TSLA Market Action: 2018 Investor Roundtable

[humbaba]

Smile, you're on camera.

This reminds me of Xena. Xena? Yeah, the episode, "A Day in the Life" where Gabrielle and Xena are discussing the attraction of men to Xena. Maybe its the leather? Sure, I'll switch to chainmail. Wait, that'd just attract a kinkier sort.

Okay, so my quote is not exact, but the point is -- cameras? cool, now someone will watch this!

ewwww

 

[Fact Checking]

It means that it's basically accounted for as if they owned it, and borrowed money to buy it. Although it's technically leased.

But Tesla won't ever end up outright owning the Panasonic lines, correct?

 

[KarenRei]

Yes. As discussed the other night, Starlink has nothing to do with replacing backbones, so they shouldn't even be part of this discussion. Starlink is about getting communications to/from your nearest backbone (within hundreds of kilometers) without having to go through potentially hundreds of ISP routers and numerous routes that go in the wrong direction, without the ability to route around congestion or damage (rarely available at the ISP level).

Some people seem to have the misconception that Starlink routes traffic satellite-to-satellite. While the system is designed to be capable of doing this, this isn't the primary way in which it transmits data. Satellite-to-satellite transmissions of user data are used only to prevent dropouts (from various causes).

I recommend everyone try doing a traceroute to various sites, and then GeoIP on the hops to see where they are (note: this will only show layer 3 hops; it's not a count of the number of servers you go through). Look for the last hop that's under a thousand kilometers (preferably less than a couple hundred) from your house. StarLink would replace all of the latency that you see there (in my case, around 20ms**) with what should be 4-7ms (round trip), depending on angles and which satellite plane you're connecting through.

** This assumes that it couldn't hop all the way to the UK from here. If it could - which is possible - it could be cutting out as much as ~80ms, according to my traceroutes

 

[neroden]

I rated your post as ‘funny’ because there’s not an ‘effing hilarious’ button. For the LA Times to quote that guy is the definition of effing hilarious.

This is what is so alarming about our situation re: the news today. We as TMCers know how exceedingly awful, and often downright devious, the reporting is on Tesla. Does that infer that all news is this misleading? God help us all....

Not all news -- but you have to learn to spot the signs of an accurate article. References you can verify yourself, to factual claims supported by evidence which holds up; when dependent on secondary sources, named secondary sources who have records you can check for credibility (and who turn out to actually be credible); a consistent picture which isn't contradicted by other evidence. Bear articles and bull articles referencing the same facts (rather than making different claims).

 

[neroden]

i've counted like 4 or 5 different articles in mainstream newspapers with headlines along the lines of "WHY DID NOBODY SEE TESLA'S THIRD QUARTER PROFITABILITY COMING?" and it's driving me crazy because it seems like *anyone* could have easily seen it coming from over a quarter away. aside from Elon saying it, all you had to do was some very simple math, or look at the numbers from the previous quarter and extrapolate. it was super obvious, and what's more, Tesla and Elon both repeatedly told everyone it was coming.

The general level of ignorance and lack of attention among almost everyone who writes almost everything is much higher than you might imagine. I've found it disappointing and angering. People don't do their homework.

I've been trying to work with my therapist on not getting as mad about this stuff. I just repeat, they're just there to collect a paycheck, they need to eat, they don't have any work ethic, they don't have any sense of responsibility, they're just doing the minimum to get their paycheck and eat, that's OK. (That said, we should have a government-guaranteed Minimum Income so that these time-servers don't have to work to eat; and then we can ethically engage in an effort to prevent them from ever working again. So that they can stop making a mess by "working".)

 

[Fact Checking]

As discussed the other night, Starlink has nothing to do with replacing backbones, so they shouldn't even be part of this discussion.

BTW., while I mostly agree with your observations, I wouldn't make this particular assumption so confidently: there's absolutely no reason Tesla couldn't build out an LTE cellular network where each Supercharger location is also an LTE cell. (Assuming they purchase/license the radio spectrum for it, etc.)

If each of them also has a Starlink connection, then people could have LTE and Starlink based Internet connectivity with each other without ever touching the regular fiber optical backbone.

Tesla would still also route to the regular backbone of course, but even initially there would be a lot of hosted content both at the Superchargers and in the satellite platforms as well: Netflix streaming helpers, Akamai cache servers, you name it.

Eventually, once a significant amount of traffic migrates over to Starlink and similar constellations almost everyone would be using LTE (and its future iterations) - even for home Wifi, and wouldn't bother with the monopolized final mile of fiber optics.

It's obviously many years down the road, but it's the obvious end-game of Internet traffic.

 

[neroden]

Where do you get the 'level 5' from? Tesla FSD aims for Level 4 autonomy with eventual Level 5 autonomy (much) later on.

I think Tesla should never have called it "full self driving". In fact, they should retract the name and refund people's money.

"Full" very clearly means level 5.

If it were called "Self-driving on limited-access highways", that would be a level 4 claim.

Level 4 (geofenced) is extremely hard because there are already a lot of corner cases (like the tree down in the middle of the Interstate during an ice storm; that required quick maneuvering), but it's more plausible than level 5 in the near term.

People are eagerly hoping to sleep while they drive, hire autonomous taxis to take them home while they're drunk, etc. You read people hoping for this even on here. And *this is fantasy*. It's not going to happen for decades. You want someone to take you home while you're drunk, get a horse.

 

[Fact Checking]

"Full" very clearly means level 5.

Wrong as per the first link Google brings up:

"Level 4: This is what is meant by "fully autonomous." Level 4 vehicles are "designed to perform all safety-critical driving functions and monitor roadway conditions for an entire trip." However, it's important to note that this is limited to the "operational design domain (ODD)" of the vehicle—meaning it does not cover every driving scenario."​

Also, you didn't reply to my primary argument: the valuation of Tesla's FSD business will not primarily depend on rigid definitions and goal-posts, it largely depends on the economic utility of FSD functionality. I believe it's a flaw of logic to assign zero economic value to the FSD business just due to some overly strict definition of 'level 5 autonomy'...

 

[neroden]

But Tesla won't ever end up outright owning the Panasonic lines, correct?

We don't actually know the terms of the lease; it's confidential, if I'm not mistaken.

 

[Unpilot]

Market is open...time to move starlink, level 5 stuff off the table please.

 

[neroden]

Wrong as per the first link Google brings up:

"Level 4: This is what is meant by "fully autonomous." Level 4 vehicles are "designed to perform all safety-critical driving functions and monitor roadway conditions for an entire trip." However, it's important to note that this is limited to the "operational design domain (ODD)" of the vehicle—meaning it does not cover every driving scenario."​

Tesla's never specified what limited operational design domain they are referring to by "full self driving", which means they're claiming level 5.

"Full self driving on Interstates" would be a level 4 claim.
"Full self driving" is a level 5 claim.

​

Also, you didn't reply to my primary argument: the valuation of Tesla's FSD business will not primarily depend on rigid definitions and goal-posts, it largely depends on the economic utility of FSD functionality. I believe it's a flaw of logic to assign zero economic value to the FSD business just due to some overly strict definition of 'level 5 autonomy'...

OK, that's fair. I do think Tesla's *driver assistance features*, which is what they should be called, have solid economic value. Many many people would like a more relaxing commute where they can chill out from "highway entrance to highway exit", or possibly in a couple of years, on certain other specified portions of the trip. It'll be popular and will help sell cars.

But I think people who are claiming that they're going to have driverless taxis (a taxi needs to take you from *anywhere* in a metro area to *anywhere* in a metro area -- minimum -- I have taken taxis between metro areas repeatedly) within a year or two are full of *sugar*. This includes Musk. He does not know what he's talking about here.

I assign zero value to "Tesla Network", because it's vaporware; it cannot be established for at least 5 years, and probably not then.

I will grant you that people will pay a premium for Tesla cars because of their excellent driver assist features.

Enough of this, let's get back to the market.

 

[Fact Checking]

Tesla's never specified what limited operational design domain they are referring to by "full self driving", which means they're claiming level 5.

Actually, Elon did say it pretty clearly that Tesla is aiming for Level 4 autonomy, he said this in the Q1 conference call:

Elon Musk: "The way things are obviously rolling towards is a shared electrical autonomy model. So, in order for the whole sort of system to work, you need all the pieces in place. You need to have full autonomy, level four or five, whatever you want to call it and, obviously, a lot of cars on the road, and then build the software infrastructure behind that to enable shared autonomy, to enable people to share their cars and be able to offer their cars as effectively kind of a robo-Lyft or robo-Uber, sort of like a combination of like, I guess, Uber, Lyft and Airbnb type of thing, where you can own your car and have 100% usage of an autonomous electric car."​

So I believe your claim that FSD is "level 5" is not true - nor is it a fair thing to require when valuing Tesla's FSD business.

 

[FS_FRA]

Can
We
Please
Move
Starlink
And
All
Other
Non-Core
Discussions
Off
This
Thread ?

 

[Fact Checking]

We don't actually know the terms of the lease; it's confidential, if I'm not mistaken.

So this is many layers of replies up, but @brian45011 pointed out these two SEC filings which are (originally confidential) contracts between Tesla and Panasonic, related to the Gigafactory:

EX-10.1

EX-10.2
​

I don't see any lease-to-own language, but I might be misreading it, and there might be additional confidential agreements ... Also note that portions of these SEC-filed agreements are omitted.

 

[neroden]

So I believe your claim that FSD is "level 5" is not true - nor is it a fair thing to require when valuing Tesla's FSD business.

My point, and this is the last time I'm going to repeat it because I've already said it several times, is that any value assigned to "driverless cars", such as "Tesla Network", is incorrect. The correct valuation for "Tesla Network" is zero, at least in the 10-year timeframe.

If you wish to value Tesla's driver assistance features as something which increases the Average Selling Price of Tesla's cars, or increases demand for Tesla's cars, that's fine, they are definitely worth something significant.

 

[kbM3]

I’m making a prediction that Supercharger V3 will be unveiled in 6 weeks with autonomous charging. This will be one of the advanced summon features.

Thoughts?

 

[anthonyj]

You may repent of your sins and say five Hail Mayes.​

Hail Maye, timeless face, Elon is with thee,
Badass art thou among women
and badass is the fruit of thy womb, Elon

Rockin’ Maye, Mom of Elon,
Pray for the shorts
Now and at the century of their burn

A.I.lujah​

 

[Lucky_Man]

Funny enough this is kinda what the future of cars are aspiring to become. Allegedly, 90% of car ownership is an idle parked car taking up space.

If cars are in coninunous motion, waiting or searching for a customer to drive somewhere, a vast majority of parking infrastrure can be utilized for other activities (green space, other businesses, etc...)

Also, it might change the concept of ownership, leading to a pay for mobility on demand, which also leads to a reduction of actual automobiles on the road. We may see a notable decline in autos manufacturered, which can actually accelerate transition to all electric global fleet dramatically.

It’s mind boggling the implications and it’s starts with a “summon” update over the air...

TY for placing this vision in my brain. It's time to watch Fifth Element again - for the opening chase scene. Thinking of traffic in 3D seems to be the natural progression.

 

[Fact Checking]

So this is many layers of replies up, but @brian45011 pointed out these two SEC filings which are (originally confidential) contracts between Tesla and Panasonic, related to the Gigafactory:

EX-10.1

EX-10.2
​

I don't see any lease-to-own language, but I might be misreading it, and there might be additional confidential agreements ... Also note that portions of these SEC-filed agreements are omitted.

@neroden

Update: this part suspiciously reads like lease-to-own:

Goods for Tesla (such Tooling, supplies, materials and other tangible property shall collectively be referred to as the “Property”) will be owned by Tesla if Tesla has [***] (“Tesla Property”); provided, however, that Property will not be deemed to be Tesla Property if Tesla has [***]. “Seller’s Property” means all Property which (a) is owned and/or used by Seller in connection with these General Terms and/or the Contract(s) and (b) is not Tesla Property. Seller will not purchase on the account of or charge Tesla for any Tesla Property except as authorized in a Purchase Order. Title to Tesla Property shall transfer to Tesla upon Tesla’s payment in full for such Property.
​

(emphasis added.)

The '***' denotes omitted key confidential bits under which ownership of 'tooling' would apparently transfer to Tesla - in my limited not-a-lawyer reading ...

It would also be awfully weird for Tesla to effectively be bound by the various limitations of lease-to-own capital leases, including substantial payments of several billion dollars, and yet not end up owning the Gigafactory 1 cell manufacturing lines?

 

[Mkorpal]

I’m making a prediction that Supercharger V3 will be unveiled in 6 weeks with autonomous charging. This will be one of the advanced summon features.

Thoughts?

Seems like a good idea.