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

[petit_bateau]

I wanted to revisit this with a bit of information.

I got a quote from a dealer for PowerWalls (without Solar). It is expensive ... ~ $20k for 1 Power wall and $34k for 2. The dealer sells other batteries too (LG, until Bolt fires, Generac etc). They said the prices are similar. They count equipment/install costs as 60/40, which makes the entire system quite expensive. But this would give automatic switchover and good support. The install costs are probably higher in my area too. BTW, 1 Power wall + 6 kW solar is $40k.

I decided to go with EcoFLow (2x EcoFlow Delta Pro) that I could connect to the panel with a simple power inlet & interlock kit. No automatic cut-over but simple enough. Total cost is ~ $7k for 7.2kWh system. Good for my use case of perhaps 5 times a year of power outages. I could also go DIY, build my own system using battery kits for cheaper.

So to conclude - there are clearly two markets
A. Full contractor sell/install with system warranty
B. More of a DIY approach

With A, Tesla PowerWalls are quite competitive. These are bigger budget, costly systems. Slight cost advantage of no-name Chinese LiFPO is trumped by brand value and support.

In DIY market, obviously LiFPO and Chinese brands are the king. Tesla will not be able to compete in this market - not would they like to.

Thanks.

Here in the UK we are paying GBP 18k = USD 22k for 30kWh of SolarEdge storage. That is version A, professional install.

There is clearly some significant geographical pricing differences going on out there for some reason.

 

[scaesare]

It's not impossible to get a decent Cd from a 4.2 meter car, just more difficult. As an extreme example, the 4.3 meter long GM EV1 had a Cd of 0.19 and a CdA of about 0.37 m^2, about a third better in CdA than a Tesla M3. When you package for 4 people, you're not going to be able to match this, but you could certainly do a 4.2-meter four-seater that was no worse than an M3.

<pedant_mode>

Cd (Drag Coefficient) is not dependent on size, but rather shape. It is the "effective" drag of a given shape as compared the total surface presented by the object. As it is a dimensionless value, it's possible for a larger object to have a better Cd, yet present more overall drag.

CdA is the effective drag presented as a function of the total surface area multiplied by the Cd. Two objects can have the same Cd but differing CdA due to size.

So, there's no real correlation of Cd to size. There is with CdA, assuming the Cd is the same.

On Edit: This is how the Semi has a better Cd than a Bugatti Veyron

</>

 

[EVNow]

Here in the UK we are paying GBP 18k = USD 22k for 30kWh of SolarEdge storage. That is version A, professional install.

I asked about Solar Edge, the dealer said they dropped it because of too many issues. I think there are some support / warranty issues here. One thing dealers hate is when they get calls from angry customers about things breaking down (and not getting quick support from manufacturers to fix). They like Enphase.

 

[AudubonB]

Continuing to violate my self-administered sabbatical, here is some information about the T-MexPark (great name!) that is sited directly adjacent (3km/2mi) to Mexico City's new airport, itself just 30km/20mi from the megalopolis's center, and which is the location presumed to be of interest to Tesla:

TMex Park construction begins - MEXICONOW

Announced in 2021, the T-MEX PARK Industrial Park has finally begun construction in Nextlalpan, State of Mexico

mexico-now.com

For the metrically challenged, 4mm sq. meters, the headlined amount of floor space potentially available in the industrial park, is about 43mm square feet, or close to 1,000 acres. Even for Tesla, that's a lot of area under roof - assuming, unnaturally, that Tesla would monopolize the entire park. It is a still-being-developed ind'l park and I have not been able to uncover other tenants also having signed contracts, so...

 

[SunCatcher]

This talk of small cars reminded me of this photo I took in 2001, in Munich, I think:

It drove home to me how much cars had advanced (?) between the 1960’s and the 2000’s.

Yes indeed. And if Tesla is ever going to have a chance in hell at gaining market share in Japan, they'll have to put something forward to challenge these products as well:

 

[loquitur]

For those following the TSLA "funding secured" trial, the current testimony
is by finance professor Hartzmark, who is trying to explain to the jury about
how TSLA options went haywire that day and the next few. To wit, medium/long-term
straddles collapsed, while short-term options didn't change much, affecting
plaintiff Littleton.

The expert witness is explaining Black-Scholes and implied volatility now
-- you can read the 362 page (!) report here, for which he charged ~$350,000
just for this work.

https://www.courtlistener.com/docket/7643790/291/1/in-re-tesla-inc-securities-litigation/

I'm not present in the courtroom now, but as a reminder you can listen to all
this at Chen, Edward M. [EMC] | United States District Court, Northern District of California.

During cross-examination now transpiring, there is a challenge to a "but for"
methodology (requires jury assessment) vs. one based upon actual prices using
different input assumptions. There is a further challenge to the Black-Scholes model
which Hartzmark acknowledges because he wrote a number of papers about such.

Naturally, the defendant has brought up that for every buyer there is a seller, so
whoever lost funds during the class period is balanced by those who gained.
What might this be, "anti-damages"?

Just before the morning break, defense zapped the expert with an amusing gotcha question ...
To address the expert's notion that options trading is "not gambling, but more like insurance",
they asked (paraphrasing): "Isn't it true that you once wrote a book about poker playing
under a pseudonym?"

Errata: the expert witness who testified first today was not Prof. Hartzmark, but was Prof. Steven L. Heston.

 

[MP3Mike]

I decided to go with EcoFLow (2x EcoFlow Delta Pro) that I could connect to the panel with a simple power inlet & interlock kit.

Be aware, that it isn't a very good choice, at least in my opinion. While you get ~240 volts out across phases, that is made up of ~108v on one phase and 132v on the other. So you end up running every 120v device in your house either 10% over, or under, voltage. And some 240v things will refuse to work properly. Like you can't charge a Tesla from it, not that you would probably want to. (Unless they have fixed that, which I haven't seen any reports of.)

 

[petit_bateau]

I asked about Solar Edge, the dealer said they dropped it because of too many issues. I think there are some support / warranty issues here. One thing dealers hate is when they get calls from angry customers about things breaking down (and not getting quick support from manufacturers to fix). They like Enphase.

Interesting. I pretty much get the reverse anecdotal feedback in the market. Again I wonder if there are product/regional variations. Thanks.

 

[Curt Renz]

CNBC - 1:01 pm EST:
General Motors doesn’t expect significant U.S. production of EVs until second half of year

 

[Ipcress]

How high of a global market share do you think Tesla can reach without selling to people that need a car smaller than a VW Golf? They are at 2% global market share. I think they could easily double or triple that without even approaching the need to address that market segment. Tesla will do what's best for the mission and Tesla shareholders, not enter market segments too early simply because those market segments exist.

I wouldn't be hammering on this single point so hard if it were not so apparent that people are forgetting how to think logically. Tesla doesn't do things "because it's there", they do things because it makes sense to do them.

Thinking logically, the dense cities of the UK, Europe, Asia, and many other markets are full of very well off and wealthy people who do not want a cheap city econobox, but a premium, well designed, safe and "cool" Tesla-style small electric car. They want it now, asap. They do not want a cheap Chinese car, but will buy one if that's all that's available. MG, BYD, etc are acting quickly to own that market unless Tesla puts down a marker that they are on the way and intend to offer something soon. With the right premium, but smaller footprint car "those markets" have the potential to be at least or even more lucrative than the current M3&Y markets. Now. In Europe and the UK liftbacks and even station wagons are still a big thing , and a previous poster was dead-on when he mentioned the likely reason the 3 sells less than the Y. I didn't buy a 3 because of the trunk, and waited and hoped that the Y would be exactly what it is--a lift back. Readers, I bought one!

 

[petit_bateau]

Be aware, that it isn't a very good choice, at least in my opinion. While you get ~240 volts out across phases, that is made up of ~108v on one phase and 132v on the other. So you end up running every 120v device in your house either 10% over, or under, voltage. And some 240v things will refuse to work properly. Like you can't charge a Tesla from it, not that you would probably want to. (Unless they have fixed that, which I haven't seen anyone reports of.)

WTF ! how has that gotten through certification ? are you serious ?

In-post non-Mod edit: Well, in the AudieB school of electrical wiring, I get 47V on one leg, 93V on the second, and the balance goes to Lost In Translatmission.

 

[MC3OZ]

I really dont think that we will see a new cheaper model at investor day. I think we might see details on this highland project, and that it will essentially be a way to make a super cheap version of the model 3. Its pretty clear that elon feels that introducing multiple models is more trouble than its worth. he even dislikes too many paint options for the same body!

I would guess that we see a new 'base' model 3 that is dramatically cheaper, with front+rear casting, 4680 structural pack, and possibly a smaller battery and shorter range.
There is not really enough clear water between the model 3 and the model Y. The Y is basically a taller model 3, with a different trunk. I reckon Tesla want to make the model 3 the entry level Tesla, followed by Y, then S/X, with definite price gaps to show the difference.

I DO think that Tesla are limiting their European sales by NOT having a compact car. Something shorter and definitely narrower, but that may be a while yet. There are plenty of legacy car companies to obliterate before Tesla has to focus its lazers on the compact car market. Until Texas and Berlin are fully ramped, I don't think this is a limit on growth though. (But I bet there is a compact tesla design hidden in some corner of freemont/shanghai already being worked on).

Also lets not forget the possibility of an optimus update for investors day. The last one was very last minute and touch-and-go. Even seeing the bot walking more confidently this time would be good.

Compact cars are coming, Model 3 (and perhaps Model Y) is the test vechicle for the Highland process.

In other words, they will prove that it works with Model 3, make any new components that are needed and prove any processes.

My hunch is that Highland and Lithium will be the stars of the show, Gen3 models will be waiting backstage and revealed at a later date.

 

[MC3OZ]

Joe Tegtmeyer said yesterday that he would release a deep-dive video on the SACMI press technology, which appears to be related to the DBE process for cathode rolling / calendaring.

Link to Joe Tegtmeyer - Giga Texas vids​

Here's the relevant portion of yesterday's tweet:

Joe Tegtmeyer on Twitter: "30 January 2023 Giga Texas VIDEO … Die shop structure at full length & inside E cathode w/ SACMI presses! https://t.co/CT4YYQHa4r" / Twitter​

This is the type of equipment they make:

SACMI double-channel roller kiln​

View attachment 901679

It is possibly equipment for Sintering.

Tesla has a patent for single crystal cathode via a 2-stage Sintering process.

A bit of confirmation bias here, that is what I would like it to be for.

 

[Marc_K_inNJ]

Should we be expecting any news from Moody’s soon? Do they rate on an annual basis?
Last time they upgraded Tesla to Ba1 was a year ago on January 24, 2022
Now that the 10k is out they should have enough info to upgrade to something more realistic…

 

[unk45]

Many folks (in the western world) are turned off by 100% made in china cars though.
I assume the MG4 is totally made in China then shipped out?

Define western world, please. Here in the western hemisphere country I am in today a Chinese car has the highest resale value in it's segment:

CAOA Chery Tiggo 5X tem melhor preço de revenda do segmento

Com índice de desvalorização de apenas 17,35%, CAOA Chery Tiggo 5X ganha prêmio como SUV compacto com melhor preço de revenda segundo o Kelley Blue Book Brasil

motor1.uol.com.br

They also have more than once been rated the highest quality cars available.

In most of the real western world, Chinese products are very well regarded. In the US for example, Apple made-in-China products have consistently high evaluations. CATL and BYD batteries are so highly regarded that they're used by Tesla, perhaps you know them. The reality is quite different than prejudiced people think. You might want to check on German perceptions of Tesla MIC cars.
disclosure: I own a Chinese-owned Belgian-built BEV. I do not like it. I'd much rather have a MIC Tesla.

OTOH, I remember a visit I had to a Chinese chocolate factory near Beijing in mid-1978. That was embarrassing by any definition. Not too long before that Korean products generated howls of laughter, and before that Japanese cars were not very adequate.

That is the problem with prejudice. It precludes seeing reality as it changes.
For reference just llook at Tesla FUD. We should be better than to accept prejudice.

 

[M|S|M MYP]

CNBC - 1:01 pm EST:
General Motors doesn’t expect significant U.S. production of EVs until second half of year

2nd half of 2030...

 

[Max Plaid]

Why would you assume that Tesla plans to reduce prices of the Model 3 by using "slight tweaks or software limiters"? That makes no sense, Tesla is on a mission to reduce the cost of EV's in fundamental ways by making the cars easier to manufacture and with lower assembly costs and lower parts and raw materials costs. This requires optimizing the engineering of both the production lines and the car. The goal will be to have the same functionality, the same reliability and longevity, the same size, at a significantly lower cost, thus driving the adoption of EV's into ever larger market segments.

People over-estimate the savings available with a smaller model, making the car smaller on the outside and more cramped on the inside. Sure, raw materials can go down by 15% or so, but raw materials are a small fraction of the total cost to produce. You still have four wheels, and you still have to install, inflate and balance four tires and wheels. You still have four seats, carpeting, a brake and an accelerator, sun visors, door handles, air bags, parking brake, etc. etc. etc. Costs do not even come close to scaling with size. The Model 3 is at a sweet spot in so many ways even if a smaller car has some advantages in the middle of European cities. Making a small city car will happen, the question is whether now is the right time or not. The Model 3 is a greatly under-utilized asset of Tesla and it costs too much to build. Tesla is going to fix that, and it will dramatically expand the addressable market and the profits from Model 3.

Aerodynamically, it's difficult to beat the Model 3 by a lot as it already has a pretty small frontal area and the Cd of a smaller car will actually be considerably worse. People who understand aerodynamics get this (you have to multiply the frontal area by the Cd). The net effect is not a wash, but it's closer than you would think. So, to get the same range, you still need 90% of the battery. The battery of a city car will be more than 10% smaller, but mostly due to a shorter range and gains in efficiency from technological advancements, the gains in efficiency due to the smaller, lighter form factor of a city car over a re-vamped Model 3 will be relatively small. People over-estimate the actual efficiency gains from making an electric car smaller than the Model 3.

A revamped Model 3 will be lighter and just as aerodynamic as the current Model 3, without losing value by scaling it into an economy segment. The battery will be able to have fewer kWh because of that (and efficiency gains from motor/drivetrain optimizations). It can sell for a lot less than the current Model 3 and have better margins. That is simply not possible with a city car unless you start compromising on quality, longevity, efficiency,and, to some degree, safety. Tesla naturally doesn't want to go there until it's necessary to continue expanding market share.

I'm not saying Tesla will not announce a city car at the same time, but they need the Model 3 to be more compelling from a price perspective so the city car does not steal the show with lower margins. There is room for both, and the Model 3 is the ideal platform to be the next stage of increasing volumes worldwide. The reason for this has to do with the differences between gas and electric platforms. Gas cars have more compelling economic advantages when scaling smaller than electric cars do. I won't go into the physics and the exact economic reasons why, but the difference is significant enough that it will change the adoption rate of the different form factors to a slightly bigger car. There is still a place for a small city car, it's just not as compelling as with a gas platform and the adoption of EV's will benefit greatly with an affordable and desirable car like a cheaper Model 3. This will benefit Tesla.

People who think they know better than Elon Musk, generally don't.

Bear in mind that wind-resistance squares with speed, and these "city cars" will be used more for, erm, cities where average speeds are way less

And regardless of the M3 efficiency, it's just too big for many folks - we just traded my wife's M3P to Tesla, we offered it to a friend for the same price - which was an absolute bargain as the Tesla offer was very, very low, but she decided against it because she thinks it's "too big". This is the reality in Europe, Teslas are just too big

 

[Curt Renz]

Should we be expecting any news from Moody’s soon? Do they rate on an annual basis?
Last time they upgraded Tesla to Ba1 was a year ago on January 24, 2022
Now that the 10k is out they should have enough info to upgrade to something more realistic…

Of course S&P has already done that. Moody's may be waiting for Elon to hire a new CEO to run Twitter. Many were hoping this would be accomplished by the end of January. That's now.

 

[unk45]

You missed my point. I'm not saying no one wants or needs a smaller car, or that it's only about a lower price, I'm saying that it's not necessary for Tesla to enter a lower profit margin market at this point in time. It will come in due time. I fully understand that Tesla's 4 models do not cover 100% of the market's needs, I'm saying they don't need to cover every market need, they can pick and choose which market segments it makes sense to sell into.

Informed people try very hard to help North Americans understand that small is NOT equal to low margin, that small is NOT equal to low price. Somehow it seems that reality is anathema to those who equate bigger with better.
VW GTI Autobahn base US price: US$39,070
Honda Civic Type R: US$ 44,390
Those are the base prices. Neither will be actually delivered anywhere near those prices.
The issue for those is not price, but performance and compact size. Most enthusiastic divers in Europe will tend towards that class, not for price, but for size.

It is probably pointless to explain this to North American drivers. To OEMs they all understand that the Gross Margins on 'pocket rockets' are enormous. The cheap fleet cars are there to absorb overhead, so are priced to cover direct costs and contribute to fixed costs, but not necessarily to have total costed profits.

When Tesla enters this market they'll have very, very low costs so they really will not need to play cost accounting games. Of that we may be assured. Of course Tesla simply will not be making the OEM-style 'strippers' either.

Please, I beg the North Americans to examine EU, South America and Asian markets. Just look a bit at all those very upscale smaller cars. Doing so will help understand the truth.
Size is not the determinate of value. Sure, big cars have more mass than do small, and if both are cheap and shoddy both can be unattractive.

 

[Curt Renz]

https://twitter.com/x/status/1620516627254231040