TSLA Market Action: 2018 Investor Roundtable

[dqd88]

Except in Belgium, because we risk blackouts in november because only 1 of our 8 nuclear power plants are operational.

NicoV can Telsa help stabilize the power grid there?

 

[Fact Checking]

I actually considered starting a business doing something related - a service that picks up your car, drives it to a nearby charging station (building new charging stations where economically optimal, using existing ones otherwise), and then picks it up when its full and delivers it back home. The idea was also to combine it with random perks, like cleanings or carwashes every X trips.

Try as I might, I couldn't make the numbers work. Simply going to and from charging stations, plus the overhead on each end and for getting drivers to their next stop, is just too much labour.

I think robust Full Self Driving is going to change the cost equation of that business model drastically:

• The cars will 'come to your service business'.
• The cars could drive overnight and be back at home in the morning. This is advantageous in terms of power costs, but also utilizes a much less congested road system. Plus it's an excellent service to have your car serviced while you sleep. Loaner fleet could self-drive to the owner if the car had to be held at the service location due to some emergency. I.e. the owner would never be without a car in the morning.
  
• Insurance costs of driving it will be covered via FSD-weighted insurance policies.
• There will be 'emergency staff' for the occasional stranded FSD vehicle that got into trouble on the way to your service location and cannot continue - but with robust FSD the percentage of such cars requiring a human driver should be very low. Chances are also that 'remote driving' features, combined with FSD, could cover most of these situations without a driver having to be present in person.
  
• Your employees would spend most of their time servicing the cars - not driving them around. This reduces costs and makes it more of a service business than a taxi business.

In fact I'd expect Tesla to offer such a charging and maintenance service eventually: the incremental utility to owners would be very high, especially to business owners, and the service margins would be very healthy.

 

[dqd88]

I actually considered starting a business doing something related - a service that picks up your car, drives it to a nearby charging station (building new charging stations where economically optimal, using existing ones otherwise), and then picks it up when its full and delivers it back home. The idea was also to combine it with random perks, like cleanings or carwashes every X trips.

Try as I might, I couldn't make the numbers work. Simply going to and from charging stations, plus the overhead on each end and for getting drivers to their next stop, is just too much labour. It makes the price seem unreasonable in contrast to how much you pay for the electricity, or even vs. gasoline, unless you trick people into working for under minimum wage. Which I know seems to be the trend today, but I have no interest in a business that works via immorality.

Yeah I can see how that would be hard to make work.
I think a simpler business, and w/ more predictable margin, is simply a charger installation service. Or is this already saturated? Seems like there still could be room for new entrants as business should be steady and consistent for many years. Nearly every apt building and office building parking lot/garage should have several chargers. Not to mention individual homes.

 

[ThereAre4Cars]

Even at 10k/week Model 3 output at a $35k entry price point covers maybe 3% of the domestic passenger vehicle sales in the U.S., a fraction of the addressable market which should be around 20-30% of all sales.

Yeah. We are too early in the process to know for sure, but it's useful for Tesla to have a contingency plan in case demand far exceeds this 10k\week theoretical Fremont output (or whatever Fremont can manage -- I'm skeptical). Just thinking about it from first princples if you take that 35k$ model and then consider its even lower TCO and then consider just how unique it is relative to competition, it could truly surprise and achieve 500k+ in US alone. But my guess is it takes some time to truly assess demand since it will be driven by word-of-mouth and so sales begets sales.

Since they haven't even mentioned a place to build the Semi, and it almost certainly will be built in the US, doesn't it basically HAVE to be GF1 at this point?

Also, I like Tesla biding it's time with GF1 because in a few years there may be substantial fire sales from competitors that they can pick up tactically.

 

[Fact Checking]

Nearly every apt building and office building parking lot/garage should have several chargers. Not to mention individual homes.

I believe the fact that you can already trickle-charge from most 110V and 240V outlets with a fair amount of range available from the typical overnight charging session of 12+ hours lowers the barrier of entry to home charging significantly, and installing a proper high capacity home charger is thus an incremental upgrade with less time pressure.

Also, much of the home charger installation is construction/electricity work, not really related to EVs directly.

I'd also expect another big wave of home charger upgrades once Tesla starts selling fully automated 'snake' chargers.

 

[mongo]

The 1M mile model 3 drive train is shared by the Tesla Semi. Semi is going to be a license to print money if the TCO per mile is significantly lower then it's competition.

Unrelated... typing ASS into the high score on Atari games is still fun.

Green day on a down macro is always nice.

FWIW, the motor and likely inverter are shared, the rest of the drive train is unique. Different axles, no differential on semi, different gear ratios.
Regarding longevity, consider how long fans and industrial motors operate when running 24/7. Only physical wear points are bearings and gears.

Yay for green!

 

[ThereAre4Cars]

We already got a few Adam Jonas types around here, but I'll make a longshot prediction you've never seen anywhere else. The SR Performance Model!

[dramatic pause]

Something like a +5k$ unlock only on AWD for 0-60 in 4.2s or similar (i.e. 46k$ MSRP). Who's with me? That free margin has to be hard to pass up and that price point is far more reachable.

 

[Fact Checking]

Yeah. We are too early in the process to know for sure, but it's useful for Tesla to have a contingency plan in case demand far exceeds this 10k\week theoretical Fremont output (or whatever Fremont can manage -- I'm skeptical).

My skepticism about Fremont capacity was significantly lowered by the recent Fremont factory audit by independent automotive experts, who found that the pathway to 8k/week is low capex, in the "tens of million of dollars" range.

Just thinking about it from first princples if you take that 35k$ model and then consider it's even lower TCO and then consider just how unique it is relative to competition, it could truly surprise. But my guess is that there is time required to spin up word of mouth and measure these things.

Yeah. There's also a SuperBowl next February with an excellent opportunity to place a well made ad, for just 5 million dollars for 30 seconds.

'Just saying.

Since they haven't even mentioned a place to build the Semi, doesn't it basically HAVE to be GF1 at this point?

Not necessarily, but that's my top pick too. Other site locations could be Gigafactory 2 (probably has enough space to expand), and maybe Tesla can buy some property near their Fremont location, or utilize a parking lot at Fremont.

Also, I like Tesla biding it's time with GF1 because in a few years there may be substantial fire sales from competitors that they can pick up tactically.

I think in North America it's the Model Y and the the Tesla Pickup Truck which is going to kick-start that process of ... forced consolidation (most of the profit margins of traditional auto comes from the SUV/Truck space), so there's a bit of a chicken-and-egg problem there.

 

[M3Rider]

Yeah I can see how that would be hard to make work.
I think a simpler business, and w/ more predictable margin, is simply a charger installation service. Or is this already saturated? Seems like there still could be room for new entrants as business should be steady and consistent for many years. Nearly every apt building and office building parking lot/garage should have several chargers. Not to mention individual homes.

It is definitely not saturated. In one of the calls Elon talked about this being a future bottleneck - the shortage of electricians - and that they are even considering some program to train electricians en masse.

 

[TradingInvest]

V9 is a major step toward self-driving. If someday Elon realize Tesla's full self-driving is actually coming, I hope he won't talk about it, don't do coast to coast demo. Instead, just quietly buy back shares.

 

[NicoV]

NicoV can Telsa help stabilize the power grid there?

We”re only need about 1GW for a few hours in the evening.
I hope we get there with nice weather and some of the big industrial consumers shifting their energy use.

 

[Fact Checking]

Regarding longevity, consider how long fans and industrial motors operate when running 24/7. Only physical wear points are bearings and gears.

Most fans and industrial motors are not really comparable to an EV powertrain though: much lower loads, much more stable RPM and stable temperature ranges. A lot of the wear-and-tear in an EV powertrain comes from weather related temperature fluctuations and the change in acceleration - the 2nd-5th integrals of velocity: jerk, snap, crackle and pop.

So I'd say the comparison is apples to ... Rice Krispies.

 

[Fact Checking]

I hope we get there with nice weather and some of the big industrial consumers shifting their energy use.

If it's a modern power grid then there should be an automated emergency shutdown protocol in place to reduce industrial power use if things get tight and there's not enough power imports available, so residential customers shouldn't really notice a thing, correct?

The nightmare scenario would be a prolonged unscheduled shutdown of that one base load power plant, right?

 

[BioSehnsucht]

Yeah. There's also a SuperBowl next February with an excellent opportunity to place a well made ad, for just 5 million dollars for 30 seconds.

'Just saying.

If they do place a superbowl ad, I hope that at minimum they call out a URL for more info that includes a playlist of all the amazing fan-made ads.

 

[M3Rider]

V9 is a major step toward self-driving. If someday Elon realize Tesla's full self-driving is actually coming, I hope he won't talk about it, don't do coast to coast demo. Instead, just quietly buy back shares.

Yep, I was super impressed with all the cars around me tracked. That's the major challenge. There's also sign and traffic light recognition, but in the future we may not even need any signs - they can be plugged in directly into electronic maps that are maintained by authorities and cars of any brand can just pull them directly from the maps based on gps coordinates. I think generic solution is already pretty close, but the problem is you need to account for all the edge cases and variations (including different signs in different countries) and these things will likely take a long time.

 

[dqd88]

Wow! Just caught up again. And just had a group of 4 Cub scouts (2m/2f ages 6-10?). Come by selling popcorn. As they left, one exclaimed ‘That’s a Tesla! And they all revolved around the M3!

Imagine the demand coming!

I often wonder if as time goes by, and the younger generations grow into discretionary income, that Tesla will grow with this wave. I'm guessing that there is a correlation, the younger one is the more they are less biased against Tesla, less mentally entrenched in an ICE culture, more objective in their car shopping. (not that old folks can't be open minded; my dad is 71 and would love a Tesla)

 

[Fact Checking]

If they do place a superbowl ad, I hope that at minimum they call out a URL for more info that includes a playlist of all the amazing fan-made ads.

Yeah, and the Super Bowl ad should be prominently about people and The Mission - not about the products.

But I'd expect them to only do it if they are profitable in Q3/Q4 at more than ~$100m. If they had only marginal profits like $10m then they'd get a lot of "Tesla just spent half their profits on a Super Bowl ad" snark and FUD otherwise.

A 2020 Super Bowl ad from Tesla is more probable IMO - which would also allow some Model Y hype.

 

[ThereAre4Cars]

I often wonder if as time goes by, and the younger generations grow into discretionary income, that Tesla will grow with this wave. I'm guessing that there is a correlation, the younger one is the more they are less biased against Tesla, less mentally entrenched in an ICE culture, more objective in their car shopping. (not that old folks can't be open minded; my dad is 71 and would love a Tesla)

I've seen this story already with Netflix. The highest adoption rate was with the youngest demographics. But then what happened is they all shared their accounts. Same thing will happen here.

 

[Fact Checking]

I've seen this story already with Netflix. The highest adoption rate was with the youngest demographics. But then what happened is they all shared their accounts. Same thing will happen here.

It's easier to share a virtual account to view content though, than to share a car that is a physical object to get from A to B.

Also, aren't young Netflix viewers creating their own accounts as they get out of school, start earning money, get into serious relationships and start families, instead of using a high school friend's account?

Takes some time, but looks like an inevitable process to me, driven by demographics.

 

[dqd88]

We”re only need about 1GW for a few hours in the evening.
I hope we get there with nice weather and some of the big industrial consumers shifting their energy use.

Please have your people call Elon's people.
Seriously though... you don't think the battery system could alleviate this? Or just not worth the cost since it's only a short blip?