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

[Musskiah]

1.4 billion miles is enough data to conclusively say that Tesla FSD with human oversight is safer than every mode of transportation, except maybe for civil aviation. And that’s only because we need about 100x more data for a meaningful comparison with airline travel.

Tesla has done a fantastic job safely rolling out the FSD Beta testing program. Doubters who said it was dangerous to hand over testing to the general public were wrong.

Amen

 

[Thekiwi]

Like is FSD really that hard compared to this:

View attachment 1042091

SpaceX's Fourth Starship IFT-4 Test Is On Track For May Reveals NASA Official

SpaceX's highly anticipated fourth Starship test flight can take place in May reveals a NASA official in a meeting held earlier today.

wccftech.com

Because Elon Musk has been focused on building a rocket factory to do this and it sounds like its progressing well, then is scaling up Tesla to the next growth phase as difficult? more? less?

Interesting question, but I would say…Yes, FSD is really that hard compared to that.

Building Starship (& Falcon 9) is super super hard. But FSD is orders of magnitude more difficult to perfect.

Space has far less variables to worry about versus the complexity of successfully navigating human road networks.

(Idly imagining Dan O’Dowd hiding behind a meteorite in LEO waiting to throw a fake child shaped doll infront of a starship to prove its unsafe)

 

[Ellec]

Interesting question, but I would say…Yes, FSD is really that hard compared to that.

Building Starship (& Falcon 9) is super super hard. But FSD is orders of magnitude more difficult to perfect.

Space has far less variables to worry about versus the complexity of successfully navigating human road networks.

(Idly imagining Dan O’Dowd hiding behind a meteorite in LEO waiting to throw a fake child shaped doll infront of a starship to prove its unsafe)

It's weird that any teenager can learn to drive in a few months but to become an astronaut it takes years of training an only an elite few qualify. I agree though the path to fly into space is known and usually zero obstacles to worry about when the flight path is planned. Similar to creating autopilot to drive on an empty highway/motorway in terms of navigation.

 

[Musskiah]

China, Europe, and the U.S. all look to have enormous overcapacity of batteries in 2025. The batteries in a 3.9 MWh Megapack cost somewhere around half a million $ assuming around $125/KWh at the cell level. There is much room for cowt improvement in the upcoming supply glut. Let the good times roll...

 

[gene]

Here’s an excellent interview with JB Straubel.

Climate One: REWIND: Building a Better Battery Supply Chain with JB Straubel and Aimee Boulanger on Apple Podcasts

Show Climate One, Ep REWIND: Building a Better Battery Supply Chain with JB Straubel and Aimee Boulanger - Apr 26, 2024

podcasts.apple.com

 

[aubreymcfato]

China, Europe, and the U.S. all look to have enormous overcapacity of batteries in 2025. The batteries in a 3.9 MWh Megapack cost somewhere around half a million $ assuming around $125/KWh at the cell level. There is much room for cowt improvement in the upcoming supply glut. Let the good times roll...
View attachment 1042223

Now this would be a fantastic use of capital for Tesla. Buy them all.

 

[CorneliusXX]

China, Europe, and the U.S. all look to have enormous overcapacity of batteries in 2025. The batteries in a 3.9 MWh Megapack cost somewhere around half a million $ assuming around $125/KWh at the cell level. There is much room for cowt improvement in the upcoming supply glut. Let the good times roll...
View attachment 1042223

If COGS for stationary storage comes down so will the price that can be charged for stationary storage. Having multiple suppliers means price competition.

The demand limiting factor for the rollout of stationary storage is not cells or cell price (although more cheap cells is better for demand), it is grid connection.

 

[NicoV]

The demand limiting factor for the rollout of stationary storage is not cells or cell price (although more cheap cells is better for demand), it is grid connection.

In Belgium the new battery parks are located on the premises of old coal or gas electricity stations, reusing an otherwise obsolete grid connection.

 

[Artful Dodger]

In Belgium the new battery parks are located on the premises of old coal or gas electricity stations, reusing an otherwise obsolete grid connection.

Indeed, it's often the situation that megapack sites are co-located with substations, for example at Giga Texas. This actually has the effect of lessening the demand on the grid, through its support and ancillary services ie: the same grid connection can provide services to more customers. It's all about flattening the duck curve.

 

[CorneliusXX]

In Belgium the new battery parks are located on the premises of old coal or gas electricity stations, reusing an otherwise obsolete grid connection.

Investors are being very clever to use as many existing grid connections as they can, but it's a drop in the bucket compared to what is needed. The whole industry needs to upskill and update their regulations to address this.

A decent article below that goes into details and some quotes:
UK grid delays are descending into farce says Solar Energy UK

Developers have long complained about excessive waiting times for connections, alongside the consequent economic damage. In some extreme cases, they have been told to wait until the 2040s, although periods of seven to ten years are more common. The situation has arisen from rules intended to keep power bills low, though have had the opposite effect by restricting the growth of cheap renewable energy.

“You couldn’t make it up” said Chris Hewett, Chief Executive of Solar Energy UK. “The idea of offering a grid connection that you can’t use and calling that some sort of success is absurd. It is like being told you can open a shop on the High Street, as long as you keep the doors locked. This is bizarre behaviour, and an apparent attempt by the DNOs to make it look like they are doing something while they still fail to invest in vital upgrades.”

The UK may be particularly disorganised, but I've heard similar stories for EU and North American grids.

 

[Maarten]

Investors are being very clever to use as many existing grid connections as they can, but it's a drop in the bucket compared to what is needed. The whole industry needs to upskill and update their regulations to address this.

A decent article below that goes into details and some quotes:
UK grid delays are descending into farce says Solar Energy UK

The UK may be particularly disorganised, but I've heard similar stories for EU and North American grids.

Yes, same story in The Netherlands.
Panicking about the insufficient grid, of which it was clear years ago that it would become inadequate, but not acting upon it.
Now in some towns new businesses cannot get a connection to the grid.

 

[Huskyf]

Elon is going to China Sunday …..announced fsd supervised ….perhaps ….

 

[replicant]

Investors are being very clever to use as many existing grid connections as they can, but it's a drop in the bucket compared to what is needed. The whole industry needs to upskill and update their regulations to address this.

A decent article below that goes into details and some quotes:
UK grid delays are descending into farce says Solar Energy UK





The UK may be particularly disorganised, but I've heard similar stories for EU and North American grids.

If so, why is Tesla silent on this?

The CEO has no problem diving headfirst in the political arenq when it's about pronouns, immigre and taxes - no issue whatsoever to pick on and troll opponent - but crickets when bad regulations hinder the transition to renewable energy

 

[Todd Burch]

It was NHTSA that issued the notices today regarding investigations, no idea what day of the week is normal for these releases.

It doesn’t matter. It’s the media that distorts and reports such things as if they’re a big deal.

 

[Spacep0d]

S.R. Hadden?

"Wanna take a ride?"

 

[Zaddy Daddy]

COGS (battery cost) for Megapack will decrease. Demand for Megapack is quasi-infinite. So if supply is finite, costs to manufacturer go down, and demand approaches infinity...how do you figure margins don't stay high?

This is the sort of dangerous assumptions that got TSLA investors into trouble in 2021 - 2022 when share price assumed massive automotive margins would be maintained with volume expansion.

Demand is not infinite. If demand was infinite right now, Tesla would be able to sell megapacks from much, much higher prices than 25-30% gross margins.

Tesla has already cut prices on the megapack (though not much).

Right now, only the places with the highest energy costs or motivations to buy these systems (1st world countries with unstable grids like Australia, Hawaii...) are paying these prices. The economics don't work for most of the populations to pay these prices. That's fine.

Megapacks are a solid business. But please be practical. Tesla is producing 20 GWh annualized right now. When that goes up to 40, then 60-80...there will be price cuts.

Just like in automotive.

COGs will go down some, but not outpace the price cuts.

Just like in automotive.

Unlike in automotive, competitors will keep upping their production of Megapack competitors increasing market supply.

Demand pressure might allow Tesla to keep solid margins, but it is entirely impractical to expect them to go up with volume increases.

For 20 - 60 GWh annualized production over next 3 years we can probably assume 25-30% gross margins, but after that expect them to move down to 20%.


10% operating margin on 200 GWh annualized production (in 5 years maybe?) at $300 / kWh ASP (though probably will be lower) would yield 6 billion in operating profit, e.g. something like $1.8 in EPS. That's nice, but only worth like 100 billion in market cap.

 

[Mengy]

https://twitter.com/x/status/1783485878914125887

Now zoom that chart out to five years and tell me F and GM are doing better than TSLA. Go ahead Stormy, post the five year chart comparison. You aren't afraid to do that, are you?

 

[SO16]

Now zoom that chart out to five years and tell me F and GM are doing better than TSLA. Go ahead Stormy, post the five year chart comparison. You aren't afraid to do that, are you?

It is fun when people point to a specific timeframe. As a LONG TERM investor, I prefer TSLA’s return.

 

[hobbes]

COGS (battery cost) for Megapack will decrease. Demand for Megapack is quasi-infinite. So if supply is finite, costs to manufacturer go down, and demand approaches infinity...how do you figure margins don't stay high?

China possibly subsidizing their BESS manufacturers who compete with Tesla..

 

[Ellec]

It is fun when people point to a specific timeframe. As a LONG TERM investor, I prefer TSLA’s return.

I doubt the troll will post this, but I think this explains all, were would rather have invested your money? Hard one! I expect the next 5 years to look similar if not much better (for Tesla only).