TSLA Market Action: 2018 Investor Roundtable

[EnzoXYZ]

By "everybody" I meant all the analyst. A professional TSLA analyst that does not know about the Bloomberg Model 3 Vin counter is grossly incompetent. If they dismiss it that is another thing altogether.

Stock Analysts by definition are all incompetent.

 

[elasalle]

Stock Analysts by definition are all incompetent.

Just like Fortune Tellers with a bad fortune

 

[Richard007]

Picked up 20 shares to bug shorts and pay for muffin and coffee later this week. Bought at $313.75

Got my coffee and muffins money today!

I think tomorrow thurs. might be another day to get in for a day or week trade.

 

[avoigt]

You could be right, but there is language in the 8-K that could be read otherwise. I'll quote it all for context and highlight the relevant portion which explicitly says that the Grohmann equipment will have a "ramp" in Q2. So that could mean that the equipment was tested in Germany and working fine, but they did not go through all of the optimization necessary to ramp it up to its full capacity.

Tesla, Inc. is clarifying the following statement made by Elon Musk, Tesla’s Chief Executive Officer, during Tesla’s fourth quarter and full year 2017 financial results conference call held on February 7, 2018:​

“[We] expect the new automated lines to arrive next month in March. And then it's already working in Germany so that’s going to be disassembled, brought out to the Gigafactory and reassembled and then go into operation at the Gigafactory. It's not a question whether it works or not. It's just a question of disassembly, transport and reassembly. So we expect to alleviate that constraint. With alleviating that constraint, that's what gets us to the roughly 2,000 to 2,500 unit per week production rate.”​

The “2,000 to 2,500” units per week cited in this comment refers solely to the capacity of the additional automated battery module manufacturing equipment that is currently located in Germany, and not to Tesla’s total Model 3 production run rate or to the capacity of the automated battery module equipment that is already present at Gigafactory 1. Tesla’s ability to meet its target of 2,500 per week by end of Q1 2018 is not dependent on the additional equipment that is currently located in Germany, as that equipment is expected to start ramping production during Q2 2018. With respect to battery module production, Tesla’s ability to meet its target of 2,500 per week by end of Q1 2018 is dependent only on the equipment that is already present at Gigafactory 1, as well as the incremental capacity that is currently being added through the semi-automated lines that were also discussed during the conference call.​

Referring to the Grohmann equipment's "capacity" and stating that the equipment was "already working" in Germany does not necessarily mean it has been fully optimized in Germany and is already working at full capacity. And given the "ramp" language, I am cautious about concluding Tesla will basically assemble the line, flip a switch and the line will be running full tilt.

I will freely admit I could be overreading this but especially given the explicit "ramp" language in the 8-K prefer to err on the side of caution.

Either way, the result could be essentially as you describe since the "ramp" of the Grohmann module manufacturing equipment could be straightforward and relatively quick once the equipment is installed.

I understand your concern but allow me to clarify:

Every engineering company in Germany building and selling a production line is tied to contract § that legally binds them to perform in a certain defined way and to test those lines up to 100% capacity in most cases even more than 100% and prove through QC and QA including documentation that all is as agreed. This is standard procedure.

Großman is a well established long term solution provider for automation in the auto industry including extremely difficult customers like BMW and goes through a pre defined set of procedures the one above just one of them.

In other words there is no real reason to believe that Grohman has changed procedures that made them successful and abandon Engineering processes that have been proven to be very valuable and beside that make them legally vulnerable . The likelihood that Grohman has send the lines over without testing them even about 100% capacity rates for a define period of time can be ruled out IMHO.

I am an production engineer and I can confirm to you that we can rule out the line was not running in Pruem previously and successfully at least at full speed before it has been send over. Its a stress test thats required to make sure you have later a happy customer.

 

[HG Wells]

I see China as having the most effect on Tesla stock this week. The tariffs that Trump is about to announce could easily irritate China. I think the general markets will go down significantly today, and depending on how China reacts the markets could decline next week also. A real trade war could result in significant market drops.

While we need to do something about the trade imbalance with China, it has to be done in a slow and patient manner.

While Tesla often times does not follow the general markets it could this week, or at least this morning.

On the other hand, the opening of sales of model 3 to Canada and the resulting three-month increase in tax incentives could significantly increase tesla's stock price if analysts understand it.

 

[EinSV]

I understand your concern but allow me to clarify:

Every engineering company in Germany building and selling a production line is tied to contract § that legally binds them to perform in a certain defined way and to test those lines up to 100% capacity in most cases even more than 100% and prove through QC and QA including documentation that all is as agreed. This is standard procedure.

Großman is a well established long term solution provider for automation in the auto industry including extremely difficult customers like BMW and goes through a pre defined set of procedures the one above just one of them.

In other words there is no real reason to believe that Grohman has changed procedures that made them successful and abandon Engineering processes that have been proven to be very valuable and beside that make them legally vulnerable . The likelihood that Grohman has send the lines over without testing them even about 100% capacity rates for a define period of time can be ruled out IMHO.

I am an production engineer and I can confirm to you that we can rule out the line was not running in Pruem previously and successfully at least at full speed before it has been send over. Its a stress test thats required to make sure you have later a happy customer.

Thank you for the explanation and for sharing your expertise -- very much appreciated and much more useful than my word parsing.

Since Tesla Grohmann is part of Tesla rather than an outside contractor, do you think there is any chance they have deviated from the standard procedures specified by contract and decided to optimize at the production facility? Or would it still take less time overall to just do that in-house in Germany before shipping?

 

[mongo]

Thank you for the explanation and for sharing your expertise -- very much appreciated and much more useful than my word parsing.

Since Tesla Grohmann is part of Tesla rather than an outside contractor, do you think there is any chance they have deviated from the standard procedures specified by contract and decided to optimize at the production facility? Or would it still take less time overall to just do that in-house in Germany before shipping?

Never do remotely what you can accomplish in house. You can't haul your lab/ equipment/ people over to the final site.

 

[avoigt]

Thank you for the explanation and for sharing your expertise -- very much appreciated and much more useful than my word parsing.

Since Tesla Grohmann is part of Tesla rather than an outside contractor, do you think there is any chance they have deviated from the standard procedures specified by contract and decided to optimize at the production facility? Or would it still take less time overall to just do that in-house in Germany before shipping?

My pleasure, its limited knowledge anyhow that I can share.

From an engineering perspective it makes sense to test it in Pruem first and make it bullet prove however knowing that Elon likes challenging engineering practices it cannot be ruled out he wanted it done differently. Given the extra high risk with very low benefit to change that procedure I don't see a good reason for that demand but you never know. As a side note to be able to calibrate such a line you need a 10X more accurate measuring and production equipment which is expensive and not easy to get and they will have all of that available in Pruem but likely not in Nevada.

Also, he paid quite some money for that expertise and went through many challenges with the German unions to get the engineering team on board therefore guess he trust them well.

I wonder if the production stop we have seen lately has to do with the implementation of that line though and they now gradually increase speed of the line. But that is guesswork...

Today a picture of 11188 has been posted and 12755 was posted in the spreadsheet too thats another indication that they speed up.

 

[schonelucht]

I wonder if the production stop we have seen lately has to do with the implementation of that line though and they now gradually increase speed of the line. But that is guesswork...

This keeps popping up but it is very unlikely. Gigafactory had the normal amount of activity throughout the reported production stop period.

 

[Starno]

My pleasure, its limited knowledge anyhow that I can share.

From an engineering perspective it makes sense to test it in Pruem first and make it bullet prove however knowing that Elon likes challenging engineering practices it cannot be ruled out he wanted it done differently. Given the extra high risk with very low benefit to change that procedure I don't see a good reason for that demand but you never know. As a side note to be able to calibrate such a line you need a 10X more accurate measuring and production equipment which is expensive and not easy to get and they will have all of that available in Pruem but likely not in Nevada.

Also, he paid quite some money for that expertise and went through many challenges with the German unions to get the engineering team on board therefore guess he trust them well.

I wonder if the production stop we have seen lately has to do with the implementation of that line though and they now gradually increase speed of the line. But that is guesswork...

Today a picture of 11188 has been posted and 12755 was posted in the spreadsheet too thats another indication that they speed up.

If I remember well, at the end of Q4 they had produced 26XX cars but highest VIN (reported) was around 5k no ?

 

[avoigt]

If I remember well, at the end of Q4 they had produced 26XX cars but highest VIN (reported) was around 5k no ?

... at that time the 5k has been also an indication that they did speed up.

 

[elasalle]

Thank you for the explanation and for sharing your expertise -- very much appreciated and much more useful than my word parsing.

Since Tesla Grohmann is part of Tesla rather than an outside contractor, do you think there is any chance they have deviated from the standard procedures specified by contract and decided to optimize at the production facility? Or would it still take less time overall to just do that in-house in Germany before shipping?

Per comments made by EM, this was already working in Germany. So it should be per specifications, and validated ?

 

[Dwdnjck]

Bmw just announced holding off mass production of ev’s until 2020, because of “ cost”. I wonder why they think they will become competitive on two years. Maybe they think Tesla will wait and let them catch up.

 

[Zhelko Dimic]

Tesla has the piece of machinery that can do 2,500 packs a week on its own being installed in GF1 currently (based on last update). I see no reason why 2,500 would not occur in (early) Q2 if it doesn't in Q1.

Edit: @sundaymorning clarified down thread that they meant 5,000 in Q3.

Your expectations have been consistently overly optimistic, no?

 

[Zhelko Dimic]

My pleasure, its limited knowledge anyhow that I can share.

From an engineering perspective it makes sense to test it in Pruem first and make it bullet prove however knowing that Elon likes challenging engineering practices it cannot be ruled out he wanted it done differently. Given the extra high risk with very low benefit to change that procedure I don't see a good reason for that demand but you never know. As a side note to be able to calibrate such a line you need a 10X more accurate measuring and production equipment which is expensive and not easy to get and they will have all of that available in Pruem but likely not in Nevada.

Also, he paid quite some money for that expertise and went through many challenges with the German unions to get the engineering team on board therefore guess he trust them well.

I wonder if the production stop we have seen lately has to do with the implementation of that line though and they now gradually increase speed of the line. But that is guesswork...

Today a picture of 11188 has been posted and 12755 was posted in the spreadsheet too thats another indication that they speed up.

I don't think this is likely, but it bears consideration: Remember that few leaders that were involved in Grohman were fired/left? What if that happened because Elon didn't like estimates for how long it takes to do things properly? What if procedures are changed?

 

[Runarbt]

I don't think this is likely, but it bears consideration: Remember that few leaders that were involved in Grohman were fired/left? What if that happened because Elon didn't like estimates for how long it takes to do things properly? What if procedures are changed?

my understanding was that this was due to unwillingnes to drop existing contracta and focus on tesla only?

 

[ValueAnalyst]

My pleasure, its limited knowledge anyhow that I can share.

From an engineering perspective it makes sense to test it in Pruem first and make it bullet prove however knowing that Elon likes challenging engineering practices it cannot be ruled out he wanted it done differently. Given the extra high risk with very low benefit to change that procedure I don't see a good reason for that demand but you never know. As a side note to be able to calibrate such a line you need a 10X more accurate measuring and production equipment which is expensive and not easy to get and they will have all of that available in Pruem but likely not in Nevada.

Also, he paid quite some money for that expertise and went through many challenges with the German unions to get the engineering team on board therefore guess he trust them well.

I wonder if the production stop we have seen lately has to do with the implementation of that line though and they now gradually increase speed of the line. But that is guesswork...

Today a picture of 11188 has been posted and 12755 was posted in the spreadsheet too thats another indication that they speed up.

Until Tesla reaches 2,500+ weekly production rate, which we cannot conclude until about four weeks after that happens, I would say it is better to be conservative with predictions: I don't think Grohmann lines are in place, yet.

 

[EinSV]

Per comments made by EM, this was already working in Germany. So it should be per specifications, and validated ?

Based on @avoigt's input that seems most likely to me, although I think there is still a possibility that some optimization/fine-tuning was left to be done at the Gigafactory.

 

[Mkorpal]

Based on @avoigt's input that seems most likely to me, although I think there is still a small chance that some optimization/fine-tuning was left to be done at the Gigafactory.

You kind of have to. Calibrations and such are going to go way out of wack during shipment.

 

[Tslynk67]

Pretty clear that a big boat-load of Teslas arrived in Norway recently as deliveries have ramped-up considerably over the last week.

http://teslastats.no

Q1 is typically not a massive quarter, was around 1000 cars last year, but if March daily deliveries continue at this pace then they'll be 50% higher, or more...

Everything red right now? What's that??