1/1/2015
guest Yes, those are the numbers I remember as well. So unless something has changed that's what I would base my estimates on.�
1/1/2015
guest ThanksI've written about this topic several times at SA (see sig)
�
1/1/2015
guest I think this line of reasoning results in double counting of $. Ostensibily, you are paying $2000 for the supercharging for a Model S. That money is counted in the average sales price and adds to the various cash items on the accounting books. this $2000 isn't specifically earmarked for supercharger construction. you can't say that SC's are paid for by each car sale and then not change the other accounting items.�
1/1/2015
guest While in China a few months ago, Elon suggested another factory or two in 3 to 4 years out. He was very brief in his comment, and there was no indication whether that meant beginning work on a factory at that point or targeting that point to open one. I suspect the former, which fits with common sense as to learning from making GF1 before diving into GF2 and GF3. What's more, at the time when he was asked about a potential Chinese partner, he said Tesla was a bit young to be thinking about dating yet.
Apparently, Tesla discussed this a bit more with Deutsche Bank.
"Through our discussions with Tesla management, it has become increasingly that the company is already pursuing the acquisition of additional assembly capacity. While we do not expect any news on this front just yet, we believe that the announcement of one or two additional assembly facilities is likely (each with capacity in the 200,000-500,000 units) by the time that Tesla launches production of its Model 3 (in early 2017). Consequently, we would be surprised if Tesla targets anything less than 1 million units annually by 2025."
http://news.investors.com/081114-712679-deutsche-bank-upgrades-tesla-expects-production-surge.htm?ven=yahoocp&src=aurlled&ven=yahoo
This seems to be following a pattern we've seen before with Tesla, for example with the Gigafactory... first sort of a throw away mumbled line about possible future major initiative, subsequently repeated, and then revealed as a focus of the company. It may be 1-2+ years before we get to that last stage of this pattern, but I think we'll continue to hear hints. It underscores the folly of assuming Tesla's rapid growth phase will end with 500K/year production at Fremont.
Fwiw, I believe even Adam Jonas only models 1 million in production for year in 2028 (I've been out in front of him on this... for nearly two years I've been estimating 1-1.5 million/year by 2025�
1/1/2015
guest I have noticed this too. He mumbles something "crazy" and then later it is revealed to be a real, funded program. Listen to the mumbles.�
1/1/2015
guest The most important parts of the Conference Call transcripts are [inaudible]
That's just how Elon is. I've come to understand that he is one you should most of the time not take With a grain of salt at all.�
1/1/2015
guest Except for probably timelines�
1/1/2015
guest This conference call and letter was full of about 3X the nuggets of most calls. for about a week I've been meaning to make a list of key points indexed to the time they were discussed on the call for future reference... will try to find some time in the next day or two.
These nuggets, among other things, make me more confident that the stock can support a 30+ pe for many years to come. In a bear market it could dip below that, but in average to bullish conditions I think a 30+ pe is realistic into the 2020s.�
1/1/2015
guest
"Well, you see we have also been spending a lot of time on [inaudible] teleportation [inaudible] quantum [inaudible]"�
1/1/2015
guest Interesting quote from CS report:
"Electric vehicles are inherently better than Internal Combustion (ICE) vehicles," said Gaives. "If Tesla can get to cost-parity with ICE and still offer $1,400-$2,500 per year fuel savings to the consumer, it won't be a fair fight."
Read more: http://www.benzinga.com/analyst-ratings/analyst-color/14/08/4780301/credit-suisse-initiates-coverage-on-tesla-says-its-not-a#ixzz3AN0g8cOl�
1/1/2015
guest It really wont! That is why they want to get the battery cost down to 100$, even 150$ would be a huge help. This is going to be so much fun watching this massive technology shift�
1/1/2015
guest And still nobody realizes that Tesla's real opportunity is in the battery storage market in the energy industry...�
1/1/2015
guest Has anybody here laid out the potential for that marked? Lots of people say it is HUGE, and I don't doubt it, but it would be nice to have an idea of how huge. What makes it a greater opportunity than car sales in the millions?�
1/1/2015
guest Higher margins (50% gross margins or more possible) and no service needed. No service center infrastructure, no superchargers, no hundreds of moving parts like in a car. Less repairs than a car.
Samsung is selling storage units for Japanes solar farms at $963/kWh. You can do the math from there, it is very simple...�
1/1/2015
guest Thanks! The price Samsung is charging is exactly what I needed. However, it seems a little bit wierd that you can have higher margins on just selling battery packs than an entire car. In lack of any competition on storage units and ICE competition for EVs I see why it is like that for now and will probably stay like that until there is no supply constraints for batteries.�
1/1/2015
guest Pretty much every household has a car, if every household would have a storage unit too in a bullish scenario (wouldn't it be more efficient to have grid storage more centralized?) it still wouldn't come close to the auto market as I see it, as the battery is only 20-25% of the cars cost and the battery for the household would probably be significantly smaller than the car battery. I'm also pretty sure you won't see even close to 50% margins on a commodity like batteries in the future.�
1/1/2015
guest I believe there is a huge a huge market for battery storage on ships and offshore structures. By having diesel-electric propulsion you save a lot of fuel. And those battery packs need to be massive�
1/1/2015
guest Samsung is charging that price for a 20-year lifespan. It will replace any bad cells over that time period, so there is some kind of warranty/service included in that price.�
1/1/2015
guest Pretty sure this will still be a niche compared to the grid that controls home electricity usage and commercial entities on land, with the home usage being the largest consumer, this is just a hunch though, I am sure the numbers are relatively easy to find.�
1/1/2015
guest I disagree with your line of thinking:
The battery storage market is a lot better business, because it doesn't require the huge infrastructure that building and servicing vehicles requires.
And yes, TSLA will be able to charge 50%+ gross margins since they will be by far the lowest cost battery storage producer in the world. If they can make batteries at $100/kWh and the rest of the world is making them at say $200/kWh, then TSLA can Charge $250/kWh and make a 60% gross margin, while the rest of the world is selling at the same price for a 20% gross margin.
Those margins will come down over time, but still there are a lot of benefits to simple selling batteries over cars. The only reason Tesla is selling cars is because there is not enough demand for battery storage today at current prices, so TSLA is doing things based on market conditions.
Selling cars might make the top line look better, but selling batteries is significantly better for the bottom line. And the bottom line is all that matters, since that is what goes to the shareholders.�
1/1/2015
guest Agree, I see the word huge came twice there unintentionally. There are a lot more households than ships�
1/1/2015
guest I think the first part of that statement is the part that's really not understood by the public. Electric engines are simply superior (that's why they're used for almost everything instead of ICE). I certainly had no idea before I looked at Tesla. Or, more accurately, it wasn't that I didn't know in theory based on facts rattling about in my head, it's that I never gave it a thought at all.
Most EVs just aren't good enough to get the general population to leave the devil they know (ICE) and go look at them. That's not to say something like the LEAF isn't good, it's just not good enough to get people to break away and reach mass appeal against it's ICE competition. Once EVs break down the cost, range, and recharge time barriers (much like the S has done relative to it's competition), it's going to be a quick tipping point.
One of the early Model S reviewers (Dan Snyder maybe?) said, sort of prophetically, that he "couldn't shake the feeling of a corner turned". Once the Model 3 comes out, it's going to become startling clear that the entire market is ready to make that turn.�
1/1/2015
guest So you are saying that the more simple the industry the higher the margin opportunity? I am confused, it is generally accepted that a commodity will be sold at a lower margin compared to products with more qualitative differentiation.
I agree that Tesla has an edge in the battery business, but I think producing at half the cost of competitors is being overly optimistic, LG just announced plans to produce a battery giving a car a 200 mile range intended to be sold around $35k. A part of Teslas battery edge lies in the quality of the battery as I have understood it, and that part doesn't really have much value in storage as you won't need to pull out large amounts of electricity at a time.�
1/1/2015
guest That's what I was wondering about as well, but this situation is a little bit special because there are no true competitors in the battery storage industry so far. In the car industry Tesla is competing with ICE's, not the Leaf and the i3. Tesla's battery management systems are superior everything else making it possible to use cheap batteries. If it would stay like this forever then Tesla should try to use all it's batteryproduction for storage units, but sooner or later there is going to be competition bringing the margins down to a more sensible commodity level. After all, the chemistry in Tesla's batteries is not Tesla's edge.�
1/1/2015
guest Just doing a bit of back of napkin math.
Let's say over the next few years/decades renewables+batteries because economically attractive, and we transition over 20 years to a system that supports a stationary storage buffer of about 5% of daily energy usage.
Using 143,851 TWh/year from World energy consumption - Wikipedia, the free encyclopedia
143,851 TWh/year = 394,000,000,000 kWh/year * 5% = 19,700,000,000 kWh stationary storage
Let's say that storage is introduced at a steady pace over twenty years, then each year there's a demand for 985,000,000 kWh stationary storage. Let's say they've streamlined the supply chain with multiple gigafactories, and have a $50/kWh cost vs $125/kWh pricing.
$125 kWh x 985,000,000 = $123 billion per year revenue
$75 x 985,000,000 = $73.9 billion per year in gross margin
Of course, it's going to be production constrianed to the ability of Tesla to scale up to this. But like Elon alluded to before, if stationary storage becomes economically attractive the demand will be quasi-infinite for decades.�
1/1/2015
guest You are also underestimating the fact that TSLA is specifically building a $5b, 35GWh gigafactory to minimize costs as much as possible. Nobody else in the world is doing that, so competitor's costs will not be anywhere near as close to Tesla's. But even if they were, there will still be a huge battery shortage at $100/kWh, which will naturally lead to higher margins for the first years, if not decades.
Also, we know that Tesla had a meeting with Apple. Everyone was speculating takeover bid. But I think it had to do with creating solar cells etched into glass (or sapphire to be specific). Apple is working with GTAT on a sapphire project, but I have a feeling that it will be a lot more. Apple also is working on etching solar cells directly into the sapphire of the phone. When the iphone6 comes out in 4 weeks, I am certain that you will see a sapphire screen. Then in a couple of years, you will see sapphire front and back. This will allow them to etch solar cells directly into sapphire and make them invisible. Your phone will then charge by itself any time you lay it down on the table; or at a minimum keep the battery from draining in stand-bye mode.
GTAT has this one of a kind Hyperion technology that can revolutionize the world. They can use it to creat ultra-thin 20 micron silicon carbide (SiC) substrates; that can be used to grow graphene electrodes that would make batteries 10x better. This could be a potential gamechanger; and I fully expect Elon Musk to be working with GTAT in using their technology; especially when it comes to SCTY but also for Tesla. Also, I would not be surprised to see TSLA incorporate solar cells into the glass of the car, and we will have a self-charging car in a few short years (maybe decade).
The future is bright, and a lot more "science fiction-ee" than most people can imagine.�
1/1/2015
guest The battery edge Tesla has is that they are able to use one of the best "quality" chemistries (particularly superior in degradation/cycle life) and innovate in the pack in such a way to produce a safe and efficient pack that's still multiples cheaper than competitors. Of course, that's not to say others can't catch up.�
1/1/2015
guest Thanks for running the numbers, so now we know what I am alluding to here.
I would just point out that $50/kWh production cost is very ambitious since Elon has said that a battery is made up of $60-$80/kWh of raw materials. I would shoot for $80-$100/kWh cost and $150-$200/kWh installation cost in the long run. Initial margins will be a lot higher and then slowly taper down over many years, but will be more than offset by higher volume.
Also, I think you meant $73.9b in gross profit and not gross margin. Sorry, but the accounting nerd in me... :wink:�
1/1/2015
guest
Until someone else starts producing cells on a Gigafactory scale Tesla will indeed have a large cost advantage. I 'm not however convinced we should expect a business with sustainable 60% margins. Yes, Tesla's cost per kWh for packs blows away other automakers but that's because they're all going for larger format cells... none of them have gone for the small cells Tesla has made. I've seen a variety of thoughts on why this is so and what I've seen centers around the other automakers having perceived challenges with using small cells for a pack in an automotive application. No such issue with grid storage. Thus I only see supply constraints limiting the other battery producers from jumping into storage if they see Tesla & Panasonic making such fat margins. Again, Tesla would continue to do quite well here, likely for many years to come, but it's I just not clear to me 60% margins would have a long shelf life. I see it depending on the size of demand. If demand for grid storage is massive at $200-300 kWh as Tesla gets down to $100-150, your 60% margins may have legs... it would simply take demand large enough that even with Tesla/Panasonic and all the competition going after the demand at full tilt the grid storage market remained supply constrained for decades. I think this is possible,�
1/1/2015
guest Sounds cool, but I think to keep the solar cells at roofs are better. You want them to be positioned perpendicular to the sunlight in order to maximize the flux. You also want them to be positioned at a place where they receive sunlight for the longest time possible each day. Hence, a car parked in a garage is a waste of solar cells or solar cell roads. A car has a far too small area to generate enough energy to make a real difference�
1/1/2015
guest Again I would argue that 60% gross margins for a commodity is extremely optimistic, you also imply that Tesla will have a market share of 100%, again very optimistic. Your math uses 5% of a years energy usage, or more than 18 days of energy usage as buffer, I don't know if this is necessary or not tbh, but either way overall a very optimistic outlook. Say Tesla had 50% market share which I still would say is optimistic and a gross margin of 30% (also optimistic imo), then revenue would be $61,5B with $18,45B in gross profit. I think Tesla's car sales will crush even this optimistic storage forecast going well into the hundreds of billions in sales with time.�
1/1/2015
guest Rear windshield
- good sized area of glass, especially in semi-kammback aerodynamic cars
- less subject to damage that requires replacement, so a higher cost isn't that big a deal
- already has power for heating
- ... so transparency is obviously not such a big deal
- allows a lot of heat into the car; reducing heat helpful in hot locations
PiP uses solar to run a ventilation fan and keep the interior temperature close to ambient
Leaf uses solar to trickle charge the 12V
I think integrating solar into the rear windshield would be a good idea. Then there are panoramic roofs with more area.�
1/1/2015
guest Very rough back of napkin math, with very basic assumptions. But I would argue these are one *plausible* outcome, with my justification below (of course, there are many other ways this can play out).
If others can barely fathom producing storage solutions at $100/kWh cost in 15-20 years (hence the analyst "whoa" on the recent Q2 call), then it has several implications.
Let's say at $125/kWh storage, the solar+storage solution becomes economically advantageous to the traditional grid, with a huge amount of demand there. While others are slowly weening down their cost basis towards a competing product, Tesla would be the *only* supplier able to supply the market at that price, independent of Tesla's cost basis (sub $100/kwh). Of course in the longer term competition will bring the percentage margin much lower, but that could be many years. Assuming equal technology improvements, someone else will have to produce at the same streamlined scale to bring margin pressures.
However, I don't see the relevance of days-per-year metric of storage requirements you mentioned. Renewables like solar only produce power part of the day (and could produce little to no energy for periods of days due to weather), which is why storage is needed in the first place... in a world with purely renewables it would be like 30-50% storage requirements. An ideal long term balance would still have some fossil fuel and nuclear sources as a base load to reduce storage requirements. If renewables become economic without subsidies, 5% storage is not an unreasonable estimate if you look out a quarter century.
I would argue the realistic market share Tesla can capture with autos has a much lower ceiling (Toyota has < 10% market share and has a huge lineup of products), due to styling and personal preferences.�
1/1/2015
guest We are getting pretty off topic, but remember even ignoring renewables there is a market for storage. Homeowners and businesses can avoid peak useage fees in the summer and/or power companies can use them to similarly bridge peak times. iirc, a typical fossil fuel grid has power plant capacity that is idle 95% of the time and only needed for that last bit of peak demand. Eliminating the need for that last 5% is disproportionately valuable.�
1/1/2015
guest eepic, you were the one using 5% of yearly energy consumption in your calculation, you wrote 5% of daily energy usage, but you are clearly using 5% of yearly
Tesla might be able to sell batteries for storage with a high margin for 5 years or whatever till competition arrives (which obviously will happen relatively quickly if they sell commodities with a margin of 50%) but the profit opportunity of that relatively short period with Tesla low production earmarked storage is low looking at the big picture so it is not something I emphasize in my evaluation of Tesla.
30-50% of yearly energy consumption stored as a buffer? That seems quite high to me, I think there will be other solutions for when solar/wind doesn't produce enough like nuclear as you say, or fossils as a backup in the rare cases where shortages happen to keep the storaged buffer at 5% of yearly usage max.
I guess I agree, but the thing is that the auto industry is enourmous, it's $2 trillion which is much larger than even your highly optimistic storage estimates, and the auto market is expected to see a significant growth in the coming years. Looking at how innovative Tesla is in its business and their quality of execution compared to Toyota with their horribly bet on fool cells I do think Tesla can achieve a higher than 10% market share in time, and with higher margins than what Toyota is doing given their vertical integrated business and head start in the new technology.�
1/1/2015
guest Well, you can run theoretical numbers and there's a reason why they'd do bulk or sell through solar installers.
Let's consider a 5kW/10kWh system. (Tesla specs C/2 for their static storage).
Capacity: 10kWh * $125/kWh = $1,250
Power: 5kW * $0.10/W = $500 (JB Straubel, Keynote Q&A)
Total: $1,750
Cost: $0.35/W
Life: 10 years
25 year cost: $0.875/W
Even at that price it's not that super cheap, and that price excludes 2.5 x delivery, installation, margin; and then also consider % usable, degredation, charge/discharge loss and utilization. I see most play in areas where per Watt installation costs would be lower, and that's in larger storage for business and utilities.
Under the current retail pricing of electricity, there may be more room for home storage, but I'm sure utilities would act to shift the pricing for people who install solar+battery. But, the good thing is that any pricing shift would favor PEVs and help Tesla. There might be a large battle overcoming the lobbying power of monopoly utilities, although I think that globally there would be some keen markets, enough to build volume, and get other power-hungry businesses onside.
While Tesla wouldn't necessarily capture a large percentage of auto sales, they can be a drivetrain supplier. If you look at car components instead of cars, there are indeed suppliers with high market share.�
1/1/2015
guest Even if it is no mystery how to produce the batteries, if it is economically impossible to raise the capital (i.e. hundreds of billions of dollars, or even a trillion dollars or more, (see below)) to build up supply to meet demand these batteries will not be a commodity in practice... that is Tesla will continue to command very high margins. of course, if it takes far more modest capital to build supply to meet demand, yes the batteries will drop toward commodity pricing.
For perspective, it's easy to do some back of the napkin that at 100 million vehicles sold per year, and $5 billion to build infrastructure to make batteries for 500K vehicles, it's going to take a trillion in investment for supply to meet demand (once nearly everyone is convinced EVs are superior to ICE). I used the car example because they are round simple numbers and I'm familiar with them, but if demand is large enough for grid storage the same principle will apply. That is, if it takes something like a trillion dollars in capex to build enough infrastructure to build battery supply that meets demand, Tesla will not have its margins squeezed. I think the key question is figuring out the arc of demand for the storage application over the coming decades at the kind of pricing that will be attractive to Tesla and the buyer.�
1/1/2015
guest Apologies, typo on my part! The 394,000,000,000 kWh is per day (143,851 TWh/year divided by 365 = 394 TWh/day), no change to the rest of the numbers. But if there is enough demand that production can't even be met at $125/kWh, even if competition can scale up to producing tens to hundreds of GWh a year, they would just sell at the same price rather than undercut. (Again, this is a hypothetical example price for the sake of discussion)
If we take the limit of 100% of world energy production being solar/wind, then I believe we would need quite a bit of storage as a percentage of daily usage (30-50% of daily usage on average). In climates where solar can be less reliable (i.e. not California), there'll be a greater need for storage. But as I alluded to earlier the ideal long term mix would still have some traditional "always-on" grid sources that provide a steady production for base power load 24/7, but arguably the renewables can be the majority.
@ItsNotAboutTheMoney - completely agree that at today's prices the economics for solar+storage does not make sense in an unsubsidized market. My (admittedly optimistic) argument is based on the premise that unsubsidized solar may become more cost efficient than traditional sources at some point, although this is straight from the horse's mouth (below).
"Goal is for unsubsidized solar power to cost less than grid electricity from coal or fracked gas"
Twitter / elonmusk: Goal is for unsubsidized solar ...�
1/1/2015
guest Steve, with your math you are implying that the storage industry will have a size of $1T a year, that is insanity. The capex requirements will definately be high in order to meet demand in batteries and will probably push margins up temporarily due to constrained supply, but if this happens then big investments will start to flow in from several companies trying to get a piece of the pie, thinking margins on batteries will be extremely high for decades to come due to supply constraint is unlikely. Just look at how fast the supply caught up in solar despite the industry growing rapidly actually creating an oversupply resulting in paper thin margins and bankrupt companies (I don't actually think this will happen but it's just an example to show how quickly supply can catch up).
- - - Updated - - -
Ah, I see, makes sense now. Well that was positive as I am a happy long as we probably all are here, then I guess you are right in that energy storage could get to $123B or even $200B (consumption will probably rise) in 10-15 years when solar/wind really catches on, which I do believe it will looking at how fast the solar prices are dropping. I still think margins will be around 25-30% at best but it does create a significant opportunity for Tesla, that is very far from priced in at this point.�
1/1/2015
guest
I think you now see that I was not saying that... I was saying the cost to build the infrastructure (i.e. Gigafactories) to produce enough battery packs to meet upcoming battery storage demand was the key question. if that cost, was in hundreds of billions of dollars, or even a trillion dollars (which for perspective is a back of the envelope estimate of building up enough GFs to convert all vehicle production to long range EVs), we wont see commodity prices for perhaps decades... if the that cost is more modest, i.e. tens of billions of dollars, competition would likely start squeezing margins on a Tesla energy storage business before it ever grew to the size of Tesla's auto business (not that the margins would necessarily be squeezed to the point that Tesla wouldn't want to keep growing the business).
this is why I think the key question is, what do we think the upcoming battery storage demand will be.�
1/1/2015
guest Steve, you mentioned a cost of a trillion dollars to build out factories for energy storage, and capex happens to coincide with the yearly revenue for the factories as 35GWH/y = $5,25B in yearly revenues at $150/KWH, I still think this is almost an order of magnitude too high compared to what we might see in a decade if the stars align.�
1/1/2015
guest Can we move the battery storage topic somewhere else please? Let's get back to short term TSLA price analysis. I guess the CS upgrade wasn't too exciting for investors today.�
1/1/2015
guest PF, you can reread what I wrote, I described a range of costs to build out the factories to meet demand for energy storage from possibly far more modest than a couple hundred billion dollars to possibly possibly a trillion dollars.
Do I know what the demand will be? No. That's why I describe such a large range, and keep saying that the key question is, how big will demand be. If the potential market is as large as the potential market for batteries in EVs (which I believe Adam Jonas suggested this past February, and I think JB Straubel has hinted at), than we would be talking about a trillion dollars to build up enough GFs to meet demand. Again, I don't know what the demand will be, and I'm not going on anyone else's unexplained say so, nor suggesting that you do that... but I don't think my suggesting that range is "insanity," and I do think it is unclear that the batteries will face commodity pricing pressure anytime soon.�
1/1/2015
guest I don't think this will happen. The chance for it to happen has passed. I doubt model x will start with excellent margins and by the time it's up to speed the model 3 will be too close to have 4 quarters of 30%. If the model x is so similar that they don't have to take time to get up to speed on margins, or they can raise the price a bit or something, then maybe there's a chance. But I doubt it.�
1/1/2015
guest Well you did mention a trillion a year in your post even if it was at the high end, now I think that is unrealistic even though I hope it too be true, either way I guess you are right that insanity was a wrong word to use.
Now back on topic I still think we will push through the ATH to $280-300 in the coming months. Like some have mentioned the restistance is propably shorts eyeing an opportunity at the ATH to sell as they don't seem very good at coming up with reasons to support their view like that guy on CNBC, the "general public" is also just so bearish on the stock, anyone watched some Tesla threads on Reddit? Wow. There is propably also a lot of profit taking as the stock has been very volatile so in fear of losing all the gains people take some money off the table, even here on this very bullish board that have been done by some. I also think there are a lot of buyers out there willing to pick up shares on even smalls dips creating a floor around 255-260 which will push the stock higher eventually, I am not selling my $220 sep calls just yet.�
1/1/2015
guest PF - I believe SteveG3 is attempting to explain that the stationary storage market won't be subject to pricing commoditization until there's capex in the trillion(s) spent to satisfy all demand at the price point, by Tesla and/or others who can compete. That's different than saying Tesla will reach that size in the next decade (or ever). In other words, Tesla and others can all happily sell everything they can at the same price without having to undercut one another, until they have the capacity to produce more than is demanded by the market.
Btw here's a relevant short-term tidbit for everyone else in this thread, sorry for the off-topic discussion (and mods if you have to move it)!
"GM Global Product chief Mark Reuss said the Detroit auto maker "absolutely" sees Tesla Motors (TSLA) as a competitor and GM engineers have spent time driving its cars and visiting the electric-powered car producer. Reuss said he anticipates TSLA will introduce a lower-priced model, and he believes TSLA will be successful. As for GM's Chevy Volt, Reuss said the company needs to do a better job of marketing the plug-in hybrid that goes 40 miles on an electric charge before switching to gasoline. He wants to target those who like the car and get them into it rather than just mass marketing."�
1/1/2015
guest I don't see why people talk about cost parity as if it's some far-off thing. What cars in the Model S' price class compare to it at all? There's nothing. It handily beats all competition in just about every measure, even cars which are much more expensive (e.g. Maserati Quattroporte). Hell, Motor Trend just published a comparison of the Model S vs. the i8, where the i8, a sportscar which is 1300lbs lighter, has 3 less seats, has little cargo space, and costs 40k more (i8 base vs. P85 base) *barely* beat the Model S in terms of performance. I'm talking identical 0-60 and quarter mile times, similar braking (Model S actually won this), and the only reason they gave it to the i8 "by the slimmest of margins" is because it feels better to drive and did the 25s figure 8 .2s faster. And of course in every other measure, except the slight beat in performance, the Model S is better, which MT acknowledged and gave the S the prize.
And this is against BMW, one of the companies taking electrification more seriously. And who have been around for 100 years making excellent cars. And they still barely squeaked by with a car that has huge natural advantages.
And we talk about cost parity? What cost parity? It's already here. It's already *beyond* here. And it's not just the Tesla, you can lease a Leaf for 199 and it's a much better car than anything else at that price point. The Fiat 500E is priced between the Pop and Abarth, and is faster than the Pop and slower than the Abarth, and at least as fun as the Abarth is (depending on the review you read). Fiat didn't even want to make the damn car, and yet it's still a fantastic car. Of course we're already at cost parity. And then the cars cost less long term and are more fun...so we're at better than cost parity. QED, conversation over, everyone go buy an EV now.�
1/1/2015
guest I realize what he means, I wrote this on the matter of demand/supply as the battery production ramps up
A trillion in capex means more than a trillion in yearly revenues though, so I don't find that likely, maybe if spread over the next 30-40 years.�
1/1/2015
guest Who are these people who keep their phones outdoors on tables, and not in their pocket? This is impractical and costly, and nobody will make a phone like this. If anyone does, it will be Samsung, since it's a silly gimmicky idea which nobody needs or will use (which is kind of their thing).
No, there won't be a solar car. The only way we could have a solar car is if a) solar cells get extraordinarily efficient, b) crash safety regulations are largely eliminated (could come when we near 100% self-driving cars) AND c) the public completely rethinks what a car is (single occupancy, self driving, drafting, prone seating position, tiny tires, swoopy shape, lower speed/performance, no city use, etc.). Or d) the sun goes nova, thus drastically increasing solar radiation per square foot, because until that happens we have to work with what they have - which just isn't enough to power a large fast metal machine with a bunch of people in it.
And etching vertical surfaces with solar won't do anything, since vertical surfaces don't get sun, horizontal surfaces do.
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While your demand numbers are interesting, you're suggesting a profit of 150% ($50/kwh cost, $125/kwh pricing). That's not going to happen.
By the way, Goldman's report talked about what they think stationary storage will be worth. Perhaps you will think these are not-optimistic-enough, but here you are: https://dl.dropboxusercontent.com/u/28705686/213091911-Tsla-Goldman.pdf
They say it's worth $20/share as of when the report was written. It's a good report btw, I think people should read it all the way through if they haven't.
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Well, this will definitely happen, as anyone who's seen the cost curves of solar over the last decades can tell you. And it will happen soon. It's already happened in some places (with lots of sun and above-average electricity costs)
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Not sure which Reddit Tesla threads you mean, are you referring to r/investing? Because if so, that place is crawling with "value investors" who think anything over a P/E of 1 is overvalued. They can safely be disregarded (or laughed at).
The rest of the site is overwhelmingly pro-Tesla, and rightly so, even if they're not as well informed as we are. Even the teslamotors subreddit has a lot of misconceptions, but they're generally positive misconceptions I guess. Except the "Elon says it's overvalued" people, who are parroting an irrelevant point they don't understand which is based on a misquote from about a year ago (so basically, there's nothing useful about it).�
1/1/2015
guest Agreed, it doesn't make much sense to be lugging around a solar panel on your car for the foreseeable future. It makes a lot more sense on your roof instead. As an aside, JB was heavily involved with the solar car race team at MIT so he knows all the challenges and tradeoffs.
I'd love to read the report, could you relink (doesn't work)? And just to reiterate, I was laying out an optimistic case with some ballpark numbers as a response to "why are analysts/folks so optimistic on the potential stationary storage market?".. not saying this will necessarily be the case.�
1/1/2015
guest Relinked, here again
https://dl.dropboxusercontent.com/u/28705686/213091911-Tsla-Goldman.pdf�
1/1/2015
guest Short-Term TSLA Price Movements - 2014
Whoah guys enough with the chest pumping. The discussion on a future energy storage market is really interesting, perhap it could be cut in to a separate thread.
Sleepyhead I too was surprised to read your vision of a car with integrated solar panels that charges itself in the nearish future... Even with 100% theoretically perfect solar panels and the car outside 24/7 on the equator you wouldn't meet even 5-10% of the average person's energy needs for a car??? Or I'm I missing something here?�
1/1/2015
guest Short-Term TSLA Price Movements - 2014
The Fisker had a rather massive panel and was able to produce enough energy to go 200 miles......per year. Assuming those cells were 15% efficient, let's now say we get ourselves to 100% efficient panels (which is impossible). That makes ~1,300 miles per year. That's a nice chunk, sure, but it doesn't make for a solar car. Also, the Fisker panel was going to be a $5k option and then they realized nobody would buy it so they made it standard. The cost will come down, efficiency will go up, and attaching it to a less overweight car will get you more miles from it, sure, but add those things up and you still have a solution which is at best only a partial reduction in (already low) energy costs.
Solar cars just won't work, unless we vastly reconsider what a car is. Now, this might (and probably will) happen over the course of decades, but no matter what it will always be more practical to have solar panels on the roofs of buildings (which are pointed towards the sun and don't park in garages, under trees, downtown next to buildings, don't drive under overpasses or next to big trucks) than in the windows of cars.
Being bullish on solar (as I am, since all my stock holdings outside of Tesla are solar companies, and my holdings are leveraged) does not mean you need to be unrealistically bullish on solar. Solar phones, solar roadways, solar cars etc., these are not realistic. An almost entirely solar grid, backed up by some nuclear and by energy storage, all cars running on solar power through batteries, possibly some v2g, and doing all of this well before anyone thinks is possible, that IS eminently realistic, as all the cost curves of solar show. There's no reason for people to get mad about injecting realism into the conversation.�
1/1/2015
guest Agree but IMHO all opinions on this matter have to be respected. So I like to read the posts of sleepy about cars with integrated solar panels. There is a thread on TMC about the matter of solar panels to be mounted on the Model S. It means that this is a subject that deserves to be treated on TMC. You never know in the future what the technology of solar panels will be able to do.�
1/1/2015
guest But we know how much energy there is in the sunlight falling in the earth is, right? And we roughly know how large a car is and most likely that won't change significantly. And with those facts it's fair to make some pretty good assumptions regarding not the practical, but theoretical feasibility of on-car panels as the sole/main source of propulsipn energy.�
1/1/2015
guest Have you seen the solar car eVe by Sunswift? Meet eVe | Sunswift
That can go 500 miles with its solar cells! And this solar car actually kind of looks like a more normal car. Imagine if its 22.7% efficient cells were two or three times better!�
1/1/2015
guest For the time being solar panels are already feasible for 12 V services like lights, air conditioning and so on. Then once again you never know what the technology will be able to do in 10 or 15 years. As sleepy I like to dream to the self-charging car. May I dream?�
1/1/2015
guest Solar cars are about as practical, and as likely, as solar cows and for the same reasons.
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1/1/2015
guest Yes you may. But don't invest based on it
(Energy required for 12V lights and such is generally discussed in Watts while for driving, well, we mostly use kilowatts right? There's a reason for that.)�
1/1/2015
guest But we do know the theoretical maximums, as Johan says. You can't get more than 100% efficient (or even to 100%), and you can't get more sun on each square foot of Earth (unless, as I mentioned, we have some catastrophic solar event, or the ozone layer disappears or something). You can reduce costs, yes, to the point where maybe it's cheap enough to have solar on every car roof, and maybe supplement the energy use a little, even if it's not going to drive the entire car, but considering the low energy cost of EVs and the relative impracticality of solar cells on cars vs. on roofs that might not be economical for some time either. But to drive the entire car, that will take a huge reimagining of what a car is. I happened to outline that huge reimagining in my original post on this topic.
"a) solar cells get extraordinarily efficient, b) crash safety regulations are largely eliminated (could come when we near 100% self-driving cars) AND c) the public completely rethinks what a car is (single occupancy, self driving, drafting, prone seating position, tiny tires, swoopy shape, lower speed/performance, no city use, etc.)"
The reasons for these things are....crash safety adds a lot of weight and restricts the forms cars can take (a hood is bad for aerodynamics, for example - the least drag shape is that of a raindrop, bulge at the front), occupancy adds weight, human drivers are inefficient, drafting is better with self-driven cars since they can follow closer and cut drag, prone seating allows more aerodynamics along with swoopy shape, tiny tires have less rolling resistance, lower speed/performance is more efficient, city use is hard because of shadows from buildings. Cars will at best be supplemented by solar cells, or charged by offboard solar cells (on the roofs of buildings), until all or most of these changes happen, and I think those will take a long time. And even after all that, cars will still be driven or parked in shade a nonzero amount of time, which further cuts efficiency, whereas buildings are only ever shaded by clouds or taller buildings.�
1/1/2015
guest Well, we know the theoretical maximum is 100% conversion so that puts a top end on it, which isn't a terribly large amount compared to energy required. Plus, it assumes massive amounts of time in the sun, which is not true of how many people have their car parked (e.g. parking garages). So even if there was some incredible breakthrough to create 100% efficient panels, they're not used 100% of the time or even close to it. And if you're parking in the sun in Arizona on purpose to get the charge, you're losing it to cooling the car and you might as well park in the shade in the first place. Not to mention that kind of constant sun creates it's own damage to the car.�
1/1/2015
guest Don't know if it's off topic but since the last posts were focused on this matter I would like to report this article about a solar powered family car that can travel 420 miles on a sunny day and creates twice as much energy as it uses.
'Stella' solar-powered family car travels 420 miles when sunny and is energy positive | Mail Online
[to Moderator: feel free to move this post if it's off topic]�
1/1/2015
guest If solar cells got light enough, and cheap enough, they could have the use of offsetting the vampire drain while a vehicle is parked, maybe keep the vehicle temperature from running away on it. But it just wouldn't do anything useful for propulsion.
The solar car races and long distance tours are always interesting, but those cars are larger than your average vehicle, just to fit all the cells, and if you look under the skin, they are much more akin to a bicycle than a car. Just not practical for real world use.�
1/1/2015
guest Agree but it's always nice to see somebody making efforts to build solar powered car. Then this kind of vehicles could improve in the future and maybe that one day Tesla will find it useful to use some features borrowed from them.�
1/1/2015
guest Mod Note: several posts went to snippiness. As usual, apologies to the innocents who got swept along.�
1/1/2015
guest Sticking two electric bicycles under some bare bones bodywork, with no safety features, comfort, climate controls, etc, is not building a car.
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1/1/2015
guest What frustrates me more than anything is when somebody on the internet calls out a financial expert for not knowing what he is talking about, when ironically the person doing the calling out is actually the one who doesn't know what he or she is talking about. Examples:
1. JC calls out Aswatch Damodaran, an expert and probably (certainly as far as academia goes) the most respected name in world when it comes to financial modelling, for not knowing how to model TSLA's financials properly. When in fact it was JC who did not understand that using internally generated cash does not come without a cost to shareholders...
2. MM is calling out all Wall St. analysts who cover GTAT that they don't have a clue what is going on inside GTAT's sapphire materials business. He points to deferred revenue as proof that GTAT has $150m of stocked sapphire material. He is even featured in this forbes.com article (fortunately he did not call them out on forbes), which is completely bogus and completely wrong. The truth is that ironically, he is the one who has no clue at all how deferred revenue works.
3. Now FANGO is calling out a well respected Wall St. analyst, insulting him that he doesn't know that EV's are already at "cost parity"; he even uses Fiat 500e as an example to prove that EV's are at cost parity. Ironically once again, the person who doesn't understand the term cost parity is FANGO, because he points out that the 500e is priced between the Pop and Abarth, but fails to realize that Fiat is selling every single one of these EV's at a $14,000 loss; they are only doing it as a "compliance car". When you factor in the $7,500 tax incentive, one can argue that Fiat would be losing $20,000+ on each 500e sold if they had to adjust the price down if you took away the incentive.
So lets all please start showing some more respect for the finance professionals who have been doing these things their whole lives and are paid big money to be knowledgeable and accurate!�
1/1/2015
guest And the media (via an automotive journalist, who gets paid money to be knowledgeable and accurate) claimed that GM was losing over $40,000 on every Volt, based on nonsense numbers which were not correct, amortizing the total cost of R&D over the first few thousand cars sold (you can see Lutz's takedown of the article here http://www.forbes.com/sites/boblutz/2012/09/10/the-real-story-on-gms-volt-costs/). That was just as unbelievable as this. If Marchionne says he's losing money selling the car, then he should stop selling the car. If he can't stop selling the car because it would cause him to lose more money, then clearly the car is making him money. I don't believe Marchionne for a second on this one, he's just mad that he has to make a car he doesn't like - even though everyone else does like it. I realize fully what he said, and I realize it's nonsense. He also changes the number every time he says it, and somehow it gets bigger. It was $10,000 per car a few months prior to being $14,000 per car. So the margins on his car are getting worse over time, is it? Or is he just blowing smoke? I'm going to bet on the latter. He's just saying it because he's an old fuddy duddy.
Not to mention that you don't account for the centuries of incentives and protection that have been given to the oil industry, automakers, and dealers, but you do account for the EV tax credit. You do business in the environment which exists, and the environment which exists includes tax credits and CARB. If CARB makes them sell the car, and if they would lose money by not selling the car (by not being able to sell to CA), then the car is making them money, because the opportunity cost of not selling the car in the business environment that exists would be far greater than whatever claimed loss they take on every car sold.
Not to mention that the only cost the consumer sees, the only cost that matters to the consumer, is the end cost of the product to them. And the 500E fits between the Pop and Abarth, which is its natural position in the product line. So there's cost parity.
And what of the Leaf? Is that losing money too, the car which Nissan has sold over 100k of, and is fixing to sell as many of as they can? And the Model S, of course, which was the original example, and is far superior to anything anywhere near its price range.
So yes, EVs have reached cost parity. Several companies are making them and selling them in numbers, and they're competitive (or superior) on features with the cars they compete with on cost. That's cost parity. It's not in the future, it's now. If Marchionne can't figure out how to do it, then he's incompetent, because at least two and possibly three other companies (Tesla, Nissan, maybe BMW) certainly have.
Are you saying that you should blindly believe everything the financial analysts say because they're financial analysts? Should we all believe BofA's price target, because their professionals have been doing these things their whole lives and are being paid big money to be knowledgeable and accurate? This is called an argument from authority, and it is not a valid form of reasoning. It's why I don't talk about my background, because I don't want my information to be judged on my background, I want my information to be judged on the information. And you of all people, who have talked many times about having a lead on the analysts, and on how the financial people are manipulating the markets and whatnot, how wall street is behind the times on solar, etc., should agree that analysts and financial people aren't always right. That's how any of us here have made any amount of money in the last couple years, by beating the analysts to the punch.
Nobody claims that EV battery costs won't go down, and that costs going down won't provide a benefit to EVs. I just contend that the crossover point is happening now, rather than a few years from now. And my evidence for it is the cost of consumer goods available to the consumer, and the cars being well-received against their cost peers. That sounds like cost parity to me.�
1/1/2015
guest sleepy, fwiw, on what do you base your description that ~"Damodaran is certainly as far as academia goes the most respected name in the world when it comes to financial modeling"? is that really a widespread opinion?
it just happens, at the end of March I pointed out to him in the comments of his most recent Tesla blog that he was vastly overestimating Tesla's capex needs for the next decade if they are trying to hit a 1 to 1.5 million run rate in 10 years (as the revenue he modeled in 2024 suggested). He was estimating $50 billion would be needed in capex, and so was estimating the 2024 share count would balloon to 300 million (that outsized dilution being the reason he thought Tesla was only worth ~$120). Once he explicitly stated the $50 billion and 300 million whopping numbers, I went through a detailed list of the capex spending Tesla would need to reach 1 to 1.5 million vehicles per year to show him that Tesla is unlikely to spend more than $20 billion on capex to reach those levels (and that a large portion of it could be paid for from retained earnings). I was pleased to see at the time that he acknowledged my numbers may indeed be right, and he'd need to go over his assumptions before writing something new on Tesla, mentioning as well that I had more knowledge and insight on Tesla's circumstances than he did (understandable given the amount of time I have for Tesla, and the demands on his time as a Prof at NYU).
Just this week, I asked him if he had taken another look at Tesla. After a little back an forth, he responded a couple of hours ago with this Seeking Alpha like response,
"Steve,
Let's agree to disagree. When I say that the narrative is in flux, it is because I thought that Tesla was an electric car company at the start of the year. For much of the year, all the talk that I have heard from the company is about its electric batteries, but that story was undercut by Musk's offer to give away the battery technology. Perhaps, the company is reorienting itself and I will have to factor that into my next valuation.
For the moment, though, I would not buy Tesla at $230, $180 or even $150. You obviously believe otherwise. So, you should hold on to your stock and I won't try to talk you out of that decision. Please return the favor and leave me to my valuation."
https://www.blogger.com/comment.g?blogID=8152901575140311047&postID=7091334422361137680�
1/1/2015
guest As is your habit you completely ignore the real range limitations of all EV's other than the Model S. So no, in reality EV's have not reached cost parity, other than the Model S.�
1/1/2015
guest As is your habit, you completely ignore efficiency, performance, convenience, cost, and numerous other things. So yes, in reality EVs have reached cost parity, including the Model S...which is an EV that has reached cost parity, so it proves the point anyway. Along with the other ones which prove the point as well.
Also, what's with this grudge of yours? Why so personal?�
1/1/2015
guest No, I do take all those into account, and the majority of people will tell you that convenience is lacking in a vehicle that can't go over 150-200 miles in most conditions, let alone the less than 100 miles of range all non Tesla EV's have.�
1/1/2015
guest It is just plain silly to argue electric powertrains have reached cost parity.
Even as big proponents of EVs as Elon and JB don't argue that.
Tesla has been able to put together a very compelling value proposition by eliminating the advertisers and dealers share of the Model S profits and cutting out some features in similar priced cars.
BTW Most people think it is more convenient to use gas stations. If not EVs would have more than 0.4% market share in the US.�
1/1/2015
guest And this is just it, the model s is an amazing car, but it's missing a LOT of features compared to anything else in it's price range, and it has half the range of an ICE. That's not to diminish it in any way, but it's hard to call that "cost parity" the good news of course is that this means that EVs are just going to continue to get better and better as we do get closer to real cost parity.�
1/1/2015
guest This is going off-topic, but I was referring to Damodaran's technical/academic expertise/understanding of how to build financial models. I am not saying that he is the best predictor of the future. So completely different definition of "most respected name in financial modeling".
JC called him out that Damodaran did the model wrong, and came up with a flawed PT. JC tried saying that internally generated cash is free, while the whole irony was that JC was the one who did not understand how to build financial models properly, because that cash has a cost to shareholders.
In am not arguing that Damodaran knows how to model TSLA. Because he clearly does not understand the company and it was an academic exercise for him anyway.�
1/1/2015
guest Academic exercises always interesting. If he believed model why not short. I do respect teachers but this does mind me of those that can do, others teach�
1/1/2015
guest
I think this actually very on topic to Tesla investors' interest in understanding the long term fundamentals of the company.
There are various people out there who by reputation and/or having a huge platform to get out their message project starkly misleading ideas about evaluating Tesla's long term fundamentals. I think part of improving as an investor is learning first hand that you have to understand the long term fundamentals of any business you invest in for yourself, and not rely on the "reputation" or "expertise" of someone else.
What were Moody's and Standard and Poor's reputation pre 2008? The "gold standard" in rating debt?
As John Wooden said "your character is what you really are, your reputation is merely what others think you are."
Here's a few quick examples of people, including Damodaran, whose reputation and/or platform have led many off the path with Tesla.
Jim Cramer may have a shaky reputation, but he's got one massive platform. He has engaged in essentially a propaganda campaign of repeating ad infinitum that Tesla is a "cult stock" and "you can't value the darn thing." Both are nonsense, but undoubtably have thrown many off from making the effort to look at the long term fundamentals... realize that Tesla is a rare company you can actually see a highly probable path to tremendous earnings growth 5 and 10 years out; earnings that say the stock was a great buy when he started claiming it can't be valued, and is at a minimum worth holding at current values. I doubt that this man who publicly said in the hedge fund business the last thing you ever want to do is tell the truth (happy to provide the link again to video of him saying this if you like) has accidentally been saying you can't buy this stock on fundamentals over and over and over, when that is simply not the case.
Aswasth Damodaran Implied credibility and objectivity of being an academic, reputation you've suggested of being the top global academic expert on valuation paired with a more modest platform (his blog) which at times becomes a large platform... for example when his Tesla valuation call of ~$65 and months later ~$120 got written up in the Wall Street Journal, led to appearances on CNBC about Tesla being overvalued, and made the rounds of repetition in the other financial media outlets.
What we can now see of Damodaran's output on Tesla tells me I'd take what he says with as much skepticism as I take what Cramer and John Lovallo (see below) say.
When he wrote his blog saying Tesla was worth ~$120 I had a pretty thorough back and forth with him where he explicitly stated his valuation was based on Tesla needing to spend $50 billion on capex in the next 10 years to get up to revenues in his model suggesting 1 to 1.5 million vehicles/year (he never explicitly shared his unit sales assumptions), and that this would mean they'd have to more than double their share count to raise that money; that is, he directly said he saw Tesla's 2024 share count reaching 300 million. I went through with him what they would need in capex through his timeframe (outlining and offering back up on projected costs for additional service centers, stores, vehicle factories and battery factories), and it wasn't even half of the $50 billion he claimed... in fact it was so much smaller, retained earnings are likely to fund the lions share of it.
He wrote back basically a ~"I see what you are saying, looks like you may be right. I'm going to have to look at this some more independently... though I have to look at the competition this opportunity would draw" at the time. When I raised the question again this week, he gave me basically, ~"now that Elon has given away the battery patents, the story of them being an EV company and battery maker has been undercut. I don't know what they are about."
Sleepy, frankly that response is even less appealing than Cramer's "I don't know how to value the darn thing"... do you really think Damodaran doesn't know whether Tesla has an opportunity in EVs and batteries in general because of the patent move? While this current "I don't know now what Tesla's worth" stance is much like what Cramer has done, unlike Cramer, he publicly said in the past that he could value the stock and that it was overvalued. He did this a couple of times, and appeared on CNBC to say it. If his goal was to convey what he thinks about the company, don't you think it would make sense to put out a blog pulling back his earlier valuations? That is saying something like "I was premature in making valuation calls on Tesla in the past... it's not a business I feel confident in determining a valuation for."
I'd say what we've seen from Damodaran is analogous to Alex Rodriguez. Lots of talent, but I wouldn't take what's been produced at face value.
John Lovallo (and the pitfall of wall street analysts in general) their position at large institutions gives both a reputation and platform advantage to all the analysts. Without going into great detail on Lovallo, he's made some statements it's hard to believe anyone having spent more than an hour learning about Tesla's and the potential for EVs as a whole could make. Some have wondered if he's lacking in brain power, some have wondered if he's got an ulterior motive. I think it's more the latter... this could of course be financial, but it can also involve ego. The point is Wall Street analysts are fully capable of writing "bizarro world" reports on the company they cover, and should not be taken at face value. Again, to me what brings it all back to the topic of this thread is you want to understand the long term fundamentals well enough for yourself not to go on someone else's say so who may be presenting a really insightful picture of a stock or a "bizarro world" fakery.�
1/1/2015
guest Great post, Steve. What's so frustrating to me is that these guys can be so blatantly wrong and when it is proven some time later, they ignore/spin/cop out their previous comments and there are no professional repercussion for them. How much money do they have to lose for people before they lose some credibility? That Damodaran cop-out was weak and here Cramer claims to have been "all in Tesla" when it took off: Jim Cramer: The Danger of Worshipping Tesla - Pg.2 - TheStreet
Cramer: "Sure, there is a YouTube clip of me at first dismissing the stock, which was right. It did next to nothing for those first three years. But when it took off I was all in Tesla. Now, 150 points later, down $50 from its high, call me worried, not from the BMW challenge, but by the worship of a stock."�
1/1/2015
guest Johan - I did not mean to imply that you will not have to charge the car at home at all, that the sun will be sufficient. Just meant to say that TSLA will be incorporating solar cells into glass and maybe even body of car some time in the future; at least that is my opinion.
If you look at a typical car, I would imagine that with today's solar technology, you could easily fit over 1kW of solar cells if you plastered the whole car including glass; probably more than 1kW. So at any time you might be producing about 500W of electricity.
If you keep your car parked in the sun during your 8 hour work shift, then you might be able to create 4kWh's of electricity, which is not an insignificant amount of charge; it would allow you to go 12 miles or so. Do that 250 days a year and you get 3,000 miles from solar charging. This is just hypothetically speaking, if they decided to plaster the whole car with solar cells.
But there are other benefits of etching solar cells into glass. E.g. the cells would absorb some heat and maybe the car would not get as hot, and you could use less electricity; I am not an engineer and have no idea if the difference would even be noticeable. But also, these solar cells would allow you to go on vacation, and park your car for 2 weeks at the airport without worrying that it will run out of charge once you are back. It is an interesting topic, but still up for debate. Maybe the tech is too expensive, but we will see if they find ways to implement it in the future.
As far as phones go, I am certain that Apple will be doing a fully wrapped sapphire phone that will have solar cells etched into the sapphire. This will allow you to take your phone out of your pocket at work and lie it upside down (or upside up) on the desk and not lose one iota of charge throughout your entire shift, so that you can enjoy longer battery life. If you rarely make any calls or use your phone, then these solar cells would allow you to not have to charge your phone for weeks. If you sit on the internet all day or make plenty of calls, then these solar cells are not going to do much for you other than maybe give you a few extra minutes of talking time.�
1/1/2015
guest The other cars are missing a LOT of features compared to the Model S, and it has the same range as the rest of them (about 300 miles, which what ICE cars typically get on a tank, give or take, if you're not making up numbers using the most advantageous situation for the ICE and the least for the Model S - which, of course, strangely, so many people here on the Tesla boards do). And then the ICE car has to go to a gas station, instead of the convenience of being refilled at home, for cheap, overnight, while you're doing other things. The only "disadvantage" is a slightly longer (and cheaper) trip for people who don't pee or eat and are driving more than 300 miles in a day.
I mean honestly, it's as if nobody here has driven an EV. You should all know this. Also, it's funny to see so people arguing that the Model S is not the best in its class by far.
It is just plain silly to argue electric powertrains haven't reached cost parity.�
1/1/2015
guest Nobody is arguing that the Model S is not the best in class, but that doesn't mean there are no tradeoffs versus an ICE.
For example, let's say you're travelling to a town 250 km from home, with no supercharger less than a 150 km detour along the way. You can't drive around or run a few errands in that town and drive straight home without a significant charging stop, so one can't deny there would be an advantage to an ICE vehicle with all the existing refueling infrastructure. Not to mention many common ICE cars can do the whole thing without any refueling stops (e.g. quick google reveals the BMW 3 series has ~800km rated range).
Do the benefits of an EV like the Model S outweigh the drawbacks? Absolutely, starting with a full charge everyday and free supercharging outweighs the drawbacks, but that doesn't mean there are no disadvantages to an EV whatsoever.�
1/1/2015
guest And nobody's saying there's no tradeoffs either. I'm saying that with all things put together, and intelligently-designed EV is able to compete with similarly-priced gas cars on balance. The Tesla interior isn't as nice, they're missing some of the auto-driving stuff (which I'm guessing will be released alongside the X), I'm not really a fan of the seats for more than 45 minutes or so, etc.
But you can contrive situations where one car is superior to another car, and I can contrive situations where the other car is superior to the first. Personally, I don't do my errands 250km away from home, I do them within a couple miles, and I think this is likely the case with most drivers. At the local Tesla store there is a chart which an owner came up with showing the tank size x mpg of various cars in the Model S' class, and the Model S is right smack in the middle of it based on rated range per tank. I do not believe the 3 series is on there, because the 3 series is not in the Model S' class.
On balance, overall, with everything considered, the EVs in question compare favorably to similarly-priced gas cars. The Tesla compares more favorably than the Leaf and Fiat, but the Leaf and Fiat are well-reviewed and well-liked by their owners as well (just not as overwhelmingly so). That's how I define parity, from the consumer perspective, and I don't know of a better way. If you define parity as "the cost of putting 36kWh of energy storage into the car" or something, then obviously we're far off since a gallon of gas is something like 4 dollars and 36kWh batteries is not. But clearly these are not the same thing. So I think most analysts who only focus on battery size, and not use cases of cars, are missing out on the consumer perspective - and I think whatever $/kWh number they've defined as the crossover is myopic, because it doesn't take the whole product into account. I think strong sales of the Leaf, and strong sales of EVs in general (sales growing at a much faster rate than hybrids at the same timeframe since introduction), show that consumers are pretty happy with EVs, despite that car companies are barely marketing them. Consumers take time to come around to things, they don't all automatically buy the thing when it reaches cost parity, they gradually make their way over, due to a lot of factors. And one of those factors which makes them take longer is EV advocates constantly talking about how subpar EVs are, as people strangely seem to do a lot around here.
And if Tesla can do it, as we both agree that Tesla has, then others should be able to do it - with effort. I just don't think anyone (outside of Nissan and maybe BMW) has really put in any effort yet.�
1/1/2015
guest Actually it's just plain silly to argue that any EV besides Tesla has reached cost parity, since they are all range and fueling crippled compared to any ICE at any price.�
1/1/2015
guest That's odd because I've never seen an ICE at any price that isn't so crippled that it can't even fill up at my home. It's plain silly to argue that having to go to a gas station and spend lots of money is crippling compared to having a cheap and easy fillup at home, which takes no time because you don't actually have to go anywhere to do it and it happens when the car is parked anyway. Which is the sort of thing I would expect an EV driver to be onboard with, yet people here get too caught up in tribalism and think that talking down on all other EVs is somehow going to help Tesla. It's crazy, we're all on the same team here. FWIW, on i3 forums they consider me a Tesla fan, and here you guys consider me a Leaf/etc fan. I like all EVs, as long as they're done in a somewhat serious effort.�
1/1/2015
guest TSLA wise I guess what matters most is that to many the Model S has reached and surpassed (?) cost parity vs its counterparts.�
1/1/2015
guest Yes, but some of us seem to be more in tune with the non-EV driving public. I can tell people all day they don't really need 300+ miles of range and the ability to fill up in 10 minutes or less, but they still won't buy an EV. They certainly won't even consider something like a LEAF which can only do less than 90 miles in most situations, especially when you tell them that it can in fact be significantly less than that in severe situations, when people really need to count on their vehicle. You can't claim cost parity for an EV that can't do some pretty common trips, like driving for more than an hour and a half on the highway.�
1/1/2015
guest Yes, some of us are more in tune with the non-EV driving public. The public which has bought Leafs and continues to buy Leafs at a greater rate than Teslas, because they don't need 300+ miles of range and they would rather save money. The public which drives far less than you think they drive, based on statistics which have been posted and analyzed multiple times before in this same conversation which you love to keep bringing up. And the public which is adopting EVs at a much faster rate than hybrids despite only two manufacturers really throwing their weight behind them (and only one advertising them, except the occasional CA Fiat commercials and the brand-new MB B-class EV commercials which will hopefully continue) and dealers being fairly complacent on selling them so far.
You can't claim that there isn't cost parity for an EV just because of one aspect which you seem to think is the only thing anyone will ever consider when buying a car, and where you purposefully take that aspect in the most negative possible way and ignore all positives to it. You *can* claim there's cost parity when the balance of reviews, awards, customer satisfaction, and features show that the EV is competitively priced with cars that it is similar to, and when the car does pretty well in sales considering the amount of effort spent on advertising and the effort spent producing and selling them. Which is the case for all the ones I've mentioned. There are no huge backlogs of Leafs sitting on lots unsold, with huge dealer incentives to just get them out of there (as we see in the case of the ELR), and the same is the case with the 500E (Fiat refuses to make enough to fill demand for it, but there is definitely more demand than supply), and possibly the i3 (though it's brand new so we can't use it as a data point).
And the fact that multiple EVs at multiple price points and multiple feature sets exist, and they all seem to be doing pretty well, shows that costs are at a pretty reasonable range right now, all things considered, in this business environment, at this moment in time, etc. Tesla, of course, is the best, and there's no argument over that from anyone.
The situation will of course only get better over time, and it will probably get better faster for Tesla than anyone else (because they're expending the most effort). But cost parity is at least easily here for the Model S, and thus if they can do it, others should be able to as well. This is why I argue that it's here already.�
1/1/2015
guest Actually what you did is admit it's not there for others, then changed your mind. Deep down inside you know it's not really there yet for other EV's besides Tesla.�
1/1/2015
guest Really, read the post if you're going to respond to it.
Actually, what you did with your post is admit that it's there for others, and that you don't really have anything to back up your argument. Deep down inside you know it's really there for all EVs.�
1/1/2015
guest Fango, I think you are right that many people would need a smaller range EV than they think they might think they need not having experienced an EV.
That said, Tesla has created a business to generate profits to expand their capacity to produce EVs. They need to respond to the consumer. The consumer loves the Model S. Both those who have bought the car and the many who ask "when Tesla will make one that I can afford?" Leaf owners may love their cars, but I don't see a big wave of people who don't as yet own the car dreaming of the day they can get a Leaf. They could go out today and buy one, but that is only happening in modest numbers. As I understand it, the Model S was the best selling large luxury car in the U.S. (at least before deliveries had to be shared with customers in the EU and China). The Leaf is no where near the top in sales for it's class. Yes, the Leaf has more absolute sales than the Model S, but that's because the size of the market for $30K starting price cars is many times larger than $70K starting price cars.
Another example, I've heard at least 8 long Q&As Elon has done with the public (store openings, annual meetings... ). Many times I've heard people ask him when he'll have a longer range Tesla. I've even heard people ask him for electric boats, and I believe electric motorcycles. I've heard a request from one person for Elon to bring him onboard at Tesla as the new co-chairman, and I recently heard Steve Colbert ask for a jetpack. I've never once heard anyone ask him for a car with a smaller range.
Look, again, I do agree you are right about many people's needs... you're just a bit ahead of your time. People just don't respond to being told what's good for them, especially if they perceive it (accurately or misguidedly) as a downgrade.
Elon wants as fast a conversion from ICE to EVs as possible. In fact, he wants this passionately. As I'm sure you've pointed out, smaller battery cars would allow for supply to ramp up faster... don't you think he's thought about this? Don't you think he'd sell a 100 mile EV if he thought it would accelerate the advent of EVs?
I say this only partially in cheek, but perhaps the best strategy to help people realize that a 100 mile range would do the trick for many of us is to say, "No, we will not sell you any 100 mile EVs. You cant' buy one." i.e. if there's a dearth of lower range EVs on the market, and consumers realize it's what they want, we'll hear them saying "what do you mean forcing me to buy that big battery I don't really need and not giving me the choice I want." Fango, I think it only works when the consumer on his/her own says "I want it."�
1/1/2015
guest Moderator's Note:
When you start criticizing the poster instead of the post, you are crossing a line towards snippiness. Please stop with the personal attacks. There are more effective ways to make your point than ad hominem ?arguments.�
1/1/2015
guest
Yes, true, there are more people who dream about Teslas than Leafs. But there's not a lot of people who dream about any car which leases for 199/mo. Things that are attainable aren't people's dream cars, because they can have them. Tesla is absolutely smart to have started at the top, to establish a "dream" aspect to their brand. This was the point all along, and it's absolutely the right thing for them to have done. Other manufacturers I think have approached it somewhat wrongly, coming out with econobox models first. But I think this was intentional on most of their parts too, since most of them are just doing it for compliance, and they don't *want* people to be dreaming about EVs because their business is still mostly conventional engines. That said, even these cars which were made for compliance have been received rather well, which is what tells me that EVs are a better value proposition than many people here seem to think.
I've heard those Q&As too, and I've heard Elon and JBs answers where they talk about how they could make a car with enormous range but that it would be lousy, and that they don't see a huge amount of upside on range from here, and that focus should be more on supercharging, and on introducing a cheaper car for the masses, than on ever-increasing range. I've mentioned this whenever this comes up, because they're right. That's my view, and has been my view for some time, and it's been Elon and JB's view for some time as well.
I too want as fast a conversion as possible, which is why I, as a Tesla owner and investor, don't talk down on other EVs that people can actually afford. It's great for people to dream about a Tesla, but if they're driving a gas guzzler around and twiddling their thumbs waiting for Teslas to come down in price, that doesn't help any of us. Which is why I encourage these people to buy or lease a Volt or Leaf or something, which are good cars for their price, and then when the 3 comes out they can get that.
I fully accept that I'm ahead of my time, as is just about everyone here since we're all in on Tesla and have been for a while. I fully accept that the consumer isn't as ready as I am. But what we were discussing this whole time is cost parity, not consumer attitudes. The consumer won't instantly accept something, especially if that thing isn't heavily marketed or they don't know anything about it, as is the case with many consumers and EVs.
I think if the other manufacturers wanted to, they could use that method to sell their cars. "Well sure you could get a Tesla, do you have 70-130k? No? Well, you know why, it's because that battery is too big for your needs...I've got this great car here which costs less than half as much, and it will still get you everywhere you go within town, and if you're still really worried about range we'll give you a loaner for up to 10 days a year...lets go for a test drive, you'll be impressed by how much peppier it is than your Corolla"...then the people buy the Leaf (or whatever), never or rarely use the loaner because they drive less than they think, and the dealer gets a sale out of it. But I don't think the dealers have put a huge amount of thought into how to sell EVs as of yet, since they get a lot of money from service contracts, and those are going to be more lucrative for gas cars than EVs. EVs have service expense, but it's going to end up being largely parts (battery), there's not a lot of shop hours for oil changes and other moneymakers.�
1/1/2015
guest EV's are going to get more range, and prices for that extra range will drop. Neither would be happening if it weren't necessary. Tesla's entire business model for the Model 3 is based on the premise that people want more range than current vehicles provide in that price range.�
1/1/2015
guest thanks for the post Fango. I think there's a fair amount to agree on here.
I just want to clarify... I was responding to my generally having seen you raise this issue about how large a battery is sensible to offer over the past few months rather than the comments over the last few hours about cost parity.
Two other items. Elon and JB have certainly said ~"yes, we could make a bigger battery car today, but it doesn't make sense," but they were talking about the reality of the time... when it comes to the future, they've said more range. Elon has hinted at more range for the S as soon as next year (he did this in a Q&A in Europe). About a year ago on one of the earnings call, one of the analysts asked about the possibility of a 400 mile range car, Elon scoffed "400 miles? how about 500 miles." Now Fango, it's possible the numbers were 300 and 400, but though you might not like this, it was quite clear he's looking at more range.
As to dreaming about a $30K car. well, if you'll loosen that up to $35K, while not generally the range of "dream cars" I would say a very large number of people are dreaming about the Gen III car... certainly far more than I see them having the capacity to build for many years.
just out of curiosity, if it were technically possible to build a metal air hybrid battery, so a 200 mile lithium ion battery (or 100 mile battery as you like) were paired with a metal air battery to function as a range extender for long distance, would that be a solution you'd find appealing?�
1/1/2015
guest Yeah absolutely, thats the brilliance of Tesla's approach. They're building an aspirational brand, an aspirational car, something people can dream for. They're establishing that their brand means performance, that it's a premium brand. And *then*, after already doing all that, they're releasing a car that more people can afford. It's definitely the right way to go about it, and has been the strategy all along. This is why people will dream more about the next Tesla than about the Nissan they can have now.
The solution that BMW has done is appealing to me, to some extent. They've got a normal battery car, but if you're worried about range you can spend money to make the car 10% more expensive and 10% worse in terms of performance (acceleration, efficiency, handling, etc.) in exchange for a very small gas engine and a small gas tank which will let you go further on the few occasions you need it. It's definitely the most well-though-out range extender (though I like to call it a range reducer, because it reduces the car's electric range) on the market, and some people will consider it a positive value proposition. Anything similar to that is fairly acceptable. The only problem I have is if they preferentially sell that particular option, playing up fears etc, because it results in more revenues for the dealers (both through the sale and the service on the engine), and lets them stick to their oil driven paradigm longer. I think actions like this tend to reinforce the incorrect belief of the public that EVs aren't ready for prime time, and thus they keep burning gas which really needs to stop now, like now now, like ten years ago now. Also, personally if offered that option I wouldn't pay more for it, nor would I want to pay extra for something that reduces my car's performance and efficiency, but it's at least the best implementation of a plug-in hybrid that I've seen yet.
As for metal-air, I don't know that I have any comments on it, because I don't understand it (and nor do I think many people do), and as far as I'm aware it isn't ready for primetime yet anyway. I would have to see it first. It sounds like your theoretical solution would be similar to the BMW one I mentioned above (which is why I talked about it), only wouldn't use oil, which would make it even better. But again, if it costs more and makes the car any worse, I personally probably wouldn't pay extra for it. Particularly when supercharging exists.�
1/1/2015
guest Fango, not sure if you are aware of this but the motorcycle engine in the i3 is meant as an emergency backup not a means of gaining range for long distance use.
This from an article with comments from BMW:
"Herbert Diess, global R&D boss for BMW, was recently quoted on the ReX range extender in Plastics News (in an article originally published in trade weekly Automotive News).
Diess explained the company's point of view, reinforcing the viewpoint cited at the launch:
The range extender is not intended for daily use. It's for situations when the driver needs to extend the range of the vehicle to reach the next charging station. Therefore, the i3 probably won't be the choice for customers with a need for an extended range.
Diess suggests that a plug-in hybrid is "a more suitable solution" for those customers who frequently need a car with range beyond that offered by the i3's battery pack."
BMW i3 Electric Car: ReX Range Extender Not For Daily Use? (Page 2)
as to metal air being added as a range extender. I don't know what's practical, and I've not heard much on this from Tesla other than their apparently having patents on this, but here's a brief video to give you some idea of what may be possible,
Phinergy drives car by metal, air, and water - YouTube�
1/1/2015
guest From reports it is not a well thought out Rex. Infact it is unsafe to drive the car in hilly areas after battery depletion - the power supplied by REx isn't good enough to even go at 25 mph sometimes.
My Nissan Leaf Forum View topic - Official BMW i3 thread
�
1/1/2015
guest When we look at huge changes in technology - we normally see changes taking hold when the new thing is more convenient than the old thing. Flat panels are obviously more convenient than old huge SDTVs - so are digital cameras compared to film cameras and DVDs compared to tapes, CDs compared to LPs (and mp3 compared to CDs) etc.
So a better way to compare would be how convenient is it to buy, own & operate an EV compared to ICE. I think the story is now rather mixed. It is easier to fuel at home nightly - but range is an issue. It is somewhat cheaper to buy an ICE of similar size and quality. It is possible to pre-heat or cool EVs in the garage - but they lose lot more range in cold than ICE. It is easier to drive your ICE over long distances than EVs (or rent an ICE).�
1/1/2015
guest the closest Cramer came to being all in was saying he thought the car was awesome (he really did rave about the car), but that he wouldn't touch a short or long position on the stock.
other than that it's been a steady stream of trying to invalidate Tesla bulls by trying to frame us as oversensitive irrational fanatics worshipping the company and/or Elon.�
1/1/2015
guest Cramer is a joke, he actually cost me alot of money. Though thanks to the advice of a friend, I did better than ok! I love Telsa/ Tsla.
Cramer is a guy that knows how to market himself. One good advice I read from his books is the need for health insurance. Folks before you do any investing, please invest in your health and get health insurance. I remember in one of his books he chose sears because Eddie was running the show, well we all know how Sears is doing. I am not trying to bash Cramer, as much as I want the truth from these so called pundits.
Cramer said point blank, tesla will fail. Well, see you in the rear view mirror Cramer!�
1/1/2015
guest Good article about the future of battery tech:
The next big battery disruption isnt coming next year - Fortune�
1/1/2015
guest Interesting quote from one of the researchers interviewed:
�
1/1/2015
guest For some reason it still amazes me how different the headlines are from the actual articles. I guess everyone is just looking for clicks.
My favorite part was when the researcher said something along the lines of most of the improvements in today battery will be driven by scale and manufacturing changes .... ie Gigafactory�
1/1/2015
guest gotta bait that click�
1/1/2015
guest News articles are written by reporters. The headlines are usually written by editors, who may only have superficial knowledge of the articles' contents. As you imply, sensationalism often rules in attempts to grab attention.�
1/1/2015
guest Tesla�s Q2 2014 earnings call on 7/31, http://www.media-server.com/m/p/bbz2caea seemed to have several extra portions of rich information as far as these earnings calls go. A great deal of these nuggets offer better visibility on Tesla�s long term strategy and potential.
I think there�s a lot here for us to discuss on the long term fundamentals thread.
What�s more, while transcripts of these calls are available and helpful, they do not capture everything (there are errors in creating them, and they don�t capture tone of voice) and take a bit of time to skim through to find a particular topic. Below is an index of key topics to make it easier to locate and listen to any of these topics in the future (each listing is meant to help identify a topic, not cover it completely). Though I only put quotation marks for what was clearly a direct quote, the majority of the remarks are the phrasing that was used.
4:30 roughly 100 Chinese service centers exiting 2015
6:45 Looking to transform service service so fast you don�t even see it, when it�s done you love it.. hit car like a pit crew..actually bringing in Formula 1 people� anticipate issues so you don�t have to come back again
11:15 some details of why Tesla sees Fuel Cells as unwise
12:40 Quality Control improvements� vast majority of issues with early cars addressed in current production and getting better at diagnosing what�s wrong
see 50:50 as well for context on Edmunds car, 52:00 replacing drive units to maximize customer experience (speed of returning car) led to scale like replacing ICE engine to replace a minor gasket 53:15 Deepak (CFO) these are not significant costs
13:30 Drive Unit Issues Detailed� loose cables solved with $3.00 cable tie� �bunch of things like that�... $.50 shim insert� several service bulletins in the process of instituting
16:15 �Goal car never needs to be serviced� � �aspiration order of magnitude better quality than any other car�... �we�re getting there quite rapidly� also 53:25 10X better than any other car on the road (discussing reliability issues that came up after Edmunds�) we�re going to be at it hard core until our car is 10X better than any other car on the road
20:30 hint: 2020 implied as a point they expect improved tech for the battery pack
21:00 Breakdown of anticipated Investment in GF by various partners� 40-50% Tesla, 30-40% Panasonic, maybe 10% state, 15-20% other partners
23:45 huge demand for the X� they�re right� �not enough information to know they�re right, but they are� [this to me seems suggestive that at least one of the cards Tesla is not showing is about the X having some fine thing(s) to offer we�ve not heard of yet] confidently �we will not have a demand problem�
24:40 Pre-GF battery capacity we see path to 150K vehicles/year, pushing it could be 200K cars per year �I would guess�, �so we�ll see where that leads to� [I take this to be an early hint that if the demands there, they might go as high as 200K S/X per year� this could mean not only higher eps near term, but more importantly up to a few billion extra cash over 3-4 years to accelerate additional vehicle plants and GFs]
26:10 Changing Cell shape ~+10% both in diameter and height, ~30% more energy per cell
30:00 Description of Global Delivery Timeframes North America ~ 2 weeks, Int�l ~5-6 weeks, average ~4-5 weeks
33:00 Guess at Long Term Sales by Region 40% Asia, 40% North America, 20% Europe (could end up 25-30%)... will go into Korea
35:15 ***$100 kWh in under 10 years*** �I would be disappointed if it took us 10 years to get to a $100 kWh pack�
36:40 Details on how GF�s scale changes what�s possible in cost savings �get to design the machine that makes the machine, not just do so with off the shelf equipment�... �get to design custom equipment much better at processing each step�...�everything about it is going to get a whole lot better�... �that�s why 30% better is conservative�
40:00 ***We�re not showing all of our cards*** �people have kind of gotten used to us showing all of our cards, we�re currently not showing all of our cards.�
44:10 �We can drive demand up at will� hardly building stores� sales/square foot double Apple�s, believe normally the leader [to me the message was, when we want more sales, we�ll open more stores]
46:50 �There are things you don�t know about� �capex and R&D numbers are better than they appear because there are things you don�t know about� [from context EM was referring to current spending]
48:30 10% Chinese Purchase Tax Exemption includes Tesla
Simple for Tesla to meet Chinese Charging standards� very similar to Europe� standards were only announced a month ago, i.e. there�s never been an issue of Tesla on the outside looking in [two recent pieces of considerable FUD both falsified]
54:45 Maybe more than 2,500 units per week new S/X body line to come ~Q1 2015 capable of 2,500 units per week, maybe more than that, at a lower cost point� big paint shop upgrade coming, most advanced auto paint shop in the world
58:00 X Volume production ramp half the time as S took 6 months to get S to 400/week, within 3 months of production several hundred/week for X, maybe less than half the time needed than S
59:45 60K+ deliveries 2015 certainly more than 60K I would think� confident exiting 2015 2K/week production and demand [said this before 60K comment]
1:00:40 Model S a few hundred pounds lighter than start of production gotten steadily lighter� we�ll continue to see improvements [while this has slightly improved range, if I understood what was said, ~10% lighter does not mean ~10% more range]
It was a call full of very enticing threads� what�s more it followed the Shareholder Newsletter which revealed the expected 100K unit/year run rate exiting 2015 in addition to the announcement the same day of the Panasonic agreement. I think the Panasonic agreement was a very big event. More than Panasonic�s money, I think Tesla is helped by Panasonic�s expertise (managing supply chain, building machinery, building cells, developing future cells�). Yes Tesla is capable enough to figure this out without Panasonic, but it would have been a far rougher path. Panasonic was expected to sign, but nothing like having the deal done. I think locking up Panasonic�s involvement ranks up there with Elon�s comment about $100 kWh batteries within a decade and the announcement of hidden cards.�
1/1/2015
guest I had a thought that at the Model X reveal it will drive on stage and make a few maneuvers, with no one in the driver's seat�
1/1/2015
guest + 1�
1/1/2015
guest 
I have been dying to post this for a while
But I do agree that this was by far one of the best earnings call we have had in a while. So much hinted at, so much clarified, and so much made definitive that it leaves me wanting more, but in a good way.
One thought maybe to JRP3 or someone else in the know, but if they are making the batteries 10% taller, a thought occurred to me... Isn't the current battery pack set up where the cells are already double stacked? So the pack would become 20% taller if they did this wouldn't it? And even if they aren't double stacked, it would make the pack at least 10% taller. How would this affect the weight of the car and the overall carrying capacity of the car?
Because although you will have less cells in the pack overall, you should in theory have more energy per pack just because it will be taller. And how is that going to affect the performance? How is that going to affect the design of the car itself? I think this will actually force a minor/major design change of the Model S/X if they move to the larger cell because it will change the dimensions of the skateboard.
I think this gives credence to seeing a major overhaul of the S and likely the X around the same time that they release the Model 3. Now they are supposed to be getting about 15GW shipped in still from Panasonic which could easily just stay in the old dimensions until they need otherwise, which would make enough cells for ~175k Model S/X assuming 85kW batteries. But overall I think that will be the signal of a design change when that happens.
But, if they do... and it does require a design change... then we will be in a bind on the current battery packs, since they require the smaller cells. Hrmmmm... Anyone else put any thought into this?�
1/1/2015
guest My thought is that the lower production volume S/X will continue to use the current size of cell even after the GF goes online, since GF production will be needed for the higher volume Model 3 and grid storage applications. There will still be 150-200K yearly capacity from Panasonic's existing lines.�
1/1/2015
guest Nice.
- - - Updated - - -
Makes sense. Apparently (if Credit Suisse got it right) chemistry improvements GF production will have will show up in next year in the X and likely soon to follow in the S Credit Suisse Report and 10 percent more energy per cell
In this section of the call (~26:00) they seemed to me to be saying changes in the shape and size worth doing as they improve cost and packaging efficiency, but energy density improvements really driven by chemistry. So while it makes sense to build new machinery for GF to use new cell geometry, it's not necessarily time to retool the existing Panasonic plants for the new geometry (i.e. added cost of retooling this early may be bigger than cost savings of new shape) and as Chicken pointed out this might avoid them doing some redesign work on the S sooner than planned (Elon said in 2013 he thinks major redesigns every 8 years, with refresh's mid cycle would be best).�
1/1/2015
guest Double-stacking and Double-counting
It doesn't quite work that way.
Let's say the current battery is 100mm high. So if doubled, 200mm (more or less)
10% more? 110mm. Doubled...220mm. Ta da! Still 10%!!!!�
1/1/2015
guest I was thinking though that it would modify the connectors on top of the cells and such to support the larger cell thus adding more top and bottom filler than we have on the current cells. Either way... a 10% taller pack seems like a decent impact on the design of the skateboard. That pack isn't small in height. To the degree that I don't know if they would be able to swap your pack in current Model S with a pack that holds the larger cells. That was all I was really getting at in the thought process.
- - - Updated - - -
So consider the upgrade they are talking about with the Roadster pack to accommodate a larger capacity. The reason this works for them, is because all that has changed is the energy density, and, in fact, the newer cells run cooler than the old ones meaning all they have to do is swap out each cell leaving the pack design as is.
Now, consider some distant future (5 years?) they swap over to the new cell size, all the older cars will likely not be able to support the new sizing. New cars will also be a modified design to handle the increased pack size. So when this change happens, this will hurt the repair costs on your older car since now it will be harder (and therefore more expensive) to obtain that depreciated sizing. And if Tesla is obligated (or just wants to support it) to handle these older cars this could hurt them down the road if they don't have a continued ability to make this other size for X number of years. I mean, aren't manufacturers required to make OEM parts for a certain number of years?�
1/1/2015
guest Bit of a detail (I hesitate, but you guys set examples for me�
1/1/2015
guest This is the same thing as the previous 10% taller question. If you increase the diameter by 10% the radius also increases by 10%.
200 diameter -> 220, 100 radius -> 110�
1/1/2015
guest Egad, you are right. I should know better--somehow, I convinced myself to look away from the percentages and just look at the numbers themselves (which still should have eventually gotten to where you say). Anyway, this has been bugging me ever since I heard it, so, with a legacy like that, I'll just leave it as a testament to my own foolishness. And I'm glad we'll be getting our 30% as stated
I'll try to do better on my next question...
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Long term-related question: This notion of the Model S moving in on and outselling the likes of Audi/BMW/Porsche/etc.; are they taking market share or are they creating an additional market? This has implications for limits on the eventual number of sales. I have to say, in my limited experience, I have met more than one Tesla owner who would never have considered a car from that slice of the market until they got a test drive in a Roadster or an S!�
1/1/2015
guest Definitely both. Stealing luxury performance buyers and upselling to people who would previously never consider one.�
1/1/2015
guest Obviously the answer is both in the USA.
In 2012, the car most traded in for a Model S was a Prius, then Civic, then Chrysler Minivans(not kidding).
In the US Tesla is strongest in CA. CA is Lexus best market.
If you look at Lexus LS sales they are way way down.
Porsche Panamera sales took a nose dive in 2013 and have stabilized in 2014.
Mercedes S Class suffered in 2013, the last year of a product cycle, and is having record sales with a fresh new model.
BMW 7 Series and Audi A8 relative to the S-Class have had low and stable sales since 2012.�
1/1/2015
guest On one of the conference calls Elon said the Honda odyssey was one of the most common previous vehicles.�
1/1/2015
guest Everyone should take the time to read through this extremely incisive analysis of Tesla's value relative to some important financial metrics vs. "everyone else:"
Risk Laboratory: Ophir Gottlieb: * Tesla (TSLA) - A Depth of Analysis Like Never Before & 10 Charts That Will Blow Your Mind
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