2017 Investor Roundtable:General Discussion

[techmaven]

Here's the problem for the shorts with the Gigafactory up and running...

Let's say the first phase of the Gigafactory is sized at 15 GWh (being conservative) and the 2nd is 20 GWh. Assume that there is a slow ramp up, so about 7-10 GWh of cell production is possible for the whole of 2017. If Tesla does not ship the Model 3 at all, all of that cell production can go towards Tesla Energy. Assuming COGS are around $200/kWh for residential products and $165/kWh for commercial products, Tesla can easily realize $100/kWh of gross profit. At 7 GWh, that's $700 million dollars of gross profit. At this juncture, it doesn't matter if Tesla ships the Model 3 on time at all... the capital expenditures over the past 2 years for the Gigafactory will finally bring in serious revenue and gross profits. And I am using numbers that give Tesla plenty of room to further drop the cost per kWh of the Tesla Energy products.

Another scenario is about 4 GWh of stationary storage for $400 million dollars of gross profit and 3 GWh of Model 3 cells. That's enough for roughly 50,000 Model 3's.

The problem for the short sellers is that a delay in the Model 3 might actually be positive for earnings now that the Gigafactory is operational.

 

[dandurston]

Plan now for 35 GWh of cell production in 2018, initial plan (announced about two years ago) was to do this in 2020. I know, we haven't seen it yet, but Tesla is aiming to overdeliver by a couple of years on this. Frankly, I think hitting this mark alone would considerably outweigh ALL past underdeliveries combined.

We need to be very careful with the distinction between production rates and quantities. For example, Tesla once claimed they would reach a production rate of 100k cars in 2015. By this, Tesla meant they'd be at 2000 cars/wk by the end of the 2015 but a lot of people took this as Tesla would produce 100k cars in 2015, which wasn't Tesla's plan. Tesla did end up at 2000 cars/wk by mid 2016 but still didn't produce 100k cars that year.

The plan for the Gigafactory is a bit unclear as we're working from one Bloomberg article, but I wouldn't be surprised if the plan is to achieve a rate of 35 GWh/year in 2018 (e.g. scale to 675 MWh/wk by the end of 2018), rather than actually producing 35 GWh in 2018. I could easily be wrong.

Hopefully Tesla will provide a clear forecast on this but historically their wording has been murky. They'll say something like "Gigafactory production will hit 35 GWh in 2018", which can be taken either way.

 

[larmor]

Easy answer: I'm looking at the Model 3 right now as I post this...it really and truly is a beautiful vehicle. Effectively unchanged from the initial reveal.
And as blogged premarket, battery production began today.
A FULL report when I'm home - won't be until vet late tomorrow at earliest.

No sleep for you-- report back tonight!

 

[Ameliorate]

vet? Ignore that...

What is this encrypted message thy Lord Vetinari sends us. We know you're not allowed to release confidential information, we'll figure it out

Just trollin, Really awesome to have somebody inside and very much looking forward to the report tomorrow. Congrats on being invited!

 

[dandurston]

Would you ever expect anything major cool positive thing, to come straight into C-class without making it to S-class first?

Additionally, adding new tech to S/X first is a risk mitigation strategy for 3.

There will be absolutely nothing new in 3 that is not already in S or X by the time 3 rolls off the line. You can bet on that!

3 will be a cheapened version of S. Not a cooler/better version.

Agreed. The S/X will have the HUD first - if the HUD is even in the plan for the 3. I think the evidence for the existence of the HUD in the 3 is still pretty speculative. Tesla has never said anything about a HUD - just that the controls will be cool.

 

[SunCatcher]

Hello All:
I am at the Higsfactory right now and will be providing as full a Tour Report as I can; please give me a day.
Cheers to all - and it's a bit difficult to post so please cross-post this to the other thread (you have my permission...)

My God. Tesla has made the leap to particle physics at the GF? What a day!

 

[dandurston]

Now do I think we will hit Musk's upper ceiling of 200k M3 this year?! Hint: marijuana is not legal in my country, so no, I do not. But I think 90-100k S&X and 60-90k M3 is certainly possible. Even that will shock shorts immensely.

If Tesla just continued their H2 2016 production with the S/X, they'd sell 90-100k in 2017. I think they'll easily surpass this. I expect to see Tesla guide for 120K S/X in 2017 and then punt on a projection for the 3 but probably do 50k.

 

[WarpedOne]

3 will be a cheapened version of S. Not a cooler/better version.

A cheapened version of S is a cooler/better version.
S is not cool because of expensive leather, materials, sugarload of aluminum and all.
S is cool because it is a non-compromise car. With good looks and good performance.

At lower price a could not care less about missing luxuries...

 

[erthquake]

If Tesla just continued their H2 2016 production with the S/X, they'd sell 90-100k in 2017. I think they'll easily surpass this. I expect to see Tesla guide for 120K S/X in 2017 and then punt on a projection for the 3 but probably do 50k.

If an interior update is imminent for the S/X, perhaps they'll keep the 90-100k guidance to accounts for any possible production hiccups like AP2. I think you're right about no guidance on the 3. I think they want to keep that on the downlow as much as possible to maintain S/X demand through Q1.

 

[T3slaTulips]

Easy answer: I'm looking at the Model 3 right now as I post this...it really and truly is a beautiful vehicle. Effectively unchanged from the initial reveal.
And as blogged premarket, battery production began today.
A FULL report when I'm home - won't be until vet late tomorrow at earliest.

"Effectively unchanged from the initial reveal."
Is this a post-pencils-down version of the Model 3?

 

[T3slaTulips]

My God. Tesla has made the leap to particle physics at the GF? What a day!

Producing cells at the speed of machine guns no longer fast enough. Cells must now exit at speed of protons.

 

[hockeythug]

I'm sure they are the same display cars that have been there for a while.

 

[MissAutobahn]

Easy answer: I'm looking at the Model 3 right now as I post this...it really and truly is a beautiful vehicle. Effectively unchanged from the initial reveal.
And as blogged premarket, battery production began today.
A FULL report when I'm home - won't be until vet late tomorrow at earliest.

So they still show the prehistoric red model "clay"?

 

[speedracer]

So they still show the prehistoric red model "clay"?

I suspect another reveal event around March-May 2016 of the pencils down Model 3 interior & exterior. The one on the gf floor now is possibly the one that's been there for a while.

 

[mrdoubleb]

If Tesla just continued their H2 2016 production with the S/X, they'd sell 90-100k in 2017. I think they'll easily surpass this. I expect to see Tesla guide for 120K S/X in 2017 and then punt on a projection for the 3 but probably do 50k.

Could we maybe just have Tesla guide for 100k still, but deliver 120k? I'd like that scenario better...

 

[Ovulation]

If an interior update is imminent for the S/X, perhaps they'll keep the 90-100k guidance to accounts for any possible production hiccups like AP2.

At this point is would be probably morally wrong to mislead or confuse investors with realistic estimates

 

[MissAutobahn]

I suspect another reveal event around March-May 2016 of the pencils down Model 3 interior & exterior. The one on the gf floor now is possibly the one that's been there for a while.

So we want some today's pictures or it didn't happen
Just to make sure it's definitely that same claymodel.

 

[mrdoubleb]

So we want some today's pictures or it didn't happen
Just to make sure it's definitely that same claymodel.

I don' think the red one at the reveal was clay, it just didn't have a drivetrain.

 

[Waiting4M3]

The contract was for 2014 - 2017 announced back in Oct 2013 (going off of memory) for almost 2 billion cells. So this year should be the last year of the agreement.

I'm sure Tesla and Panasonic can agree to amend the contract and accelerate transition to 2170 production at GF, given the increased demand seen for M3 and Powerwall/packs, info they didn't have in Oct 2013 when the contract was signed.

 

[mmd]

The contract was for 2014 - 2017 announced back in Oct 2013 (going off of memory) for almost 2 billion cells. So this year should be the last year of the agreement.

IIRC, each car is ~7000 cells. So, 2B cells are ~286k cars. But so far, Tesla has sold a total of (77k + 50k + 31.5k+17650+2650) 179k cars.
Does this mean, another 100k cars will use 18650 cells? I don't think powerwall 1 sold substantially, so where will so many cells be soaked up? Unless the contract got amended.
BTW, what is the main advantage of 2170 cell over 18650?