You said, that if there is a new technology to double lithium-ion battery capacity, it has zero effect on Tesla. I don't know whether that would have big or small impact to Tesla, but I'm sure it is not zero.
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You said, that if there is a new technology to double lithium-ion battery capacity, it has zero effect on Tesla. I don't know whether that would have big or small impact to Tesla, but I'm sure it is not zero.
Well obviously the result is negative, but what I mean is in what other car would someone intentionally stop paying attention because they trusted the car so much? Obviously the fact the car let him down is a negative, but in general this helps get the word out of how good autopilot generally is. Sure the bears will paint this as negative, but we know Tesla is improving autopilot so these accidents should reduce in frequency.
Anyway, I'm shocked as well the stock price is green after that news, but is shows how resilient TSLA is at this level.
Gerardf
Active Member
Schonelucht brings up an important and valid point about Tesla Energy and the GigaFactory. And IIRC you also brought it up in another thread as well. If I understand / interpret correctly you fear the Chinese might consider the storage market of strategic importance that they will 'buy' themselves into that market by offering Li-ION cells (or packs) at a price that can only be reached by subsidies or taking losses, similar as what happened in the Solar panel market. And as price is everything in the storage market (where the end-products are not complex and offered by many) you seem afraid that will block Tesla from selling as they need to make a profit.
I think that there is one important variable that might not have been considered there, and that is the very steep growth of the market in case of lower Li-ION cell pricing, in combination with the time needed to build factories like the Gigafactory.
As soon as the Gigafactory starts to produce the first cells, Tesla can sell any cell produced. IMHO it will be even more production constrained than the Model-S ever was. One example that points to this is the fact that Tesla recently significantly increased the PowerPack price, now being very high compared to even the current cell costs. Tesla has a lot of room to lower prices should that be needed to increase TE demand. That room to lower prices, while making a nice profit, will dramatically improve once the GigaFactory start producing and ramps up production.
You warned for other competitors, with a long list of storage offerings. Nobody on that list will be able to compete with the Tesla cell pricing, and if they do the demand will grow faster than the price lowers.
Now, say the Chinese want to to grab more market share, and lower the price below their profitability level.
Not an immediate problem for Tesla, they have the Model-3 as guaranteed demand. However, the Chinese undercutting even the Gigafactory price will result in a far more a dramatic increase in demand, as even more new applications for Li-ION storage suddenly become competitive.
Maybe you remember the ERCOT / Brattle report that stated big utility storage to become economic at a price below US$ 350 / kWh. In fact IIRC they already thought a 700/kWh level was very interesting. Tesla can make a VERY healthy profit selling at US$ 200,--/kWh as they are aiming for US$ 100,--/kWh costs for GigaFactory cells. Even today, Tesla can sell at US$ 350/kWh with a profit, remember they have PACK pricing below US$ 190,-- already and initial PowerPack price was US$ 25k for 100 kWh (!) before the increase to current price.
http://www.brattle.com/system/news/..._Distributed_Electricity_Storage_in_Texas.pdf
Imagine what the demand will be at the US$ 150,-- / kWh end-user price point ! I think the Chinese will not be able to build factories fast enough to fill that demand, even if they are willing to take these even bigger and bigger losses due to the higher volume.
And of course, that new proven demand from the market will even make it easier for Tesla to find investors for GF-2, -3 etc, etc.
IMHO the demand for Gigafactories, at the production costs and resulting sales prices it aims for, is much bigger than the worldwide production can fulfill in the next 10 years building cell production as fast as possible.
BTW, I remember Elon's "GigaFactory-as-a-product" reference very well. The Chinese might even end up being the first customers for it !
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MitchJi
Trying to learn kindness, patience & forgiveness
If it's viable Tesla will purchase the rights to use the technology and start building them at the GF.
It sounds good, but if you had 10k for every new battery technology that sounds good you could retire.
I'm betting on zero impact on Tesla (not viable). It has to be better now and better than Tesla's and Panasonic's roadmap for the near future.
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Like Elon has said: "Don't send us a PowerPoint, just send us a working cell!"
What's with the snark? This is from the latest 10Q and similar language has been in filings for years:
Mr. Musk has pledged shares of our common stock to secure certain bank borrowings. If Mr. Musk were forced to sell these shares pursuant to a margin call that he could not avoid or satisfy, such sales could cause our stock price to decline.
Certain banking institutions have made extensions of credit to Elon Musk, our Chief Executive Officer, a portion of which was used to purchase shares of common stock in certain of our public offerings and private placements at the same prices offered to third party participants in such offerings and placements. We are not a party to these loans, which are partially secured by pledges of a portion of the Tesla common stock currently owned by Mr. Musk. If the price of our common stock were to decline substantially and Mr. Musk were unable to avoid or satisfy a margin call with respect to his pledged shares, Mr. Musk may be forced by one or more of the banking institutions to sell shares of Tesla common stock in order to remain within the margin limitations imposed under the terms of his loans. Any such sales could cause the price of our common stock to decline further.
FredTMC
Model S VIN #4925
How many "dislikes" does it take here to get a troll banned (even for a few days)?
Similar to "how many licks does it take to get to the tootsie roll center...?"
Similar to "how many licks does it take to get to the tootsie roll center...?"
As far as new battery technology goes, a battery engineer at the GF opening told me that Tesla keeps tabs on about 70 different battery research efforts. Very few of them to date have produced a battery that Tesla has even tested. If there was a viable new battery tech out there, Tesla would know about it...
Please refer to Elon Musk Supports His Business Empire With Unusual Financial Moves
"He said his loans aren’t risky to shareholders because they add up to less than 5% of his total net worth, which exceeds $10 billion. That figure doesn’t include Mr. Musk’s large stake in SpaceX, which is private. He said he could easily put up more SpaceX or Tesla shares as collateral if needed.
“The odds that a margin call cannot be addressed are almost zero,” Mr. Musk said in the interview."
I think it's extremely unreasonable for anyone to criticize Elon for his "unusual financial moves". That article was originally click bait for a few people who were trying to do that.
Since when was it wrong to use unusual financial moves to establish an unusual company and unusual relationships? In my view, it would be more appropriate to refer to his strategy as INNOVATIVE moves.
Or maybe the Rive brothers want to earn a little income on their stocks during the voting period to make up for their salary haircuts
Ah now I see your point. Merging with SCTY would put additional restraints on TSLA for the access of capital market. I think this may largely be due to the losing money constantly history. If SCTY business can turn in profit, I think lenders would be more willing to finance TSLA.
I'm an advocate of axing SCTY's sales, not installation team. And the installation team costs less than 15% of these two added together. Synergy can still happen with the SCTY installation team coming on board. Because then at least for the US market, TSLA won't need to hunt down every electricians in every city to make TE work (to those who want one and bought one, residential and enterprise alike), they just send in their new team from SCTY. The sales and marketing team on the other hand, is not important for synergy to happen so ax away.
I have a pessimistic view on residential power storage too. I too think the overall cost is not really worth it expect for a few niche places in the world. But the industrial level Powerpack is a different story. And to move forward with this, demand/production aside, TSLA needs a distribution and maintenance team and this is what SCTY can offer.
I'm guessing you'd need to "report" and then provide evidence of how the poster violated terms in order to get someone banned. Since it's August and our mod may be enjoying some vacation (or hosting vacationers in a B&B), may take a wee while for it to all bubble up.
Or maybe the Rive brothers want to earn a little income on their stocks during the voting period to make up for their salary haircuts
Interesting thought. Elon could conceivably have made $100-300 million, if not more from lending out his shares over the past year. Lyndon could have made a similar amount.
If Elon has lent out all of his shares, and forces them to be recalled at the same time, wouldn't that cause a massive short squeeze?
This would be an interesting ace up Elon's sleeve that I don't think anyone has considered.
Zero chance of this happening. He can't and will not do this for many reasons, the most superficial of them that company lawyers will not let him do this, as, given his insider status and insider knowledge, this will raise all sorts of red flags. The main purpose of the large Elon stake is maintaining control of the company, so he never ousted again as happened at PayPal. Lending his shares defeats this purpose. I am pretty sure that 0 of his shares are available for borrowing.
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(Sorry for the late reply)
I got the quorum requirement from Tesla's bylaws -- the merger agreement shouldn't really matter. It would be really unusual for the bylaws to change in anticipation of a merger. (Though, I wouldn't rule it out given the un-usualness of Elon's abstention).*
Further, the bylaws provide that a matter must pass by a majority of the shares entitled to vote at the meeting. So, you need 74 million shares to appear and a majority of those shares to vote yes. While it is entirely possible that the merger could pass without any share recall (non-Elon shares =111 million, shorts =~25 million, so ~85 million net), it's really difficult to imagine it coming that close.
By way of background, I would certainly not profess to be expert and I have not done enough additional reading on the peculiarities of an abstention this large and whether a securities lending recall would even work given the securities lending system. However, I am a corporate governance attorney and have been involved in public company mergers, shareholder matters and mutual fund securities lending.
* I've also given a bit of thought to what happens if Elon appears at the meeting for quorum, but doesn't abstain. I think that should have the effect of a no vote since it would raise the required vote under the bylaws (to a majority of quorum). What I'm not entirely sure about is whether Tesla could somehow get Elon's shares to count for quorum but not raise the required vote. I don't think so, but I admit it's probably worth considering. In some ways its irrelevant though since no institutional shareholder that wanted to approve the merger would rely on this.
I got the quorum requirement from Tesla's bylaws -- the merger agreement shouldn't really matter. It would be really unusual for the bylaws to change in anticipation of a merger. (Though, I wouldn't rule it out given the un-usualness of Elon's abstention).*
Further, the bylaws provide that a matter must pass by a majority of the shares entitled to vote at the meeting. So, you need 74 million shares to appear and a majority of those shares to vote yes. While it is entirely possible that the merger could pass without any share recall (non-Elon shares =111 million, shorts =~25 million, so ~85 million net), it's really difficult to imagine it coming that close.
By way of background, I would certainly not profess to be expert and I have not done enough additional reading on the peculiarities of an abstention this large and whether a securities lending recall would even work given the securities lending system. However, I am a corporate governance attorney and have been involved in public company mergers, shareholder matters and mutual fund securities lending.
* I've also given a bit of thought to what happens if Elon appears at the meeting for quorum, but doesn't abstain. I think that should have the effect of a no vote since it would raise the required vote under the bylaws (to a majority of quorum). What I'm not entirely sure about is whether Tesla could somehow get Elon's shares to count for quorum but not raise the required vote. I don't think so, but I admit it's probably worth considering. In some ways its irrelevant though since no institutional shareholder that wanted to approve the merger would rely on this.
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Possible, but unlikely.
This is probably just sloppy merger agreement drafting. They didn't both to conform the language in the merger agreement to the language of the bylaws (which require a majority of the shareholders present at the meeting and entitled to vote on the matter so true abstentions don't matter).
Incidentally, it just occurred to me that Elon isn't legally required to abstain. He can vote his shares like any other shareholder. He just has pledged not to (and made it a condition to the closing of the merger).
As a result, if the bylaws remain in effect, he won't even appear at the meeting to vote because his shares would legally raise the required vote.
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