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

[Discoducky]

BYD doesn't make any real profits on their EVs. If they had say 10 or 20% margins, they would tell everyone.

Does any car maker make profit from each BEV they sell? (other than Tesla)

I would guess ANY car maker would shout this from the hilltops if they were able to achieve this.

 

[Ogre]

There will - imho - come a point during 2023 where they will clone & replicate a third 4680 team at Berlin, as well as the ones currently at Austin and Fremont. Precisely when & where in the qualitative improvement journey and the quantitative machinery journey I am unsure. Mid 2023 and DBE stability perhaps ?

Yeah, there are a few issues around DBE and chemistry that seem unresolved or at least haven’t made it into a shipping product yet. I wonder if that’s why they are stockpiling packs in Austin. Either they have them ready but don’t want to release them yet, or they are old chemistry and they stockpiling them and will release them in a big batch all at once before switching to the new chemistry/ DBE.

 

[Discoducky]

I wonder if that’s why they are stockpiling packs in Austin.

Time will tell...we might know any day now, but the likelihood goes up quite a bit on/after Jan 1st.

 

[hobbes]

https://twitter.com/x/status/1607080893952180225

Can we assume that those are 4680s with dry cathode? This is the pilot facility near the Fremont factory, correct? Do I remember correctly that at Austin, they are doing 4680 but with externally made cathodes (non-dry) for now?

Nice job with run rate extrapolation here:

https://twitter.com/x/status/1607092117234483202

 

[Nocturnal]

Does any car maker make profit from each BEV they sell? (other than Tesla)

I would guess ANY car maker would shout this from the hilltops if they were able to achieve this.

That is my thought. Why bury EV profits in with your hybrids or gas vehicles if they were materially profitable? I'm assuming nobody is profitable for pure EVs until proven otherwise.

 

[Cattledog]

That is my thought. Why bury EV profits in with your hybrids or gas vehicles if they were materially profitable? I'm assuming nobody is profitable for pure EVs until proven otherwise.

Polestar.

 

[Ogre]

Time will tell...we might know any day now, but the likelihood goes up quite a bit on/after Jan 1st.

Interesting thought.

I wonder if packs sold in 2023 qualify for the Advanced Materials Production Credits if they were produced in 2022. That would be a significant reason to park fully assembled packs.

 

[mongo]

Interesting thought.

I wonder if packs sold in 2023 qualify for the Advanced Materials Production Credits if they were produced in 2022. That would be a significant reason to park fully assembled packs.

Nope
Sec. 45X. Advanced manufacturing production credit.’’.
(c) EFFECTIVE DATE.—The amendments made by this section shall apply to components produced and sold after December 31, 2022.

 

[nativewolf]

If you don't want Tesla to disrupt multiple industries with the high volumes and low costs of their 4680 cells, then you should probably cry. Because ramping this quickly indicates they haven't hit any unsolvable obstacles yet and the growth of cell production continues unabated. The more quickly they can ramp volumes, the less each cell will cost and the faster the disruption will occur.

About the beginning of May of this year Tesla bragged it had built it's millionth 4680 cell and now, only 8 months later, they are making 3.8 million per month and growing! Even CATL has announced plans to build factories on various continents to produce cells in the 4680 form factor developed by Tesla.

It looks to me like, in the middle of the last decade, Tesla asked Panasonic to develop a larger, more efficient cell for the Model 3 production and the result was the ground-breaking 2170 cell first used in the Model 3. But Tesla felt Panasonic was not willing to push the boundaries of what was possible far enough, maybe Panasonic felt it would be too risky to deviate too much from the 18650 form factor that had been around for nearly 30 years. The 4680 form factor Tesla developed on their own is the first time in automotive history, an automaker had introduced a new cell standard, not a battery manufacturer. And I find it notable that the worlds largest battery manufacturer, CATL, didn't waste much time to jump on the 4680 bandwagon with announcements that they will also be building cells to this standard developed by Tesla. The media didn't pick up on, or highlight, just how notable it was for a car maker to be at the forefront of the battery industry by introducing entirely new cell form factors, a job usually performed by leading battery manufacturers.

It looks like Tesla's 4680 cell standard has a long and prosperous life ahead of it. The Semi is using 2170 cells. If you are so inclined, you may cry now.

I would like them to have ramped a bit faster, a year ahead. But at the same time very glad to see that they are scaling . The Tesla semi is a critical project and that needs to happen and it uses 2170 and I believe it is not trivial to switch. This we need to see Kato and Austin replace Reno in the next year . Tall order, fingers crossed.

 

[Artful Dodger]

The Semi will also mop up a fair amount of cells during 2023.

Those cells for Semi will be 2170s from Sparks, NV in 2023. Per Carsonight on Twitter, Giga Nevada had 2 lines dedicated to TE products (powerwall, megapack). Both those lines have now been converted to Auto cell production (and P/M moved to Lathrop on LFPs).

Those 2 lines produce ~4 GW/yr of cells, more than enough for pilot production at Sparks. It remains to be seen where the high-volume line will be built, and which cells they will use in '24.

Cheers and Merry Christmas!

 

[Ogre]

Nope
Sec. 45X. Advanced manufacturing production credit.’’.
(c) EFFECTIVE DATE.—The amendments made by this section shall apply to components produced and sold after December 31, 2022.

This is why I love this thread so much.

Collective wisdom is large here.

 

[Ogre]

Can we assume that those are 4680s with dry cathode? This is the pilot facility near the Fremont factory, correct? Do I remember correctly that at Austin, they are doing 4680 but with externally made cathodes (non-dry) for now?

I think Texas may be using external cathodes until their new cathode factory is online.

It’s really unclear and since they stopped producing the Model Y we don’t have any sample production coming out to compare.

 

[MP3Mike]

So, only stuff made after this year, thus a reason to drag heels a little. (Including stockpiling cells to make into modules)

What if all of the packs are missing one screw, and that screw is put in next year?

 

[Brn2Run]

I think Texas may be using external cathodes until their new cathode factory is online.

It’s really unclear and since they stopped producing the Model Y we don’t have any sample production coming out to compare.

And there was no silicon in the anode when Sandy opened it up a while back. (Which can improve density up to 30-40%).

Anyone know of any other Semi deliveries than to Pepsi? Was that a one off delivery and back to testing etc., or have they been ramping up deliveries all december?

 

[mongo]

What if all of the packs are missing one screw, and that screw is put in next year?

Modules are:

(iii) BATTERY MODULE.—The term ‘battery module’ means a module—
(I)

(aa) in the case of a module using battery cells, with 2 or more battery cells which are configured electrically, in series or parallel, to create voltage or current, as appropriate, to a specified end use, or​

(bb) with no battery cells, and​

(II) with an aggregate capacity of not less than 7 kilowatt-hours (or, in the case of a module for a hydrogen fuel cell vehicle, not less than 1 kilowatt-hour).

So pack could equal module and delaying final assembly until 2023 might qualify.
(Unless Treasury guidance specifies the module sub-component differently)

 

[EVWatcher]

Modules are:

So pack could equal module and delaying final assembly until 2023 might qualify.
(Unless Treasury guidance specifies the module sub-component differently)

I don’t know where this conversation started but when the product has near infinite demand and your primary limitation is factory production capacity the idea of holding up a bunch of product to try to satisfy some incentive loophole sounds like a logistical nightmare for something you could sell for a hefty profit without the incentive in the first place.

TL;DR : they aren’t doing any of this silliness

 

[Maarten]

Car sales don’t drop to zero in a recession. Not even luxury cars. Because EVs are still only a single digit percentage of sales in most markets there is still plenty of room to grow absolute volumes. Especially with the margins that Tesla has.

The graph hereunder shows you are right (it incudes passenger vehicles as well as light trucks, buses and vans).
According to the National Bureau of Economic Research (the official arbiter of US recessions) there were 10 recessions between 1948 and 2011.
The most recent began in December 2007 and ended in June 2009 (1.5 year duration).
At the time there was a drop of a little over 30% in vehicle sales.

I agree with the possible room to grow by EV's and most important: it is unclear if we have a recession coming.
But if it is: vehicle pricing will be a very important factor and Tesla is in a very good position with regard to flexibility in that aspect.

And from us in Bali, where the monsoon season has started: hope all people in the USA will be able to cope with the bad weather and wishing you all a merry Christmas and a happy and healthy 2023!

 

[EVNow]

I’m not poor till I sell, TYVM.

Or the broker sells if you are on margin

 

[mongo]

I don’t know where this conversation started but when the product has near infinite demand and your primary limitation is factory production capacity the idea of holding up a bunch of product to try to satisfy some incentive loophole sounds like a logistical nightmare for something you could sell for a hefty profit without the incentive in the first place.

TL;DR : they aren’t doing any of this silliness

Ah, but your "when" clause is assuming delaying the 4680 supply would throttle production.
I agree, delaying cells or packs to the detriment of production would not be economically savvy.
However, if Austin is full accelerator with 2170s, then delaying finalization of 4680 cells and modules is potentially a reasonable maneuver.

 

[TrendTrader007]

what's the worst case scenario for TSLA? $95 to $97 a share within next week or two
and then rebound, if not sooner
so at very worst another 22 to 23% down from current sp $123
please note i am not expecting this to happen, but if i continue to be continually wrong, just like i have been for last 14 months, then i expect that to be the absolute lowest worst bottom
definitely not investment advice so nobody should treat this as any kind of half-way accurate prediction
what's basis of my reasoning?
#1 in 2021- 2022 NFLX fell -76% ; META fell - 77% ; both companies are actually facing existential crises unlike Tesla which, in my opinion, is the single fundamentally strongest company in world. so far TSLA has dived -70.8% in 14 months and i certainly don't expect it to be discounted any worse than NFLX or META, neither of which is a company i care to put a single dollar of my money in.
#2 beside fairly typical -50% or so haircut that most strong company stocks take every few years or so, there are times when a company has a fundamentals crisis like NFLX did back in 2011-2012. what happened to stock: took -82.6% beating over a span of 15 months.
what happened subsequently?
NFLX rose 92X over next 9 years
suppose TSLA only does 1/4 th of that: gets me a stock price 23X (whatever final low of TSLA ends up being currently) over next 10 years
that is a return of 36. 83% from whatever eventual low of TSLA ends up being, let's hope it's not too far down removed from here
now you could easily dismiss all this as gibberish, which is just fine by me
keeps me occupied

PS: I don't think Elon expects TSLA to fall 97% like Broadcom in 2000-2002 time frame. in fact Elon is very clear that he expects TSLA to reach or exceed AAPL current mkt cap in approx 5 years. if that happens i am looking at 5X current sp which is ARR 38%
pretty close
i think in real life TSLA likely to do much better, but let's be conservative here
we are still in a bear market, after all
Cheers!