Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[jhm]

The Verge posted a recent video and article about Waymo: Waymo’s driverless car: ghost-riding in the back seat of a robot taxi - The Verge

The article doesn't mention it, but in the video he casually mentions that each vehicle will cost $400,000. Meaning that at present it's more expensive, but they're aiming to bring it down to $400,000.

The value of a robotaxi is the discounted income stream from ride services provided. Even so, if this thing has a useful life of 200k service miles, it's hard to see how recovery of depreciation is terribly competitive.

 

[Singuy]

I don't see how Waymo can compete because of the cost of their system. They will have to charge more than a Tesla robotaxi to show a profit.

Robotaxi is so lucrative that if they crack it first then it will be an all hands on deck scenario pumping out as many cars as possible driving the cost down.

 

[X Fan]

umm yes.

You are talking 2015 not 2020.

The CCS Network is fast improving.

Ford will have an app for Mach-E that will integrate almost all of them.Mercedes has done the same in Europe. The other OEMs will have to follow suit.

FWIW: the network in the US is still too fractured and doesn’t have enough high speed locations up yet to make longer distance travel realistic. A neighbor of mine is buying a Taycan (to add to their Model X) and their plan is to just drive around town. They take their X back and forth to Michigan.

What is really needed is singular brand networks to rival Tesla’s (maybe 2 more).

At some point, a smart operator will do a roll up and create that national competitive charging network.

 

[EVMeister]

How many stalls are usually at a CCS station?

Exactly. We have the same issue/discussion over here in the UK. Superchargers here typically have 8+ stalls, CCS typically 2-4 and sometimes they're a shared spot with CHAdeMO. The reliability is terrible, if you're lucky and find a working charger you might also have to wait as any EV with CCS can use it. And possibly waiting a while due to charging speed restrictions either on the site or vehicle itself charging. With Superchargers you've got 8+ spots which only Tesla vehicles can use. It's simply much better and I've been caught out by the poorer alternative on roadtrips before.

 

[mongo]

So, does that foreshadow a cross Russia, Mega Charger enabled, Tesla semi roadtrain enabling, system for shipping cars from both Europe and China?

 

[sparcs]

at 2:38 you see a good view of what i believe is the southern end of the property. You can see the first phase of the battery pack assembly/powertrain plant on the left in the middle of the screen.

They are leveling a lot of ground here. I wonder if that whole southern end will include cell production?

 

[humbaba]

Google has absolutely no need of building any car whatsoever to get Waymo to be a major player in the market. They simply provide software for all the other car manufacturers who have no intention to build such software.

Android. Has more than 50% of all mobiles and tablets market, yet doesn't make a single portable devise.

But not much of the profit.

Not that I think Android is a good comparison, but let's take it for a moment.

1) Google does not charge for Android. Saying FSD is for Waymo what Android is for Google means Waymo will make no money from it. Given the high costs of implementing Waymo's FSD this is a problem.

2) Google did Android so that they could maximize data collection -- Apple has too many limits. Expect Waymo's FSD to feed everything into Google's data store. They will know every wireless device that gets in and out so they can track movements of non-Android users as well, even if they weren't the one who used the app to summon the vehicle. Given the existing sensor cost it is a drop in the bucket to add a few more to collect all RFID as well. But this is an insight into Google and how they do business that is exemplified by Android. No insight from Android.

3) Android lacks a hardware standard which causes (generally minor) user facing issues, but worse, and not directly visible to users, is that the lack of a hardware standard makes application development much more troublesome. If we are trying to carry this overburdened analogy, for Waymo's FSD this correlates with the different driving characteristics and physical layout of each vehicle. This would pertain to the contention that Waymo would sell their product to others.

4) Having a worse experience (Android vs iOS) is a personal thing and personal tastes matter. But FSD isn't a matter of personal taste -- its the execution that matters and in alignment with point 3 by analogy it will have worse performance in its task (FSD) than a proper solution (Tesla's solution is clearly the "iOS" in this analogy). Even buying off regulators can't save you from the ensuing troubles (either damages from accidents or lack of service utilization due to excessive caution).

Again, I don't think mobile operating systems make a good analogy for FSD. But if the correlations held true it would mean trouble for Waymo.

 

[Unpilot]

So, does that foreshadow a cross Russia, Mega Charger enabled, Tesla semi roadtrain enabling, system for shipping cars from both Europe and China?

No...... Please Tesla. Stay.As.Far.Away.From.Russia.As.Possible.

 

[lklundin]

BASF partnership. Just a wild guess.

So far its seems to be mostly German media reports, but BASF is building a factory making battery cell cathodes for 500M€, with an annual capacity for 300k cars.

BASF baut in Brandenburg Batteriefabrik für 500 Mio. Euro

The BASF location is about 120 km South of the GF4 site.

 

[Tslynk67]

Rumour that Tesla will raise prices in January for the not-a-MIC M3's

The Dow Fell 28 Points Because Trade Trumps Impeachment

BEIJING, Dec 11 (Reuters) - U.S. electric vehicle maker Tesla Inc plans to increase prices of imported Model 3 vehicles in China in January, sources briefed with the matter said.

Tesla plans to increase prices of imported Model 3 vehicles with longer range and those with performance function, which are currently priced at 439,900 yuan ($62,495.56) and 509,900 yuan respectively.

The move comes as Tesla, which is building a car plant in Shanghai, aims to deliver China-made Model 3 sedans, which are priced at 355,800 yuan, to customers before January 25 next year.

It is unclear how much Tesla plans to increase its China prices by. Sources declined to be named as they are not allowed to speak to media.

 

[humbaba]

up on closing on 100k volume in pre-market. While I expect a price drop on open, this is looking like a good start to the day

 

[jerry33]

Robotaxi is so lucrative that if they crack it first then it will be an all hands on deck scenario pumping out as many cars as possible driving the cost down.

But Waymo has to crack it one city at a time.

 

[EV Promoter]

Not all have turned over, it seems like. The left hand, upper most row seems largely unchanged.

And is that a body in white? What's it doing outside?

View attachment 487018

You can see a zooming of that odd line of experimental- testing cars (2 for sure for crash tests) here:

Mystery cars in GF3, Prototypes?

 

[avoigt]

In my opinion Lithium Carbonate/Hydroxide and Nickel Sulphate supply are by far the largest potential bottleneck to the EV transition. The price isn't really an issue (likely $500 lithium hydroxide and $900 Nickel sulphate per SR+ pack currently), but in the future actual availability could be. Not this year, but during the period 4-10 years from now when EV penetration really does takeover. Lithium and Nickel sulphate are the slowest moving part of the EV production capex chain (Tesla can build a car factory in 1 year, likely it can build & ramp its own cell and pack factory in 1-3 years, but new Lithium plants take 5+ years to ramp). Elon has said Tesla should get into Nickel and Lithium processing. He is right and I really hope they will.

None of the leading Lithium and Nickel companies believe in an EV transition anywhere near as aggressive as Tesla, so they are not investing in the 2025-2030 capacity required to meet Tesla's goals. For example ALB is expecting demand from EVs of 700kt LCE (lithium carbonate equivalent) in 2025 (which is equivalent to a 4x increase in Lithium market size from 2018 levels). This is enough for 13 million EVs at a 56kwh average pack size (size of the SR+ pack) and market average 0.93kg LCE /kwh (I think Tesla's is closer to 0.7kg/kwh as it has more advanced chemistry). This is what the industry is building towards, but it is not enough. Tesla alone will need around 10x the current Lithium market to supply its 2TWh cell production target, or c.2x more than the entire global lithium capacity targeted by the industry by 2025.

There is no lack of actual resources in the ground, but there will be a lack of mines and processed high purity metals unless capex is quickly ramped.

I think average Lithium capex of around $700-1,400m per 1 million EV capacity will be required. Likely less than 20% of capex is used for buying the resources in the ground plus buying the equipment to dig it up (or pump it up for Lithium brines). Nearly all the capex is for highly complex processing - crushing equipment, processing, refining or electrochemical plants etc. For example, look at Nemaska Lithium's project (https://www.nemaskalithium.com/assets/documents/NMX_NI4301_20190809.pdf) Page 394 shows pure mine capex at just CAD$28.5m (total mine site CAD447m) vs total capex of CAD1.27bn including the electrochemical plant.

These are highly complicated value add processes and it takes 5-6 years to ramp up a new lithium plant. The purity and consistency of the metal (particularly lithium carbonate/hydroxide) is also critical to battery energy density, cycle life, power density and safety. So it is not easy to substitute new lithium producers into your cell supply.

There has been one main reason for Lithium Prices crashing the past 18 months.

China EV sales are far far below plans this year following the economic downturn and huge subsidy cuts. Battery metal capacity had been built for a supply ramp which didn't happen and this supply is now flooding the market. The price impact of this has been exacerbated by two factors:

• Lithium Supply had been built for low quality low range batteries with low tech cell chemistries. The Chinese subsidy change means there is very little demand for these low range subsidy driven cars anymore. The Lithium purity ordered for these cars is not good enough to build high quality high energy density cells, so this low grade product is finding no buyers any more. Hence the price of low grade lithium products finding no floor, while at the same time cell supply for high quality battery cells is still limited.
• Lithium Carbonate and Hydroxide cannot be stored and stockpiled for long. The product quickly spoils, so unlike most commodities, a producer cannot simply stockpile when the price is low - they have to sell quickly no matter the price. This means prices are always going to be volatile and will always be driven by very short term supply and demand dynamics rather than longer term considerations. To some extent this is more similar to the volatility you see in short shelf life agricultural commodities.

So Lithium Prices have crashed due to a short term subsidy adjustment in China, not due to a long term setback to the EV transition story. However, the lower prices have caused lots of lithium companies to fail to raise financing and cancel production plans that would have brought on new capacity after 5-6 years in the 2025+ timescale. So I think it is important for companies like Tesla that actually do still believe in the EV transition, and have the cash to finance it, to step in to fund the capacity required to match their battery cell production ambitions.

Its a very big mistake to take a short term lithium price correction the past 18 months to mean there is no need to bother helping to build future capacity.

Note my argument is utterly different to the false FUD narrative that there are not enough lithium, cobalt and nickel resources for the EV transition. There are plenty of resources. And it is relatively easy to build the new capacity to get to a 100% Clean Energy society. But this takes time and cash. I'm just saying Tesla needs to be masters of their own destiny and not rely on an array of half incompetent junior metals startups and conservative larger metals corporations who believe in a slow EV transition to deliver on a product so critical to Tesla's own extremely aggressive battery production targets.

Nickel Sulphate is a similar story, but I'll discuss that another time .

This is great information to have and thanks for posting. looking forward to part 2!

 

[Christine69420]

So, does that foreshadow a cross Russia, Mega Charger enabled, Tesla semi roadtrain enabling, system for shipping cars from both Europe and China?

Well a major road system from China to Europe is beeing planned along thew New Silk Road.

Source - just ignore the hyperbole from The Sun - but they have a map:
Russia approves Silk Road-style 1,250 mile road connecting it to China

Another source:
New Silk Road linking Europe and China is given green light - Lonely Planet

An obvious road to build superchargers along IMHO.

 

[kbM3]

I have been encountering an increasing number of Cruise and Waymo self driving test cars in the Bay Area, so much so that I rarely don't see several any trip into San Francisco.

A concern I have is that while these companies may not have near as many miles driven as Teslas with Autopilot, there is something to be said for quality over quantity. In this case, I mean that using myself as an example, while I probably drive more autopilot miles than almost anybody on earth in a Model 3 most of that driving is over the same roads, that are already fairly well suited for it. Take driving in SF for instance, most of the time it would be borderline insane for me to use autopilot, and if I do it's in a fairly brief, limited fashion with close supervision. Obviously it's impossible to know the full capabilities of the competitors cars, but a phrase from a racing text comes to mind:

Practice doesn't make perfect, perfect practice makes perfect.

A self driving car in San Francisco, even if interventions occur occasionally, is constantly "pushing the edge of the envelope" for self driving technology. I can assure you even though I know it very well and I am certainly a frequent user I am rarely pushing that edge. (only because Elon's check hasn't cleared yet, $TSLAQ) This is not to say that Tesla's Autopilot miles don't have value- they certainly do- but without a test fleet constantly pushing the edge of that envelope the ragged edge will expand only slowly as any responsible users will not be pushing hard against it.

Fire Away!
(Yes I'm playing devil's advocate here intentionally, and am looking forward to the responses.)

Two considerations:

1) You can bet that Tesla employees are currently driving their FSD cars in very complex environments like Manhattan and San Francisco. Maybe they are even gathering almost as much data as Waymo

2) Although Waymo will likely have a large lead when Tesla first deploys FSD, that lead will evaporate extremely rapidly, because of the much larger size of the Tesla fleet..

 

[TheTalkingMule]

If I think WTI is going to $30 in the next 9 months, what's my best avenue to try and match that shift with ETFs?

Keeping in mind anything with leverage can't be held that long.

 

[TheTalkingMule]

CNBC:
"We didn't talk about Tesla today...."
[puts up chart]
"Netflix is moving up today. Blah blah blah..."

Meanwhile any mild negative gets 45 mins of coverage. We're clearly tracking to crack ATH prior to earnings. Kind of a big deal.

 

[Unpilot]

Can I say it....Squeeze baby Squeeze.

 

[Singuy]

But Waymo has to crack it one city at a time.

Yeah so I'm not really worried that they will be first.

I also think Tesla Fsd will also be limited at first but probably can scale way faster than Waymo.