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General Discussion: 2018 Investor Roundtable

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AI and Manufacturing

I didn't pay much attention to earlier news of Andrew Ng's fund. Uninteresting to the cognoscenti here and the necklace thread, but for amateurs like myself:

Via Bob Cringely’s Prediction #6 I, Cringely - on technology comes this about Andrew Ng’s AI Fund
Google Brain founder Andrew Ng creates $175 million AI Fund where we learn about his new corporation.

A snippet:

“Ng will also be running a company of his own while leading the AI Fund. After leaving Baidu last year, Ng announced in December his new startup called Landing.ai, which seeks to bring artificial intelligence to the manufacturing industry. AI Fund will be funding Landing.ai, according to Ng.”

Edit: I remembered enough html to break link at bolded since it referenced a link above.

Best wishes for a better day tomorrow and beyond.
 
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Maybe, but this bit has me hoping they'll be able to scale up more until the automated lines arrive:
Ahh. I took that to mean they had scaled it rapidly to where we are now. For some reason, it gave me the impression that the scaling was limited from here but that was my interpretation. Perhaps you are right that they will be able to continue to scale up with it.
 
If Tesla holds off $200k until day 1 of Q3, the move will reverberate for a long time, saving Tesla owners something like 500 million-750 million dollars, all depending on exactly how many cars they are making at those points in the future.

Q408 = $7,500 instead of $3,750
Q109 = $3,750
Q209 = $3,750 instead of $1,875
Q309 = $1,875
Q409 = $1,875 instead of $0

It's what aubreymcfato said. To summarize, the number of cars that are sold under the Federal Tax Credit is largely a function of the run rate they have achieved when they sell the 200,000th car, since every car they sell in the quarter they hit #200,000 and subsequent quarters (per the FTC schedule) are eligible for the credit. If the ramp is proceeding slowly then the longer they wait to hit number 200,000 the better. And one way to slow down U.S sales is to begin sales into Canada or elsewhere, but Canada makes sense since it's the closest (and Mexico).

I see a quite a few folks here who are not happy with delays to base-model deliveries. But it looks like they are probably deliberately slowing down base-model delivery start until they have the run rate up. If so, then there are going to be a whole lot more U.S. base-model reservation holders who will benefit from the FTC. That all seems like a good thing. Bummer if you have to wait for your car (I am, but only waiting for a LR), but good for Tesla and good for a lot of customers whose cars will be more affordable.

I'm not sure what sconelucht is getting at. How they manage US sales with respect to FTC-eligible sales isn't going to effect the ramp rate.
 
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Bullish Signal!

I would normally agree with that, but lately Elon hasn't been hitting any of Tesla's goals. Model S/X margins are in the. Model 3 production is (at least) six months late. We went from "people should absolutely have zero concern" to *zero clarity* in three months. Production plans and mix for one million units by 2020 still seems at the Master Plan level (i.e. Elon's head). We just got another "3 months, 6 months on the outside" prediction, like a slap in the face. It's almost as if his entire attention is on SpaceX. These are the things we should be discussing, before awarding him with a potential of tens of billions of dollars, right in the middle of the company's worst ever production ramp, save for Tesla Energy.
 
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What do people think of the fact that not a single person (analyst, bear, or bull) believes Elon's projections? Not only that, but everyone, almost without exception (I don't know of any exceptions), heavily discounts everything Elon says.

What does this fact mean to investors?

It means that the market is likely discounting Tesla at present. IF Tesla can start delivering the discount/risk will be removed. Tesla, priced as it is, is currently a 'show me' stock. They have to show the market that they can get to 5k Model 3 per week. As of right now there is undrestandable skepticism.

Tesla will get through the Model 3 problems and a year from now those issues will be grouped alongside the Model S and X issues. The sp will likely see a big jump and find another trading range until the Semi/Roadster/Y hit the market. Rinse & repeat...not an advice.
 
If Tesla holds off $200k until day 1 of Q3, the move will reverberate for a long time, saving Tesla owners something like 500 million-750 million dollars, all depending on exactly how many cars they are making at those points in the future.

Q408 = $7,500 instead of $3,750
Q109 = $3,750
Q209 = $3,750 instead of $1,875
Q309 = $1,875
Q409 = $1,875 instead of $0

I'm sorry to say that they cannot hold of that long, it's nearly impossible. As it stands, they are already closer to the beginning of Q2 to hit 200k they are not getting close to Q3. They would have to basically stop all US deliveries of all cars and shift then to Europe and China and Canada. Not just model 3, but all cars. I guess if they started today, but they aren't they could trickle cars out in the US, but they aren't. I thought there was a chance with this budget that just passed that they would extend the 200k amount? I know they extended some clean energy credits.
 
I would normally agree with that, but lately Elon hasn't been hitting any of Tesla's goals. Model S/X margins are in the shitter. Model 3 production is (at least) six months late. We went from "people should absolutely have zero concern" to *zero clarity* in three months. Production plans and mix for one million units by 2020 still seems at the Master Plan level (i.e. Elon's head). We just got another "3 months, 6 months on the outside" prediction, like a slap in the face. It's almost as if his entire attention is on SpaceX. These are the things we should be discussing, before awarding him with a potential of tens of billions of dollars, right in the middle of the company's worst ever production ramp, save for Tesla Energy.

-------------------------------------

So many of Elon goals depends on a lot of variables that are not under his control : for example, he knows that a certain machine needs 4 weeks to be built. But then if the supplier has an issue, it gets delayed to 5 weeks. Then, a certain machine that he assumed worked doesn't work perfectly, and so needs 2 more weeks of work to correct it etc.

----------------------------------------

To think about why Elon misses a goal, think about like if you plan to travel around the world only with a backpack. You plan, you calculate, you think about all that you need, all the transportation, the hotel, the booking etc. and finally you end up with 4 months.

But then you go to a country, and the police stops you and tell you that you need such paper, to do such paper you need to wait 1 week. Then you find out that the hotel is overbooked, you need to find an other hotel. You lose time. Then you take the bus, but realize it was a the wrong direction, you lose time. Then you need to take a plane, but the plane is delayed. You lose time
....

That's the same " kind " with production ramp.

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These are the things we should be discussing, before awarding him with a potential of tens of billions of dollars, right in the middle of the company's worst ever production ramp, save for Tesla Energy.

Elon gets 1% shareholders 99%.

If he doesn't increase the value of our holdings by multiples Elon gets zilch.

If Market Cap in 10 years is $99B or less Elon gets NADA.

If Elon wants all $65B he has to increase my TSLA holdings 13x from right now. I am good with that.
 
What do people think of the fact that not a single person (analyst, bear, or bull) believes Elon's projections? Not only that, but everyone, almost without exception (I don't know of any exceptions), heavily discounts everything Elon says.

What does this fact mean to investors?

I believe his projections. But I understand what projections are, and don’t confuse them with promises.

Tesla nailed the timeline for the South Australian battery— there was a lot of money on the line for that one. Tesla nailed its 100k guidance for 2017– that’s standard-level execution for a public company, but Tesla hadn’t executed on that level previously. Finally, Tesla nailed the start of production in July 2017– not many, even on this forum, expected that.

That said, they’ve missed badly on their projections for the ramp to mass production. Quality has been good (unlike the X ramp), but quantity is way behind. I’ll believe 2500/week when I see it (and not until), but the cash position makes me comfortable that they’ll get there in time— though probably not on time.

In the meantime, I’m reminded of why I don’t mess with options or margin. Ride it out.
 
So many of Elon goals depends on a lot of variables that are not under his control : for example, he knows that a certain machine needs 4 weeks to be built. But then if the supplier has an issue, it gets delayed to 5 weeks. Then, a certain machine that he assumed worked doesn't work perfectly, and so needs 2 more weeks of work to correct it etc.

This is a BS excuse. Everyone in a professional settings knows that they need to evaluate the likelihood of their partners meeting their promises when planning ahead.
 
I think there is some concern that Tesla is letting their first mover advantage slip. The delay of the 3 impacts future investments, slowing down their ability to scale. If they were at 5K per week now, we’d be hearing about the next factory. The delay is not so bad, it’s the echo of the delay. I’m confident they’ll get this sorted and the Grohman acquisition is looking extremely wise and should help address capabilities, and also planning timelines. I think Grohman probably has a better handle on project mgmt timelines than Elon.

If they get Model 3 going end of Q1, the stock will be bouncing back strong, if not...

I'll tell you this...
No eternal reward will forgive us now
For wasting the dawn

Jim Morrison
 
I had a sneak peak at the Grand Tour review of the Model X. Jeremy Clarkson was pretty positive about the car. I will not say anything else.. no spoilers.:p

Quite surprising that he introduces the car as "the new Tesla Model X". And at the end gives a price of the fully loaded version. Oh well...

While nice, I don't think this will do much to the SP or Tesla brand. I didn't think it was a thorough review, mainly focusing on gimmicks. Maybe few people will learn about Tesla and maybe buy the car but nothing more.
 
Study from an independent European institute about carbon emissions of EV versus ICE cars

Effects of battery manufacturing on electric vehicle life-cycle greenhouse gas emissions
(...)
Electric cars are much cleaner than internal combustion engine cars over their lifetime. We found that a typical electric car today produces just half of the greenhouse gas emissions of an average European passenger car. Furthermore, an electric car using average European electricity is almost 30% cleaner over its life cycle compared to even the most efficient internal combustion engine vehicle on the market today. Plug-in hybrid vehicles, when driven on electric power for most trips, have life-
cycle emissions similar to battery electric vehicles. In markets with very low-carbon electricity, such as Norway or France, electric vehicles produce less than a third of the life-cycle emissions of an average combustion-engine vehicle. This nding bolsters governments’ goals to promote electric cars as part of their decarbonization strategies.

Battery manufacturing life-cycle emissions debt is quickly paid off. An electric vehicle’s higher emissions during the manufacturing stage are paid of after only 2 years compared to driving an average conventional vehicle, a time frame that drops to about one and a half years if the car is charged using renewable energy. Approximately half of a battery’s emissions come from electricity used in the manufacturing

process. Battery manufacturing emissions appear to be of similar magnitude to the manufacturing of an average internal combustion engine vehicle, or approximately a quarter of an electric car’s lifetime emissions. However, recent estimates of battery manufacturing emissions vary by a factor of 10, indicating the need for additional research in this field. (...)

http://www.spiegel.de/media/media-42528.pdf
 
I went to the Tesla Model 3 event, downtown Chicago last night. It was a private viewing for owners with reservations and will be open to the public this weekend I believe, if not already today. Its a newish Tesla Gold Coast location on Rush, right at the Viagra Triangle or so I have heard that is what its called. I must have seen 20 Teslas in the opposite lane going from the northern burbs to down town.

There were about 150-200 people there and they where showing off all 3 cars as well as solar roof, panels and powerwall 2. They had specialists there to go over solar if people had questions. My understanding from talking to a few people there that Solar roof installs would start there this year, but no set date yet. There was a clear push for solar at this event even though it was mostly about the model 3. They had a DJ and drinks and Hors D’Oeuvres (copy/paste from the web). I was expecting more information on the car and duel motors but there wasnt really a speaker, just a ton of Tesla employees that you could engage with and they would answer any questions. I talked for a while with someone I recognized from Highland park and they told me that they where delivering ~14 model 3s a day for the past few weeks. Oddly specific numbers, but that was what was stated. Thats roughly 60 a month for one location.

On the way down, I toured the 2 new chargers (in the last 3 months). One in Skokie (20 stalls I believe) and one in the Mariano's grocery store parking garage near Wrigley field in Wrigleyville, 10-12 stalls. Many iced stalls, bunch of jerks, but still plenty of open slots during rush hour and a very busy store. Both where the 72KW, newer style, smaller stands. I topped out at 72KW, but I was driving my X75D and I was charging from 50% or above as I was not really stopping to charge as much as I was stopping to see the locations and check the rate, so they could go higher in better circumstances as it was also very cold. There was again talk about expanding highland park with more charging and another guy told me they were trying to lease a dealership that was empty, but the owner only wanted to sell and Tesla did not want to buy, only lease. Probably something to do with the advantages of leasing compared to owning? In general, charging has grown nearly exponentially from a hand full of 4-8 stall locations around chicagoland to what must be 100+ stalls and 10 locations in the last year or less. These are all new; Bollingbrook (20+), Rolling Meadows (12+), Skokie (20), Wriglyville (12ish) and the Aqua hotel downtown with at least 10.

The model 3 is pretty much everything that people have discussed. Its very nice all around and its roomier then it looks. I sat in the back at first with people in the front and I am 6'4". I was very comfortable, but the front seat was not all the way back. Later I got in with the driver seat much farther back and it was cramped but not uncomfortable. Kind of like American Airlines economy seating where the seat in front of you is about 2cm from your knees, but not touching. Again, I am well over 6 foot and head room as great. I had read complaints about how far down you sit in the back, but I didnt notice it at all, even making note to see how it felt and it was fine. This is overblown and again I am pretty tall so any cramped leg space or knees riding high would have been noticeable and less then comfortable for me and I felt totally fine.

The one bad thing I can say about the car is that its not an S/X. Its just not as big in the drivers area. For me, its something I would notice as I am over 250lbs. The steering wheel is just shrunk down and it feels like you are in a race car compared to the S/X. The steering wheel is thick though, which is comfortable. The center screen is lightening fast and responsive. On part with the most responsive cellphones and tablets and faster then most android devices. The wheels re responsive as well and I expect more functionality to moved to the wheels based on context It could be that you will change context with voice and use wheels to fine tune things that are touch screen only today. I could see not having to touch the screen at all for any functions while driving if you dont want to. The trunk is a bit hard to close for an older lady there but mostly because it opens so high. There are handles hidden inside that are not obviously noticeable and they make it much easier for someone that is not that tall to close.

Another very cool thing.. at least for me.. I ran into a guy I met that has an S and went to the Semi Reveal. He was telling me that the two semis where not just different configurations of the same truck. They are completely different sizes. The black truck was noticeably smaller. This struck me as something I had never heard before. I read smaller pack/range, but not smaller vehicle. And I questioned him a ton on it and its not just the wind screen on the top of the truck, it was physically smaller and he showed me some pictures he took that made it more clear the size difference, though I am still skeptical. It very well could be that the smaller semi could be targeted all the way down to box truck and large van like solutions. Maybe even a smaller pack for hotels that just go back and forth to the airport all day with 1-20 people and luggage max.

Oh and lastly.. one of the guys told me to say "Ho-Ho-Ho, Not Funny" instead of just "Ho-Ho-Ho" and it would do something different then Santa and jingle bells. It was so loud with all the people and the DJ that I could not hear what it was doing, but I assume it was funny. Forgot to try when I was leaving to come home.

Overall it was a very nice event with a lot of really nice folks and there was a ton of excitement in the room. Not one person pissed about the 35k car, everyone I talked to, including employees seemed to be waiting for the duel motors, this is Chicago.
 
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