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

[JRP3]

The idea of a Tesla that is good at off roading would be very appealing on it’s own merit.

Umm, maybe you've heard of this vehicle?

 

[petit_bateau]

The supply chain disruptions of 2022 that have impacted Tesla’s EV production through much of the year - particularly in China, screams volumes about the benefits of Tesla Energy’s future contributions to the company as compared to the industry that Wall Street and mainstream media wants to shoehorn Tesla into (Auto). These benefits not only include the TE revenue source that Legacy does not have, they also include significantly increased stability of that TE revenue source in times of supply chain disruption. I had not considered this until conversations around the Tesla PD earlier today with @wipster and in light of a recent post from @Singuy regarding Covid impacts on Shanghai production to Tesla in 2022. The number of suppliers necessary to produce a Tesla EV - and thus the entire logistics chain necessary to create, deliver, assemble, and ship that EV must create a risk of delay that is at least an order of magnitude more than the production and delivery chain for a Megapack - which Tesla has fine-tuned to little more than filling up a big container van with batteries from their own Giafactory that is just a short Tesla semi haul away. Smoothing the curve on EV revenue forecasting will always be difficult considering the number of variables in that equation that are beyond Tesla’s control. TE will not only grow to perhaps 50% of Tesla’s revenue, it will become a much more reliable source of overall revenue than Tesla Motors can be, as witnessed in 2022. And with Tesla adding their own refining capabilities in the next couple years that supply chain is going to be only a couple links long.

I keep seeing this meme that Tesla Energy is going to save the day, the year, the decade. Not just from you but all over the place. Especially here on TMC. However much I might wish that to be the case (and as a shareholder I would like it to be so) the actual facts do not support the hopium on offer.

So sorry if this seems like a snippy response to your post, really it is a response to all energy hopium posters.

1. Tesla solar is pants. It is not even a rounding error on global solar sales. It shows no signs of changing nor do I expect it to in this decade, if ever. Approx 315 GW of global solar was installed in 2022, and Tesla will have done barely 0.3 GW of that. Can you say 0.1% very slowly ?

2. Tesla wind is worse. It is to be precise zero. So of the 110-120 GW of wind installed globally in 2022 there is nil attributable to Tesla. Yes, that is 0%. Nada, zilch, rien.

3. The evidence I see suggests that Tesla Energy is slipping in the storage space. In domestic storage it is not even on the leader board for most of the world, excepting USA. In utility storage it has no penetration in China, is market leader in USA, and RoW is very murky but with plenty of non-Tesla wins.

4. For the next several years the vast bulk of the cells going into the storage market will be LFP. That is good, the characteristics of LFP make it a good match for storage. Remind me again how much LFP Tesla makes. Yes, zero. Tesla does not have a competitive advantage in LFP manufacture. The people who do make LFP such as BYD, CATL sell to everyone in the storage market, including themselves for packaging into client-ready cabinets. So the people who are most vertically integrated in this area are BYD et al, not Tesla.

5. Putting LFP into a 4680 form-factor does not seem to be an attractive or high-priority thing for the next few years, if ever. Prismatic LFP is plenty good enough for storage. Load-bearing prismatic LFP seems to be attractive in auto as well, but that's not that relevant in storage (except double-wrapping becomes unnecessary). So by the time that 4680 form-factor reaches LFP (if ever) then there is no reason to think that Tesla will have any particular magic sauce to add.

6. The biggest other cost in storage is the bi-directional power electronics, i.e. the inverter-charger. The vast majority of these in the world are made in China. The Tesla inverters are good, but they are not a game-changer. Again, the vertical integration is better in China than in Tesla, or anybody else in USA or Europe/etc for that matter.

7. The actual products coming out of China increasingly look generic, whether they are at domestic scale or utility scale. This is because there is increasing convergence on a dominant design for each segment's core-product. (The intermediate scale, aka Powerpack, for the commercial segment, looks to be an evolutionary dead end). Now I don't think we are quite at a fully generic dominant design quite yet, but we are getting close. Especially in the domestic market where I increasingly need to check the logo before I can figure out who is actually making/selling product coming out of China. This means that huge numbers of companies who you've never heard of are suddenly making LFP domestic plug'n'play product that is remarkably good quality, fully specced, absolutely functional, low priced, and is really a good deal with not much 'pray' required. That is also increasingly the case in the utility market as well. Take a look at this link and you'll see one (of many) wins of yet another fairly unknown utility-scale supplier of containerised storage by the half-GW, with not a Tesla logo in sight.

China connects 220 MW/440 MWh battery to grid

Robestec has connected a 220 MW/440 MW battery storage system to the grid in Ningxia, China. It is reportedly China’s largest standalone energy storage station, and uses lithium iron phosphate (LFP) batteries from Hithium Energy Storage.

www.pv-magazine.com

8. There is no logistics or cost advantage to Tesla in making this stuff in the USA, whatever the belief system one ascribes to. Roughly speaking one container-load of stuff disappears into one door of a factory and one container of product comes out the other door of the factory. Pretty much that is how it is both by weight and by volume. Irrespective of whether it is a domestic-scale product or a utility-scale product. The two big lumps that go in are the LFP and power electronics; labour and dumb steel get added; software gets loaded; testing happens; and a finished product comes out ready for mass-shipment. The tightest logistics integration comes from doing all this in China. Any claims that somehow doing all this in the USA lead to a better manufacturing/logistics supply chain are plain baloney. That is precisely why storage competitors of Tesla are out there around the world offering more product now than Tesla, even when Tesla's ramp is constrained by chip and cell supply shortages. Believe me, I have some on order from a competitor - the Tesla product is not available, not certified, does not integrate well with the rest of my system(s), and is in any case twice the price for no corresponding gain in functionality.

9. And last time I checked Chinese workforce were a darn sight cheaper than a US workforce, highly motivated, and very productive. In fact there is a Tesla plant or two in Shanghai that prove this (auto, and supercharger) and Shanghai is probably the most expensive place to make stuff in China. The only advantage the USA (and by extension, Tesla-USA) has is a cost one driven by a taxpayer subsidy called the US-IRA and various tariff and non-tariff barriers (whatever happened to free trade ?). That does not seem like a sustainable competitive advantage to me.

10. I've yet to see any evidence of a Tesla software advantage in this sector vs peer competitors. Yes there are advantages vs non-peer competitors, but not vs peer competitors. Want a utility-scale VPP or a trading/operating/metering platform, buy Kraken. Want to integrate with your car and your solar, buy Zappi. Or many other products. The (domestic-level) problem in the software area is not a lack of offerings, or the lack of standards, it is a lack (until now) of a dominant design that allowed this problem-set to be cleaved, and the desire by vendors for lock-in in the scaling wars. My personal guess is that the emergence of dominant designs will soon create the conditions that allow this to be solved. Yes Tesla is a nice little Apple-style walled garden, but don't mistake it for the only game in town. And whilst sometimes walled gardens are very productive Apple-style enterprises, more often they are a fast road to ruin - Yahoo, AOL, DoCoMo, are just some that tried and failed.

11. Look at the actual numbers.

a) If you think that Tesla Energy is going to grow to become 50% of Tesla Incs revenue then either the rest of Inc is going to have an epic fail, or I have to ask how many decades are you looking ahead - best I can figure out is 40% by 2030 with a lot of favourable winds to reach Tesla's own target:

b) Ditto profits, well only 37%,

c) Ditto cell usage, max 50/50 by 2030:

12) So overall if Tesla Energy is going to have a crack at world domination in storage it will need to scale much faster than it has been doing; to recognise that the competition is in fact here; and to spread its plants globally like now, and especially into China and Europe. If it is not careful it will enter the death spiral of Tesla solar and be globally irrelevant.

13) No more hopium please.

 

[marvinat0rz]

It’s within about $107 of the bottom.

You've got a great point; the vast majority of the decline is behind us.

 

[kabin]

Probably also dumb to expect mainstream Americans to spend $66k on a minimalistic MYLR. TSLA has to comes to grips with their pricing and accelerate the next gen low cost vehicle production.

 

[thesmokingman]

This is just a straight up lie. Cold weather doesn't cost 50% of range. Now, if conditions are just terrible it's possible your total range decrease might approach that on older vehicles without heat pumps but that includes losses due to speed, wind, etc.
View attachment 891761

They are defending their domestic makers, terribad precedents but not surprised either.

 

[StarFoxisDown!]

This is gut feel, but taken all the numbers into account, I don't think we are going to see under $100.

We have bounced off the previous minimum today. And really the whole panic of the past 3 months is just that, panic. We are slightly short of numbers and demand is less than it was 12m ago, but this is nothing we havent seen before. I remember when there was lots of Model 3 inventory back on 2020 despite much lower production.

Yes, we will go lower than $100 if earnings per share is less than $1 for Q4. But I am expecting record profits by a long way, and 2m vehicles delivered in 2023. All good

I'd venture to say at this point that TSLA staying above 100/share will greatly depend on the macro's. Nasdaq is continuing to tread water but could break to the downside on any day, which point probably looking at another 6-7% drop before the next technical support level. Given TSLA's very weak state, that'll definitely take TSLA below 100.

 

[Ogre]

Umm, maybe you've heard of this vehicle?

View attachment 891869

I hadn’t realized that Tesla is limited to exactly one off road vehicle. Seems like an odd restriction.

 

[thesmokingman]

It will be interesting to see what Tesla does about the MY not qualifying for the 2023 Us tax credit.

Part of me thinks Tesla should tell the US to **** off. The deal was Tesla opens SUC network for access to the rebate. If they are ****ing with the rebate to prevent this, the deal is dead. Tesla has prospered w/o the rebates before. However the US EV transition will fail w/o a proper charging network and the public charging systems have proven time and again they are wholly incompetent. They need Tesla more than Tesla needs a rebate. If this is how they are showing this need, **** that!

 

[2101Guy]

My headline would be "goldman cuts price target from 261 to 205 after beating their forecast estimate of 1.05M units for 2022."

Everyone keeps punishing Tesla for failing to meet aggressive guidance everyone felt was BS to begin with.

Tesla To $205? Here Are 10 Other Price Target Changes For Tuesday - Anavex Life Sciences (NASDAQ:AVXL), Brilliant Earth Group (NASDAQ:BRLT)

Goldman Sachs cut Tesla, Inc. (NASDAQ: TSLA) price target from $235 to $205. Goldman Sachs analyst Mark Delaney maintained a Buy rating on the stock. Tesla shares fell 2.6% to $119.93 in pre-market trading.

www.benzinga.com

But I mean, thats how Wall Street...works. Meet your own guidance, and you are rewarded. Stray too far either way (especially under), and you often are penalized. This isnt exclusive to Tesla.

 

[vikings123]

I keep seeing this meme that Tesla Energy is going to save the day, the year, the decade. Not just from you but all over the place. Especially here on TMC. However much I might wish that to be the case (and as a shareholder I would like it to be so) the actual facts do not support the hopium on offer.

So sorry if this seems like a snippy response to your post, really it is a response to all energy hopium posters.

1. Tesla solar is pants. It is not even a rounding error on global solar sales. It shows no signs of changing nor do I expect it to in this decade, if ever. Approx 315 GW of global solar was installed in 2022, and Tesla will have done barely 0.3 GW of that. Can you say 0.1% very slowly ?

2. Tesla wind is worse. It is to be precise zero. So of the 110-120 GW of wind installed globally in 2022 there is nil attributable to Tesla. Yes, that is 0%. Nada, zilch, rien.

3. The evidence I see suggests that Tesla Energy is slipping in the storage space. In domestic storage it is not even on the leader board for most of the world, excepting USA. In utility storage it has no penetration in China, is market leader in USA, and RoW is very murky but with plenty of non-Tesla wins.

4. For the next several years the vast bulk of the cells going into the storage market will be LFP. That is good, the characteristics of LFP make it a good match for storage. Remind me again how much LFP Tesla makes. Yes, zero. Tesla does not have a competitive advantage in LFP manufacture. The people who do make LFP such as BYD, CATL sell to everyone in the storage market, including themselves for packaging into client-ready cabinets. So the people who are most vertically integrated in this area are BYD et al, not Tesla.

5. Putting LFP into a 4680 form-factor does not seem to be an attractive or high-priority thing for the next few years, if ever. Prismatic LFP is plenty good enough for storage. Load-bearing prismatic LFP seems to be attractive in auto as well, but that's not that relevant in storage (except double-wrapping becomes unnecessary). So by the time that 4680 form-factor reaches LFP (if ever) then there is no reason to think that Tesla will have any particular magic sauce to add.

6. The biggest other cost in storage is the bi-directional power electronics, i.e. the inverter-charger. The vast majority of these in the world are made in China. The Tesla inverters are good, but they are not a game-changer. Again, the vertical integration is better in China than in Tesla, or anybody else in USA or Europe/etc for that matter.

7. The actual products coming out of China increasingly look generic, whether they are at domestic scale or utility scale. This is because there is increasing convergence on a dominant design for each segment's core-product. (The intermediate scale, aka Powerpack, for the commercial segment, looks to be an evolutionary dead end). Now I don't think we are quite at a fully generic dominant design quite yet, but we are getting close. Especially in the domestic market where I increasingly need to check the logo before I can figure out who is actually making/selling product coming out of China. This means that huge numbers of companies who you've never heard of are suddenly making LFP domestic plug'n'play product that is remarkably good quality, fully specced, absolutely functional, low priced, and is really a good deal with not much 'pray' required. That is also increasingly the case in the utility market as well. Take a look at this link and you'll see one (of many) wins of yet another fairly unknown utility-scale supplier of containerised storage by the half-GW, with not a Tesla logo in sight.

China connects 220 MW/440 MWh battery to grid

Robestec has connected a 220 MW/440 MW battery storage system to the grid in Ningxia, China. It is reportedly China’s largest standalone energy storage station, and uses lithium iron phosphate (LFP) batteries from Hithium Energy Storage.

www.pv-magazine.com

8. There is no logistics or cost advantage to Tesla in making this stuff in the USA, whatever the belief system one ascribes to. Roughly speaking one container-load of stuff disappears into one door of a factory and one container of product comes out the other door of the factory. Pretty much that is how it is both by weight and by volume. Irrespective of whether it is a domestic-scale product or a utility-scale product. The two big lumps that go in are the LFP and power electronics; labour and dumb steel get added; software gets loaded; testing happens; and a finished product comes out ready for mass-shipment. The tightest logistics integration comes from doing all this in China. Any claims that somehow doing all this in the USA lead to a better manufacturing/logistics supply chain are plain baloney. That is precisely why storage competitors of Tesla are out there around the world offering more product now than Tesla, even when Tesla's ramp is constrained by chip and cell supply shortages. Believe me, I have some on order from a competitor - the Tesla product is not available, not certified, does not integrate well with the rest of my system(s), and is in any case twice the price for no corresponding gain in functionality.

9. And last time I checked Chinese workforce were a darn sight cheaper than a US workforce, highly motivated, and very productive. In fact there is a Tesla plant or two in Shanghai that prove this (auto, and supercharger) and Shanghai is probably the most expensive place to make stuff in China. The only advantage the USA (and by extension, Tesla-USA) has is a cost one driven by a taxpayer subsidy called the US-IRA and various tariff and non-tariff barriers (whatever happened to free trade ?). That does not seem like a sustainable competitive advantage to me.

10. I've yet to see any evidence of a Tesla software advantage in this sector vs peer competitors. Yes there are advantages vs non-peer competitors, but not vs peer competitors. Want a utility-scale VPP or a trading/operating/metering platform, buy Kraken. Want to integrate with your car and your solar, buy Zappi. Or many other products. The (domestic-level) problem in the software area is not a lack of offerings, or the lack of standards, it is a lack (until now) of a dominant design that allowed this problem-set to be cleaved, and the desire by vendors for lock-in in the scaling wars. My personal guess is that the emergence of dominant designs will soon create the conditions that allow this to be solved. Yes Tesla is a nice little Apple-style walled garden, but don't mistake it for the only game in town. And whilst sometimes walled gardens are very productive Apple-style enterprises, more often they are a fast road to ruin - Yahoo, AOL, DoCoMo, are just some that tried and failed.

11. Look at the actual numbers.

a) If you think that Tesla Energy is going to grow to become 50% of Tesla Incs revenue then either the rest of Inc is going to have an epic fail, or I have to ask how many decades are you looking ahead - best I can figure out is 40% by 2030 with a lot of favourable winds to reach Tesla's own target:

View attachment 891832


b) Ditto profits, well only 37%,
View attachment 891833

c) Ditto cell usage, max 50/50 by 2030:
View attachment 891834


12) So overall if Tesla Energy is going to have a crack at world domination in storage it will need to scale much faster than it has been doing; to recognise that the competition is in fact here; and to spread its plants globally like now, and especially into China and Europe. If it is not careful it will enter the death spiral of Tesla solar and be globally irrelevant.

13) No more hopium please.

Thank you for making a sensible post with relevant data. This forum badly needs multiple doses of reality per day. We now have bulls either being intentionally deceptive or delusional with all the stuff I'm reading. I don't want to be Tesla economist or CGS but I also don't want people to gamble away their money with option bets or whatever.

The primary driver of Tesla's near term growth will be automotive and to a large extent FSD. Funny how I don't hear Optimus potential from the influencers.

 

[mongo]

Part of me thinks Tesla should tell the US to **** off. The deal was Tesla opens SUC network for access to the rebate. If they are ****ing with the rebate to prevent this, the deal is dead. Tesla has prospered w/o the rebates before. However the US EV transition will fail w/o a proper charging network and the public charging systems have proven time and again they are wholly incompetent. They need Tesla more than Tesla needs a rebate. If this is how they are showing this need, **** that!

Charging station funding is separate and distinct from the vehicle credits.

 

[Artful Dodger]

Secondly, exercising at the basis cost is no different from just buying the shares, he would net nothing from the CEO Plan.

Replying to this in a separate message so the content doesn't get lost, or missed by some:

It's really NOT like just buying the shares. Excercising stock options creates new shares from Tesla, which is NOT the same as competing in the open market for the same number of existing shares. Remember supply'n'demand? It still applies, even though MMs have certain exemptions in their favor.

If Elon was simply to buy 302M shares on the open market, the SP would spike, the SEC would halt trading, and then likely try to sue him for something or other.

Alternatively, if Elon wanted to drive the SP down to any arbitrary number of his choosing, he can do that too simply by selling at a faster pace than the market will bare. As Uncle Jack wrote those many years ago in his "dead whistleblower" blog post:

"One man has them totally surrounded, outnumbered, and outgunned. Elon Musk.”​

 

[thesmokingman]

Charging station funding is separate and distinct from the vehicle credits.

It's a requirement to have an open network.

 

[MP3Mike]

It's a requirement to have an open network.

Not for the vehicle credits.

 

[JRP3]

I hadn’t realized that Tesla is limited to exactly one off road vehicle. Seems like an odd restriction.

Don't think I mentioned that. You said the idea of an off road Tesla would be appealing, I simply pointed out that idea already exists. I'd love a jacked up version of the Y but I think it's a greater investment than many understand and would eat up much of the rebate. It would also take a meaningful range hit.

 

[petit_bateau]

There is a lesson here for the higher volume compact Gen3 models, more factories are needed to locate production closer to the end customer, less time in transit on boats is ideal.

It is also true that Tesla needs more Models and some lower priced cars. The 4680 ramp is probably important for the Gen3 cars.

6-12 months ago Tesla had more demand then they could cope with, it seemed like a simple ramping of production to crank out more Model Ys was all that was needed. Now the game has shifted slightly, demand in China combined with logistics out of Shanghai appear to be an issue.

I seem to recall several months ago pointing to the possibility that better-than-expected competition from China in the vehicle space might lead to volume curtailment for Tesla and premature GM% compression. I got loudly shouted down.

For years I have pointed out that Tesla would need offerings successively in the cheaper and smaller vehicle segments of 2/Z; 1; and micro so as to sustain the global ramp for a decade and remain relevant whilst addressing all global market opportunities in pursuit of the mission. I got told that such small cars were un-American death traps. (Fortunately I am European.)

How times have changed.

An interesting issue is that the castings technology on display in the 3/Y and the S/X, and we believe also in the CT, would appear to only be cost-effective in a factory where there is a very high minimum volume for just one product (or platform). At least 500k/yr, perhaps 1m/yr. This naturally leads to a situation where, if a factory is to remain viable during transitions between products (or platforms) then it needs to have (say) 2m/yr or more throughput, i.e. multiple vehicles. Given that the largest auto factory in the world is the 1.4m/yr Hyundai plant in Korea we can see that the planned build-out of Shanghai, Austin, and Berlin - which are all quite obviously going to at least exceed 2m/yr - is revolutionising the entire auto industry. We do not yet know the full scale of these plants, indeed I am not sure anyone in Tesla is yet ready to answer that question. Maybe they will aim for 4m/yr , maybe just halt at 2m/yr per plant.

This in turn means that there will be somewhere between five (5x 4m/yr = 20m/yr) or ten (10x 2m/yr = 20m/yr) plants. Either way there will be inevitably a lot of logistics complexity as, even at 4m/yr per plant no single plant will be ableto manufacture the entire model range for one region. So EOQ stock will have an irreducible minimum. Wet finger in the air, if they are doing 15-days stock in transit they are doing exceptionally well for the next 10-years. And at the ten plant case the transit volumes are likely higher and certainly more complex. And these would ALL still be the largest auto plants ever built by humans.

Unless there is something different in the Gen-3 product platform that we have yet to see.

 

[Artful Dodger]

With my last dry powder I could buy 550 more at $100 or 916 more at $60…….

Genuine dilemma. Any (not) advice?

$5K more at each $5 step down btwn $100 and $60? (DCA).

But first remind us why $60 is the bottom?

Cheers!

 

[Ogre]

Part of me thinks Tesla should tell the US to **** off. The deal was Tesla opens SUC network for access to the rebate. If they are ****ing with the rebate to prevent this, the deal is dead. Tesla has prospered w/o the rebates before. However the US EV transition will fail w/o a proper charging network and the public charging systems have proven time and again they are wholly incompetent. They need Tesla more than Tesla needs a rebate. If this is how they are showing this need, **** that!

The somewhat ironic thing here is Tesla is likely to drop a lower priced Model Y into the lineup as a response.

A Model Y selling for (effectively) $47,500 is pretty much they last thing the auto industry wants right now. That puts massive downward pressure on all of the other makers. Who is buying a LYRIQ for $65k when it sucks road tripping and you can get a Model Y for $20k less?

 

[Sofie]

Well I just bought a bunch and did like @Artful Dodger suggested for today; 25% today and I’ll DCA the rest of my dry powder over the rest of the month (because stop losing triggering and all that other crazy stuff happening, yep).
I think by 2030, I will indeed be very happy.

 

[CatB]

I keep seeing this meme that Tesla Energy is going to save the day, the year, the decade. Not just from you but all over the place. Especially here on TMC. However much I might wish that to be the case (and as a shareholder I would like it to be so) the actual facts do not support the hopium on offer.

So sorry if this seems like a snippy response to your post, really it is a response to all energy hopium posters.

1. Tesla solar is pants. It is not even a rounding error on global solar sales. It shows no signs of changing nor do I expect it to in this decade, if ever. Approx 315 GW of global solar was installed in 2022, and Tesla will have done barely 0.3 GW of that. Can you say 0.1% very slowly ?

2. Tesla wind is worse. It is to be precise zero. So of the 110-120 GW of wind installed globally in 2022 there is nil attributable to Tesla. Yes, that is 0%. Nada, zilch, rien.

3. The evidence I see suggests that Tesla Energy is slipping in the storage space. In domestic storage it is not even on the leader board for most of the world, excepting USA. In utility storage it has no penetration in China, is market leader in USA, and RoW is very murky but with plenty of non-Tesla wins.

4. For the next several years the vast bulk of the cells going into the storage market will be LFP. That is good, the characteristics of LFP make it a good match for storage. Remind me again how much LFP Tesla makes. Yes, zero. Tesla does not have a competitive advantage in LFP manufacture. The people who do make LFP such as BYD, CATL sell to everyone in the storage market, including themselves for packaging into client-ready cabinets. So the people who are most vertically integrated in this area are BYD et al, not Tesla.

5. Putting LFP into a 4680 form-factor does not seem to be an attractive or high-priority thing for the next few years, if ever. Prismatic LFP is plenty good enough for storage. Load-bearing prismatic LFP seems to be attractive in auto as well, but that's not that relevant in storage (except double-wrapping becomes unnecessary). So by the time that 4680 form-factor reaches LFP (if ever) then there is no reason to think that Tesla will have any particular magic sauce to add.

6. The biggest other cost in storage is the bi-directional power electronics, i.e. the inverter-charger. The vast majority of these in the world are made in China. The Tesla inverters are good, but they are not a game-changer. Again, the vertical integration is better in China than in Tesla, or anybody else in USA or Europe/etc for that matter.

7. The actual products coming out of China increasingly look generic, whether they are at domestic scale or utility scale. This is because there is increasing convergence on a dominant design for each segment's core-product. (The intermediate scale, aka Powerpack, for the commercial segment, looks to be an evolutionary dead end). Now I don't think we are quite at a fully generic dominant design quite yet, but we are getting close. Especially in the domestic market where I increasingly need to check the logo before I can figure out who is actually making/selling product coming out of China. This means that huge numbers of companies who you've never heard of are suddenly making LFP domestic plug'n'play product that is remarkably good quality, fully specced, absolutely functional, low priced, and is really a good deal with not much 'pray' required. That is also increasingly the case in the utility market as well. Take a look at this link and you'll see one (of many) wins of yet another fairly unknown utility-scale supplier of containerised storage by the half-GW, with not a Tesla logo in sight.

China connects 220 MW/440 MWh battery to grid

Robestec has connected a 220 MW/440 MW battery storage system to the grid in Ningxia, China. It is reportedly China’s largest standalone energy storage station, and uses lithium iron phosphate (LFP) batteries from Hithium Energy Storage.

www.pv-magazine.com

8. There is no logistics or cost advantage to Tesla in making this stuff in the USA, whatever the belief system one ascribes to. Roughly speaking one container-load of stuff disappears into one door of a factory and one container of product comes out the other door of the factory. Pretty much that is how it is both by weight and by volume. Irrespective of whether it is a domestic-scale product or a utility-scale product. The two big lumps that go in are the LFP and power electronics; labour and dumb steel get added; software gets loaded; testing happens; and a finished product comes out ready for mass-shipment. The tightest logistics integration comes from doing all this in China. Any claims that somehow doing all this in the USA lead to a better manufacturing/logistics supply chain are plain baloney. That is precisely why storage competitors of Tesla are out there around the world offering more product now than Tesla, even when Tesla's ramp is constrained by chip and cell supply shortages. Believe me, I have some on order from a competitor - the Tesla product is not available, not certified, does not integrate well with the rest of my system(s), and is in any case twice the price for no corresponding gain in functionality.

9. And last time I checked Chinese workforce were a darn sight cheaper than a US workforce, highly motivated, and very productive. In fact there is a Tesla plant or two in Shanghai that prove this (auto, and supercharger) and Shanghai is probably the most expensive place to make stuff in China. The only advantage the USA (and by extension, Tesla-USA) has is a cost one driven by a taxpayer subsidy called the US-IRA and various tariff and non-tariff barriers (whatever happened to free trade ?). That does not seem like a sustainable competitive advantage to me.

10. I've yet to see any evidence of a Tesla software advantage in this sector vs peer competitors. Yes there are advantages vs non-peer competitors, but not vs peer competitors. Want a utility-scale VPP or a trading/operating/metering platform, buy Kraken. Want to integrate with your car and your solar, buy Zappi. Or many other products. The (domestic-level) problem in the software area is not a lack of offerings, or the lack of standards, it is a lack (until now) of a dominant design that allowed this problem-set to be cleaved, and the desire by vendors for lock-in in the scaling wars. My personal guess is that the emergence of dominant designs will soon create the conditions that allow this to be solved. Yes Tesla is a nice little Apple-style walled garden, but don't mistake it for the only game in town. And whilst sometimes walled gardens are very productive Apple-style enterprises, more often they are a fast road to ruin - Yahoo, AOL, DoCoMo, are just some that tried and failed.

11. Look at the actual numbers.

a) If you think that Tesla Energy is going to grow to become 50% of Tesla Incs revenue then either the rest of Inc is going to have an epic fail, or I have to ask how many decades are you looking ahead - best I can figure out is 40% by 2030 with a lot of favourable winds to reach Tesla's own target:

View attachment 891832


b) Ditto profits, well only 37%,
View attachment 891833

c) Ditto cell usage, max 50/50 by 2030:
View attachment 891834


12) So overall if Tesla Energy is going to have a crack at world domination in storage it will need to scale much faster than it has been doing; to recognise that the competition is in fact here; and to spread its plants globally like now, and especially into China and Europe. If it is not careful it will enter the death spiral of Tesla solar and be globally irrelevant.

13) No more hopium please.

How do we nominate as “post of particular merit”?
Content and balanced tone are both appreciated.