This video cracks me up. Watching this (first time for me) makes me wonder why any lawyer in their right mind would take up the lawsuit about Musk‘s compensation plan.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
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Knightshade
Well-Known Member
AFAIK back in the mid-late 70s GM tried a strategy of building plants in non-union parts of the US (south and southwest) but in the end national contracts with UAW killed it and GM ended up allowing unionization at those plants too. Story about it from 1978-
Then GM tried just a couple years ago to avoid the national contract issues with requiring acceptance of unions by opening "joint venture" plants with battery companies that weren't necessarily covered by the national contracts...and again pressure from UAW got GM to back down. Story about that from 2021
GM now says it will support union at new battery factories
The company's statement Tuesday departs from GM's past stance, but it falls into line with President Joe Biden's promise to create good-paying union jobs in the transition from combustion vehicles to electric.
www.pbs.org
I think the big difference between buybacks and dividends is it’s easier to structure buybacks so they are done opportunistically to boost shareholder value when it makes sense for the company and the investors. Companies can quietly buy back shares when the SP is soft and hold cash when it is high.
Investors like dividends with predictable payouts, buybacks they are just happy to see when the company gets a good buyback price.
The other massive difference is buybacks are not subject to double taxation. I think this last reason alone is the big reason dividends are becoming a smaller percentage of investor payouts for a lot of companies.
Given that the last three hardware versions (and who know how many major software revisions) were supposed to enable Full Self Driving what’s the chance that this is the one?
Can you or someone give some idea on where we are on the recycling costs to extract minerals ? I understand at this time the costs are higher than mining, extracting and refining from ore, but not sure how much higher.
And also what is the cost trajectory look like and when is the cost expected to get on par with mining?
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The woman was extremely annoying. Market cap targets are actually not that weird. Stock options implicitly use market cap targets since you get more compensation (or zero) as the stock price moves.
But yeah, funny how these “expert” talking heads thought they were so smart…
petit_bateau
Active Member
Let me try to answer your question - there are a few things here.
1. Pretty much there is very little storage for oil. So figuratively speaking what we produce today, we ship tomorrow, refine the next day, and use the day after. At any given time the world can only support about a 1% or so difference between supply and consumption for a relatively short duration. After a month or so of more than 1% or so mismatch - in the oversupply case the tanks are literally brimming over, or in the undersupply case the oil price hits $120/bbl or more to encourage additional supply to be produced. So for all intents and purposes the historical supply (production) line is also the historical demand line at the price in the market at the corresponding times. If you look on that graph, at the historical blue line you can see the demand reduction from the 2008 economic downturn and from the 2020 Covid pandemic. There is a limited amount of extra supply that is kept on standby (primarily by Saudi Arabia and the other OPEC countries) so that if demand goes up unexpectedly, or a major incident happens somewhere (like a big war in Iraq & Kuwait, or something) that everything stays flowing smoothly.
2. Looking to the future I have also plotted a future blue line. That is the production required to meet oil's share of future energy needs as dictated by the model I built. As renewables get built out in ever greater quantities there is less oil used in heating houses or running cars, or whatever. I have similar (but slightly different) future production curves for gas and for coal. Ultimately the model shows that the fossil fuels simply aren't desirable by 2040. No-one would demand to buy them so no-one would produce and supply them. I'm being slightly simplistic as very minor amounts of greases and lubricants and chemical feedstock are still of interest, but they are not significant quantities compared with the overwhelming amount of oil that is used in one way or another for energy.
3. I'm not doing anything magic in my modelling, or relying on any magic technology. I am simply taking the logical extension of the existing trends that we see in the data, combined with my knowledge of the various parts of the energy industry. Over the years I've pretty much worked in all the various bits of the energy industry (fossil and renewable and big-electrical) at a practical level, as well as having a more academic level of understanding. So that means I am able to see which stuff in the data is significant enough to extract and use.
4. When you drill the first oil well(s) into an oil reservoir you tend to get a lot of oil out to begin with, and then as time goes on you get less and less until finally it is not worth the cost of looking after the well(s) and you declare the field dead, and close it in safely (at least you should do it safely). This is called natural decline, and it happens over time with all oil (and gas) reservoirs no matter how much care and attention we give them in all sorts of complicated ways to try and stop it happening. In any given reservoir there is a natural economic limit (at a given oil price) no matter how many wells we drill into them. It is just a natural fact of life for oil & gas reservoirs. If you crunch the historical data for all the known reservoirs in the world it turns out that the average decline is 6.5% per year. I've worked on reservoirs that declined faster than that, and ones that declined slower than that, but my personal professional experience also aligns with the studies that came up with the 6.5% average number, so I'm happy to use it. So if at the end of each year we were to actually stop actively going out and drilling new wells into existing (or new) reservoirs, and to stop doing interesting 'workovers' and 'sidetracks' and 'stim jobs' and other fascinating stuff to make more oil come out, then by the end of the year there would be 6.5% less oil flowing. For each calendar year have plotted those natural decline curves in the various colours.
5. When you consider the coming years it seems that by about 2030 nobody will want to drill any more wells at all. Not ever. By then the oil industry won't even be able to stimulate extra demand through its natural mechanism of lowering oil prices. Normally lowering oil prices mean that magically Americans go out and buy bigger vehicles and consume more, and so does everyone else in the world. But by 2030 as far as I can see the bigger truck wil be running on electricity, and so will the bigger aircon, and it will increasingly be supplied by renewable electricity. So somewhere about 2030 the OPEC/etc countries will conclude that if they don't use their standby wells (and fields) now, they'll never use them, and the game of chicken in OPEC will really be on. And by 2040 it will be completely game over for oil, and everything will be running on non-fossil energy : mostly renewables with a small amount of nuclear, etc.
6. I find it interesting that my models of EV curves, battery curves, and energy are all giving me very well aligned results. If the energy model was saying full transition by 2030 but my EV model was saying that transition would take until 2050 then I'd recognise that these were contradictory answers. But instead they are in very good alignment with pretty much game over for dino-juice vehicle manufacturing by 2030, and then end of fossil fuel production about 2040. That gives just enough time for the very last dino-juice vehicles to do about 10-years useful work between coming off the production line in 2030 and literally having no fuel available in the market in 2040.
7. The amount of effort going into drilling all those wells to overcome the 6.5% decline curve; and to building new oil & gas facilities (because they do wear out); and building new oil/gas/coal power stations; and shipping, and so on (because it all wears out) is very significant in industrial, financial, and economic terms. The point is we are already doing that. So in my model I quantify it and that effort gets progressively transferred across into building the renewables & electrical infrastructure. In fact that sets my maximum 'speed of transfer' constraint in my model, so I know that what the model predicts is realistic and achievable. This is already going on - it is now cheaper to build a new solar farm than to run an existing coal power station - so all my model does is use the existing data to make that trend explicit.
8. Collectively we've been working towards this since the 1970s or earlier. I grew up in a house in the 70s stuffed with books written in the 50s and 60s about these issues. But really it was the 70s when things became serious* and so it is fantastic to see it finally coming to fruition after 50-years of human effort. The next 20-years are going to be literally transformative. What remains to be seen is whether this is going to happen fast enough that we can escape the consequences of the damage we have been doing, mostly in those same 50-years.
Hope that helps.
* for example :
I've read a variety of things. I don't know enough to form a view. There are some people here on TMC who almost certainly can answer as they are invested in some of the startups.
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Thanks, hoping someone here would know, as I am trying to fight a FUD from a BBC article that claims that recycling is an unprofitable industry not going anywhere..
Easy to determine, is a pile of EVs higher grade ore than a hole in the ground?
dgodfrey
Member
The more I see how Tesla handled the opening up of the SpC Network in the U.S.A., the more impressed I am with the genius behind it.
It's almost as if someone knew a year ago how this would shake out and played their hand brilliantly.
www.newsweek.com
*I made some assumptions that the retrofits of SpC's get the same subsidies as new installs. If anyone knows otherwise, please advise.
It's almost as if someone knew a year ago how this would shake out and played their hand brilliantly.
- Firstly, teasing the non-Tesla's with a taste of the formerly forbidden fruit by providing access to ~10% of the network will only tempt them to want the remaining 90% of the apples. Only one way to access is with the purchase of a Tesla. I don't think some of them realize how relaxing a road trip is when you:
- Don't need a plan B
- Don't have to plan your stops
- Be 99.7% certain you will have a successful stop
You don't miss what you never had I guess
- Second, waiting till Biden folded after realizing the only way to get even close to his charging infrastructure target was if Tesla did most of the heavy lifting.
- This put Tesla in the dominant position for negotiations resulting in the retrofit of existing SpC kiosks qualifying for the subsidy.*
- And then there is the 97% uptime requirement. The average public fast charging network uptime is 80%. How will they miraculously increase their performance literally overnight?
Electric Vehicle Charger Study 'Flawed', Says Electrify America
Here's how automakers, drivers and the networks themselves are trying to improve the experience
www.newsweek.com
- Lastly, the app. I hear a lot of CCS apologists tout Plugshare as a superior tool for finding or navigating the public charging environment. I've used it on road trips only for level 2 but I wouldn't trust it to accurately reflect real time feedback. The check-ins are sometimes hours in the past and there are plenty of stories of CCS travelers either stuck at an offline charger that showed as working 2 hours earlier or limping to a level 2 or even level 1 just to make it to the next stop. Fingers crossed that one has an accurate functional rating.
Whereas, the Tesla app shows in real time how many functioning chargers are available. The SpC uptime is so reliable that rating them seems silly. I have over 90,000 miles of which at least 20,000 are road trips and I've never even thought about checking the status or reliability of a SpC. It's really a whole new world for existing CCS road trippers that if they are being honest will openly embrace the convenience, simplicity, reliability, locations, and seamless execution of the road trip experience.
*I made some assumptions that the retrofits of SpC's get the same subsidies as new installs. If anyone knows otherwise, please advise.
It is likely profitable since there are companies already doing it. Take a look at lead acid battery recycling for an example of a mature industry. And if by some miracle it wasn’t profitable, then governments would make it profitable through mandates and recycling fees.
The more I see how Tesla handled the opening up of the SpC Network in the U.S.A., the more impressed I am with the genius behind it.
It's almost as if someone knew a year ago how this would shake out and played their hand brilliantly.
- Firstly, teasing the non-Tesla's with a taste of the formerly forbidden fruit by providing access to ~10% of the network will only tempt them to want the remaining 90% of the apples. Only one way to access is with the purchase of a Tesla. I don't think some of them realize how relaxing a road trip is when you:
- Don't need a plan B
- Don't have to plan your stops
- Be 99.7% certain you will have a successful stop
You don't miss what you never had I guessThis is huge when compared to EA, EVgo, Chargepoint, etc. as their existing infrastructure gets nothing AFAIK. And for effectively peanuts, Tesla will get the same amount as if they built a new SpC. According to the numbers culled from the Texas infrastructure buildout program, the typical Tesla SpC was $40,000 compared to ~$200,000 for a comparable CCS station. My guess is the total cost to Tesla for the retrofit is between $1k-$2k per kiosk but just a WAG. Certainly less than starting from scratch.
- Second, waiting till Biden folded after realizing the only way to get even close to his charging infrastructure target was if Tesla did most of the heavy lifting.
- This put Tesla in the dominant position for negotiations resulting in the retrofit of existing SpC kiosks qualifying for the subsidy.*
- And then there is the 97% uptime requirement. The average public fast charging network uptime is 80%. How will they miraculously increase their performance literally overnight?
Electric Vehicle Charger Study 'Flawed', Says Electrify America
Here's how automakers, drivers and the networks themselves are trying to improve the experience
- Lastly, the app. I hear a lot of CCS apologists tout Plugshare as a superior tool for finding or navigating the public charging environment. I've used it on road trips only for level 2 but I wouldn't trust it to accurately reflect real time feedback. The check-ins are sometimes hours in the past and there are plenty of stories of CCS travelers either stuck at an offline charger that showed as working 2 hours earlier or limping to a level 2 or even level 1 just to make it to the next stop. Fingers crossed that one has an accurate functional rating.
Whereas, the Tesla app shows in real time how many functioning chargers are available. The SpC uptime is so reliable that rating them seems silly. I have over 90,000 miles of which at least 20,000 are road trips and I've never even thought about checking the status or reliability of a SpC. It's really a whole new world for existing CCS road trippers that if they are being honest will openly embrace the convenience, simplicity, reliability, locations, and seamless execution of the road trip experience.
*I made some assumptions that the retrofits of SpC's get the same subsidies as new installs. If anyone knows otherwise, please advise.
One more thought on this.
So far we’ve seen Tesla opening up only their smaller sites with lower utilization.
Tesla can use this as a way to boost utilization while not sacrificing the experience for Tesla drivers. The new sites with more stalls and higher volume can be Tesla exclusive until Tesla has expanded capacity enough where they can support the various other makers at all their sites.
If Tesla is getting subsidies for installing these devices, it’s a huge win for them with very little downside. They can keep converting sites which are in lower use areas and collecting subsidies while not hurting their own customers.
This isn’t like some dumping ground where CCS users only get the cast offs either. There are a lot of locations where it’s necessary to have a charger, but utilization is not super high.
There is no subsidy for what Tesla is doing now. For a number of reasons:
- The money is issued via the states/territories via a RFP process. (i.e. Biden can't direct the money anywhere, specific unless the states agreed.)
- No state has issued the RFP yet. (So Tesla can't have applied/been granted any of it yet.)
- The first NEVI funds are likely to be granted this fall. With construction starting next year.
- The money is only for future projects, it can't be used to fund something already built.
- As the Magic Dock has been installed it is likely not NEVI compliant, to qualify for any of the funds:
- Are the locations NEVI approved? (Within 1 mile of an AFC and being ~50 miles from the next closest NEVI AFC site.)
- It requires that you download the Tesla app, that is not allowed.
- It requires you to create a Tesla account, that is not allowed.
- It doesn't allow you to activate/pay through a third-party provider. (Think ChargePoint, Blink, Ford Oval app, etc.)
- It doesn't allow you to pay via a dumb phone.
- It likely can't meet the minimum power requirements, minimum of 150kW on any NEVI funded stall anytime a car asks for it.
- A normal full V3 site can only provide ~83kW per stall.
- Tesla hasn't opened their real-time stall usage data to any third-party that asks for it.
- Some states/territories may require on-site physical credit card readers.
- Some states/territories may require on-site physical displays.
- Some states/territories are going to require Plug&Charge support.
- MagicDock may not qualify for NEVI funding as it isn't really a permanently attached CCS Type 1 connector.
Yes, upgrades to be NEVI compliant would get the same subsidy, which is 80% of the cost of what is submitted in the proposal. So, Tesla would be eligible for 80% of their cost of making them NEVI compliant. (Not 80% of the complete cost of the site's original build cost in addition to the upgrade cost.)
That also means idling an existing factory (along with those workers, and if they are union you might be paying them to not work) until you can complete the upgrade. That's a lot of opportunity cost.
In the case where buybacks do not cause the option grants to grow EVEN MORE than the buyback, they are anti-dilutive. Less dilutive than no buyback.
In the case where they increase the option grants the exact same amount as they buy back, then they are neutral.
Only in the weird case where the company decides to issue more than they buy back over and above the grants they would have issued anyway, would buybacks be net dilutive. Can’t conceive of this happening.
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Imagine you own enough shares to constitute 100 billionth ownership of the company.
Scenario 1: 2% dividend
Result: You own 100 / 1B of the company plus get 2% cash
Scenario 2: 2% stock buy back
Result you now own ~102 / 1B of the company.
Option 1: Sell 2% of your shares:
Result: You own 100 / 1B of the company + 2% cash (Identical to dividend scenario. Fewer shares, but identical ownership)
But now you also have Option 2, which is to sell those shares in the future at a possibly more tax advantageous time.
All that matters is percentage ownership of Tesla, not the share count.
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Dreadnought
Member
I am in the camp of those expecting that Investor Day will be about Master Plan Part Troix, i.e. how to scale for a global transition to renewables. So far, I abstained from such speculations but @wdolson wrote in a post in the Russia/Ukraine thread [emphasis mine]:
Living in Germany, I was curious now how my personal use of electricity compares to the entire country's consumption divided by headcount.
Gross electricity consumption in 2020 for Germany was 559 TWh per [1]. In the same year, Germany had 83.1 million residents.
That equates to 559 billion kWh / 83.1 million / 365 = 18.45 kWh per person per day or about 6.700 kWh/year.
According to [2], private households consume about one quarter of all electricity and other sources saying that the average private use of 1300 kWh per year and person corroborates that.
Renewables contributed 246TWh or about 50.5% of electricity generation in Germany for the year 2020 (down to 47.5% in '21). Renewables need to roughly double in order to fully replace non-renewables. Btw, nuclear contributed 12.5% in '20 and 13.3% the year after.
All of the above is just the tip of the iceberg if we look at overall energy consumption. According to [3], Germany's gross overall energy consumption in 2020 was 11.504 PJ (Peta Joule). According to [4], industrial use was 3.747 PJ, out of which 12% or 448PJ were used as feedstock to chemical processes. If we put these aside to be tackled later, this leaves us with 11.056 PJ used for energetic purposes. To get the delta, we can also subtract half of the 559 TWh = 276,7 TWh renewables. We all know that 1TWh = 3.6 PJ. With that, I calculate 996 PJ of renewables in '20 and a remaining 10.060 PJ of fossil (and nuclear) sources to replace.
As we're talking about gross electricity, we can assume 100% efficiency for renewables. For fossils, efficiency varies widely. Thermal power plants can have a thermal efficiency around 40% and more if waste heat is used for heating purposes. In everyday use, cars tend to be in the low 20s if one doesn't go with official but looks at actual fuel consumption. A lot of gas is used directly for heating, be it domestic or in industrial processes. Heat pumps produce between 2 and 5 times the invested electrical energy as heat.
With considerably more research, it might be possible to calculate how much electricity would be needed to replace all fossil energy but an average factor of 33% should be at least in the right ballpark.
With that, we have to generate an additional 10060/3 = 3353PJ = 931 TWh of renewable electricity to match Germany's energy consumption in 2020.
TL;DR; Renewables covered about 21% of all energy needs in Germany in 2020 if we assume that 1 kWh of electricity can displace 3 kWh of crude fossil energy. In other words, we need about 5x of today's renewables for a full transition.
Is this achievable? I did not investigate but there's a lot of untapped potential for onshore wind, domestic and grid-scale PV and offshore wind is only a matter of funding.
How many batteries will be needed?
Tony Seba calculated 110 hours of storage for a least cost solution at 400 GW of installed renewable power [5]. We had 63MW of wind and about 50 MW of PV in 2020. If that were equally scaled by 5x, we may need less storage. Vice versa, his demand for 400 GW looks reasonable with additional storage in place as surplus capacity today gets sold or wind power is shut down.
Therefore, I won't come up with my own calculation but consider his 6.2 TWh demand for storage (in Germany) to be a good estimate. As he demonstrates, the amount of storage for a least-cost solution depends on local availability and variability of wind and solar. Therefore, it's not easy to extrapolate global demand from the case studies in his presentation.
My hope is that investor day will be used to share Tesla's plans for this decade and the 2030s with respect to installing production capacity, sourcing raw materials and how to address any other challenges that they identified.
[1] Stromverbrauch
[2] Anteil am Stromverbrauch nach Sektoren in Deutschland 2021 | Statista.
[3] Indikator: Primärenergieverbrauch
[4] Energieverbrauch in der Industrie 2020 um 1,9 % gegenüber dem Vorjahr gesunken
[5]
My immediate reaction was like "We're a household of 3 with an electric car and we use less than 15kWh per day on average. This 50kWh number has to be the entire country's consumption divided by # of UK citicens".
Living in Germany, I was curious now how my personal use of electricity compares to the entire country's consumption divided by headcount.
Gross electricity consumption in 2020 for Germany was 559 TWh per [1]. In the same year, Germany had 83.1 million residents.
That equates to 559 billion kWh / 83.1 million / 365 = 18.45 kWh per person per day or about 6.700 kWh/year.
According to [2], private households consume about one quarter of all electricity and other sources saying that the average private use of 1300 kWh per year and person corroborates that.
Renewables contributed 246TWh or about 50.5% of electricity generation in Germany for the year 2020 (down to 47.5% in '21). Renewables need to roughly double in order to fully replace non-renewables. Btw, nuclear contributed 12.5% in '20 and 13.3% the year after.
All of the above is just the tip of the iceberg if we look at overall energy consumption. According to [3], Germany's gross overall energy consumption in 2020 was 11.504 PJ (Peta Joule). According to [4], industrial use was 3.747 PJ, out of which 12% or 448PJ were used as feedstock to chemical processes. If we put these aside to be tackled later, this leaves us with 11.056 PJ used for energetic purposes. To get the delta, we can also subtract half of the 559 TWh = 276,7 TWh renewables. We all know that 1TWh = 3.6 PJ. With that, I calculate 996 PJ of renewables in '20 and a remaining 10.060 PJ of fossil (and nuclear) sources to replace.
As we're talking about gross electricity, we can assume 100% efficiency for renewables. For fossils, efficiency varies widely. Thermal power plants can have a thermal efficiency around 40% and more if waste heat is used for heating purposes. In everyday use, cars tend to be in the low 20s if one doesn't go with official but looks at actual fuel consumption. A lot of gas is used directly for heating, be it domestic or in industrial processes. Heat pumps produce between 2 and 5 times the invested electrical energy as heat.
With considerably more research, it might be possible to calculate how much electricity would be needed to replace all fossil energy but an average factor of 33% should be at least in the right ballpark.
With that, we have to generate an additional 10060/3 = 3353PJ = 931 TWh of renewable electricity to match Germany's energy consumption in 2020.
TL;DR; Renewables covered about 21% of all energy needs in Germany in 2020 if we assume that 1 kWh of electricity can displace 3 kWh of crude fossil energy. In other words, we need about 5x of today's renewables for a full transition.
Is this achievable? I did not investigate but there's a lot of untapped potential for onshore wind, domestic and grid-scale PV and offshore wind is only a matter of funding.
How many batteries will be needed?
Tony Seba calculated 110 hours of storage for a least cost solution at 400 GW of installed renewable power [5]. We had 63MW of wind and about 50 MW of PV in 2020. If that were equally scaled by 5x, we may need less storage. Vice versa, his demand for 400 GW looks reasonable with additional storage in place as surplus capacity today gets sold or wind power is shut down.
Therefore, I won't come up with my own calculation but consider his 6.2 TWh demand for storage (in Germany) to be a good estimate. As he demonstrates, the amount of storage for a least-cost solution depends on local availability and variability of wind and solar. Therefore, it's not easy to extrapolate global demand from the case studies in his presentation.
My hope is that investor day will be used to share Tesla's plans for this decade and the 2030s with respect to installing production capacity, sourcing raw materials and how to address any other challenges that they identified.
[1] Stromverbrauch
[2] Anteil am Stromverbrauch nach Sektoren in Deutschland 2021 | Statista.
[3] Indikator: Primärenergieverbrauch
[4] Energieverbrauch in der Industrie 2020 um 1,9 % gegenüber dem Vorjahr gesunken
[5]
KBF
Model X owner (formerly Cdn Signature Model S)
I wouldn't be shocked if Elon's next compensation package was tied to TSLA becoming the biggest company in the world.
It’s all weird either way.
VW almost certainly has a lot of idle capacity right now due to lower demand. Do they continue running 10 factories at 80% utilization and while they build another factory? Now they have 6 factories working at 66% production.
Probably the ideal solution right now has more to do with finding the quickest way they can transition capacity to producing (desirable) EVs. I don’t think we can answer that easily.
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