Thứ Hai, 31 tháng 10, 2016

Long-Term Fundamentals of Tesla Motors (TSLA) part 22

  • 1/1/2015
    guest
    The way this works is that only a Tesla battery will work in a Tesla. If you want a new battery you pay for supercharging.
    �
  • 1/1/2015
    guest
    I'll just mention the thing I always say: charging for electricity is never going to be worthwhile. Charging for *parking*, however, may start to make sense. (This will also deal with the problem of people hogging Supercharger spots when they've already filled up their batteries..) A per-hour charge for sitting and locking up the parking spot will probably eventually materialize at the busier places. This also deals with the "Taxi fleet hogging the superchargers" scenario.
    �
  • 1/1/2015
    guest
    I truly do not understand what you are trying to say.

    Yes, only a Tesla battery will work in a Tesla -- obviously -- but what does that have to do with my post?

    My point was that, as I understand it, Tesla says that if a Model S was purchased with Supercharging capability, then Supercharging is free for the life of the car. If the cars battery is changed at some point, that does not change the fact that the car (that VIN) can Supercharge without paying for the charge. Many people have posted on TMC that there battery was changed by Tesla because of some sort of problem and they could still Supercharge for free.

    If there is a statement from Tesla that contradicts what I am saying, I would like to know about it.
    �
  • 1/1/2015
    guest
    I just wanted to clarify that during the life of the car the battery will probably get replaced. When that happens (unless it's a warranty replace of course) the owner pays for supercharging.
    �
  • 1/1/2015
    guest
    Citation needed. Really, really need a citation or it's on the horrible side of wrong.
    �
  • 1/1/2015
    guest
    What citation? Do you mean that Tesla will sell so cheap batteries in the future (currently $45K) that it will be clear that $2K have not been added to the price for supercharging?
    �
  • 1/1/2015
    guest


    Building out the supercharger network _is_ capital expenditure. From the filing : We plan to continue investing in our Supercharger network for the foreseeable future, including in NorthAmerica, Europe and Asia and expect such spending to be approximately 5% of total capital spending over the next 12 months
    �
  • 1/1/2015
    guest
    That's not the current price of a battery.
    �
  • 1/1/2015
    guest
    Thank you for your helpful comment. Would you like to share the current price of a battery with us?
    �
  • 1/1/2015
    guest
    I don't know that the raw battery cost is without a prepaid plan, but the prepaid plans when they were still available was $8k 40kWh, $10k for 60kWh, and $12k for 85kWh.
    http://www.teslamotors.com/blog/2013-model-s-price-increase

    Also, even if the price is high enough that there is $2k of margin available to cover supercharging, that does not mean that money is used for supercharging versus other capital expenditures. So to make that claim, there really does need to be a citation (for example something in SEC filing saying where the margins for the battery money goes to).
    �
  • 1/1/2015
    guest
    After you point us to where Tesla lists a new battery at the price of $45k.
    �
  • 1/1/2015
    guest
    And you know this how? Citation please. I have never seen it stated by Tesla that if a Model S owner pays for a new/replacement battery for their car then they immediately lose the free Supercharging they paid for when they bought the car.

    Really, you can't just make stuff up. Show me where Tesla has said that. I am happy to be proven wrong.

    - - - Updated - - -

    I just reviewed the video of JB Strauble talking at that conference, on Youtube at The Future of Transportation - YouTube

    Here is what Strauble said, in discussing the Supercharger network, quote: "A full charge on a Model S is about ten dollars . It's really not entirely worth the hassle of dealing with a whole separate billing structure. In the future of course I think it will make sense to figure out how we phase in some kind of financial transaction here, but it's going to take time, and for the beginning million cars this is a pretty viable way to do it."
    (I believe the $10 is Tesla's cost for the electricity)


    I interpret the statement I quoted to mean that they are years away from creating the ability to charge people for a Supercharge, but they think that at some point in the future they will do that. I would not assume that at some point in the future all Tesla's sold will have to pay to use the Superchargers: they could offer a pre-paid "free for life" option and the alternative could be that you pay per Supercharge in exchange for the cost of the car being lower.


    And I believe Tesla when they say that the cars they are selling now and since 2012 will have "free for life" Supercharging (assuming the original buyer paid for that option). They can't back away from that, it would be a PR disaster.
    �
  • 1/1/2015
    guest
    You are of course correct in that. But you presented it so that it could be perceived that you meant that only $500 of the $2,000 being paid for access to SuperChargers was spent on these, and that is what I have tried to show that is completely wrong. I also tried to show that although the development of the network so far has taken a significant portion of this money, it does not necessarily apply equally in the future.
    �
  • 1/1/2015
    guest
    Whereas discussing the competing approaches the various BEV manufacturers are taking to charging infrastructure, in my opinion is still on topic, this discussion of unfounded claims that Tesla is deliberately throttling Supercharger rates has absolutely nothing to do with the topic, Tesla BEV Competition Developments.

    Larry
    �
  • 1/1/2015
    guest
    Yes. not insulting anyone's intelligence. Not in this crowd. TMC=smartest forum ever.
    �
  • 1/1/2015
    guest
    I don't have a citation, I just think this is obvious. Tesla can make their car to accept only Tesla batteries. Why would they sell the batteries with so low price that they would lose (potentially a lot of) money with supercharging in long term? Battery replacement is a perfect way to charge a little bit extra that at least partly covers the charging of that battery for the next 10 years.

    - - - Updated - - -

    Thank you, this is interesting but as you said they don't offer this any more? Someone will be getting a 40kWh battery after 8 years :). There are several posts in this forum citing an invoice that an insurance company had to pay. There the price of a new battery was $45K. Here is one post about a battery price quote I could find quickly:

    "I told Tesla I wanted to replace my battery (for one of the same size), and they quoted me $45,000."

    http://www.teslamotorsclub.com/archive/index.php/t-11429.html
    �
  • 1/1/2015
    guest
    I think what doesn't make this obvious for I, and others on this thread, is that Supercharging has been tied to the VIN, not the battery. Batteries have been replaced, and the supercharging capability of the car didn't change. One would extrapolate that this would be similar with that battery-swap scenario: If you used a battery swap station your car wouldn't like lose or inherit the ability to supercharge based on the temporary battery you received.

    In addition, that battery price that you referred to (I've seen that as well), doesn't change based on if the battery is "supercharging enabled" or not. It's a single price.

    Finally, in the battery teardown threads, it appears that the logic & circuitry on board the battery pack supports the BMS... there doesn't appear to be any firmware where it would be programmable to enable/disable supercharging.

    I understand what you are saying: Tesla may be simply charging extra for each battery sale to support supercharging... but I doubt it. I believe they are incorporating that in to overall vehicle purchase cost. If anything, they want to get battery cost down as much as possible... replacement expense is still one significant "negative" concern to many potential owners...
    �
  • 1/1/2015
    guest
    Looks like I was not clear. I'm not saying that battery swap would disable supercharging. What I am saying is that the Supercharging cost that you pay when you buy the car will never ever cover supercharging costs for tens of years. It could cover it for the life of the battery and that's why they will charge it again when the owner buys a new battery.

    That's a price for a 85kWh supercharger enabled battery. The price that they sell 60kWh batteries does not matter because there are so few of them. Now with 70D all new cars are supercharging enabled.

    Does this mean you could use a 3rd party battery in Tesla? I doubt that will work.

    That is a very good point but I still think they cannot afford to pay for our electricity forever. I think we'll be seeing upgrade offers, for example from 85kWh to 100kWh battery. I think people are willing to pay a lot for the upgrade and Tesla can sell the old 85 battery for home storage use or something.
    �
  • 1/1/2015
    guest
    No, the citation that says it's for the life of the battery, rather than, as Elon Musk has said, for the life of the car.
    �
  • 1/1/2015
    guest
    As I replied above there is no citation. Supercharging will always work in a car that has it enabled once as Elon has said. Buying a new battery will not disable it. But when you one day buy that new battery you will pay $$$ to cover supercharging for that battery. It will not be a separate fee, it will just be a bit more expensive battery.
    �
  • 1/1/2015
    guest
    So you have no evidence to back up your statement. Thank you for clarifying.

    So it is your OPINION. And you are welcome to your opinion.
    �
  • 1/1/2015
    guest
    So now you are changing your position after having conceded that you have no evidence to support your original statement.

    Your new position seems to be that part of the cost of a replacement Tesla battery is money that Tesla allocates to covering their cost of providing free Supercharging to that battery.

    That may be true. Only Tesla knows for sure how the allocate and manage the money they derive from selling cars and batteries.

    The fact remains that, as Tesla has stated, if you buy a car with Supercharging enabled, charging is free for the life of the car, not the battery.
    �
  • 1/1/2015
    guest
    The big evidence is $45K battery price. That seems to include quite many supercharging fees. If one day there are cheap 3rd party or Tesla batteries available for supercharging enabled cars I will be wrong but I very much doubt it. Of course it's only about $2K addition to battery price which goes unnoticeable with current battery price levels.

    - - - Updated - - -

    Here is my original statement: "The way this works is that only a Tesla battery will work in a Tesla. If you want a new battery you pay for supercharging.". Did you understand it so that there would be two fees: battery price + supercharging fee? Sorry if that happened, I never meant that.

    Good, now it sounds like we almost agree.
    �
  • 1/1/2015
    guest
    OK, so you're just expressing an opinion as if it's fact.

    Incidentally, I completely disagree with your opinion. In my opinion Tesla will continue to take the money up front in the price of the car, unless they believe that lowering the initial price of the Model 3, 4 etc would substantially increase sales.

    The reasons for this are:
    - New car buyers are more willing to spend the money up front; used car owners are value buyers who are more calculating
    - Improvements in technology should make future batteries cheaper, lighter and possibly higher capacity, and it is not in Tesla's interests to do anything that would discourage purchases of new batteries that would not only earn income but would _decrease_ Supercharging.
    �
  • 1/1/2015
    guest
    The battery is not $45k; that was from when they were battery constrained and included a car's profit with the battery. Ask a product specialist for the current price. It is $25k, which is a great price for 85kWh.
    �
  • 1/1/2015
    guest
    That's great news. Obviously it still includes supercharging fee (Leaf 24kWh battery is $5K).

    - - - Updated - - -

    How would it decrease supercharging?
    �
  • 1/1/2015
    guest
    Money is fungible. Clearly they make some profit on selling replacement batteries. Elon is quite insistent that they don't do stuff like that at a loss. They sink that money (at the moment anyway) into stuff like growing the supercharging network and buying new robots. If they had an accounting line that said "provision for supercharging" and transferred money into it from "battery sales", you might have a point. Otherwise it's just as valid to say "Obviously it still includes new robots fee."
    �
  • 1/1/2015
    guest
    Right, but there just happens to be a tight connection between a battery and supercharging. That's why I would call it a supercharging fee but others can use other terms if they want. The bottomline is that the money for supercharging (long term >10 years) must come from somewhere and if it does not come from battery sales I don't understand where it would come from.
    �
  • 1/1/2015
    guest
    More capacity increases range.
    Newer batteries have more range.
    Lighter batteries decrease vehicle weight and increase efficiency, increasing range.

    The more range the battery has:
    1) the more trips you can make without needing to use a Supercharger
    2) and when you do go beyond range the less you need to use a Supercharger

    The higher the capacity the faster you can charge the battery.
    The faster you can charge the battery the less time you spend at a Supercharger.
    The less time you spend at a Supercharger, the fewer Superchargers are needed.
    �
  • 1/1/2015
    guest
    A more efficient car gains range faster at the Supercharger.
    If a car that uses 400 wh/mile gains 100 miles of range in half an hour at the Supercharger, then a car that is 200 wh/mile will gain 100 miles of range in only 15 minutes - when the charging rate is the same.
    So a more efficient car needs less time at the Supercharger, and fewer Superchargers are needed.
    Increasing efficiency without changing battery capacity can be a huge win.
    �
  • 1/1/2015
    guest
    That may be possible, but I disagree that it is obvious. In fact, I think it is unlikely.

    First, the LEAF battery is $5,500. Second, Nissan has said that the current price is subsidized (they expect to hold the price steady and make money later; it's not a big deal as they are selling in extremely tiny numbers now). Third, there is more to the Tesla's active-cooled battery than there is to the LEAF's passive-cooled one. Fourth, money is fungible as ggr pointed out. Fifth, it doesn't fit with Tesla's stated business model. Sixth, the battery was designed to last the life of the car (~16 years), so there should be very few cars getting replacement batteries for old cars to extend vehicle life. There may be some people getting upgraded batteries in relatively new cars if Tesla ever offers that, but I'm not at all convinced that would increase Supercharger use.

    I can't prove my case, but I'm not trying to do that because I don't see it as a big deal - if Tesla includes a "Supercharger fee" by any sort of accounting method, that's fine with me. But I don't see any evidence or need for it.
    �
  • 1/1/2015
    guest
    I don't believe you can freely hand-wave it away like that. A supercharger fee means the money goes directly toward supercharging expenses. This is different from the money just going to profit, which can go toward any general expense/investments in the company.

    The only evidence we have so far is that $500 explicitly comes out of every car sale towards supercharging and previous SEC filings say the early infrastructure came out of the marketing budget.

    That any supercharger money comes out of battery sales is complete speculation, as there is no evidence they are doing accounting that way, nor that there is enough battery sales to make such a contribution significant. I think that is what people want to make clear (plus the way you worded it misled people to believe that people will lose their supercharging capabilities after swapping a battery, given your accounting method implies supercharging is tied per battery, not per car).

    Note that in the Nissan case, they are losing money selling 24kWh replacement batteries for $5k, but they don't care since there has been so little demand (plus the rapid deterioration of their batteries in hot climates meant they needed to offer it given the negative PR).
    �
  • 1/1/2015
    guest
    If you are using the archived thread above as your reference, it does not support your assertion the $45K cost is for "a 85kWh supercharger enabled battery".

    That thread contains the keyword $45K exactly 4 times. None of them refer to anything other than he cost of am 85KWH battery. No qualifications.

    That thread contains the keyword Supercharging exactly 2 times. Neither of them is in reference to a replacement battery.

    Technically, it's possible provided any signals/protocols/etc... were reverse engineered and implemented correctly. You'd be able to drive with it.

    If your point is that supercharging wouldn't work because of it being a non-Tesla battery, if the above implementation was such that the car accepted it to drive and "normally" charge, I'd expect it would supercharge too.

    Again, I've seen no evidence to suggest that the Supercharging is enabled within the battery itself. There's lots of evidence (ncluding screenshots that have been posted here) that the car's computer is what maintains a configuration database for all of the car's options.

    Folks have done the calculations using "reasonable" Supercharger usage, and the up-front charge can pay for a significant amount of electrical cost. All that has to happen is for the average to work out within Tesla's financial model. There will likely be some outliers that supercharge more than than what their initial $2K covered. There will also be those who barely use it.

    Finally, once Tesla has solar generation in play, the financial model takes another turn in their favor.
    �
  • 1/1/2015
    guest
    Panu's entire premise seems to rely on the idea that a Model S will need a replacement pack after 10 years or so. 12K average miles per year is 120K miles after 10 years, for a 265 mile pack means 453 full charge cycles. The pack should last more than twice that long and still have more than 80% capacity, so I would not expect many cars to need replacement packs.
    �
  • 1/1/2015
    guest
    Some people drive a lot more than 12,000 miles per year. Someone that drives 60,000 miles per year will likely need to buy a new (or refurb) pack after 8-10 years. (Based on 2000 cycles life). Limousine services, such as TMC member pcmacafe, will find this limit for us.

    Even normal drivers will start running into the maximum calendar life of the cells at about 15 years. I think buying a pack may be more popular than scrapping the car. The Model S will be a classic and well worth keeping on the road.

    Tesla will continue to get revenue from selling not only new cars, but also "replacement cars" and parts. Supercharger maintence will come from Tesla's revenue, so I think Panu is essentially correct.

    GSP
    �
  • 1/1/2015
    guest
    I don't think using outliers is helpful. Average mileage would seem more useful. While we do expect Tesla vehicles to last longer than most I think we also expect cell chemistry to become more robust and provide greater range, both factors will further reduce the need for new packs over time. When Tesla is producing 500K-1million+ vehicles per year the SC "revenue" proposed from a few thousand early vehicles that may need a new pack will be fairly small.
    �
  • 1/1/2015
    guest
    LiIon cells are subject to degradation both from cycling and the passage of time ("calendar aging"). You'll have a stronger pack after 200k miles if you did those miles in 5 years rather than 10 (all other things being equal).
    �
  • 1/1/2015
    guest
    What data are you quoting. I charge to 85% on a Dailey basis and still start with a range of 276 miles at the end of that charge. The car is two years old with 30,000 miles. This range is actually higher than when new. Nobody knows where cars will be at 8 years of age. How you can say likely is beyond me
    �
  • 1/1/2015
    guest
    Hawaii has one of the highest per capita purchase rates of the Model S, and we have exactly zero superchargers, and I'm sure there are very many owners on the mainland who rarely if ever use a supercharger either. This surely counterbalances the outliers of those that use it for their limousine service.
    �
  • 1/1/2015
    guest
    I'd be happy to sell y'all a product for 100 grand, and then pay you 6 bucks every now and then.....
    �
  • 1/1/2015
    guest
    I wasn't sure where to put this but this thread is probably as good as any.

    I got a loaner for my annual service yesterday. I was hoping for a P85D but it was a 2013 P85 that had been traded in.

    I did not know that they were using trade-ins (i.e., CPO cars) for loaners. I suspect they may have stopped putting newly-manufactured cars into the loaner pool and instead will just use CPO cars exclusively now that there is sufficient supply.

    CPO cars may be why we didn't hear much about an end of quarter rush for Q1. I think it is a financially smart move to not sell brand new cars at a discount. I also hope that this will mean a more consistent supply of loaners for owners.
    �
  • 1/1/2015
    guest
    Nice observation. If Tesla doesn't have to continually replenish the loaner/service pool because they sell them out each quarter, that could save them a couple hundred cars they have been robbing from Peter to pay Paul. I would rather they pay Peter and pay Paul...and don't call Saul. :tongue:
    �
  • 1/1/2015
    guest
    OK so even though us in the know have known for a long time that Tesla were going in to stationary storage and we knew this could be a viable business, the new info in the last few days has really changed the outlook. In my mind let's forget about the "Powerwall" product for home use, which is for now - let's be honest - kind of a niche/boutique item. No, let's focus on the $250/kWh product for large-scale applications. There is enough low hanging fruit to fill Tesla's order book for years to come, and as time goes by Tesla will be able to lower their prices even more making projects that as of today don't make financial sense (the not-so-low hanging fruits) make sense. If they keep innovating, improving on both battery chemistry/tech and economies of scale (multiple Gigafactories) I see no reason why any competitor should be able to catch up for years (decades?) to come.

    But, I keep thinking, what about our investment in TSLA? TSLA stock is the publicly traded stock of Tesla Motors Inc. Up until now Tesla Motors Inc. was a car manufacturer building electric cars. Now all of a sudden there's also the "Tesla Energy" aspect to the company. And if this line of business has margins that are as great or batter as the automotive line of business why shouldn't Tesla try to grow it too as fast as possible? My guess it maybe the stationary storage business is actually simpler to grow quickly? Ramping up vehicle production is hard, taking new models (X, 3) to market is hard, there is a lot of services that needs to expand with regards to vehicles (service centers, Supercharging network etc.) With stationary storage perhaps not so much - just build the units, ship and install them. Yes, some after sales service will be needed but to me the product seems overall much simpler than a car.

    So will Tesla Motors Inc. change in to just Tesla? Or will they bud off the energy business in to a new company? That could also make sense. But if so, how will the stockholders of TSLA be rewarded? IS there such a thing as a "budding off split" where a new company is formed by budding off from a mother company and the stockholders of the original company are issued stock in the newly formed company? Or would it be some kind of mother-daughter configuration (subsidiary?).

    Again, if the Energy aspect of Tesla were to be taken off it would make the most sense for Elton and Co. to not make it a public company but privately held. In my opinion they were forced to take Tesla Motors public way too early - something us early stockholders should be really happy about but it would have been much easier to run Tesla Motors in its current phase are privately held.

    So those who have more insight in to the workings of the financial markets - what is going to happen in the next few years??? I sure want in on the stationary storage investment as well, as early as possible! I think that business may hold even greater promise, at least equal promise, as the automotive.
    �
  • 1/1/2015
    guest
    Not sure why there is talk about spinning off the battery stationary storage business as a seperate company, keeping the businesses in one company makes much more sense as you can build large factories (giga ones) that produces batteries to both businesses which benefits from economy of scale. I am sure there is a lot of R&D overlap between the 2 businesses also.

    "I sure want in on the stationary storage investment as well, as early as possible!"

    You're already in.
    �
  • 1/1/2015
    guest
    I just want to make sure the big boys don't fool us small time investors out of it. Am I being paranoid?
    �
  • 1/1/2015
    guest
    I think so. Can't imagine it would be of interest to Elon, spinning it off.
    �
  • 1/1/2015
    guest
    But then surely Tesla Motors Inc. will have to become just Tesla Inc? I understand that a name change doesn't take anything away from our investment but it will be symbolically important and would send a signal that could in it self signal a higher valuation of TSLA?
    �
  • 1/1/2015
    guest
    That does make sense, like Apple Computers became just Apple. I agree that as soon as analysts starts seeing Tesla as more than just a car company TSLA should appreciate, seems like a part of the analysts haven't considered the storage business yet, ER next week should be pretty interesting. I think they will wait a bit with the name change though, to the stationary storage and what else might be is a more significant part of Teslas business.
    �
  • 1/1/2015
    guest
    There seem to be other companies called Tesla xyz, according to what others have mentioned, so I don't know if Tesla Inc would be registerable. Certainly my investment thesis is based on autos, GF and storage, and the internal synergies are very material to what makes an investment in TSLA attractive, to me. If the 3 units were not co-operating, and cross-managed, by a single top management team, it would be sub-optimal imho.
    �
  • 1/1/2015
    guest
    Absolutely that happens all the time. The shareholders would get stock in the new company according to some formula. The Board agrees the split at some valuation say they say the new thing is worth 10% of the company, so if you have 55 shares of TSLA you would get 5.5 shares of the new thing. (I have gotten fractional shares from this). Conoco phillips spun off their retail arm, McDonalds spun off Chipotle, etc.

    But no way do I see that happening any time soon. For one thing they are using the same facilities.
    �
  • 1/1/2015
    guest
    There are three things that seem to me to be the same, but apparently they're not:

    1. Free cash flow. This is the current popular topic, and we're expecting to go positive around the end of the year.
    2. Profitability. Elon swore up and down that we'd refuse to make money before 2020 since we need to reinvest everything we're making.
    3. Earnings (visible as earnings per share). A few quarters ago, we were seen being just about dead even on this number, to the extent that it looked like we would just sell a few carbon credits to make up the difference...so we could declare an EPS of $0.01. We've drifted off of this mark, probably because R&D budget demands it. This number ought to track one or the other of the first two, unless they really are all the same.
    So, are these different things, and if so, how? I mean different as in, they can occur at different times. Or is the story just changing, and I have too good a memory?
    �
  • 1/1/2015
    guest
    The real answer to your question @EldestOyster is to look for a webinar or other online resource that provides an overview of accounting terminology and how to read financial statements. Here is one page I found that looks like it gets off on the right foot:
    Accounting Basics | Accounting 101 Tutorials

    Figure this is a 2-6 hour topic - more than a trivial amount, but small enough to still be approachable. And as a bonus, if you also invest, then this is a basic skill (reading financial statements) that will be valuable to you in those investing efforts.
    �
  • 1/1/2015
    guest
    A quick example of why these two are not the same: if some long-lasting equipment or property is purchased (i.e. capital expenditure, CapEx), then that does not detract from profitability because the company still has that equipment on its books and could (at least theoretically) sell it if and when required. Well, depreciation of equipment/property does affect profitability, but quarterly depreciation is usually a relatively small percentage of the total value. However, the impact on cash flow is the total value of the equipment at purchase, as the full cash amount is paid at once, assuming that a loan was not used.
    So this explains why a company's cash flow can be poor when profitability remains high: the cash was used to buy the equipment, but the company still owns the value of that equipment and so there is no loss of value to the company (except some relatively small depreciation), despite the loss of cash.

    With some other things, for example with salaries, profitability and cash flow are affected the same way.

    Finally, an example of the other way around: the cash flow could be positive, but the company might discover that an asset (e.g. some land) now has a value far lower than previously determined. This value must be written-off, so the company might make a net loss (in terms of profitability), despite increasing its cash balance, if that write-off is more than the increase in available cash.
    �
  • 1/1/2015
    guest
    I think the margins are lower in the stationary battery business, actually. I could be mistaken, but I think they are lower.
    �
  • 1/1/2015
    guest
    The gross margin can be lower, but the net margins will likely be approximately the same. For the stationary storage part of the business, The SGA expenses will be much lower (no need for a network of company stores and service centers), with a low incremental R&D costs, as most of the R&D is accomplished developing the car batteries.
    �
  • 1/1/2015
    guest
    Tesla's Marketing Machine: The Pop-Up Store

    First things first, is it the secret weapon for demand and against dealers?
    I know it looks rather lame on the surface, but it is almost surely the secret weapon for both demand and against dealers, and it can be very effective. If it turns out that it is not THE secret weapon, it is at least A secret weapon.?

    Better Than A Store
    In many ways, a Tesla pop up store is better than the brick and mortar counterpart. The Pop-Up store costs significantly less in rent, as the only cost is the asphalt on which it stands, and does not include the building. Since most of Tesla's stores are located in malls and shopping centers, where rent is the one of the largest ongoing costs, this is a huge advantage. Labor is also a high ongoing cost, and if Tesla decides to make a mobile team that moves with a service center, the cost of labor will be somewhat higher. Overall, the costs seem to balance out or even be below that of a store. The Pop-Up store, then, is much like an ice cream truck, while the brick and mortar store is more like an ice cream parlor/shop in terms of costs (since an ice cream truck driver is paid about twice as much as a clerk at a shop, yet the truck is much cheaper than the shop).

    The next advantage is maneuverability. The Tesla Pop-Up store has a set goal (which I will discuss later on), and once it completes its goal in a certain location, it can simply move to a new location to pursue the goal there. This is a huge advantage over a brick and mortar store, where the options are to end the store lease and set up in a new location at a very high cost, or open a new store at an also high cost. So again, the Pop-Up store is like an ice-cream truck and a brick and mortar store is like a ice cream shop/parlor, but this time in the sense that the ice cream truck and the Pop-Up store are both maneuverable alternatives to the brick and mortar store.

    The main purpose of the Pop-Up store and a brick and mortar store differ dramatically. A brick and mortar store has two functions: to attract the public at malls and inform them about the existence of Tesla's products, and answer more nuanced questions from already informed and willing to buy people about their products. Some of you may point out that the Pop-Up store really does only one of these tasks well: it can answer questions from the already "hooked" people, but it doesn't really attract the large crowds that can be found in malls. I would argue that the Pop-Up store can do just that. The fact that a Pop-Up store can stand alone and shine Tesla's logo on a brilliant red background is one way, but there is another way. Placing the stores at Superchargers. Just imagine for a second that you are at the Delaware travel plaza that contains a Tesla supercharger, and it looks something like this:
    delaware-welcome-center.jpg
    The canopy in the picture leads to the main entrance and exit, where thousands of people pass through. The people walking in and out of that entrance already stare at the handful of beautiful cars that are plugged in right across from them, and are genuinely intrigued. Putting a Pop-Up store there, along with solar panels, would create huge interest and inquiry from people who have yet to learn about Tesla. Also, while a mall usually has the same people going to it, travel plazas attract a much more diversified crowd, which could result in higher overall interest. It is at superchargers like this one that Tesla can really fling itself at the public. This brings me to my next topic.
    ?

    The Tesla Pop-Up Store Is The Ultimate Trojan Horse
    Yeah, that's right. The Pop-Up store is a Trojan Horse shaped Ice Cream truck. Just take a look at this quote from Tesla's Press release (which I still haven't got my hands on):

    The key word is pretty clear here. Obviously, there is a process to drumming up orders from a region that involves a visit from the Pop-Up store first, and then a brick and mortar store is built. To understand why this process exists, you must know how Tesla sells cars: Word of mouth and conversations with product specialists in a Tesla store. There are plenty of places in the world where there are a few adoring Tesla fans who know about everything or want to know everything Tesla does and are huge fanboys, but hundreds of miles around them, 99% of people don't even know about Tesla at all. Investing into a Tesla store in such an area doesn't make too much sense yet, because not too many people would know about it, and thus it would reach a limited amount of people. However, a Tesla Pop-Up store can serve as a catalyst for rising interest by catering to the fanboys of the area and giving them something to talk about. Then through word of mouth, the regional interest grows to a point that it justifies the investment into a brick and mortar store and also a service center.

    Also, in some states where auto dealers wailed loudly enough, Tesla is only allowed to have a certain number of brick and mortar stores. Tesla can bypass these silly rules by having mobile stores that don't count as an actual store because they aren't brick and mortar. This is how Tesla's Pop-Up stores are really Trojan Horses. The Pop-Up store (Trojan Horse) doesn't look like a (invasion device) brick and mortar store, and is therefore allowed into an area where brick and mortar stores are limited. The Pop-Up store then can help with invasion by inciting word of mouth from Tesla fanboys and creating a reason to build a brick and mortar stores. Moreover, the Pop-Up store (Trojan Horse) avoids the "city gates" (laws limiting the amount of stores allowed in a state) that the dealers have put into place. The Pop-Up store, then, is a perfect invasion and expansion apparatus that eats local auto dealers lunches as it takes sales and bypasses the restrictions they put into place.
    ?
    The Future
    A Tesla Pop-Up store fleet is coming (already 4 of them), and as Tesla ramps up production, Tesla will need to ramp sales accordingly with infrastructure, and the returns on investment into this infrastructure can be maximized through the use of Pop-Up stores. So, through 4Q15 to 4Q16, when Tesla is drowning in cash, Tesla can use its excess money to invest into more service centers rather than more brick and mortar stores, while still promoting sales growth. So look for a huge expansion in Pop-Up stores and Service Centers.?

    Conclusion
    The Pop-Up store is an effective apparatus designed to help Tesla accomplish its end goal of bringing sustainable transport to the masses because of its favorable cost structure, mobility, effectiveness in attracting the public, effectiveness catalyzing a word of mouth chain reaction, and bypassing some state laws. Here are some pictures for those who are visual learners :tongue::?
    Tesla popup.jpeg
    Trojan-Horse.jpg
    tesla-pop-up-store.jpg
    ice cream truck.jpg
    mobile-store-tesla-2_large.jpg ?
    �
  • 1/1/2015
    guest
    Nicely presented 32NO.
    �
  • 1/1/2015
    guest
    Agree, and I like the Trojan Horse analogy.
    �
  • 1/1/2015
    guest
    Agree, great analogy.

    One way to battle dealership law is to circumvent it in clever ways, thereby both making those laws obsolete as well as without meaning.
    �
  • 1/1/2015
    guest
    While I think 32no makes some excellent points I think there is another better reason for the popup store. To explain this I'm going to give a brief bit of background here.

    As you're all surely aware multiple states have car franchise agreements that make it difficult or impossible for Tesla to sell vehicles in those states. Tesla has been slowly fighting back against those laws and trying to get them changed. This is a difficult and political process that the entrenched Dealer Associations have the advantage in, as evidenced by the failure of the recent push in some states e.g. Texas. An alternative way of fighting these laws is to start violating them and then going to court to change them. It may be difficult for the states to win in the courts over the long term, these laws are very likely unconstitutional. Telsa and it's supporters are not alone in that view, for instance the FTC shares that view.

    However, doing so has significant costs. Let's take a look at what happened in Utah when Tesla tried to open a store in Salt Lake. Tesla spoke with the regulators in the state and their initial conversations were that they could get licensed as a dealer. Once Tesla had spent $3 million to build the facility and then applied for the license (the order that the law requires) they were denied. If you haven't watched it already I'd suggest you watch the excellent video by Park City TV that covers the Salt Lake situation very well, I've embedded it below for your convenience.



    The popup stores allow Tesla to do two things that would be exceedingly expensive with a brick and mortar store in these states.


    • Allows them to test the waters in such states with a temporary movable asset rather than spending $3 million on a fixed asset. If the state pushes back Tesla hasn't wasted their investment.
    • Allows them to deliberately violate the laws in some states in the hope of legally challenging the laws without spending a lot of money on fixed assets.

    The state laws on this front vary a lot and this strategy may not be possible in all of the states but it will in some states. In Utah there is no exemption for temporary locations and all locations have to be subject to a dealer license. Granted at this point Telsa could just try this with the store they have prepared in Utah. But in other states they may wish to avoid this sort of expenditure while not being able to be sure they'll obtain a license. Then again they could try to invalidate just the portion that effectively prevents them from even advertising their products with these such locations in these particularly difficult states.

    In other states they may be able to use these locations to exclusively provide information but not actually sell the vehicles (e.g. Texas and Michigan). This is of course pretty much exactly what 32no is suggesting above. But it's certainly not the only way to use these setups.

    So I think the popup stores go beyond just being a way to generate demand in certain markets, but also potentially part of a legal strategy to invalidate the dealer franchise laws.
    �
  • 1/1/2015
    guest
    32no and Breser, thanks for your analyses. I am wondering if anyone has seen reactions from auto deal associations. This does strike me as a way to test the laws. And it seems that if dealers take Tesla to court on this, they risk violating first amendment rights. A temporary store is not actually selling cars as it leaves town long before the product arives. If dealers argue that Tesla needs a dealer licence just to show cars, then this interpretation could be used against the dealers themselves when they try to display their products off the dealer's lot, for instance at a mall, fair, sporting event or auto show.

    Another analogy here is that of gun shows. Gun shows exist at least in part to get around certain laws that govern firearm sales. For example, some states allow gun show sales to bypass background checks. Now I am not wanting to get into any sort of debate here about whether this is a good thing or bad. The point is simply that different laws can apply to temporary vending situations than apply to permanent stores. So Tesla may have done its homework on how to exploit these differences.

    In any case, it will be interesting to see how the NADA and the like respond to the Tesla pop up invasion.
    �
  • 1/1/2015
    guest
  • 1/1/2015
    guest
  • 1/1/2015
    guest
    yes- good point; Ford attempting to spin in order to attract the Electrical engineers it wants to hire apparently. Too bad... and a bit similar to Toyota. I was hoping Elon/Tesla mission to change the patent atmosphere would prove more fruitful. The more TSLA has to go it alone, the more suppressed the growth path imo. We're really going to have to get new players (Apple, Google, etc.) coming on very strong and very fast; or the legacy players will have to come around much faster (seemingly an impossible dream - like the song; and one I don't believe is possible).
    IMHO Tesla is currently growing the market of EV at VERY much too slow a pace to be transformative, much less disruptive.
    �
  • 1/1/2015
    guest
    Something interesting caught my attention as I was reading through Wait But Why's piece on Tesla: http://waitbutwhy.com/2015/06/how-tesla-will-change-your-life.html

    The article referenced was from the 2013 EV sales which I found interesting that even in 2013 Tesla had already captured 8% of the 50k+ Luxury car market in the US. That is pretty insane! I would love to have seen a redo of the 2014 numbers like they did here for 2013.

    But the really important thing I want to point out is if it is true that we are looking at a buyer pool increase of 125x going from the Model S to the Model 3, and if we assume that the Model S demand is going to be capped at 50k (even though it very likely will not be, but go with it...) then a 125x increase by bringing out the Model 3 would be a whopping 6.25M cars demand! I sense that Tesla is going to need a few more car factories very soon. ;)
    �
  • 1/1/2015
    guest
    That math doesn't seem plausible. $5K off a $75K vehicle doesn't seem as if it would suddenly open a door to a whole new buying audience, but $5K off a $25K vehicle certainly would.
    �
  • 1/1/2015
    guest
    Your skepticism is correct. It is extremely unlikely that the change in accessibility has such a simple relationship over the entire range of vehicle prices.

    Nevertheless, there also is a fair change that waitbutwhy's noted maxim has some basis in reality. If you consider a variety of data points, it may become a little clearer.

    Let's start with the absurd: the market for $2mm cars may be n=10. If you drop that price by $5K to $1,995,000, I'll bet you the whole $2mm that the market has not risen to n=20! Likewise, let's call the market for $5,100 vehicles to be n="X". If we apply that same price diminution, I'll likewise guarantee you the market for $100 vehicles to be a lot larger than 2X.

    However, along the more reasonably-expected portion of the price spectrum, that d$5K----->p=2X doesn't sound unreasonable. It probably fairly represents reality between the $20K - $60K marks.
    �
  • 1/1/2015
    guest
    Its actually simpler than that. The doubling of 7 times was based on lumping all 50k+ cars into one category and then dropping 5k increments from there. And if you go look at the data which was pulling the real numbers from US 2013 sales it pretty much doubled every 5k drop. So going from the 50k+ category to 45k doubled the numbers, then 45 to 40, and so on. The presumption is that after tax incentives and gas savings the 35k model 3 will equal a 20k gas car. So you are considering a drop from 50k+ to 20k and doubling 7 times in the process. Even if we only hit 30k as the real value (tax savings reduced and gas savings curbed) that would still be a doubling 4 times over!
    �
  • 1/1/2015
    guest
    I don't think you can use this formula for anything useful. Applied to the $2M car results in 2^200 or 1.6x10E60. Having said that, I won't be at all surprised to see 50x the current demand (number of units). I've been saying all along that Model 3 demand will be way beyond general expectations. Many, many people, a very high percentage of the people i talk to about my car, have told me they don't want a luxury car but they will buy one as soon as an affordable model is available. A crude market study but if only 2% of those people I talked with follow through with what they said it will be well over 50x current demand.

    I've said it so many times I sound like a broken record: Tesla's biggest obstacle is ramping up fast enough. Elon has said the same thing.
    �
  • 1/1/2015
    guest
  • 1/1/2015
    guest
    Interesting article at Forbes about dropping costs for renewable energy and EVs and growing market adoption during recent years:
    National Lab Director On Tesla Battery: 'This Is The Future, Now'
    (link, please click "continue to site" to hop over the advertising page and display the above mentioned article)

    Do not miss the charts at the bottom of page three;)
    �
  • 1/1/2015
    guest
    Mild-mannered Moderator chiming in -
    that link in post 2751 as presently set up takes the viewer to an unrelated and fairly undesirable site. You might see if you can fix it - thanks.
    �
  • 1/1/2015
    guest
    Thanks for the hint!
    Yes, following the link to the Forbes article the web site is displaying an advertising first, you have to click "continue to site" in order to see the article.
    I do not like this kind of advertising, but I accept that Forbes has to earn some money with advertising;)
    Added the info in the above post that the user has to click "continue to site" in order to see the article.

    Is that ok, AudubonB?
    �
  • 1/1/2015
    guest
    AdBlocker is particularly useful on the Forbes site. :)
    �
  • 1/1/2015
    guest
    +1. Forbes always has that ad as the first screen when you load their site, personally I believe it's fair if I want to consume their content.
    �
  • 1/1/2015
    guest
    If Tesla can't deliver on Autopilot will it cause a big impact on stock value? Based on the current blind spot monitoring function, I doubt Autopilot will function anywhere near promised.
    �
  • 1/1/2015
    guest
    GregTexas, I was at the annual shareholder's meeting recently where Elon said that an update to the software that will bring lane following will likely be released at the end of this month. Last week I drove 2,000 miles in my Model S with the adaptive cruise control, and I was not only impressed but the feature significantly reduced my workload while driving. Heck, that's almost enough driving to cross Texas! Add the auto-dimming lights and 2nd gen seats and the driving experience was exceptional. Elon has been testing lane-holding software in his personal Model S and must feel it is close to being ready for release if he said end of this month. Fully-autonomous driving is years in the future and will require significant redundancy of sensors, but autopilot should be with us in July. I wouldn't worry about a no-show.
    �
  • 1/1/2015
    guest
    Sorry I missed you at the annual meeting! Small correction to the above: IIRC Elon indicared Beta testers will have the upgraded software by the end of the month. I would suspect that the fleet will get it a couple weeks ( a month?) later.
    �
  • 1/1/2015
    guest
    Regarding it affecting the value... Long term not at all because the real money is going to be in driverless tech which is about 3 years away from being practical (price and capability) and then beyond that whenever people feel like they will trust it enough to allow it. Tesla should be working on that tech as well, but if this auto pilot stuff fails, or doesn't live up to the hype, then it will get fixed better when they release the next set of hardware on the car. So log term I don't see this as a big deal since we have time for it to come around.
    �
  • 1/1/2015
    guest
    (From short term thread).

    I'd actually be quite interesting in tracking down this pilot program. Those guys would be the first example ever of this type of coupling between the car and utility, whereby the utility uses the car battery for load balancing by directly controlling charging/discharging of the car, occuring in reality. If these thing happen in reality somewhere in the world spontaneously it shows that this phenomenon could be huge in the future potentially. And if it becomes a wide spread demand for these types of collaborations between car owners and utilities this market could be huge. As jhm has suggested, Tesla could make deal with their customers on selling them the car as whether to participate in this or not, and Tesla might be able to knock the cash price down $1-2k which could mean a lot for any customer and if handled right would mean huge uptake of this option, making Tesla the world leader in distributet load balancing services. Tesla can basically say to the utilities: "You want to rent a 50GWh battery (bit arbitrary number but in the ballpark) from us every night"? How much is this worth? Ballpark answer: ALOT.
    �
  • 1/1/2015
    guest
    It sounds as if that program only does charge rate throttling, not active discharging from the pack. That's easier since there is no potential added strain or cycling on the pack.
    �
  • 1/1/2015
    guest
    It's also easier, because going the other way implies "Vehicle to Grid", which does not seem to exist outside of demos and promotional videos (and university projects). Although, I suspect it's a regulatory challenge, and not a technical one.
    �
  • 1/1/2015
    guest
    Yeah this is just charge throttling, not discharge to grid. So only half of the implementation. It gives the utility a "dynamic range" of 0-22 kW. Whereas if the car could also discharge the dynamic range would be double; from -22kW to 22kW. That would be worth more to the utility.

    Still the aforementioned project would be one first step toward this, seeing as it's the utility controlling the charge rate.
    �
  • 1/1/2015
    guest
    Thanks for the correction, and I too am sorry we didn't meet this time. I sat directly behind the board members and enjoyed the heck out of the meeting. Elon and the rest of Tesla's leaders are rock stars in my book and it was better than sharing the bench with favorite NFL or NBA players. Very cool. We're not fans, though, we're minor players on the team. We bid the stock price up, especially when it is nearing the bottom of the valley, and are appropriately rewarded for our faith in the company. Our optimism and ideas are often picked up by the media, shared with greater audiences, and thereby multiplied a hundred or a thousand fold. Our willingness to believe in the team makes the process of raising capital easier for our stars. Our buying Teslas adds to the quarterly income and delivery numbers. Naturally, I enjoy meeting the other players, both TMC forum members and the Tesla top dogs, alike.

    Had the pleasure to meet EldestOyster at the superchargers.
    �
  • 1/1/2015
    guest
    Hi,

    http://m.barrons.com/articles/BL-SWB-38947
    �
  • 1/1/2015
    guest
    I'd love to read the original article that Barrons is using @MitchJi - do you have a link back to that as well? I didn't see anything in the Barrons article.

    This is a line of research that I see as invaluable - if we see the same level of brand loyalty and attraction to the car from other segments with Model 3, that we're seeing today with Model S/X, that will expand the market significantly (as the Barrons article notes). It would be nice to better understand the current data and assumptions.

    At least for me, this is an important part of my investment hypothesis, and being able to quantify it might do more than reinforce (maybe I am underinvested :D).
    �
  • 1/1/2015
    guest
  • 1/1/2015
    guest
  • 1/1/2015
    guest
  • 1/1/2015
    guest
    This is a nice survey, and matches my anecdotal evidence. I don't know where I'd be on the survey having never previously *owned* a car when I bought my Tesla... (I'd been driving other people's cars because I was refusing to buy a car until it was all electric... that makes for a 100% price premium on a Tesla for me, eh?)
    �
  • 1/1/2015
    guest
    Hi,
    c
    Sorry I don't have a link. Maybe you can google it.
    �
  • 1/1/2015
    guest
    A utility:
    - can buy a bunch of cheap Powerpacks and have 24/7 control of the battery location and state of charge
    - doesn't need manufacturer buy-in for G2V
    - is still selling electricity with G2V

    I'm with JB Straubel on this one: G2V will happen, V2G won't.
    �
  • 1/1/2015
    guest
  • 1/1/2015
    guest
    I gave that a whirl, and came up with about a dozen other news articles with the same quote and saying the same thing. But no luck getting back to the original research. I suspect that it's firewalled and private / paid content unfortunately.
    �
  • 1/1/2015
    guest
    Thinking of it like that you're probably right. In theory there is a case where the curves intersect and it still makes sense, but seeing how cost reductions in storage is going to quickly change the slope of the cost curve I think you're right that we won't get to V2G in reality.
    �
  • 1/1/2015
    guest
    Line#2 that is undoing some validation testing now,IIRC, is capable of producing 2-3k vehicles per week when fully operational. So, I am confident that TM can produce a combination of the X and S to reach their goal of 55k vehicles produced. What number are S vs X I do not know and frankly as an investor I do not care.
    �
  • 1/1/2015
    guest
    We will see if the Chinese do V2G.

    - - - Updated - - -

    I doubt they are production constrained now. I'm wondering if they will sell 50,000 MS this year. They can sell all the MX they can make this year.
    �
  • 1/1/2015
    guest
    The major part of the factory production - body in white assembly line (not to be confused with the general assembly line) - is currently running at close to it's max capacity, at more than 10 shifts per week. They are definitely production constrained. Until this constrained is removed, it is very difficult to say with certainty what is Model S demand really is. Given production constraint and factory backlog, though, the current demand for MS is definitely higher than 55-60K per year.
    �
  • 1/1/2015
    guest
    Have you been watching the vin #s, however? They are building some units in the 94xxx-951xx series and the max reported recent confirmation is 9541x. Either they held back on Asia and Europe builds or there is not really any visible production constraint that I can see. Vin #s don't mean much but a lot of them just confirmed and went to production recently very quickly. Many under 10 days from confirmation over to their start of production email (as tracked here on breser's sheet).
    �
  • 1/1/2015
    guest
    IIRC, TM has not yet started or is just starting RH 70D production. I do believe they are still production constrained with the S on line #1. I think line #2 may still see some production constraint going back to battery supply at that point. Do I believe that they can produce 50,000K model S this year. Yes.
    �
  • 1/1/2015
    guest
    The production constraint is there for *everybody* to see - it is linked to the maximum output of the existing BIW line. In the best of circumstances it is limited to 1000-1200 cars/week with OT. I have no way of estimating whether demand is significantly *more* than 55-60K per yer, but based on information we currently have MS demand is at least 55-60K per year.

    The limit of the production output at the existing BIW line (#1) is a direct evidence to indicate that factory is production constrained, while there could be multiple explanations for the VINs that are tracked on the Breser's spreadsheet.
    �
  • 1/1/2015
    guest

    Tesla has already removed "production constrained" from their 2015 Q1 shareholder letter.
    �
  • 1/1/2015
    guest
    I'm pretty enthusiastic about Model S demand @AlMc, but I'm thinking 50 million (50,000 thousand) Model S's is a bit more than either of us think are possible or demanded :) So I'm going with typo, and in full agreement that there is demand and ability to manufacture 50,000 Model S this year.


    There's a more general observation about demand that is worth making here. In most economics situations, the amount consumed is defined as the demand. Thus, the number of cars Tesla builds is both the supply and the demand, and for most situations, that is a good approximation.

    I believe that the Model S is different, and more specifically, that anybody who tells us what annual Model S demand is in 2015, or what the peak, or steady state will be at some imaginary time in the future, is guessing. That guess will be based on better or worse data, but its still a guess. Nobody, and by that, I include Elon and Tesla; nobody knows what actual Model S demand is. It's never been satisfied - not fully in all markets. Of course the day will arrive when anybody can get a Model S/X in 2 months, but that day is not today.

    For myself, I define demand as the number of cars Tesla would need to be building and delivering so that anybody in a served market can order the car they want, pay for it, and at least see it in production within 2 months. I believe 2 months is the target Elon has talked about previously. Of course, some markets take longer for the shipping to happen. That is at least my starting point. An obvious extension is that the car is available in every country of the globe, with a realization that will take awhile and that many countries won't be providing a meaningful demand. Are enough of the right countries opened at this point so that we're close? (I'm thinking yes, but wondering about some of the Middle Eastern countries; h'mm...).


    Here's an interesting thought - could worldwide Model S/X demand reach 500,000 units? There are certainly enough vehicles in that price range and body style being built and sold - what if Tesla took that much market share between now and 2018 / 2020 - is anybody modeling demand at that level? Could Model 3 come to market after a long delay, as Model X seems to have already, due to the popularity of the already available vehicles and the attempt to satisfy demand for the production car? Wouldn't that be an interesting problem to have - Tesla will start shipping Model 3 just as soon as a new auto plant is built or acquired for the car to be built in - Fremont is fully loaded producing S/X...
    �
  • 1/1/2015
    guest
    Anyone have a guess at this years total production ending Q2? Have they built 25,000 so far this year?
    �
  • 1/1/2015
    guest
    Hi,

    A summary of my long term thoughts on Tesla. I hope this is not too long for this thread - if the moderators want to move it that's fine.

    After reading about 1/3 of the previous posts in this thread I disagree with the theory that Tesla has quite a few large technology advantages. E.g. Superchargers, Tesla's advantage is not technology, its vision. Carlos Ghosn (Nissan could easily and quickly roll out competing technology) has been saying that the problem the Leaf faces is not limited range, but lack of charging infrastructure. He's wrong on the range and is obviously not even considering building a network of chargers of any kind. Nissan build a high speed charging network? Not even on their radar.

    I think Tesla's major possible technology advantage is (now or in the future) low level battery chemistry tweaks, due to their recent hiring of Jeff Dahn's team, and their earlier hiring of one of his PHD Students.
    http://chargedevs.com/newswire/tesla-hires-prominent-battery-researcher-jeff-dahn/

    The video below from 2013 details his work. In a nutshell it is pretty easy to quickly determine all of the performance characteristics of Li-ion Batteries, except for cycle life. He and his team have figured out a much faster method to determine cycle life, which is a huge advantage in developing and evaluating cell chemistries.

    https://www.youtube.com/watch?v=pxP0Cu00sZs
    Once again this comes down to vision, how many other car companies are even considering hiring a team of battery chemistry experts? This is very similar to SpaceX designing their own radio (see the quote below).

    I believe that Tesla's vision advantage is due to more than EM (they made a lot of excellent decisions before he joined Tesla). But even on this forum I think the EM advantage is not fully appreciated.

    http://motherboard.vice.com/read/how-elon-musk-willed-spacex-into-making-the-cheapest-rockets-ever-created
    The quality of the MS is amazing for the first vehicle Tesla built themselves! Normally the second and third times anyone performs a complex task they are able to make substantial improvements. At either the stockholders meeting, or the 2015 Q1 report EM stated that their MX testing is much more extensive than the MS testing due to lessons learned with the MS. IMO in the future Tesla EV's will be at least equal in bang for buck quality. Of course the first test of that theory will be the release of the MX. And I also believe based on what they have learned with the MX delays that there will not be any future delays of that magnitude.

    They are also making substantial improvements in the production process:
    http://www.streetinsider.com/Analyst+Comments/Tesla+%28TSLA%29+Optimism+Expected+to+Grow+into+Model+X+Launch%2C+Factory+Gearing+Up+-+Pacific+Crest+/10681668.html
    I think that in the long-term a six month delay for MX does not mean anything. The two important things are the quality and popularity of the car.

    http://www.fool.com/investing/general/2015/06/28/tesla-motors-incs-model-3-ambitions-more-realistic.aspx
    That might be incorrect. They could probably make more money by continuing to produce enough EV's to fund R&D and focusing on Stationary Storage. It would be cheaper and simpler to just produce Powerpacks and Powerwalls.

    http://rameznaam.com/2015/04/14/energy-storage-about-to-get-big-and-cheap/
    There is also a very large market for large UPS's (e.g. Data centers):
    Here's a youtube interview with Jim Chen, in which he states that EM said that the GF will reduce costs by 33% due to economies of scale, logistics (shipping costs), and efficiency (e.g. cells go from cell production straight to packs?).
    https://www.youtube.com/watch?v=pb4zGSDQZpM
    So I believe that we can safely assume that that they should get to at least close to 20% savings pretty quickly because in addition logistics and efficiency they should negotiate some long term supplier contracts at or very close to the start of production. And so by the beginning of 2017 their pack costs will be substantially less for Stationary Storage, and Model S-X. So pretty soon they will be able to either increase profits or reduce prices on all of these products.

    http://www.thestreet.com/story/13142191/1/tesla-motors-tsla-earnings-report-q1-2015-conference-call-transcript.html
    What do "relatively low margin" and "we don't have enough information to say exactly what that would be" mean? Tesla needs cash, and they are selling and have already produced some 100kWh packs that are priced at "deeply disruptive" levels. And they have already produced a huge number of almost identical MS 85kWh packs. The main differences are a different form factor and different materials (probably not using aluminum). It seems highly likely that EM has an excellent idea of their pack costs and does not want to not reveal them.

    If we assume 20% profit on the packs produced in Fremont (what would be their motivation to charge less?) these packs cost Tesla $200 per kWh, and by the beginning of 2017 they should have pack costs that are not more than about $140 per kWh. Which bodes really well for M3 pricing given that $100 per kWh is widely considered a price point at which battery pack prices achieve parity with gas/ICE prices and for Model S-X (85kWh for $11.9k) profit margins.

    Note that I assumed zero improvements for cell energy density and relative cell prices are almost exactly proportional to energy density, which is improving by 5-8% per year. So all things considered I think that $140 per kWh is a pretty conservative estimate.

    Thanks!

    Mitch
    �
  • 1/1/2015
    guest
    Just a note, they would have been very proud to have announced a 20% margin on the Powerpack. In the call there was a clear hesitation and pause to think through the answer, so I think the it's very possible Fremont Powerpacks are barely breakeven. My guess is that launching the Powerpack and building demand now is a strategy to minimize the risk of the Gigafactory and Model 3 line being brought up out of synch.

    Imagine they hit a last minute snag that delays M3 production ramp by 4-6 weeks - the GF wouldn't have to sit idle as a huge capital sync, it could be churning out Powerpacks at full speed instead.
    �
  • 1/1/2015
    guest
    More like "show Panasonic that there is a marked for this batteries even if TM3 is delayed or is a flop" to convince them to invest there part of the GF-I.

    Is it a coincident that Panasonic confirmed their investment in the GF shortly after the PowerPack event?
    �
  • 1/1/2015
    guest
    Tesla needs cash, but more than cash, Tesla needs cell demand. The more demand it has, the more keen the cell makers will be to invest. I think Tesla's being aggressive on margin for that reason.
    �
  • 1/1/2015
    guest
    I agree. TM had huge Q1 inventory numbers, which would seem to be batteries. I think in the short term storage is part of their strategy to safely order a huge number of cells from Panasonic and others. They can then throttle the storage business if needed to provide more car cells. The gigafactory has produced zero cells. Tesla's choices now are largely determined by their needs as the world's largest buyer of lithium-ion.

    I've said for months that powerpack and powerwall prices are 2016 numbers. Why not price based on future costs? They haven't delivered a powerwall yet. Inverter software isn't ready for the more interesting 7kwh powerwall. I doubt there will be a 7kwh powerwall delivered this year.

    This is all satisfactory, IMO. I don't see the point of investors overstating TM storage profitability in 2015-2016. What matters is how their choices fit into the greater medium term strategy.
    �
  • 1/1/2015
    guest
    Regarding possible demand for Model 3: In a way, we do not have to guess the possible future demand for Model 3 because we already have a country where the car is available. Norway. Buyers of the Model S in Norway do note have to pay fees or VAT, making the car much cheaper relative to other markets. In addition, GDP per capita in Norway is among the highest in the world, making the Model S even more affordable. The price of a Model S for a norwegian today is hence closer to the price of a Model 3 (around 35000 USD) for a US buyer in 2018.

    And what will the likely demand be for the Model 3 in the US? This year it looks like around 5000 Model S will be sold in Norway, in a country with a population 63 times smaller than the US. So this would hence translate into a yearly demand for the Model 3 in the US of around 315 000 cars.
    �
  • 1/1/2015
    guest
    Welcome to TMC Emerson. Your first post is very thought provoking.
    �
  • 1/1/2015
    guest
    Are you looking at the right line there? "finished goods" is up ~100M Q/Q but those are completed cars. "Raw Materials" is actually *DOWN* 20M Q/Q which would include any batteries sitting there waiting to go into cars. But you can tell that production is up just based on the "Work in Progress" as it is up 7M. It is tough to equate a number for how many cars that extra 7M$ is since you are just pricing the cost of goods there and not the labor/cost of putting those goods together, and certainly not accounting for them as their full retail buy-a-model-s price...

    So not clear what you are seeing, but if anything it would point to a shortage in supplies not an over abundance, since 20M$ is not chump change here in raw materials. Sure that difference could be anything... seats, computer chips, batteries, alluminum, tires, whatever... but unless you have some other metric to point to them being somehow up on batteries while massively down supplied on everything else... I'm not buying it. Also note, at the end of Dec 2014 the port strike was in full swing making it *harder* to get supplies from over seas, and that port strike was cleared up well before pulling the March 2015 numbers... so again, if anything those numbers should be up if there was supply sitting somewhere else just waiting to make it to the US... and yet, clearly the numbers are down, not up... so I don't know what these excess inventory numbers are that you speak of?
    �
  • 1/1/2015
    guest
    Inventory. A billion dollars of Q1 inventory isn't cars, so what is it if not batteries?
    �
  • 1/1/2015
    guest
    About half of it is cars (finished goods), actually.

    As of March 31, 2015 and December 31, 2014, our inventory consisted of the following (in thousands):


    ?
    March 31,?
    ?
    December 31,?

    ?
    2015?
    ?
    2014?
    Raw materials
    ?
    		$
    370,553?
    ?
    		$
    392,292?
    Work in process
    ?
    63,058?
    ?
    56,114?
    Finished goods
    ?
    492,645?
    ?
    397,318?
    Service parts
    ?
    128,584?
    ?
    107,951?
    Total
    ?
    		$
    1,054,840?
    ?
    		$
    953,675?
    �
  • 1/1/2015
    guest
    How many cars would that represent?
    �
  • 1/1/2015
    guest
    Pinky_zpsc2ziqowa.jpg
    �
  • 1/1/2015
    guest
    hahaha, that's awesome!
    �
  • 1/1/2015
    guest
    JB as pinky? C'mon.....
    �
  • 1/1/2015
    guest
    For anyone that thinks TSLA is overvalued.....

    In March of 1996, I talked to a friend who was a hedge fund manager about buying shares of Starbucks. His retort was 'that ship has sailed. Great product, way overvalued.' Here's a chart of what SBUX has done since that time:

    Starbucks 1996 - 2014

    Yep, that's close to a 40x increase. The lesson I learned is, if you believe in the product and in the long-term success of the company, be willing to pay a premium for the stock.
    �
  • 1/1/2015
    guest
    Yeah, for me it was thinking about buying Apple stock back in Nov. 2004 when I bought an iPod mini. The stock was already doubled so that seemed overvalued. Oops... Anyway I don't want to make that mistake twice.
    �
    • Người đăng: vào lúc

    Không có nhận xét nào:

    Đăng nhận xét

    Đăng ký: Đăng Nhận xét (Atom)