000 for couples or under $75,000 for individuals.

This will prop up resale value of every Tesla for the next 10 years. Bullish.

 

[MC3OZ]

I thought it is the other way. LFP can be deep charged to 100% and the cell does not degrade and lose capacity for a long time.

This post has the details:- Investor Engineering Discussions

One reason I take an interest in the engineering details is, that what is possible, impacts on the cost to build products, the product longevity and margins.

The other reason is, it is interesting stuff, but mostly best kept to a separate thread.

 

[MP3Mike]

All used Teslas will be eligible for a $4000 tax credit on January 1st. The only catch is that the buyer must have an AGI under $150,000 for couples or under $75,000 for individuals.

This will prop up resale value of every Tesla for the next 10 years. Bullish.

I thought that they had to be under $25k as well as other conditions, like it had to be from a dealer and has to be a sales to the second owner. So not all Teslas would qualify. In fact probably very few.

 

[ClimateOptimst]

So I have a friend who received notice over the weekend of his Model Y delivery date for this week. He has to travel cross state to pick it up. Should he drag his feet for a few days in an attempt to pick it up after the Inflation Act is signed by Biden, assuming they get it through the House largely unchanged as quickly as they're planning to this week? Or won't it matter?