TSLA Market Action: 2018 Investor Roundtable

[Artful Dodger]

Here are the stats and analysis I promised in my Comment #49890 above for Model 3 Dual Motor/RWD VIN production split:

Stats with Inferences:

• approx. 26,770 Model 3s are currently planned for production
  
• AWD is about 56.3% of planned production
• RWD is about 43.7% of planned production
  
• this proportion will likely change due to intro of L3MR (see below)
• there is likely about 2-weeks leadtime in prod. planning vs. VINs

ASSumptions and W.A. Guesses:

• let's assume planned VINs above are for 31 days (October) - W.A.G.
  
• current production plans imply about 6,045 Model 3s per week
  
• that implies Panasonic's current production is 6K LR packs/wk worth of cells
• wag. if L3MR uses 25% fewer cells vs LR, then prod. multiple is 1.33x cars/cells
  
• assuming AWD production remains the same, Nov production becomes:
  • 3,400 AWD per week
  • 3,525 L3MR per week
  • 6,925 Model 3s per week
• assuming a 50/50 L3MR/T3LR bty cell split, then Nov prod. becomes:
  • 3,020 AWD per week
  • 4,030 L3MR per week
  • 7,050 Model 3s per week
• Note: to get to 8,000 Model 3s per week under current battery cell constraints, about 97% of production would have to be L3MR.

TL;dr Panasonic currently may be producing 6K/wk cells, and Tesla could produce in the range of 6.9-7.1K Model 3s per week by the beginning of November 2018. Tesla production in Q4 2018 could total 83K Model 3s given existing resources. Guidance will likely be 80-85K given Tesla's history.

 

[YasB]

That's a combination of conjecture, wishful thinking and misrepresentation on your part: after 10 years of empty promises the traditional ICE automotive industry has yet to demonstrate a single competitive product on the level of the Model 3, let alone broadly available options that could meaningfully compete with Tesla on quality, price and volume.

That's a combination of conjecture, wishful thinking and misrepresentation on your part: We are living in 2018. Please show me the promises made in 2008 by the traditional automobile industry regarding affordable, long range, mass produced EVs, that would be available today.

 

[dondy]

The answer depends on what kind of criteria you apply to define leadership. I'd probably point to willingness, a different judgement of the market, economic situation and customer base and not to a lack of capabilities.

hilarious. Sure the current (up to 2022) situation with battery packs available for european producers is stellar, and (together with no less depressing situation with motors and BMS) doesn't define production constrains for european companies....
I wonder when all european companies will fail miserably to reach their declared production targets, what will be the reaction of MM?
Regrettably rhetorical question.

 

[schonelucht]

My take on the FSD removal is that they are ready with the new chip, and they are simply limiting those people who will need to have a (free) hardware update when the time comes. Considering EM timeframe of 6 months for the new hardware, "flushing" out orders with the old hardware now makes perfect sense.

This is a non-sequitur. You could as easily make the case that they are not selling FSD anymore because they realized they are not that close. It's also impossible to 'flush out the old hardware' since it is needed for EAP, an option that they continue to sell.

 

[Fact Checking]

Please show me the promises made in 2008 by the traditional automobile industry regarding affordable, long range, mass produced EVs, that would be available today.

There's plenty of examples of failed EV promises and empty anti-EV posturing over the last 10 years by the ICE automotive industry, but you conveniently glossed over the key point of my argument:

The current track record of most ICE OEMs is that they are able to build ICE power trains and outsource pretty much everything else, and they also have an uncanny ability to engage in emissions tests fraud to poison millions of people for profits.

Neither of these qualities has any market value in the post-ICE world.​

Your original argument was making the assumption that making a Tesla car is broadly equivalent to making an ICE car, which assumption is false.

So please explain, why should people invest into ICE carmakers that are burdened not just by liabilities due to the emissions fraud they were engaged in for at least a decade, but they are also burdened by a lot of aging ICE infrastructure that is making the wrong kind of cars and which manufacturing capacity is more expensive to convert to EV making than to build new EV capacity from scratch, without the legacies?

 

[dondy]

Introduction of MR in it's current form means only one thing. Tesla solved Fremont ramp, and now they are waiting for Panasonic to install extra cell lines.

 

[Fact Checking]

New Introduction of MR in it's current form means only one thing. Tesla solved Fremont ramp, and now they are waiting for Panasonic to install extra cell lines.

Also, they want to allow more people to be able to take advantage of the $7,500 federal tax credit - and the best way to do that is to spread the (constant) supply of cells into more cars.

This would also generate more EAP (and later on FSD) sales, so increasing the unit count has advantages. The small $4k reduction in entry ASP from $49k to $44k makes sure they unlock the next level of demand - and the bundling of long-range with AWD probably counter-acts some of the average ASP reduction from the MR introduction.

This is something bears don't seem to get, or chose to ignore: Tesla has so many more 'levers of demand' compared to ICE carmakers. Here's a few they've not activated yet for the Model 3:

• No international sales of the Model 3 yet, at all: and the smaller form factor should be particularly popular in Europe, so at least 60% of the global Model 3 market is still not utilized.
• No leasing of the Model 3 yet, at all: even of high-end Model S/X leasing is ~11% of their current sales. With lower ASPs the proportion of leasing and financing increases - so if Tesla wanted to increase demand this way they'd start offer 'captured' financing options with the Model 3 as well.
• The Premium Upgrades Package is still bundled, and no Standard Range option yet either.
• Tesla doesn't do any mass advertising. A single well-made Super Bowl ad, Apple-style, could easily generate hundreds of thousands of new orders ...

Those are only the most obvious ones - and like Medium Range was a surprise option, I'm sure they can think of other levers as well.

 

[gora321]

The answer depends on what kind of criteria you apply to define leadership. I'd probably point to willingness, a different judgement of the market, economic situation and customer base and not to a lack of capabilities.

Where is no definition is meant as general, overall.

 

[Heimdallr]

Introduction of MR in it's current form means only one thing. Tesla solved Fremont ramp, and now they are waiting for Panasonic to install extra cell lines.

If it can only mean this, doesn't that imply that the mid-range model will go away again? And how does this jibe with Panasonic's recent comments that they are ahead of their plans?

 

[dondy]

There's plenty of examples of failed EV promises and empty anti-EV posturing over the last 10 years by the ICE automotive industry, but you conveniently glossed over the key point of my argument:

The current track record of most ICE OEMs is that they are able to build ICE power trains and outsource pretty much everything else, and they also have an uncanny ability to engage in emissions tests fraud to poison millions of people for profits.

Neither of these qualities has any market value in the post-ICE world.​

Your original argument was making assumption that making a Tesla car is broadly equivalent to making an ICE car, which assumption is false.

So please explain, why should people invest into ICE carmakers that are burdened not just by liabilities due to the emissions fraud they were engaged in for at least a decade, but they are also burdened by a lot of aging ICE infrastructure that is making the wrong kind of cars and which manufacturing capacity is more expensive to convert to EV making than to build new EV capacity from scratch, without the legacies?

obvious example is Renault Zoe. The french never succeeded to satisfy existing market. Waiting times depending on a country are still 2 to 4 months. And it is a garbage car as EV, much worse then Leaf not talking about other models. Waiting times for inevitable battery changes make european Tesla look like a sprinter. Did I mention the battery leasing system which they require?

Mercedes while selling all EV contraptions they made never reached significant numbers for any model. Of course because "there was no market" according to DB bosses (facepalm). But let continue to bash Musk, don't digress.

 

[dondy]

If it can only mean this, doesn't that imply that the mid-range model will go away again? And how does this jibe with Panasonic's recent comments that they are ahead of their plans?

Panasonic had plans for 2019, the lines they planed for Q1 2019 they are going to install in November-December. It is japanese company, they are incredibly slow nowadays. 1990s killed them as engineering nation...
LR is amazing car for hyper-miling. It will be huge success in the Netherlands, Switzerland and Germany. There are no financial reasons to make MR instead of LR.

 

[ThereAre4Cars]

I don't find it unreasonable to believe that it's a demand lever. By the end of this quarter they have moved a phenomenal number of 50k$+ cars into the us market while still having relatively less brand awareness than other makers. That market really is not all that big particularly within sedans. There's a reason similar volume vehicles were under 35k$ in q3.

You could also say 40% of overall demand is in us as fact checking just did, and 1/3rd of demand is 50k$+, and you are basically at 67k annual hoped for organic demand for what they were delivering..

 

[YasB]

Sure the current (up to 2022) situation with battery packs available for european producers is stellar, and (together with no less depressing situation with motors and BMS) doesn't define production constrains for european companies....

Imho, production constraints are a completely normal thing when it comes to ... uh ... production. That's for example why Tesla is limited to a certain number of cars produced until that china plant is up and running. I'd be interested in your logic, how Tesla seems to have no problem to build new battery production capacity for a factory in 2021, while other companies will probably lack battery cell supply. Anyway, there is no need to deny that such constraints exist, but i usually assume that most companies (that includes Tesla) are not run by idiots. There is awareness of things like the necessity to build your supply chain before you can start production.

 

[avoigt]

That's a combination of conjecture, wishful thinking and misrepresentation on your part: after 10 years of empty promises the traditional ICE automotive industry has yet to demonstrate a single competitive product on the level of the Model 3, let alone broadly available options that could meaningfully compete with Tesla on quality, price and volume.

The current track record of most ICE OEMs is that they are able to build ICE power trains and outsource pretty much everything else, and they also have an uncanny ability to engage in emissions tests fraud to poison millions of people for profits.

Neither of these qualities has any market value in the post-ICE world.

I could not agree more to Fact Checking here.

YasB I tried hard to understand what you write and have a question.

Do you seriously believe all ICE manufacturers could produce a car like the 3 but did not do by purpose, accepting to loose large revenue in the US and their rankings as well?

Seriously, is that what you are saying?

 

[cheshire cat]

I did. It said that infrastructure in germany is lacking, but would be required for self-driving cars and other stuff. It's talking about deploying cars in the field, not R&D. Now please enlighten me, how gora321 made a valid point with his remark that Tesla is not located in Detroit but Silicon Valley, since that was what i replied to. Maybe read and understand the article before you answer smartish guy?

A similar/dissimilar reason that Toyota built in Derbyshire and Nissan built in Sunderland and NOT Brum' ( Birmingham /Longbridge. ) whilst At Speke (Liverpool) the Triumphh plant later BL later Ford, had years of problems only later largely sorted but Jaguar LandDrover but only AFTER TATA (Indian ) management. Whilst I would be the first to say German unions are a world away from the communist inspired idiots of the sixties and seventies over here, maybe their management has a lot in common with the thick-O golf playing entitled idiots who were a match for our Union bosses of the same era.

 

[RobStark]

• No international sales of the Model 3 yet, at all: and the smaller form factor should be particularly popular in Europe, so at least 60% of the global Model 3 market is still not utilized.

Psss, Trump hasn't invaded Canada and made it the 51st State yet.

 

[Buckminster]

Or as we say in U.K. "I'll get me coat".

What have I done!!!

 

[YasB]

after 10 years of empty promises the traditional ICE automotive industry has yet to demonstrate a single competitive product on the level of the Model 3, let alone broadly available options that could meaningfully compete with Tesla on quality, price and volume.

Please show me the promises made in 2008 by the traditional automobile industry regarding affordable, long range, mass produced EVs, that would be available today.

There's plenty of examples of failed EV promises and empty anti-EV posturing over the last 10 years by the ICE automotive industry, but you conveniently glossed over the key point of my argument:

You are deflecting. You just had to make it sound, as if in 2008 ICE carmakers had promised EV heaven and something that would be competitive to todays Model 3 regarding price and volume to have a strawman. Probably you were simply hoping nobody would ask about it. When i did you immediatly had to fall back to "some generic failed EV promises" ...

Your original argument was making the assumption that making a Tesla car is broadly equivalent to making an ICE car, which assumption is false.

No. That's not something i wrote or wanted to express.

So please explain, why should people invest into ICE carmakers that are burdened not just by liabilities due to the emissions fraud they were engaged in for at least a decade, but they are also burdened by a lot of aging ICE infrastructure that is making the wrong kind of cars and which manufacturing capacity is more expensive to convert to EV making than to build new EV capacity from scratch, without the legacies?

Another strawman since i never suggested anybody should invest in ICE carmakers. Also please explain how rebuilding manufacturing capacity for drive train and batteries, but reusing the rest of your assets is more expensive than building everything from zero. Especially when you own a dozen factories and have to modernize / re-equip one every years anyway.

 

[30seconds]

I could not agree more to Fact Checking here.

YasB I tried hard to understand what you write and have a question.

Do you seriously believe all ICE manufacturers could produce a car like the 3 but did not do by purpose, accepting to loose large revenue in the US and their rankings as well?

Seriously, is that what you are saying?

I’m still waiting for the revolutionary GM Hy-Wire.

And let’s not forget how VW has completely dominated the EV market with the E-UP and E-Golf.

Volkswagen Will Dominate the World of Electric Cars. Got That?

 

[KarenRei]

I wish he would make the falcon wing doors an option. I think that would open the X up to many others who just don't want those doors. Those who want them can pay an extra $15k or something. (for the record I like them, but I have seen others feel stand off-ish about them)

Two words: "Model Y".

People who want a Model X without falcon-wing doors will just buy a top-spec Model Y.