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

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Dave Lee with a good tweet:
“What’s the rationale from Tesla in choosing Monterrey, Mexico as the site of the next Gigafactory? Why not just double the footprint of Austin instead?” Dave asks a Tesla exec yesterday.


2. Mexico Gigafactory is for new markets, not the U.S. The idea is to build cars in Mexico for Mexico, Latin America, etc.

@unk45 i have a fuzzy memory of you mentioning a few months ago that Mexico has some kind of preferential access to the major Latin American car markets like Argentina, Brazil and Chile, all of which are in MERCOSUR. I did a bit of research and saw Mexico is not a MERCOSUR member state but is an “observing” party, though I couldn’t find a definition of that.

Can you (or anyone else) provide any insight on this? Will GigaMex avoid tariffs or have an easier time with marketing in general in Latin America?
 
My thesis on that is in this mega post from last year.

https://teslamotorsclub.com/tmc/posts/6738702/


The math shows multiple opportunities for dramatically increased energy consumption unlocked by lower costs, that would totally outweigh the efficiency increase. Depending on how many of these speculations come true, I think we could see energy consumption increase by one to three orders of magnitude in my lifetime. As crazy as that sounds, that’s where the calculations take me and it’s already happened since 1900, so this would basically be the renewables phase continuing the same trend.

View attachment 913002

For example, the majority of the world’s population currently does not have HVAC, including almost everyone in the hottest places like Mexico, India, Bangladesh, Indonesia and the tropics. Even with heat pumps, the overall increase in demand from this alone could double total human energy consumption.

Note that the graph is deliberately scary as they're choosing to show renewables as their fossil-equivalents.

For example there are estimates of 1TW/year of PV production by 2030. At 20% cf, that's adding around 1,753TWh of electricity supply per year.
But you need to multiply if displacing existing fossil generation, fossil fuel for vehicles or powering heat pumps.
Jacobsen estimated a reduction of 43% in actual current primary energy requirements if you electrify with renewables.
So, we're going to need more but not as much as the graph might imply.
 
I’m buying every chance I get. So no, I don’t think Tesla is showing all their cards.

But I can also see the flip side of investment funds not being okay with just “assuming” Tesla does have more hidden cards.
Watch Zach’s closing segment again. He is the CFO and he was talking directly to fund managers. Half of Tesla’s presentation was on Tesla’s hugely successful efforts to manage costs. Tesla demonstrated fairly well that they would be able to sustain last year’s operating margins with this year’s prices and volume. They also demonstrated that they have a product in the wings which is even higher volume and will maintain those margins. Zach’s closing remarks highlighted that fairly well. That alone should impress any serious investor.
 
You are right.. I connected an external powered speaker to my laptop to crank up the volume
I had the same issue. I'm hard-of-hearing and I use a headphone amplifier to hear videos from the 'net, and I had to crank everything all the way up just to get a decent signal. I don't have this issue normally with TV or any computer/Internet-sourced audio.
 
Ok... Where is Master Plan Part 3? Did I miss it?
...
Is the plan just "Electrify all the things"?
I was really impressed by the message and even though I do read about this technology I didn't know these stats. I thought it was a brilliant presentation, especially for the curious who only listened to the first part. It will take less energy and resources to go all electric. Less toxicity than gas engines - including the development of batteries, if I understood it correctly. And designing rare materials out of the system... Making factories smaller, ramping up charging infrastructure.

For me this was a good look at the big picture and I no longer cared about HW4 etc.
 
I love the Canoo too. Unfortunately their “One Trick” doesn’t seem to be manufacturing though.

Canoo got a rave review from Sandy Munro when he drove the thing, and it LOOKS amazing. If Tesla does as good of a job on their family van (assuming it's not a Sprinter-style) it's going to be a hit. Of course, Tesla's version will have superior tech and the expansive Supercharging network. Then again, non-Teslas will have some use of the Supercharger network too, but Tesla owners derive the most benefit from it and without exception.

I'm also one of those people who thinks Tesla's styling is beautiful and timeless, and that Tesla doesn't need to 'update' or 'refresh' their design without very good reason. Legacy OEMs seem to do this every few models, but all that does is increase the parts catalog and I suppose it might attract new buyers. Tesla should be above this for the most part unless there's a good reason (form following function). The Beetle is a classic example of timeless design....or most Lamborghini/Ferrari designs (not you, Mondial). Lots of neo-retro muscle cars capitalize on time-tested form language as well.
 
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My questions: Is this not a switched-reluctance motor as in current cars, and instead just PM motor?

Or is it a switched-reluctance motor, but without the current rare-earth permanent-magnet rotor inserts?

It will be switched reluctance for sure, but with non rare earth magnets, maybe a big ferrite ones

Purely PM can't have high efficiency at low power and high speed, such as highway cruising due to the interaction of the permanent magnets field with the stator iron core, with reluctance you almost zero those losses and can achieve closer to 100% efficiency, while pure PM would likely stay sub 90%

And just did a dig on ferrite magnets, their filed strength is a bit less than half of neodymium ones, Tesla probably has ways of increasing that, since nobody bothered much before, but overall you need double the magnet volume for the same field or less power

So overall, Tesla might be able to just drop in ferrite magnets and operates them at lower power, but we know that's not what they will do

A smaller motor, with less power, but still good because Tesla doesn't make slow cars, less copper due to less power, we can see where they went to achieve ~$1000 drive unit cost
 
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Just watching the Q&A last night as I was drifting off and when Musk was asked how many models Tesla needs he says in an off-hand sort of way: “I don’t know, maybe 10?“.

I count 8 vehicles on their current roadmap. Plus the Roadster so 9.

It was an off hand answer by Musk but I don’t think counting sheets on a slide is any more accurate than Musks’s throw away answer.

It’s pretty clear they aren’t shipping 40 different models. But the answer to “What is under that sheet?” Might be 2-3 cars depending on what Tesla feels is appropriate to ship in volume. It might even be regional variants.

View attachment 912995
When that question was asked and that guy said "people will get tired of seeing the same Tesla on the streets", I thought, no, have you seen any futuristic movie? All the cars are the same!

For me, one day, years from now when I'm old, if I could see mostly Tesla's on the road, I would be relived that the transition finely happened....
 
I've been going over that statement in my head.

Elon is correct that the current variety of vehicles is an overkill and the result of companies trying to segment the market instead of making materially better products. Small sedan, mid sized, large, van, truck, small truck, semi, box van, sports car that pretty much covers it. The only gap I've been considering is cost/features. What if I want a larger sedan but don't have Model S money? Legacy offers sedans that are not premium offerings but that are larger than a Model 3.

Two options here are that Tesla just doesn't bother to cater to that market segment, or that offering a limited range of vehicles means that they can come close to the price of those sub-premium large sedans. Maybe it's 80k for an low end S, but 60k for that crappy legacy sedan. Still some gap there but it's a lot narrower than we might suspect. So I figure we will see a combination of the two, abandoning certain segments and getting buyers to squeeze up a little because of the huge value increase in going from a blah sedan to an S.

I do struggle with how much people really want to be different than others with their car purchases though. I'm somewhat of a "car guy" so I'm biased in the direction that says I don't want the same car that everyone else has, but not sure how many other people really care that much.
Or, the world becomes a very different place and there’s no longer a need or want for a large quantity of repetitive vehicles with simply different badging and shaped headlights.

I contend people are missing the bigger picture; today is not tomorrow. The world is either going to be very, very different in all aspects of life or we dead. By the responses of several here, arguably a community that’s more forward thinking and intelligent than their average neighbor, I’m still betting we don’t make it.
 
My concerns after the presentation:

- Heard absolutely nothing new on the FSD. FSD is progressing incrementally, but no breakthroughs yet. We reach there, when we reach there.

- DBE is still not a solved problem. Some good measurable progress, but nowhere close to getting the benefits that was touted on battery day which was what 3 years ago? "But trust us, we will solve them"
 
Yesterday Tesla showed a plan to convert the world off of fossil fuels. They had numbers, costs, engineering, and answers to common questions. Best plan, by far, anyone has shown to convert to sustainable fuels.

Hardly anyone is talking about it today and wall street is pitching a fit that they didn't get a shiny toy instead.

We live in Idiocracy.


Also, good to see @Krugerrand back.
View attachment 912988
Alot of the world and world economy run on fossil fuels. People are being killed to sustain fossil fuels. Alot of military industrial complex is based on imbalances of fossil fuels and prices. It is not surprising that the street is not interested in getting rid of fossil fuels, since the money behind them is fueling this market action, pun intended.
 

Dave Lee with a good tweet:
“What’s the rationale from Tesla in choosing Monterrey, Mexico as the site of the next Gigafactory? Why not just double the footprint of Austin instead?” Dave asks a Tesla exec yesterday.
1. Tesla will expand in Austin and Mexico Gigafactory is not taking away from Austin expansion plans.

2. Mexico Gigafactory is for new markets, not the U.S. The idea is to build cars in Mexico for Mexico, Latin America, etc.

3. Monterrey has a lot of auto suppliers in the area, so good place for Tesla to be.

4. Monterrey is close to Austin, just a 1 hr flight.

5. Monterrey has an affluent area with good engineers.
We had posts here weeks ago about that. Dave obviously has never heard of Mersosur nor the Mexico treaty with them. He does not know Brazil produced >3,000,000 cars in 2014 nor that Mercedes benz exported some models to the US from Brazil. By a huge margin Mercosur is the largest volume market not served by Tesla, excluding micro-oriented markets like India.
Skipping all the details, Monterey is the choice because Mexico is the only place with preferred access to the US, Canada and Mercosur.

Of course everyone thinks only cheap sells, after all we're all unwashed down here. I suppose the reason my local shopping center BEV charging is filled with Porsche, Mercedes, BMW, Audi and Volvo BEV's cannot possibly be an indication of a larger market.

Sorry for sarcasm. FWIW, with only gray market Tesla, there are a few hundred of them in operation here. I'm happy for every new market, but a bit puzzled for the long wait since I placed my Model 3 order for Brazil in 2016 the day after I ordered one in the US, when Tesla opened the brazil order book. It still shows on my account.
 
Canoo got a rave review from Sandy Munro when he drove the thing, and it LOOKS amazing. If Tesla does as good of a job on their family van (assuming it's not a Sprinter-style) it's going to be a hit. Of course, Tesla's version will have superior tech and the expansive Supercharging network. Then again, non-Teslas will have some use of the Supercharger network too, but Tesla owners derive the most benefit from it and without exception.

I'm also one of those people who thinks Tesla's styling is beautiful and timeless, and that Tesla doesn't need to 'update' or 'refresh' their design without very good reason. Legacy OEMs seem to do this every few models, but all that does is increase the parts catalog and I suppose it might attract new buyers. Tesla should be above this for the most part unless there's a good reason (form following function). The Beetle is a classic example of timeless design....or most Lamborghini/Ferrari designs (not you, Mondial). Lots of neo-retro muscle cars capitalize on time-tested form language as well.
It's planned obsolescence. Their new models don't have any real improvements, maybe a new cupholder or 5 more HP. Nobody wants to upgrade for just that. So they just come out with a new model that instantly makes the current version look "old" and nobody wants to drive an "old" car.

I think the constant small changes model is working just fine. Most of the "the cars are aging" narrative comes right from TSLAQ and it's BS.
 
I’m buying every chance I get. So no, I don’t think Tesla is showing all their cards.

But I can also see the flip side of investment funds not being okay with just “assuming” Tesla does have more hidden cards.
Those investment funds too stupid to exist if they haven’t figured Tesla out yet and don’t have confidence there’s more to come. Seriously. 🙄
 
My concerns after the presentation:

- Heard absolutely nothing new on the FSD. FSD is progressing incrementally, but no breakthroughs yet. We reach there, when we reach there.

- DBE is still not a solved problem. Some good measurable progress, but nowhere close to getting the benefits that was touted on battery day which was what 3 years ago? "But trust us, we will solve them"
Looks solved to me, they are just testing different approaches to see what's work better

From the language, it sounds like DBE is working on anode and cathode, we need someone that toured the factory to confirm if they saw silve (aluminum) foils going through the DBE machines

Other than that, Drew said their goal is to ramp by 1000 pack per week per quarter and they are tracking that, so they are at almost 2000 pack per week, or 6.72 GWh run rate, and if they track that, will be at 17 GWh by the end of the year

There is a chance it will ramp faster once lines 3 and 4 start production
 

Dave Lee with a good tweet:
“What’s the rationale from Tesla in choosing Monterrey, Mexico as the site of the next Gigafactory? Why not just double the footprint of Austin instead?” Dave asks a Tesla exec yesterday.
1. Tesla will expand in Austin and Mexico Gigafactory is not taking away from Austin expansion plans.

2. Mexico Gigafactory is for new markets, not the U.S. The idea is to build cars in Mexico for Mexico, Latin America, etc.

3. Monterrey has a lot of auto suppliers in the area, so good place for Tesla to be.

4. Monterrey is close to Austin, just a 1 hr flight.

5. Monterrey has an affluent area with good engineers.
I don't completely agree with his analysis, in part because I think it ignores the basic premise that if you are building a lower cost model and still want it to remain profitable, building it in a location with cheaper labor and other costs is straightforward. Not to say it won't be for Central/S. America as I'm sure Tesla wants to expand there as well, but the car will be shipped to other regions as too, at least initially until other factories are expanded/completed.

Correct me if I'm wrong, but doesn't Berlin only do Model Ys, and the 3s come from Shanghai? I can definitely see another factory being built in Europe for this next gen model, but if they put it outside of Germany I'd think it wise considering the business experience there thus far. Another factory in a lower cost country would mirror the Austin/Monterrey setup.

I think it indirectly answers the question of risk exposure to China/global politics as well. Assuming China would be the biggest market for such a vehicle, they will undoubtedly expand Shanghai or build at least one more factory there as well, but Monterrey will be the initial one for this new vehicle, clearly. I applaud the not putting all your eggs in the communist-dictatorship basket too, especially while Ukraine is still being played out.

With the competition we see coming (and I know, I know we've heard it for years but we do have a number of solid offerings now outside of Tesla from when I ordered my first Model 3 five years ago) Tesla can simply address demand concerns with price decreases which was referenced in the presentation!
Clearly other manufacturers are going to have to diligently innovate as well to compete and sell EVs profitably.
 
Yes, that appears to be the fleet numbers: 1.44 billion vehicles across all listed categories. Today's fleet is ~2 billion, which Elon said autonomy can reduce to 70% of current, or ~1.4 billion.

What he DIDN'T say was what share of that 1.4 billion vehicles that Tesla intends to deliver. This leaves room for other automakers to expand their own EV production ('get with the program') or alternatively for Tesla to increase it's own annual production rate so that all 1.4 billion vehicles are EVs by 2050 (per Elon's goal).

Personally, I think this leaves ~200M ICE powered specialty/niche vehicles remaining in the fleet by 2050, which is okay so long as total fossil fuel consumption has dropped by 90% compared to 2005 emissions. That's a win (and potentially enough to avert climate disaster, if positive-feedback loops like melting permafrost do not surprise to the upside).
I think the total global fleet is about 1,600 million vehicles right now (more precisely I hold 1,570m at end 2022). To a certain extent it depends on how one counts. So I think that Tesla thinks the current fleet is 1.44 billion, i.e. they have a slightly different number than me, which is far enough. At least that is how I understood it. Maybe I'm wrong. It was not the clearest slide on the deck.
Many have rightly expressed concern about "paint control" when the car is painted in separate sections, versus the body-in-white. I'm willing to speculate this won't be a concern. Consider this image:
View attachment 912969

The Unboxed parts can roll through a specialised paint shop, all lined up along a flat plane, like an identity parade, together. Probably held in a special frame from the interior sides. All painted in the same session. Those pieces all get attached to the same car. In conventional paint shops, we often see paint robots performing elaborate contortions to paint the various nooks & crannies of the BIW. This requires a lot of room... a lot of cubic volume. If the Unboxed car parts are on a relatively flat plane, the paint shop itself might be physically smaller, and require less programming and less elaborate paint robots. Undercoat dipping processes might take up less room. (not sure about the actual vagiaries of Tesla paint layers) But my key point is that if a factory paint shop can be optimised for Unboxed manufacture, it can be smaller, cheaper, waste less, and still produce a car that the casual onlooker has no idea about the revised processes.

Perhaps more than one Unboxed paint shop can be fitted into the space formerly occupied by one BIW paint shop. Meaning... higher production speed. All sorts of benefits

Bingo, thanks. I was trying to figure out how they'd avoid getting a paint seam in the middle of the roof. But of course you are absolutely right. The 2/Z will have a glass roof. There will be no external paint to be mismatched at a join seam. The joins are all 'internal' in nature.
 
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It will be switched reluctance for sure, but with non rare earth magnets, maybe a big ferrite ones

Purely PM can't have high efficiency at low power and high speed, such as highway cruising due to the interaction of the permanent magnets field with the stator iron core, with reluctance you almost zero those losses and can achieve closer to 100% efficiency, while pure PM would likely stay sub 90%

And just did a dig on ferrite magnets, their filed strength is a bit less than half of neodymium ones, Tesla probably has ways of increasing that, since nobody bothered much before, but overall you need double the magnet volume for the same field or less power

So overall, Tesla might be able to just drop in ferrite magnets and operates them at lower power, but we know that's not what they will do

A smaller motor, with less power, but still good because Tesla doesn't make slow cars, less copper due to less power, we can see where they went to achieve ~$1000 drive unit cost
Perhaps it was just poor phrasing during the call, but that's generally not what one understands when they hear "permanent magnet motor", especially as switched-reluctance motors aren't nearly as common.

Interestingly, the label Tesla uses refers to the motors as SWRPM (switched reluctance permanent magnet motors). So the new acronym would ostensibly be SWR?
 
Or, the world becomes a very different place and there’s no longer a need or want for a large quantity of repetitive vehicles with simply different badging and shaped headlights.

I contend people are missing the bigger picture; today is not tomorrow. The world is either going to be very, very different in all aspects of life or we dead. By the responses of several here, arguably a community that’s more forward thinking and intelligent than their average neighbor, I’m still betting we don’t make it.

My general sense after that presentation:

So much positivity compared to years past. It was clear to me they had confidence talking to investors that a sustainable future is probable. Black swans can work in the positive direction too.

I'm hoping the world has given enough investment and Tesla to maintain their willpower for those positive black swans to manifest worldwide to a sustainable future. I expect we will continue to do so until a sustainable future happens