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

[GhostSkater]

All this talk about 4680 is great, except for the fact we don't even know if they can make DBE work efficiently, ever.

Right now their yields are poor, so much so they can barely make anything off their V2 line in Austin, and we are nearing 3 years since Battery Day.

They are still hiring external DBE experts because they may be stuck. High volume production is hard, I heard.

4680 is at least 1 year behind schedule already, and burning a hole through Tesla's financials. We are essentially banking on 4680 converting a Hail Mary to produce anywhere near positive margins to have a chance to grow volumes later half of this year and 2024. Its not a slam dunk.

Meanwhile, people were thinking Drew Baglino could be next CEO? The battery factory of sadness is an embarrassment, I'd bet it more likely he is fired than made CEO.

While it’s true that production rate is low so far, last report was the yield was over 90%, that’s better than most of Panasonic Nevada yield for most of it’s existence

 

[Bobfitz1]

That’s why social media was invented.

I think Drew should be fired. The 4680 has, to date, been a complete flop. They bet the company on this and would have been years ahead if 6 years ago they'd gone a different route and invested in more 2170 and alternative form structures for LFP to enable the energy side to keep growing. Energy's lack of growth, before pandemic, during pandemic, is, when peeled back, all about battery constraints and the lack of solutions.

Right. Like Elon wouldn't fire Drew in a New York minute if the 4680 delays were due to his insufficient competence rather than a number of intractable ramping problems with the materials and high speed production automation. If it was the former Drew would have been gone and Elon sleeping on the floor at Kato Road.

 

[Electroman]

Is the concern expressed here is about 4680 production? or 4680 with DBE manufacturing tech?

I thought Tesla is already manufacturing 4680 in high volume? Except that energy density still lags behind 2170, and tabless hasn’t given them all the stated benefits maybe?

So maybe both.

 

[unk45]

You're missing money’s actual usefulness … it is information. If the price of something spikes, that is an information signal to the economy to make more of it since it is in demand.

Prices are essential to a functioning economy so that the economy knows what to allocate resources to. That’s the fundamental problem with no money systems like communism and socialism. Since there are no undistorted price signals, you end up with malinvestment. Ie. Huge amount of resources are spent on things that aren’t good investments or on things that people don’t want or need.

We will always need money.

Clue to the real world: Throughout written human history, money has existed. Money is nit dependent on any given political system. An artificial method of exchange might be the Yap stone disks. (Look them up). Maybe Chinese renminbi, North Korean won, or the a ncient Mesopotamian shekel. Every human society has some artificial means of exchange.

The relevant topic regarding Optimus, FSD, etc really is not the means of exchange. It is, rather, how exchanges between humans will be when (if) human labor is not the core basis for generating those means. Elon’s shortcut is ‘universal basic income’. Even more fundamental is the question of the role of.most societal institutions in such a World, one in which garbage collection, police, military, social services are all automated, including most of medicine.

Isaac Asimov speculated such worlds. Elon has read Asimov. Is that not the postulated eventual outcome of Elon’s thoughts? In that sort of world will our TSLA exist?

 

[Krugerrand]

I think Drew should be fired. The 4680 has, to date, been a complete flop. They bet the company on this and would have been years ahead if 6 years ago they'd gone a different route and invested in more 2170 and alternative form structures for LFP to enable the energy side to keep growing. Energy's lack of growth, before pandemic, during pandemic, is, when peeled back, all about battery constraints and the lack of solutions.

I think everyone at Ford should be fired. If they’d had half a brain over a decade ago they’d be leading the EV market now instead of GM. Additionally if they had any kind of clue how to manufacture efficiently, they’d be making at least a nickel profit on their electric vehicles by now.

 

[traxila]

I disagree the 4680 has been a "complete flop".

This is a new battery technology, a new way to manufacture batteries, and that is why development has hit hiccups along the way and is very much behind schedule. The delayed progress does not diminish the ultimate goal however, which is to have a very economical battery production line capable of very high output. That is important.

When Tesla stated its goals to manufacture 500,000 EV's per year by 2020 most experts laughed at them and thought Tesla was crazy setting impossible goals like that. Ambitious goals are why Tesla is so far ahead of everyone else today. Sure Tesla often hits the mark behind their own deadlines, but Tesla has a solid track record of still hitting those goals in time.

The 4680 is behind schedule and people are now claiming it's a "huge flop", but what if they still solve the issues in the near future and the 4680 then becomes the (delayed) success Tesla wants it to be? Will the current naysayers then admit they were wrong? Will it still be a "complete flop" even if the 4680 takes off a few years behind schedule?

According to the haters who also frequent this board, all EM enterprises and projects, from SpaceX to Boring, have been complete flops. Huge flops!

They all missed their timelines and were not a success from day one.

Paypal? Flop.
Roadster? Failure.
SpaceX? A blooper reel of massive explosions.
Model S? Didn’t they stop making it?
Model X? Hubris and arrogance that sealed the fate of Tesla.
2170? Waste material stockpiled in sky high hills.
Model 3? Hahahaha bankrupted Tesla! Did you see the ridiculous tents? What a con man!
GigaShanghai? Guess EM paid off enough of the CCP to cover up the disaster that is coming anyway.
StarLink? A subsidised destruction of the astronomical world as we know it.
Las Vegas Loop? A festering sore of corruption.
FSD? Flat out extreme fraud and deadly why isn’t he in prison?
Cybertruck? Everyone knows it will never be made.
Optimus? A comedic distraction.
4680? More evidence of the never ending fraud that is Musk.

 

[nativewolf]

Yep, just like FSD, everyone should be fired for not hitting a timeline on complete new technology that has never been done before /s!!!!

I think looking at the results of other battery manufacturers' (outside of China) production ramp should illustrate how hard it is to get a new battery factory up and running...and that's using EXISTING technology!

Which is why you don't typically risk losing marketshare waiting for new technology to hit manufacturing. The tech world is rife with examples of this and self driving is not a good comparison. Self driving was something others had been working on for years, the basic science was all pretty much understood. Everyone is facing the issue of "manufacturing" self driving - it is hard and a solution is years away and Tesla has learned that the hard way. A battery process that was unproven that has held back the energy sector for 5 years...a very different issue. In the end they just scaled battery by using LFP cells from China.

 

[Zaddy Daddy]

While it’s true that production rate is low so far, last report was the yield was over 90%, that’s better than most of Panasonic Nevada yield for most of it’s existence

Which report was that? While promising, yield is also a function of volume rate and their production rate is well below spec of their plans for each line. That's part of the problem - they can't even ramp a single line because any rate increase probably kills the DBE yields.

The 4680 is behind schedule and people are now claiming it's a "huge flop", but what if they still solve the issues in the near future and the 4680 then becomes the (delayed) success Tesla wants it to be? Will the current naysayers then admit they were wrong? Will it still be a "complete flop" even if the 4680 takes off a few years behind schedule?

Of course if they 'solve' high volume production using DBE, then it is ultimately a success even if a few years behind. But the problem is we are in the thick of it in terms of inability to separate a successful path from a failed one. It could go either way. We are not being given confidence or clarity from the C suite on the true progresss. No real data is provided to give confidence that it will be solved. This is supported by external battery experts espousing how it has been previously essentially impossible to make DBE work at scale.

From Battery Day:
«Elon Musk: (02:35:03)
I mean, 0.420%, of course. So what this enables us to do is achieve a new trajectory in the reduction of cell cost. And now to be clear, it will take us probably a year to 18 months to start realizing these advantages and to fully realize the advantages probably it’s about three years or thereabouts.»

That was about two and a half years ago and a bit, I am not so sure his thereabouts prediction is sure to be that far off, as predictions go…

It is far off, you've actually proved the point further. A year to 18 months to realize of the cost savings? Tesla isn't realizing any cost savings right now, it is massively burning cash on 4680! They have said as much in their last 2 earnings reports. This is part of the reason we have much lower earnings than we thought we would - costs are higher because of 4680.

If Tesla had skipped DBE, 4680 would have ramped faster with lower costs, and Tesla profits and share prices would be higher right now. Instead they chose to bet the company on ability to pulverize powder well.

 

[Bobfitz1]

Probably was his last interview with CNBC before the one with Faber

Saying some sort of Universal Basic Income will come about once tens of millions of people lose their livelihood to self driving trucks, cars and bots is whistling past the graveyard. Uncharacteristically Ron Baron either hasn't a clue or just doesn't want to admit publicly where things are headed over the next twenty years. As Ray Kurzweil laid out in great detail two decades ago, the pace of technological change is accelerating each year. Until recently it was possible for many to adapt and escape to different, new and often better jobs. Citing the Industrial revolution as an example of how the AI revolution is going to play out ignores that revolution took place incrementally over a few hundred years. I don't know how or if this ever faster disruption of the majority of people employment options can be slowed and eased into a new economic model of sharing the wealth so people can survive and follow their bliss. But IMO those who know what's coming should be honest about what's coming and devote a portion of their attention and resources to thinking about how it might be eased somewhat.

 

[Cosmacelf]

Or just check inventories and deliveries.

Even if everything is “free” (provided by a robot economy), you still have questions of resource allocation. Someone still has to decide how many starships to make to give people vacations to the rings of Saturn to use a particularly resource and time expensive service. Not everyone can be given first dibs on hanging out ogling Saturns rings. So how do you choose who gets to go now? Lottery? Now you’ve got a Soviet system, only the bread lines are slightly more tolerable.

Look, maybe you like the idea of a completely egalitarian society where the value of human output is completely ignored. The hard work of person X is worth no more than the laziness of person Y. I just happen to think that would be a horrible time and place to live in.

 

[Beltsbear]

It is far off, you've actually proved the point further. A year to 18 months to realize of the cost savings? Tesla isn't realizing any cost savings right now, it is massively burning cash on 4680! They have said as much in their last 2 earnings reports. This is part of the reason we have much lower earnings than we thought we would - costs are higher because of 4680.

If Tesla had skipped DBE, 4680 would have ramped faster with lower costs, and Tesla profits and share prices would be higher right now. Instead they chose to bet the company on ability to pulverize powder well.

Looking at just the 4680 one could see that…. But with the 4680 how many extra cars per week are they making versus batteries they would NOT been able to get? What is the profit on those extra cars? I figure that is thousands of model Y per week. The 4680 program itself may be losing money but it makes the model Y line make more money.

 

[Knightshade]

I love that we went from "Naah I still believe Tesla is totes sandbagging!" to " Well sure everything is late but they deliver eventually!" so quickly

FWIW, and for years, I've been pushing back against the "they're obviously sandbagging this latest thing..." posts because there's never been significant evidence they had, have, or will have, any intent whatever to do that.

Instead I find the argument, recently repeated by others, that Elon simply sets super aggressive goals, which is the opposite of sandbagging, and genuinely wants to hit them, but since it's often doing something nobody ever has before, nobody can REALLY guess how long it'll take, and it takes however long that is....and almost every time it's longer than Elon originally thought, but they do get there. That view seems to better reflect actual reached-target times far far more often than the "everything is sandbagged just wait and see" story....not that they've NEVER gotten something done early but it's the exception (Y launch comes to mind) not, remotely, the rule.

Meanwhile legacy is still tripping over their own junk trying to make something as good as the 2012 S.

 

[Cosmacelf]

The relevant topic regarding Optimus, FSD, etc really is not the means of exchange. It is, rather, how exchanges between humans will be when (if) human labor is not the core basis for generating those means. Elon’s shortcut is ‘universal basic income’. Even more fundamental is the question of the role of.most societal institutions in such a World, one in which garbage collection, police, military, social services are all automated, including most of medicine.

Isaac Asimov speculated such worlds. Elon has read Asimov. Is that not the postulated eventual outcome of Elon’s thoughts? In that sort of world will our TSLA exist?

The specific Asimov book that lays it out is The Naked Sun which describes, at length, a world with a robotic workforce of 10,000 robots per human. The planet is completely settled with a stable population of 20,000 humans, each having a gigantic estate, to the point that they all view each other via room sized 3-D zoom calls rather than personal contact (I’m already seeing an aversion towards personal contact in our younger generation). Babies are all grown in artificial wombs, carefully monitored by robots. Children are raised by robots as well. There is no communicable disease since so little contact is made.

Asimov touches on how amateur the population ends up being … with only 20,000 people, even a mediocre talent can be the best in whatever in their society. It also leads to stagnation. With everything provided for, there’s no need or desire to strive for anything.

Even though the book is a sequel, I read it as my first Asimov book, and I can recommend it as highly enjoyable. The first book, The Caves of Steel, also talks about a unique society, a highly overpopulated earth which is very leery of robotic labor. Both books have interesting things to say about human societies in the age of robots.

 

[unk45]

What was it someone said about how Tesla (or SpaceX?) always delivers the impossible, late?

Lather. Rinse. Repeat.

The mere fact is that Tesla is doing 4680 development, and pioneering Dry Battery tech ahead of the veteran battery companies, and that no other auto OEMs are even working on such improvements. This is a testament to how they draw the line in the sand well over the horizon from where others are even looking.

Except for “…

that no other auto OEMs are even working on such improvements…”

I can agree. From the most glaringly obvious one, BYD, several others, including Tesla, are working closely with CATL. None, except BYD, are producing their own batteries at scale. We should recognize that nearly all OEM’s are not very vertically integrated. That does not mean they’re ignoring the subject. There are Magna, Zeiss and others working on both platforms, cells and batteries. Then, repititiously, CATL performs that role for many and Northvolt for others. And LG is there too. Each of those are working on new approaches asbwell as existing technology.

Despite my TSLA position I cannot imagine they’re “the only OEM” in anything other than sharing high vertical integration with BYD, although BYD ‘goes it’s own way” more than Tesla, which happily buys batteries from any qualified supplier, including BYD. One gigantic TSLA advantage is that they adopt practical and efficient solutions from whoever has them, doing it on their own when suppliers cannot meet quality, quantity, price and supply requirements.

The foregoing explains battery innovation, lithium refining, Model X seats, BMS, Gigacasting and much, much more. None of that implies others are not working on any given innovation, in fact many are doing so. Tesla is mostly better, though…

So HODL, but also watch others carefully. There are also other OEMs, almost all not as good

 

[y_naught]

You ha

I haven't seen any physical banks close down locally and new ones are still being built.

You haven’t? 20% fewer bank branches now than 10 years ago: Number of U.S. FDIC-insured commercial bank branches 2022 | Statista

 

[unk45]

The specific Asimov book that lays it out is The Naked Sun which describes, at length, a world with a robotic workforce of 10,000 robots per human. The planet is completely settled with a stable population of 20,000 humans, each having a gigantic estate, to the point that they all view each other via room sized 3-D zoom calls rather than personal contact (I’m already seeing an aversion towards personal contact in our younger generation). Babies are all grown in artificial wombs, carefully monitored by robots. Children are raised by robots as well. There is no communicable disease since so little contact is made.

Asimov touches on how amateur the population ends up being … with only 20,000 people, even a mediocre talent can be the best in whatever in their society. It also leads to stagnation. With everything provided for, there’s no need or desire to strive for anything.

Even though the book is a sequel, I read it as my first Asimov book, and I can recommend it as highly enjoyable. The first book, The Caves of Steel, also talks about a unique society, a highly overpopulated earth which is very leery of robotic labor. Both books have interesting things to say about human societies in the age of robots.

Among my first memories of Elon comments were a few about various Asimov books. The Naked Sun was extreme, but lays a foundation (not a quip) for understanding the possible. Impact of excellent AÍ technology driving fundamental transformations. I recommend “Robbie” and “I, Robot” to understand how Elon views dystopian possibilities. Realistically, we should understand that the factory OS, FSD and Optimus are speeding the transition, most visible right now with the successors of ChatGTP that are incorporating vision.

Some must think this subject is off-topic in this thread. Definitely it needs new thread(s). However, we all should, as TSLA investors, understand we are invested in an AI company that builds and sells physical products (vehicles, solar equipment and energy storage), software, services and electrical energy.

All of that forces us to consider Asimov’s hypotheses, just as Elon has been doing.

corollary: TSLA is not a good investment for those who cannot endure volatility.
Thus I HODL.

 

[Knightshade]

You ha

You haven’t? 20% fewer bank branches now than 10 years ago

From what I've read that's overwhelmingly more due to massive consolidation of small banks bought out by large ones and closing redundant/unprofitable locations than due to ATMs existing (not that I doubt that, and much moreso online banking, has had SOME impact)

 

[lascavarian]

You ha

You haven’t? 20% fewer bank branches now than 10 years ago: Number of U.S. FDIC-insured commercial bank branches 2022 | Statista

View attachment 939753

Presence of credit unions has tripled in my town with small commercial banks fading.

 

[GhostSkater]

Wasn’t the EV9 supposed to be a full size SUV?

This is just a fat Soul, bring on the CyberSuv

https://twitter.com/x/status/1660288136977711104

 

[Cosmacelf]

Among my first memories of Elon comments were a few about various Asimov books. The Naked Sun was extreme, but lays a foundation (not a quip) for understanding the possible. Impact of excellent AÍ technology driving fundamental transformations. I recommend “Robbie” and “I, Robot” to understand how Elon views dystopian possibilities. Realistically, we should understand that the factory OS, FSD and Optimus are speeding the transition, most visible right now with the successors of ChatGTP that are incorporating vision.

Some must think this subject is off-topic in this thread. Definitely it needs new thread(s). However, we all should, as TSLA investors, understand we are invested in an AI company that builds and sells physical products (vehicles, solar equipment and energy storage), software, services and electrical energy.

All of that forces us to consider Asimov’s hypotheses, just as Elon has been doing.

corollary: TSLA is not a good investment for those who cannot endure volatility.
Thus I HODL.

Oh wow, you made me go down the rabbit hole of a quick re read of I Robot. In each short story, Asimov postulates some problem with a particular type of robot and what effect it would have. It is indeed an interesting exploration into the issues we might have with robots once we introduce AI powered ones into general society.

I was born 40 years too early. All my life I’ve fantasized about being a robot psychologist. That may very well end up being a real profession soonish.