2017 Investor Roundtable:General Discussion

[dc_h]

The early on design renderings of the GF included a massive array of solar panels coming from then SCTY. Where are they fitting into this situation? I find it hard to believe Tesla/Elon is totally relying on Los Vegas for power Trying a little humor here. This just does not sound right to me Is he really dancing around this problem ~ get it, night club dancing in Los Vegas

Just as parking. With the total recall, okay, I mean design detail we see of Elon, I find it hard to believe parking was not considered an integral overall part of the architectural layout. I drove out to the GF last year and I was about the only car on the road, granted it was not 0730 Also, there was a manned guard shack with two lanes going into the property. No, drawbridge entry.

I have lived too many years around military posts, and have only once or twice encountered surge back ups of traffic going onto a post. Usually, a surge situation was caused due to an emergency and caused a change in procedures. In all cases, it was rectified quickly.

If actuall physical parking is a problem, then why did Tesla not put in parking garages? Still, why not do it now? They put in garage style parking while I was attending El Camino Community College. So, I think Tesla, and them employees are able to handle it. Where are the drone films of the backed up traffic? There used to be folks that would take the time to film the progress of the GF

No solar yet. I expect after NY plant is running.
Parking, I wonder why they wouldn’t provide a toll road like device to speed ingress and maintain security.
They should be doing busses too. Save the road for the trucks.

 

[neroden]

Endeep claims Tesla abandoned the concept of self-sustaining solar/wind generation for the site--IMO it's not abandoned but needs the Buffalo facility output and additional capital to install

For stabilizing the power supply the solar/wind isn't nearly as important as the Powerpacks. It seems that it would be quite wise to divert battery production to in-house power supply stabilization immediately, as it would pay off fairly quickly in faster battery production. Not sure why they haven't prioritized this; they can always add the solar/wind later. It's also the only customer where they don't have to do delivery logistics!

 

[neroden]

No solar yet. I expect after NY plant is running.
Parking, I wonder why they wouldn’t provide a toll road like device to speed ingress and maintain security.
They should be doing busses too. Save the road for the trucks.

It's expensive, but they should have shuttle buses from Reno immediately, and they should be working on shuttle TRAINS from Reno. Get the rail track extended to the Gigafactory (which is desirable for freight as well) and start shuttling people in several hundred at a time.

 

[neroden]

You have to have net profits to make use of charitable deductions.

I was curious, so I checked. There's a five-year carryforward rule. So charitable deductions made in 2017 can be deducted against future taxes as late as 2022.

(Of course, the Net Operating Loss carryforwards have to apply first, and they carry forward for *20* years, so Tesla would have to accumulate enough profits to wipe out all the earlier operating losses before it could use the charitable carryforward. The accumulated deficit for accounting purposes is about $3.7 billion; while it would be different for tax purposes, it will be in the same ballpark.)

 

[neroden]

I am concerned about the veracity the various rumours we have been hearing in the last week. Fortunately Nov 1st is rapidly approaching so we may settle out a bit after the quarter results.

Honestly? I believe all the rumors about problems, more or less. Production hell!

The thing is... with the possible exceptions of difficulty hiring decent people to work in Sparks, and of Panasonic corporate culture being unable to get rid of deadwood.... all of these are problems with essentially straightforward "work through it" solutions. The sort of problems which Musk has solved reliably, and efficiently, throughout his career. If we were hearing about substantial problems in one of the areas where Tesla has weak corporate culture -- like responding to customer complaints -- I'd be more worried. But the customer reports on the Model 3 are glowing.

 

[neroden]

"Gigafactory 1 currently has four lines of machines, with 14 machines in each line. Each machine is capable of more then 500,000 batteries per month, so all together the equivalent of ~10,000 Model 3s per month, and have been producing at that rate for at least the last two months"


4416 cells are required per long range M3. That equates to enough batteries being produced to fill 6340 long range M3s per month (if each machine produces exactly 500,000).

Tesla Model 3: Exclusive first look at Tesla’s new battery pack architecture

OK, so let's be pessimistic here. Two lines switched over to Powerpack production. Lines running at half capacity due to power fluctuations and incompetent managers causing high downtime. This leaves us with about 1500 Model 3 per month. Not a bad place to be, and start trying to fix the problems from there. Since we haven't seen that rate of car production yet, I would then suspect there's another bottleneck in addition to Panasonic's battery production issues.

 

[neroden]

Btw, there is no charity deduction for businesses. There is no need. All expenses are 100% tax deductible by definition. Donations just reduce/increase profits/losses.

Not correct for the US. Charitable deductions are a specific line item expense on the corporate income tax return form.

I must point out: NOT all expenses of a corportation are 100% tax deductible! For an interesting exception, IIRC payments for illegal activities (such as bribery, contract killing, sabotage, etc.) are specifically *not* tax deductible. Perhaps more common, excess payments to executives are not tax deductible (though they've found loopholes around that).

 

[ValueAnalyst]

I was curious, so I checked. There's a five-year carryforward rule. So charitable deductions made in 2017 can be deducted against future taxes as late as 2022.

(Of course, the Net Operating Loss carryforwards have to apply first, and they carry forward for *20* years, so Tesla would have to accumulate enough profits to wipe out all the earlier operating losses before it could use the charitable carryforward. The accumulated deficit for accounting purposes is about $3.7 billion; while it would be different for tax purposes, it will be in the same ballpark.)

Tesla will not pay corporate taxes at the federal level until 2020.

 

[ValueAnalyst]

The hospital project is a donation until the crisis is over. Then they may enter talks on whether to make it permanent and what the payment would be.

What about the money Congress is looking to allocate for Puerto Rico recovery efforts?

 

[RobStark]

You know you are a Teslaholic when......

 

[HG Wells]

If it was battery production that was the problem, they would've started offering the short range version of the model three. If there is any problem at all related to batteries it's at the pack level.


Advice: Buy low, sell high!

 

[anticitizen13.7]

The in-depth YouTube review from M3OC of Model 3 showed that Tesla has engineered a superb compact sport sedan. From a hardware perspective the only thing I could quibble with was the use of glossy black (fingerprint magnet) surfaces on the center console storage doors.

From here on out it’s down to resolving production hell. Enjoy the ride! Happy Halloween!

 

[Mike Smith]

Delays is ramp-up due to any kind of temporary bottleneck don't matter. The big risk was a repeat of the Model X situation - which required a redesign of the car itself. This is not happening with the Model 3. This is a case of the market focusing on highly visible issues that don't really matter while ignoring the fact that the real risk is rapidly passing.

 

[kenliles]

 

[Mike Smith]

New interview of George Hotz with interesting comments on Tesla and other competitors.

 

[Thumper]

I think that video has been around for a year or two.

 

[ValueAnalyst]

This is awesome.

Vicente Fox Quesada on Twitter

 

[Mike Smith]

I think that video has been around for a year or two.

No, it's a new interview by Reason.com

 

[geneclean55]

Trump signed the disaster relief bill into law on Thursday. Includes ~5bill in low interest loans to PR.
I believe there was some grumbling that it includes federal oversight on how it can be spent.

 

[mmd]

That's a complex question. If you look at the EV incentives, they started as a way to support the only domestic auto maker, Think Global. The company eventually went out of business after several bankruptcies, but the incentives stayed in place.

Then, before it became apparent that BEVs would become very popular, all the parties arrived at at an environmental compromise to keep the incentives until we had 50,000 BEVs on the road. By the time this limit was met, the current coalition government had taken over, and they needed the support of the Liberal Party and the Christian Democrats. Those parties managed to convince the Progress Party and the Conservatives to keep the incentives beyond 50,000 BEVs. This wasn't a difficult compromise, because the incentives aren't very expensive. We aren't talking about direct subsidies like in the US; here, BEVs simply aren't taxed, while fossil cars have always been taxed heavily. There's a revenue hit, but fossil car taxes are simply raised to compensate for that. A couple of other factors that makes the EV incentives easy to support is that our electricity is quite clean, over 95% hydro- and windpower. That mostly eliminates the long tail pipe argument, and also means that supporting BEVs is to support the domestic electricity sector. Also, the incentives are quite popular, as this is the first time in history that the middle class is able to afford high-powered cars.

A third factor is the diesel-fiasco. Around 2000-2005, diesel cars were thought of by politicians as the most environmentally friendly solution, due to low CO2 emissions. Taxes were shifted to favour diesel cars over gasoline cars, and the share of diesel car sales rose to over 70%. This has been terrible for air quality in the cities. And one way to help remedy that is to ensure maximum adoption of EVs. Graph of fuel market shares below:

Make no mistake, there are political forces that want to see the EV incentives go away, but thus far the pro-environment movement has come out on top.

The plug-in share in Sept was actually 48%. Any idea what the cumulative percent of plugins is among all the cars on Norwegian roads?

Where is the tipping point? It seems an average car was paying almost $100k in new car taxes earlier. Plus toll taxes, ferry charges and very high taxes on gasoline. At the Norwegian car sales rate of ~13600 cars a month, that's a loss of $1.5B in revenue every month just in initial taxes. If the entire new car sales are BEVs and PHEVs, how is the govt going to fill this big hole in the budget?

How and why cars are expensive in Norway (tax examples) • r/cars

How and why cars are expensive in Norway (tax examples) (self.cars)
Submitted 3 years ago by VerticalNOR'10 Fiat Abarth SS, Modified Fiat X1/9
Hi people.
I recently saw a thread on best and worst countries to be a car enthusiast, and Norway popped up frequently as an answer. I'm about to show you why. The average salary in Norway is about 60,000k dollars, but still we got one of the oldest car-fleets in Europe. This is because of extreme taxes on everything. Power (hp and kw), weight, age, so on. A Chevrolet Camaro (3.6 litre V6) is over 156,000 dollars here in Norway (if I were to import). Why?

• Value-added tax = 9,000 dollars
• Tax for the weight of the car = 15,000 dollars
• Engine tax (horepowers mostly) = 27,000 dollars
  
• CO2 tax = 72,000 dollars
• N0x-tax (nitrogen oxide) = 1000 dollars
• First-time registration (to get license plates, don't know what this is called in us) = 115,000 dollars
• In case you want-to-scrap-your-car-tax = 400 dollars

Total taxes for a Chevrolet Camarao V6? 125,000 dollars. This does not, of course, include shipping, insurance, gas, so on.

Reading ev-sales.blogspot, it seems some places within Norway are curbing incentives as plug-ins reach early majority. Will be interesting how this is tackled.
EV Sales: Norway

I have a feeling that the EV thing will be a repeat of the diesel thing ten years later. The pollution in creating batteries and electricity are not insignificant for most countries. The politicians are as smart as they were 1-2 decades ago.
Making car ownership cheaper also promotes more cars that cause more congestion for everyone.

Edit: I noticed that reddit post has mixed up the tax numbers. The total isn't correct.
But here is another old article, saying Norwegian govt sees the car as a "milking cow". 2/3 of the petrol prices are just taxes.
Oil-rich Norway is taxing on cars

In Oslo, there is ample public transportation that can be used as an alternative to cars. Yet Norway, with a population of just 4.6 million, differs from much of Europe in its breadth, with an extensive network of roads, tunnels and bridges.

"Rural areas without good public transportation alternatives are hit a little harder," said Knut Sandberg Eriksen, a senior research economist at the Institute of Transport Economics in Oslo who estimates the government collects about $2.4 billion in fuel taxes each year. Some of the revenue supports Norway's social benefits.

"Our government has been grateful to use the automobile as a supreme tax object," said Eriksen. "The car is its milking cow."