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

[winfield100]

That also applies to the many OEM’s that still supply L2 chargers with EV sales, but surely those are diminishing as adoption rates rise. Otherwise there are almost countless L2 suppliers around the world, including many that supply multi-unit installations for shopping centers, commercial buildings and multi-family housing. I think even a 5% share is unlikely because of that context.

Fast charging clearly is a very different matter precisely because the infrastructure is more complex, maintenance is greater and energy infrastructure is more expensive to operate. That combination is the only structural advantage to the Supercharger network. Specifically for North America the unreliability and fragility of CCS1 provides powerful incentive for OEM change to NACS. Because the EU is CCS2, as is Supercharging, the EU advantage is primarily a single EU-UK standard network vs the many dozens of national/regional ones.

Under current conditions Tesla L2 charger solutions are very much the premium priced solution, which thrives in part by having the capacity to directly recognize individual VINs. Others with very slightly less functionality are sometimes less than half the price. L2 also easily acts as ‘just another plug’ with only reduction in amperage due to being a continuous load.

Those and other factors ensure that Tesla will not derive significant financial benefit from L2. FWIW, the many third party multi-unit solutions from ChargePoint, EverCharge, and dozens of others are far cheaper than those postulated by @Usain above.

@unk45 @petit_bateau
as an aside vis a vis batteries & such & renewables growth & needing a _lot_ more batteries
(note: 550 GWH of batteries just in 2022 just in EV's)

(i'm quite sanguine about Tesla energy growth capabilities)
(and the temporary pause in stock price rise)

IEEE Xplore Full-Text PDF:

(semi log scale graph)(ie batteries gained `~ 9x - 10x)

".......While the growth of batteries for stationary storage has been spectacular, the global fleet of electric vehicles (EV) already represents a larger energy storage capacity than the stationary storage. The IEA estimates that EVs sold in 2022 had batteries with a total of 550 GWh of capacity [......'
note rate of growth of solar wind below

(wind & solar broken out above)
(below Y axis is 100, 1,000, 10,000, article is preliminary but authors need to clean up graphs IMHO)

 

[winfield100]

in 2018 over 50% of new energy was renewables, and increasing. so a lot of batteries will be needed, like the (estimated) 550 gigawatt hours of EV batteries in 2022, plus behind the meter batteries plus storage, etc. Tesla Energy

How Renewable Energy Is Transforming Global Electricity — Charts! - CleanTechnica

NREL researchers recently published an article in the Journal of Photovoltaics tracking changes to the Transforming the Global Electricity

cleantechnica.com

 

[Webeevdrivers]

Looks like a refresh lite for the model Y in China. These should be showing up in Canada in the next month or so.

Tesla Surprisingly Launches Updated Model Y In China

On October 1, 2023, Tesla surprisingly updated the Model Y in China, applying changes to the exterior, interior, and a few select specs.

insideevs.com

 

[Usain]

I'd be very surprised if Tesla gets to double digit % market share for L2 chargers. The L2 charger is basically a commoditised product at this stage because it is trivial for any company that already manufacturers electrical products to move into this adjacent product and they all know how many are needed in the long run. There's also no limit to scaling like we have with batteries in vehicles. Tesla's offering isn't the cheapest. When building management is deciding to purchase hundreds of L2 chargers there are cheaper offerings.

I still think Tesla can capture 50% of the L2 network market if they want to go after it. Here is why I think Tesla has a huge advantage in L2:

• Tesla can scale production of the chargers to a massive number and achieve a level of cost and quality that nobody else will be able to touch.
• Tesla's NACS connector is becoming the standard. Tesla has been the only ones producing them for years, so others will be far behind in offering and manufacturing NACS plugs.
• During the time of transition to NACS, Tesla has the universal chargers with the J1772 adapter built in. Nobody else has this.
• Tesla will continue to dominate the EV market in North America for several years to come. So customers with Teslas will naturally prefer Tesla's chargers. Building management knows this. They will trust the Tesla brand over others.
• Tesla's L2 network software will be vastly superior to the others in everything from the customers experience in the app to the payment system to software for building management. Tesla just makes great software.
• Tesla's maintenance costs will be less. This is partially because of scale and partially because they manufacture a more durable, high-quality charger.

 

[Usain]

Except, as we talked about yesterday, the announcement specifically discusses Tesla handling payment, but makes an explicit point about the Property Manager setting the price, and no monthly fees. I can't imagine Tesla is going to take a cut of the charging price without bothering to mention that...

View attachment 978682

I can't imagine Tesla would give away the service for free. It only says "no monthly fees" for the payment system. That implies they are taking revenue somewhere else. They have to be taking a cut somewhere.

 

[jerry33]

Maybe the charging stops will show “short subject” films. Remember them? The ones they used to show before the feature film and after the news real. (Okay, maybe most of you don’t.) Every year I’m never able to see all the nominated short films before the Oscars, maybe these will bring back that market.

Yes, I recall those. The Scorpion, Jet Jackson, Flash Gordon, The Shadow, Gene Autry, and many I don't recall. Most were serial cliff hangers.

 

[Usain]

The days of free and low-cost L2 public charging are numbered. Things that are priced too low become over-used. The infrastructure becomes strained.

So once we start to see a significant share of the fleet become electrified, a market rate for charging will become the norm. The profit motive will kick in. You will no longer see "free" EV charging as a gimmick to attract customers to a business or renters to an apartment complex.

Then the market will consolidate and only a few players will be left to run the L2 networks. Tesla will dominate if they decide that's what they want to do.

 

[winfield100]

I can't imagine Tesla would give away the service for free. It only says "no monthly fees" for the payment system. That implies they are taking revenue somewhere else. They have to be taking a cut somewhere.

@Usain

I have used superchargers 205 times in 16 months
7,280 kwh at a cost of 36 cents a kwh, $2,596.85
with a range of 25 cents to 54 cents a kwh

I have manufactured, and used, from "virtually zero marginal cost" sunlight (free)
1,140 kwh at a cost of 2.6 cents a kwh, $29.64 (My Electric utility values it at that cost to purchase)

I expect in that ~$2,560+ difference, somewhere, Tesla gets their cut, multiplied by 10's of 1,000's of others charging and the number will rapidly climb as others join the NACS wave

I suspect that whilst I'm a single data point, and a road tripper, I'm fairly representative, especially as free supercharging goes away

 

[Artful Dodger]

I wonder how far away we are from a trial production line for Optimus - the product doesn't look finished with various wires and connectors still all over the place and general movement still seems a little hesitant, but it appears very close to doing the thing that saves money. Perhaps they can squeeze a small trial line in the corner of Fremont or Austin.

Nov 2023 at Giga Nevada. Telsa is already hiring for production jobs (listings on jobs website).

 

[CorneliusXX]

From my European perspective, the 500 euro Tesla wall charger is the cheapest charger on the market. A quick google says that typical chargers are 500-1200 euro. That’s for the hardware only. Installation by a competent electrician will cost about the same, assuming no major rework of the distribution box is needed (or even worse: digging in the ground).

Vs the £475 price in the UK, here are some of the many results from Google shopping. Starts at £200 if you want to roll the dice on something Chinese, mid £300s (c.30% cheaper) for more reputable local options.

 

[CorneliusXX]

Apologies - going to answer work email style with responses in [green]. Tesla makes a great product, but from what I've seen there's not enough differentiation to overcome cheaper price.

I still think Tesla can capture 50% of the L2 network market if they want to go after it. Here is why I think Tesla has a huge advantage in L2:

• Tesla can scale production of the chargers to a massive number and achieve a level of cost and quality that nobody else will be able to touch. [Why wouldn't a street lamp manufacturer, or a microwave manufacturer, or an iron manufacturer (any ultra high consumer goods electronics manufacturer) produce at a scale far in excess of Tesla which doesn't do that?]
• Tesla's NACS connector is becoming the standard. Tesla has been the only ones producing them for years, so others will be far behind in offering and manufacturing NACS plugs. [Helpful for Tesla but I don't know of any barriers to entry for using it - also only applies in the USA]
• During the time of transition to NACS, Tesla has the universal chargers with the J1772 adapter built in. Nobody else has this. [USA centric and presumably only relevant for a limited time]
• Tesla will continue to dominate the EV market in North America for several years to come. So customers with Teslas will naturally prefer Tesla's chargers. [Agree] Building management knows this [I don't think that would influence the decision - have you ever declined to charge due to brand of charger? If I had a choice I'd choose the Tesla but I'll charge with any plug available when needed]. They will trust the Tesla brand over others.
• Tesla's L2 network software will be vastly superior to the others in everything from the customers experience in the app to the payment system to software for building management. Tesla just makes great software. [I don't think that matters for your local home charger as you get used to whatever silly hoop that needs to be jumped through with inferior tech - it would have to be so bad that you would want to replace it]
• Tesla's maintenance costs will be less. This is partially because of scale and partially because they manufacture a more durable, high-quality charger. [Maybe, but I've seen no reliability stats on L2 chargers. Also, at this price maintenance is non existent - if you are going to pay hundreds to send out an electrician you are getting a new charger]

 

[Artful Dodger]

Looks to me as if Tesla is deliberately delivering only in Q4 everywhere at the same time to get more attention for the launch.

Beginning Highland sales in Q4 will also help with Q3 financials. If Highland deliveries began in Q3, then associated costs of the factory upgrade would have to be included on the Q3 Income Statement. With deliveries beginning in Q4, Tesla has an entire Quarter of Highland deliveries to help amortize costs. Plus, all the cars built at the end of Q3 but delivered in Q4 will move from the Balance Sheet to the Income Statement, which will further boost Q4 results.

 

[Bet TSLA]

Discount? I'm listening to the audiobook I got from the library. Something like: "the best cost is no cost"?

And to put this in perspective. I just bought a new MY LR (see sig), taking delivery this past Wednesday. Moved FSD from my 2017 M3.

Echoes of my first Tesla, which I also took delivery of on September 27. That was 2014. Happy to say both paid for entirely out of TSLA profits.

 

[Artful Dodger]

I do consume as much Tesla media as I can fit in a day, but honestly my own spreadsheet numbers alarm me.

We don't know the assumptions built into your model, but below let's look at some of the non-obvious items which the mainstream analysts never include in their models.

Lower margins + lower production creates a challenge for Q3 EPS to come in above Q2. I'm hoping they recognize some substantial FSD revenue or very large Megapack sales to offset it.

Let's examine each of these in order:

1. Lower Margins:
   1. Models S/X price cuts were matched with FSD price cuts. If that increases the "take rate" from 10% to just 12% then the S/X price cuts are revenue neutral, and increase margins.
   2. Futher, if the "elasticity of demand" for FSD means that a 20% price cut results in greater than a 20% increase in FSD "take rate", then the S/X price cuts are accretive to Tesla's bottom line.
2. Lower Production:
   1. Tesla is in the phase of optimizing costs at each of its newer factories. Lower labor costs per unit, and lower commodities prices generally, mean that even if production is slightly lower, margins can go up (which also goes to your 1st concern)
   2. Deliveries is what actually sets the pace for the Income Statement. What assumptions does your model include for the draw-down of inventory in Q3 (this is like 'harvest' for Income)
   3. Lastly, Tesla production should not be examined in a vacuum. All other automakers are experiencing lower production and demand, with Tesla running away with the EV market in N.America and Europe. Only in China is there substantial competition, but that is only at lower price points, with Tesla taking the majority of PROFIT in China, out-matching all the other players combined.
   4. Tesla Margins are World Class, and should not be spun as a negative for the Company.
3. Yes, substantial FSD deferred revenue recognition is likely in Q3 (Tesla guided to recognize about ~$1B over the course of 2023):
   1. Wall-E will handwave while trying to ignore this as a 'one-time' item. This next part is important
   2. Analysts can not simultaneously back out "one-time" FSD revenue but count temporary production pauses as "on-going"
   3. If FSD deferred revenue is to be backed out as 'one-time', then temporarily decreased production due to factory upgrades must also be backed out
   4. In reality, both FSD revenue and Production will increase in a step-wise manner going forward. Estimates should reflect that new situation.
4. Tesla Energy (Megapack deliveries) will begin to make a material contribution to Tesla's Quarterly Results. Wall-E likes to ignore TE growth as being inconsequential, but it will soon be substantial (and then Wall-E will act 'surprised').

Cheers!

 

[ItsNotAboutTheMoney]

Tesla has to charge per session charges of some sort if only to recover credit card processing fees, and they’d be idiots to not also tack on a Tesla network charge there as well.

Some poster on here knew somebody who was looking into having Tesla L2 and were told by Tesla they charged 1c/kWh for L2 payment processing in their program.

This isn't charger management, it's just handling payment.

L2 home and destination chargers are going to the most used by owners. It's also a major barrier to adoption. Adding significant cost is the opposite of what's needed.

I see significant opportunity for Tesla, especially through wider adoption of NACS, and I expect Tesla to do it the Tesla way, with a focus on low cost.

 

[Usain]

@CorneliusXX - Note that I was only talking about L2 networking in North America. None of what I said applies elsewhere. Also note the "network" part. That is important. I contend that there is going to be a huge addresable market in L2 charging networks for apartments, condos, and businesses.

Original bullet points are bolded. My replies are in black after your green responses.

• Tesla can scale production of the chargers to a massive number and achieve a level of cost and quality that nobody else will be able to touch. [Why wouldn't a street lamp manufacturer, or a microwave manufacturer, or an iron manufacturer (any ultra high consumer goods electronics manufacturer) produce at a scale far in excess of Tesla which doesn't do that?] I still believe that Tesla can build L2 chargers at a level of cost and quality that nobody else will be able to match. Unlike a microwave manufacturer, Tesla knows what it takes to build a quality product that integrates into a charging network.
• Tesla's NACS connector is becoming the standard. Tesla has been the only ones producing them for years, so others will be far behind in offering and manufacturing NACS plugs. [Helpful for Tesla but I don't know of any barriers to entry for using it - also only applies in the USA] I'm only saying that Tesla will have a big lead in this regard as they have years of experience and they know what it takes to implement the NACS standard better than anyone. Just knowing the specs doesn't give you years of engineering expertise in actually building and maintaining a charger that complies to those specs.
• During the time of transition to NACS, Tesla has the universal chargers with the J1772 adapter built in. Nobody else has this. [USA centric and presumably only relevant for a limited time] Yes, that's what I said. The universal charger helps Tesla gain market share during the transition. And gaining market share is paramount in the growth phase of a market. I doubt that anyone else will be able to bring a networked universal charger to the market very quickly.
• Tesla will continue to dominate the EV market in North America for several years to come. So customers with Teslas will naturally prefer Tesla's chargers. [Agree] Building management knows this [I don't think that would influence the decision - have you ever declined to charge due to brand of charger? If I had a choice I'd choose the Tesla but I'll charge with any plug available when needed]. There are only a handful of companies that will be able to provide networked chargers to apartment complexes nation wide. If 60% of the EVs my tenants drive are Teslas, I probably want to make them happy and go with Tesla for my networked charging solution.
• Tesla's L2 network software will be vastly superior to the others in everything from the customers experience in the app to the payment system to software for building management. Tesla just makes great software. [I don't think that matters for your local home charger as you get used to whatever silly hoop that needs to be jumped through with inferior tech - it would have to be so bad that you would want to replace it] We aren't talking about home charging. This is all about networked L2 chargers for people who don't own the property where they live and work. Tesla's software for that networked charging experience will be superior.
• Tesla's maintenance costs will be less. This is partially because of scale and partially because they manufacture a more durable, high-quality charger. [Maybe, but I've seen no reliability stats on L2 chargers. Also, at this price maintenance is non existent - if you are going to pay hundreds to send out an electrician you are getting a new charger] I'm talking about maintenance on the charging network. And I've seen plenty of broken L2 chargers that need maintenance. A larger charging network will be able to do maintenance more cheaply because of economies of scale. As for quality, Tesla's universal charger just got the highest score ever given from Tom Moloughney. He tests the chargers thoroughly and he seems to be the top authority on this.

 

[Rarity]

Nov 2023 at Giga Nevada. Telsa is already hiring for production jobs (listings on jobs website).

Only one Tesla Bot job in Nevada is listed. The other 49 positions are in Palo Alto.

At this scale of production, a corner of the Palo Alto AI engineering HQ should be sufficient.

https://www.tesla.com/careers/search/?query=tesla%20bot&site=US

 

[Baumisch]

I still think Tesla can capture 50% of the L2 network market if they want to go after it. Here is why I think Tesla has a huge advantage in L2:

• Tesla can scale production of the chargers to a massive number and achieve a level of cost and quality that nobody else will be able to touch.
• Tesla's NACS connector is becoming the standard. Tesla has been the only ones producing them for years, so others will be far behind in offering and manufacturing NACS plugs.
• During the time of transition to NACS, Tesla has the universal chargers with the J1772 adapter built in. Nobody else has this.
• Tesla will continue to dominate the EV market in North America for several years to come. So customers with Teslas will naturally prefer Tesla's chargers. Building management knows this. They will trust the Tesla brand over others.
• Tesla's L2 network software will be vastly superior to the others in everything from the customers experience in the app to the payment system to software for building management. Tesla just makes great software.
• Tesla's maintenance costs will be less. This is partially because of scale and partially because they manufacture a more durable, high-quality charger.

Why is nobody mentionung the obvious usp for tesla l2 - being inside the tesla Navigation and billing backend - the one that in the us most manufacturers agreed to embedd next year - so without hassling you could see a larger hotel with it's l2 chargers in the Navigation and use it seamlessly as superchsargers today

 

[SPadival]

Re L2 charging, I think there are region specific regulations around electricity retailing that we’re not aware of.

Tesla in Australia offers L2 charging setup & ongoing payment gateway service, but for a minimum of 6 chargers. Many businesses can afford the chargers, but don’t have the 6 parking bays to spare!!

 

[jkirkwood001]

The days of free and low-cost L2 public charging are numbered. Things that are priced too low become over-used. The infrastructure becomes strained.

So once we start to see a significant share of the fleet become electrified, a market rate for charging will become the norm. The profit motive will kick in. You will no longer see "free" EV charging as a gimmick to attract customers to a business or renters to an apartment complex.

Then the market will consolidate and only a few players will be left to run the L2 networks. Tesla will dominate if they decide that's what they want to do.

Then there's the corollary, when abundant renewable energy sourced cheaply becomes virtually free. Others here have researched more than I (@Artful Dodger ?), I can't remember off this happens in 10 or 20 years, but it will happen. Maybe in the medium term you're right, bit long term, this is one of the worst of Tesla's Teams IMHO.