2017 Investor Roundtable:General Discussion

[DurandalAI]

There is more TE news, now from Australia

Lyndon Rive, who's position at Tesla is now head of energy products, was speaking on Thursday (yes, Thursday already happening down below) at the Australian launch event for PowerWall 2 and PowerPack 2. Here is the salient points reported by Australian publication REneweconomy.com:

• SA power crisis, which culminated in a large black-out event back in September, could be solved by adding 100-300MWh of storage, and Tesla is ready to help, in under 100 days (with the reference to the Mira Loma Substation project installed in 90 days). Rives indicated that Tesla is in negotiations with Australian utilities:
  
  
  
  
• Tesla has "big pipeline" of grid-scale battery storage projects
  
  
• Rives specifically addressed use of BES as a way to avoid building additional transmission capacity - an application that can have much better return than just time arbitrage or avoidance of peak charges.
  

I think that last part, of using BES at substations instead of adding transmission capacity is a point that is probably underestimated currently. If they place storage at local substations, you handle 4 different items concurrently. 1. Outages upstream to a substation can be temporarily mitigated by BES. 2. Pricing of peak power can be offset, saving the utilities money for residential and other non ToU customers. 3. Reduce the need for additional transmission lines. 4.Customers with solar/wind net metering have less of a power swing influence on the grid as a whole.

I truly think that TE is a product that utilities really need, but they just don't know they need it. As such, BES is likely to really take off at the PowerPack level in the next few years as examples of success begin to penetrate the minds of the utilities. This is a great way to preserve profits.

 

[2Pearls]

Trump hating again in the investor thread?

You can disagree and call this hate all you want, but the FACT remains that Trumps business dealings are being called into question. Money laundering is a crime in the US, maybe not in Russia, but in the US, people go to jail for doing this. Companies need to do due diligence. They cannot claim incompetence. Pres.Trump has many dealings like this, including selling a property in Palm beach that was never lived in for more than double he paid to a Russian who never lived in it. This is working with people who launder money. And this same Russian shows up at the airports of events Mr. trump is at. Not a coincidence. How does Duesche bank, a known money launderer give Mr. Trump millions of dollars in loans when he still owes Duesche millions. Throwing bad money after bad money. Why? Mr. Trump gives his "word" that he will pay back loans and then files 4+ bankruptcies. Claiming he was working with the tax codes at the time. Please do your own accurate due diligence and see why Trump does not want to release his tax returns and why, now, our country could be in danger of blackmail because of his bad/illegal business dealings with known money launderers like the Iranian Revolutionary guard.
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[DurandalAI]

BMW's Profitability Hits Lowest Since 2010 Amid Tech Rivalry
"Amid higher spending on electric-car and autonomous-driving technologies, BMW’s automotive profit margin narrowed to 8.9 percent in 2016 from 9.2 percent a year earlier"

“We are fully focused on implementing our strategy,” which involves pivoting to self-driving, electric vehicles, Krueger said in the statement. “From 2019 onwards, we will be firmly embedding all-electric, battery-powered mobility in our core brands.”

"Carmakers are investing in battery-powered vehicles to comply with tightening emissions regulations, even though customers aren’t rewarding the effort because they’re concerned about cost and driving range. BMW said it plans to sell 100,000 electrified vehicles this year, for the first time."

All of this, and yet no mention as to Tesla, who has stolen a decent percentage of the upper sedan market from BMW, and helped BMW slip from their #1 spot with Mercedes taking it from there. BMW knows that the writing is on the wall for ICE vehicles, especially in the luxury market, where a smooth ride is king.

 

[scaesare]

I think that last part, of using BES at substations instead of adding transmission capacity is a point that is probably underestimated currently

Indeed.. I had never even thought of it, but it makes good sense.

 

[racer26]

BMW's Profitability Hits Lowest Since 2010 Amid Tech Rivalry
"Amid higher spending on electric-car and autonomous-driving technologies, BMW’s automotive profit margin narrowed to 8.9 percent in 2016 from 9.2 percent a year earlier"

“We are fully focused on implementing our strategy,” which involves pivoting to self-driving, electric vehicles, Krueger said in the statement. “From 2019 onwards, we will be firmly embedding all-electric, battery-powered mobility in our core brands.”

"Carmakers are investing in battery-powered vehicles to comply with tightening emissions regulations, even though customers aren’t rewarding the effort because they’re concerned about cost and driving range. BMW said it plans to sell 100,000 electrified vehicles this year, for the first time."

All of this, and yet no mention as to Tesla, who has stolen a decent percentage of the upper sedan market from BMW, and helped BMW slip from their #1 spot with Mercedes taking it from there. BMW knows that the writing is on the wall for ICE vehicles, especially in the luxury market, where a smooth ride is king.

So we squeezed 0.3% of BMWs margin this year. They're squealing a bit.

What happens when Model 3 comes along and steals swaths of market share from the 3 series (which I would estimate is where BMW makes most of their profit)?

 

[jbcarioca]

Indeed.. I had never even thought of it, but it makes good sense.

IIRC JB talked about that as well as a number of other grid management issues (my memory suggests he discussed distributed storage in two aspects, peak management and local production storage. He did discuss grid capacity optimization with reference to both issues. The entire Smart Grid discussion at the (former) EPA and in Europe, especially Germany, Netherlands, Denmark and the Nordics has a concentration on minimizing incremental energy transmission capacity with local peak management storage and production, among other things.

I don't have time at the moment to look up the references but there are quite a few of them. The US is a particular focus for such questions because of regionalized grid structure, fairly creaky capacity management processes and a general lack of adequate peak managemnt throughout the US system. Further the NE US is deeply dependent on Canadian wheeling, with local generating capacity barely adequate for any unusual factors.

From Tesla energy perspective I find it almost a certainty that massive growth in local and subregional energy storage will be assured during the next decades, almost globally. We already have long passed the point that storage is cheaper than are new peakers, and faster to react also. Pretty much globally the notion of grid support for all peak demands has ceded preference to local storage. Even the Chinese high capacity long range network will also feature vast increase in local storage to reduce peakers, especially given that Chinese peakers are often coal fuelled vs US natural gas.

All that growth will spawn many competitors as it already is, but there will be Tesla Energy advantage in two areas: 10 very fast deployment of turnkey local storage and 2) turnkey integrated single-supplier photoelectric generation and storage. The latter will be popular in remote areas, islands and grid backups for industrial sites, military bases and much more.

Frankly, careful analysis should suggest that Tesla might have more competitive advantage and profit potential for TE than for BEV's.

 

[racer26]

Looks like AP2 hardware cars got another 5mph bump to the max TACC and autosteer speeds (now 85mph and 55mph respectively) last night.

Also, the fan speed can now go to 11.

 

[MitchJi]

SA power crisis, which culminated in a large black-out event back in September, could be solved by adding 100-300MWh of storage, and Tesla is ready to help, in under 100 days (with the reference to the Mira Loma Substation project installed in 90 days). Rives indicated that Tesla is in negotiations with Australian utilities:

That's very generous! TSLA is offering to help seeking alpha with their power crisis.

 

[racer26]

On a tangentially connected to TSLA note:

Falcon 9 is once again vertical on LC-39A for the static fire test this evening for Echostar23. This was supposed to happen on Tuesday but was pushed back - has delayed date of launch to March 14 at around 1:30am EDT.

 

[jhm]

I want to give a warning that oil prices appear to be tanking. WTI (US) is below $50/b now and Brent (EU) is going below $53. Prices fell over 5% yesterday and look to continue to fall today. If this becomes an extended bear run for oil, it could impact Tesla's stock price as we have seen in the past. We'll continue to discuss this the "Shorting oil, hedging Tesla" thread.

Good luck.

 

[racer26]

Electrek reporting Tesla's response to the excessive servicing time allegations:

Tesla acknowledges some issues with delays on parts for repairs, says working actively to improve

Mostly sounds like Tesla blames the shop in question for not ordering all of the parts they needed in a timely fashion.

Tesla didn't deny having long lead times on some parts, but in the case of that article from Motley Fool, the shop in question placed 8 separate orders with Tesla for parts for that car over a period covering 6ish of the 8 months they've been without their car.

 

[mrdoubleb]

Some food for thought on Q1 deliveries now that most of Europe has reported (save for Denmark, but that should be of minimal consequence).

In January and February Tesla has delivered 6860 vehicles in the US and Europe (based on InsideEVs and our TMC Europe tracker). The rest of the world contributed ~18% of the sales last quarter and this was a growing trend, so being extremely generous, calculating with an extra 20%, we should be at ~8200 cars for the first 2 months worldwide.

So how much will March contribute? Here are some data points, everybody can draw their own conclusions.

• In 2016 Europe showed 1700-3200 cars for the last month of the quarter, with September coming in at 3200 and December at 2700.
• US deliveries were ~5800 during the first 2 quarters last year, then as X ramped up they grew to ~7500 and almost 10,000 by Q4.
• The rest of the world should add ~20% on top of US + Europe
• The 10 day shutdown may impact US deliveries, but Tesla did plan to add more shifts in March to compensate - and just using the 4 weekends would be 8 days, so it`s not impossible they can pull it off.
• The ~2000 cars extra from Q4 should help, but a chunk of that is already incorporated into the record Europe January numbers.

So realistically, if the US and Europe repeat their best showing so far, we could see 20,000 cars there in Q1. Adding in the 20% for ROW brings us to 24,000.

If the factory shutdown has a bigger impact than expected, or if Tesla continues to grow US and Chinese deliveries in the pace we`ve seen in 2016, this can change up or down.

PS: So far Norwegian numbers are encouraging for March. 9 days into the month we have already surpassed February totals by 40% in that country. The 3rd month of the quarter is usually 2-4x of the 2nd month, so this is nothing extraordinary, does show "business as usual", no issues though.

 

[Lump]

Yes I did. @techmaven nailed the SP!

For anyone that missed the Google hangout

 

[Waiting4M3]

So we squeezed 0.3% of BMWs margin this year. They're squealing a bit.

What happens when Model 3 comes along and steals swaths of market share from the 3 series (which I would estimate is where BMW makes most of their profit)?

If Elon had stuck to his original M3 roadmap then BMW's 2019 target might have worked out much better, but now we may be looking at 500K of M3 in 2018. Elon lied, BMW died.

 

[geneclean55]

So how much will March contribute? Here are some data points, everybody can draw their own conclusions.

• In 2016 Europe showed 1400-1700 cars for the last month of the quarter, but last March stood out with 2500

I think you are just looking at MS deliveries. MS and MX combined give a much larger number.

 

[mrdoubleb]

I think you are just looking at MS deliveries. MS and MX combined give a much larger number.

Duh! Thanks for noticing that. So it turns out in our archives the order of the tables is not the same as in the current year part of the Wiki. For 2017 the S&X totals are the top table, in the 2016 archives it`s the 3rd.

Fixed my calculations.

 

[kenliles]

Tesla could eventually become the next Apple or Amazon, AllianceBernstein predicts

"
Tesla could eventually become the next Apple or Amazon in the automobile industry, but until then, the stock is likely to remain range bound, according to AllianceBernstein analyst Toni Sacconaghi, who initiated the name with a market perform rating Thursday.

"We have seen this pattern play out before (with AAPL, NFLX, AMZN)...."
"

 

[geneclean55]

Duh! Thanks for noticing that. So it turns out in our archives the order of the tables is not the same as in the current year part of the Wiki. For 2017 the S&X totals are the top table, in the 2016 archives it`s the 3rd.

Fixed my calculations.

I think Tesla basically needs to repeat the US delivery effort that it achieved in December to come out with 24000 cars for this quarter. That's a tough challenge but they have obviously managed it before.

 

[DurandalAI]

If Elon had stuck to his original M3 roadmap then BMW's 2019 target might have worked out much better, but now we may be looking at 500K of M3 in 2018. Elon lied, BMW died.

I pray for 500k M3 deliveries in 2018, but I would guess it will be more like 200-250k. Given from what I remember of what Elon said, he expects to hit the 10k/week production rate some time in 2018, which I would cautiously apply to Q4 2018.

 

[dennis]

Billboard Campaign Urges Tesla CEO To Cut Ties With Trump