Let's not forget that ramping cell production is a lot simpler than ramping car production. Likely that Panasonic only needs to replicate the production line that is now producing cells, especially true since they have similar, if not identical, production lines making 2170 cells in Osaka. We should expect a rapid increase in 2170 production in Gigafactory1. Seems likely that cell production will not limit the ramp of Model 3 production.
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Let's not forget that ramping cell production is a lot simpler than ramping car production. Likely that Panasonic only needs to replicate the production line that is now producing cells, especially true since they have similar, if not identical, production lines making 2170 cells in Osaka. We should expect a rapid increase in 2170 production in Gigafactory1. Seems likely that cell production will not limit the ramp of Model 3 production.
I'm a bit more optimistic than that.
Car2go proves the logistics end of things can work and that there is demand for such a service (car2go rentals can be left in most public and metered spots inside a good chunk of participating cities, rentals are self-managed where only customers will drive the rentals for days before a car2go employee has to intervene or check up on the vehicle, and it's cheaper than getting a cab or buying an Uber). Car2go operates in several countries around the world. Logistically, a self-driving car is much easier to handle than car2go since self-driving cars could drive themselves to a central location for cleaning/fueling/etc. as needed, whereas car2go employees have to drive all around cities to reach and service their vehicles.
Autonomous driving is certainly a monumental task, but mostly for the very long list of edge cases. Google, Nvidia's self-driving demos, and Tesla's demo videos show that, for general everyday driving situations, this is a solved problem. However, due to machine learning I don't think edge cases will forever be a huge deal when combined with the deluge of data Tesla is taking in from "shadow mode" operation of AP2 hardware. Google's Go bot for example uses the same principles as a self-driving car would use to solve real-world edge cases--it makes its own decisions and can out-class humans using strategy and "intuition". The car doesn't need to be programmed to handle every situation, it just needs to be able to interpret billions of miles of data gathered from drivers in a useful manner and act on it. Google's Go bot learned by playing hundreds of thousands of Go games against itself; Tesla's autonomous algorithms will learn from simulating their actions while shadowing billions of miles of real-world miles from customers.
When people doubt things like Tesla Mobility or the AI revolution drastically altering the job landscape, I think a large factor is underestimating how powerful machine learning has become. I think most people would agree Tesla's timeline is aggressive (full cross country trip by the end of 2018, they said?), but I also don't think it's anywhere close to 10+ years out like many folk estimate.
Krugerrand
Meow
Why? For what purpose? Serious questions. If you're long, the past hasn't hurt you one little bit. Tesla is ahead of schedule and has offered a ton more upgrades to their vehicles then any of us could have imagined, driving demand higher than any of us could have imagined.
Toyota’s skepticism about the future of cars should make us think twice about self-driving tech
Toyota's slogan shouldn't be, "We Go Places"....it should be,"We're Going Nowhere".
Seriously....we support Hydrogen, Hybrids and Highway Deaths - that's your "go to market" entry argument? Who couldn't get behind that brilliant marketing plan? May as well come out against long weekends, puppy dogs and commercial air travel. "If man were meant to fly, he'd have wings".
It's not just that OEM's are blind to the future, they are blind to the present and even to their own past/creation. There is so much dissonance between the contrasting viewpoints that either we are the little boy who tells the village that the Emporer is naked, or we are the Emporer walking around with our ass showing from listening to Elon and buying into his vision for our wardrobe. I'm not sure there is any middle ground.
Toyota's slogan shouldn't be, "We Go Places"....it should be,"We're Going Nowhere".
Seriously....we support Hydrogen, Hybrids and Highway Deaths - that's your "go to market" entry argument? Who couldn't get behind that brilliant marketing plan? May as well come out against long weekends, puppy dogs and commercial air travel. "If man were meant to fly, he'd have wings".
It's not just that OEM's are blind to the future, they are blind to the present and even to their own past/creation. There is so much dissonance between the contrasting viewpoints that either we are the little boy who tells the village that the Emporer is naked, or we are the Emporer walking around with our ass showing from listening to Elon and buying into his vision for our wardrobe. I'm not sure there is any middle ground.
The original bull thesis, as of 2013, was based on three tenets:
1) EVs will dominate the future
2) Tesla will dominate EVs. Thus it will make 100s of billions of revenue, say like Toyota today, or beyond
3) Owing to far fewer moving parts, EVs overtime will be lot more profitable than ICEs with very high margins (my view: maybe even Apple like margins, as a car effectively becomes a very expensive electronic device)
The problem is, over last one or two years, the third tenet has become very elusive. Instead of exploiting the simplicity, Mr.Musk went on to create the most complicated vehicle to build ever. That totally ruined the third tenet. However Musk and management have realized the folly and are going full 180 on model-3. They not only want to exploit the EV simplicity, they want to take it to extreme, with an "alien dreadnaught" design for the manufacturing line . So it's very much possible that the third tenet will be restored (and shorts will be blindsided and massacred).
As the third tenet is no longer the prevailing view, even among bull circles today, in 2016. New tenets came to support the long term bull thesis. Namely Tesla Energy (esp powerpack/powerwall), FSD - Tesla Network, etc.
Any one of these things pan out, shorts are dead in the water, Tesla will be one among the big tech firms like apple, google, amazon so forth... Multiple things pan out, we are looking at a 1T company.
OT: Just looking at T12 valuation in a spreadsheet against other auto companies is quite very silly. It's like looking at Apple in 2007 against Nokia, Motorola et all and comparing number of cellphones, revenues etc in a spreadsheet. iPhone fundamentally changed what a cell phone meant, along the way destroyed all existing cell phone makers, and pivoted apple to the most valuable company on the planet. Today nobody thinks an iphone is in the same league same as 2006 nokia flip-phone or even the sexy motorola razr. In 2020 it will become totally absurd to put Tesla cars on par with other company cars. If you haven't noticed the "velocity of innovation" tesla is putting out over just last few years, you haven't been paying attention.
PS: if you don't "believe" or "have faith", that is totally ok. Nobody will blame anyone for staying on the sidelines. But going longterm short is utterly stupid. What if things pan out as envisioned? Are you willing to pay 10X your "investment". If not, what is your stop-loss? When will you (be forced to) cover and close?
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Kenriko
Former Vendor
What you're missing is there will be an inflection point where EVs are so much more attractive to buyers then ICE cars (I give this 3-5 years) that the traditional ICE manufacturers enter death spirals with lower sales year after year. Look at what Tesla has done to the high end ICE auto market as a sign of what it will do to the larger market. Given the only way to produce enough cells to support that many EVs is to have the production capacity locked down (Gigafactory) then you will see a dire future ICE manufacturers who won't be able to source the batteries to compete. I would like to note that Apple's biggest success was in the way it structured its deals for things like FLASH memory which made it very hard for other companies to release competing products because they could not get access to enough of the components at a low enough price since Apple had deals in place that cornered the market.
This only matters to (and will benefit) longs.
What do I know? I just build companies for a living in the Bay Area.
The Innovator's Dilemma - Wikipedia
Krugerrand
Meow
I know you were, but only the most purposefully obtuse would think they'd keep making the building larger without having used the interior space and/or needing more interior space for the next set of equipment. So just how much space and equipment do they need to start making the cells? Clearly not THAT much space. People were in there just a few months ago and that was all over the news.
After buying on the dips over the course of years, I finally have enough shares to sell options! So without any further planned catalyst, I expect the stock to stagnate until the Q4 ER. Took advantage of this lull, and the thinking of the shorts to sell Mar 255's! Should be high enough to not excercise even with a good 2017 forecast (relying on market doubt about TSLA's guidance). And if it expires OTM, then sell the next call option at a higher strike. Rinse and repeat. If it gets called out, sell puts. The only drawback to this strategy was accumulating enough shares/capital to initiate it.
Edit: Oops. Should've posted this on the trading strategies thread. Sorry Audobon!
Edit: Oops. Should've posted this on the trading strategies thread. Sorry Audobon!
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[QUOTE="eloder, post: 1904980, member: 33495"I think most people would agree Tesla's timeline is aggressive (full cross country trip by the end of 2018, they said?), but I also don't think it's anywhere close to 10+ years out like many folk estimate.[/QUOTE]
Tesla is planning that cross country trip by the end of this year (2017). Remains to be seen if they will be allowed to try it.
Tesla is planning that cross country trip by the end of this year (2017). Remains to be seen if they will be allowed to try it.
Just a quick UPDATE: If this is 2016, you're in the wrong thread!
Apart from that, brilliant.
I agree with the idea, but view the inflection point occurring sometime in 2018 (next year!). The catalyst will be the volume production of model 3 and model 3 reservations going off the charts, fully impacting sales of ICE cars. The beginning of the end.
racer26
Active Member
There's nothing to stop them from trying it - they didn't say the car would do it without an occupant, they said it would do it without driver intervention. No state I'm aware of has any laws against autopilot-type functions being used by a driver.
Of course we knew that building space was not for storing unsold inventory cars, but the specific timeframe of the start of production, aside from long standing guidance of end of 2016, was not known until it actually happened. Kudos to Tesla for delivering on-time, and keeping full control of the information, releasing it when they saw fit. Well done.
I just want to note that the 2170 form factor itself is not all that interesting. First, other companies already do this. Second, it's just form factor - the overwhelming emphasis on this is misplaced. Sure, there are a few less interconnects that might lead to slightly less cost. But if form factor was all that, then prismatics and pouch cells would rule, and they don't, at least not yet.
The conversion of a Model S or X to 2170's without changing cell chemistry is not all that particularly interesting. Any improvements are welcome, of course, but something like that doesn't move the needle all that much. I am expecting a change in cell chemistry for the Model 3 and that's where the real steak lies. Also, the cell chemistry being made today for Tesla Energy is not the same cell chemistry that goes into vehicles. But the most important thing is to get the equipment up and running and get the production processes sorted out. The stationary storage products sell at a much higher cost per/kWh and can therefore deal with a higher cost of production as the factory gets more optimized. That's why when I look at it, I see $200/kWh for residential product in COGS (for the cell module part of the PowerWall 2 only) versus $190/kWh for vehicles using Osaka's cells between the difference in size (14 kWh versus 75 kWh) and initial startup. In Q2, when Tesla starts to make Model 3 cells, the cost of production should be much closer to eventual targets and they layer on the improvements on cell chemistry for automotive.
One of the big benefits of leasing-to-own your own factory is that the cost of acquiring a cell is pretty close to the cost of manufacturing it... while a traditional model of acquisition means that the producer wants a higher margin for the latest technology cells, even though the cost of production of the cells remains close to the older technology cells.
The conversion of a Model S or X to 2170's without changing cell chemistry is not all that particularly interesting. Any improvements are welcome, of course, but something like that doesn't move the needle all that much. I am expecting a change in cell chemistry for the Model 3 and that's where the real steak lies. Also, the cell chemistry being made today for Tesla Energy is not the same cell chemistry that goes into vehicles. But the most important thing is to get the equipment up and running and get the production processes sorted out. The stationary storage products sell at a much higher cost per/kWh and can therefore deal with a higher cost of production as the factory gets more optimized. That's why when I look at it, I see $200/kWh for residential product in COGS (for the cell module part of the PowerWall 2 only) versus $190/kWh for vehicles using Osaka's cells between the difference in size (14 kWh versus 75 kWh) and initial startup. In Q2, when Tesla starts to make Model 3 cells, the cost of production should be much closer to eventual targets and they layer on the improvements on cell chemistry for automotive.
One of the big benefits of leasing-to-own your own factory is that the cost of acquiring a cell is pretty close to the cost of manufacturing it... while a traditional model of acquisition means that the producer wants a higher margin for the latest technology cells, even though the cost of production of the cells remains close to the older technology cells.
anticitizen13.7
Not posting at TMC after 9/17/2018
Toyota makes mediocre cars, albeit reliable ones. Keep in mind that this is a company whose core products (like Corolla, Camry, RAV4, maybe Prius) are are inspiring as cardboard. They've been resting on Prius laurels for a decade now.
Sudre
Active Member
BMW sold a little over 2.2 million vehicles in 2015. Precision here isn't the point. (Is that number right?)
BMW market value on your chart is 60B.
SO
If all Tesla did was sell 1 million vehicles by 2020 would that not be 30B market value?
Or now should we value Tesla lesser than any other car company. I thought you mentioned before you were valuing Tesla as a car company?
If Tesla meets their goals battery backup, Solar and 1M vehicles I think they will be valued way over 30B by 2020.
Of coarse it's a risk. That is true of any company pushing these kinds of advancements.
I kind of find this discussion very ironic. You say you are a software engineer but somehow you fail to see "technology". The spreadsheet in itself suits the likes of Mark B.S. What if you did a similar spreadsheet on Amazon when they expanded from books to 'everything', put in WalMart, KMart etc. and decided to go short against AMZN??
Here is a nice hint. Mark B.S derided Amazon for the longest times. He said he was long-term short and said he managed to escape big losses by "trading around it". Go figure!
dennis
Model S Plaid
I believe what you are missing is that if and when Tesla reaches it's medium term goal of 1M/year it will still likely be growing at 50%+ per year. So you are in fact not taking into account the impact of CAGR on valuation. If Tesla has $60B in revenue at that point, the market will be forecasting it to be at $90B the following year. Renault is currently at $50B in revenues and at its current growth rate might reach $60B at the same time. But the market will be forecasting $62B in revenue for Renault vs. the $90B for Tesla. Which stock would you rather own then?
Of course their are huge risks involved in Tesla reaching 1M deliveries in the 2020 timeframe. So depending on how big a discount factor you wish to apply to account for that risk will determine whether you want to own Tesla today at $36B or Renault at $29B.
for every Amazon there's 10000 companies in a graveyard. Just because Amazon exists, doesn't mean all high risk ventures will succeed.
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