Official Tesla Talk Thread **No Politics**

[GrussGott]

Originally Posted by KRS_SN

there is about to be an explosion of choice because govts are banning ICE and tesla eats a part of the common pie.
Shares are valued at tesla eating the pie alone.

Exactly, just like Apple's. In cell phones remember Blackberry, Nokia, Ericksson, LG, Motorola, Microsoft, et al?

Look at your phone, what kind is it? I bet it's an Apple even though you had lots of choices, so why didn't you take them? Because net-net they were worse choices and Apple has better software and a better eco-system.

It's is why "The Bigs" argument fails - and why The Bigs failed for cell phones:

Despite The Bigs knowing how to put together the hardware better and cheaper than anyone (incl apple), and despite all their distribution and cellular network expertise, they couldn't overcome Apple's software. And not just the UI, though that's huge, also the cloud services, i.e., the store.

In Silicon Valley speak, Apple disintermediated the consumer from the hardware and the network - consumers flocked to the UI and the rest of it became a commodity. In the non-Apple phone market, even the mighty Samsung can't win consumers with their hardware alone - know anybody with a Tizen OS? Do you even know what Tizen is? Probably not.

Back to cars, The Bigs might be able to screw together better hardware but their software SUCKS:

"[The] biggest weakest is the infotainment system, the software, it's too slow, sometimes it's failing, they need to fix it ... the hardware of the vehicle is really excellent"

And this software problem is not unique to the ID.4 - every VW BEV has had this problem and this is the largest auto manufacturer in the World. Sounds easy, though, right? Just fix the software!

How'd that work out for the phone Bigs?

The problem comes back to leadership and focus - Tesla realized from the start, it's the software stupid and they build an entire organization around the software (UI, energy storage & management, cloud). Every top auto software engineer wants to work for Tesla, and most are, because that's where the action and rewards are. The Bigs have software 'C' & 'D' engineers because the 'A's are at Tesla, and the 'B's get fed up with bureaucracy and leave for other industries. (and the same is true for BEV auto engineers)

And, again, Tesla could just stop selling cars altogether and just sell their software and batteries to others, but they won't because they can't make enough cars right now:

I see Tesla as a volatile trade, so I wouldn't own it (except via index), but that's simply because it's hard to predict how the bowling pins will bounce around and push back on Tesla - that said, there's no doubt in my mind that Tesla is the bowling ball and The Bigs are the pins.

[garrettt033]

Originally Posted by GrussGott

As I said, if there's lots of money for multiple industries in pilotless drones, the regs will be updated to accommodate in ~18 months and the lobbyists will write them.

A great example is driverless vehicles, and you don't even have to talk about Tesla, Amazon, or the other Bigs:

Long-Haul Trucking

Alphabet subsidiary is now expanding its geographic footprint into Texas and New Mexico. ... Tests will be primarily along Interstates 10, 20, and 45 and through metropolitan areas like El Paso, Dallas, and Houston ... Demand for driverless trucks is strong. They are predicted to reach 6,700 units globally, totaling $54.23 billion this year, and stand to save the logistics and shipping industry $70 billion annually while boosting productivity by 30%

Retail

GM-backed autonomous vehicle startup Cruise today announced a partnership with Walmart to deliver orders from a Scottsdale, Arizona store to customers’ homes. As part of the pilot, which is scheduled to begin in early 2021, customers will be able to place orders from a Walmart store and have them delivered via one of Cruise’s electric self-driving Chevy Bolts. Earlier this year, Cruise announced a deal with DoorDash to test food and grocery delivery in San Francisco for select customers ... In November [2019 Walmart] teamed up with Postmates (help: postmates customer service) and Ford to deliver food, personal care items, and other goods from Walmart stores in Miami-Dade County, Florida using prototype self-driving cars. Walmart stores in Surprise, Arizona briefly trialed Udelv’s self-driving vans for deliveries. Nuro, which this week raised $500 million, collaborated with Walmart to deliver groceries to customers in Houston, Texas following a pilot in Scottsdale. And Walmart is working with Gatik to ferry customer orders between select store locations in Bentonville, Arkansas.

You can find a nice table of the current laws by state here.

The point is, all of those states (AZ, CA, TX, FL, etc) are all in on self-driving vechicles as are the feds and not only are these vehicles on the roads, but some companies like Nuro already have paying customers.

It's not lost on retail that the next battle will be over local retail self-delivery (long-haul trucking to local DCs to last-mile), and it's a place where Wal-Mart realizes it could beat Amazon ... and Nuro has already begun deliveries.

I've seen them around Mountain View delivering Walgreens stuff.

Thanks for your post. A lot of useful information for me.

[Mosaud1998]

Tesla =

[sygazelle]

Originally Posted by Mosaud1998

Tesla =

Let's confuse ourselves with the facts. Cars with internal combustion engines, even our precious BMWs, catch fire. If you look at the stats, Teslas are no more likely to catch fire than any other vehicle.

[KRS_SN]

gruss
Apple was successful with ipod and took it forward with iPhone so one didn't have to carry an ipod and iPhone. Nokia LG Ericsson etc didn't do music like apple did. Iphones looked better also.
BUT
apple dictates how I must use my phone. I left apple with iPhone 3 or 4(can't remember but it was in 2012)
Samsung lets me dictate to it how I use it. I have a Samsung S10.
Nobody buys a car for software. Better to have odd software issues with solid software than sunroofs falling off.
I think Tesla is a wrecking ball too but there are so many pin sets metamorhosizing into wrecking balls so that they don't get knocked over that the original wrecking balls purpose and value remains to be seen.

[AlexFL]

[GrussGott]

Originally Posted by KRS_SN

Apple was successful with ipod and took it forward with iPhone so one didn't have to carry an ipod and iPhone. Nokia LG Ericsson etc didn't do music like apple did. Iphones looked better also.
BUT
apple dictates how I must use my phone.

Samsung lets me dictate to it how I use it. I have a Samsung S10.
Nobody buys a car for software.

ha, I'm with you on phones, I never got onto the iPhone wagon - went from Blackberry right to Android for the exact reasons you said ... but we're not The Normals

And speaking of Blackberry and people buying cars for software ... ho boy do I think you're wrong; both now and for the future.

First, let's just think about BMW:

If iDrive sucked most people would be outa there. Maybe not us, but most people - and VW's BEV software SUUUUCCCKKKKSSssss. People just won't put up with a slow, laggy annoying UI. And this doesn't even address actual features like navigation, bluetooth, infotainment, vehicle functions, online stuff, et al.

Next, let's talk about what consumers are starting to demand in auto software:

Most people want their new cars to be an extension of their online life, i.e., Apple CarPlay, Android Auto, etc (not me tho); but especially with their music, podcasts, radio, etc; also their navigation (from PC to phone to car to phone to destination); also for convenience in terms of keys on your phone; also for apps integrated with you car; and soon ....

Finally, auto software will be all that and soon all about safety, security, and reliability (V2V, V2X) and infrastructure/power/subsidies (V2G):

Blackberry missed the first revolution and they're not planning to miss the next ... nor is Amazon.

Oh, and also that's coming to a BMW near you:

[KRS_SN]

cars used to be a lot of hardware and no software and still great. Loved such cars in the past.
now most have Software which enhances the way the hardware works so better.
I like idrive 7 but wouldn't buy a car or upgrade just for it. I would also loathe cars without the physical control ar least for climate control etc despite touchscreen and software etc.
Would in the future cars be all about software with little emphasis on hardware thrown in? not that I can imagine.
tyres suspension powertrain body etc still are the mainstay of a car software is the 'manager' but managers often are an addition to core workers not a substitute.

[GrussGott]

Originally Posted by KRS_SN

Would in the future cars be all about software with little emphasis on hardware thrown in? not that I can imagine.

That's exactly right for multiple reasons!

Future vehicles will be two new things:

(1.) Extensions of consumer's mobile digital lives.

For example, as assisted-driving advances and becomes more prolific, consumers will expect less out of the driving experience because they'll only be actually driving the vehicle 50% of the time they're in it. This will only expand with V2V and V2X software - it's why Blackberry and Amazon are teaming up. A model 3 is no porsche, but it's as fast and for most consumers it'll be supercar fast for an everyday price. The vehicle will become a device.

(2.) Extensions of energy storage and management - both at the consumer level and the infrastructure level.

For example, power companies need a place to store excess capacity since they can't instantly produce infinite energy - right now that's expensive & complex. BEVs, which sit idle 90% of the time - because they're cars - are the perfect place to do that and pay consumers a subsidy. If you could get a 50% discount on your next vehicle in exchange for hooking it up to grid x% of the time would you? Most people will.


In 1900 vehicle functions were mostly wetware with a little hardware; by 1930 they were mostly hardware; by 2030 new vehicles will be mostly software.

[GrussGott]

Ho boy:

In other news, I tried to drive over one of those Neuro delivery drones today: it was waiting to cross the cross-walk at a blinking red light intersection and it started to go so so did I, and it was smart! It stopped and backed up.

I think it should be a law that if you hit one of them you get whatever's in there.

[GrussGott]

Lots of people not feeling duped by Elon

[GrussGott]

Some mindblowers about TSLA's inclusion into the S&P:

• $TSLA demolished the all-time volume record for any equity yesterday: $148B traded. Previous record was $118B; Microsoft trades ~$5B/day for perspective.



• $TSLA traded more yesterday than the next 25 most active stocks COMBINED - another record.



• $TSLA is the largest new S&P entrant ever @ 1.68% of the S&P 500



• $TSLA's volume yesterday was the equivalent of Hungary's annual GDP

[KRS_SN]

Tesla made a lot of people a lot of money(including musk)despite making little money itself. Having watched ozark etc I wonder if it's the mother of all shell companies. Anyways all this bluster doesn't mean anything.

[GrussGott]

Originally Posted by KRS_SN

Tesla made a lot of people a lot of money(including musk)despite making little money itself. Having watched ozark etc I wonder if it's the mother of all shell companies. Anyways all this bluster doesn't mean anything.

There's prolly a few ways to look at it:

(1.) Nobody's made a dime until they sell ... are they selling? Obviously not, and/or at least there are way more people coming in than leaving. If people are HODL for the long-haul TSLA has time to catch up, but that also means a single bad news day could seriously crater the stock

(2.) The buyers are largely driven by millennial retail investors (if you extrapolate robinhood data, etc) who've never seen a crash - they keep getting more people in, and putting in more. That could set up the crash if they're jittery, but if they HODL it could be a sign of stability.

(3.) If TSLA is getting a big chunk of younger investors investing in the future 20-40 years from now - AND assuming TSLA's R&D and product portfolio continues at the same rate - there's a legit argument it'll be one of the very few big investing opportunities of their lifetimes (e.g., a Ford, IBM, Amazon, Google, Microsoft, Berkshire Hathaway, et al): Millennials who bought in the teens and HODL will more/less be set for life compared to their peers.

(4.) TSLA is mostly traders and speculators - in this scenario a crash is highly likely.

Bottomline seems to be, it'll be ok if things continue as it seems they will ... but if there's some big shakeup (Musk dies, major product failure, et al) then hell's probably comin.

Net-Net: There is no model of successful investing stragtegy that says anyone should have a large position in this stock.

[GrussGott]

This Netherlands+Norway+Spain EV registrations cumulative leading sales data starts to show why VW is so worried about Tesla:

First the full year -



• You can see Tesla sales (lt pink) starting to punch through the Asian brands, chasing down Audi (grey) & VW (red)
• Q4 looks particularly worrisome so let's look at just that



• Here you can really see that Tesla (green) has punched through all the brands save VW (red)
• VW knows every lost sale is one they might never get back - brands can be sticky
• The risk for Tesla is their brand disappoints & VW (or others) offer a more compelling product, though as the data shows, it's getting mighty late for that

In short, if Tesla's product locks in with most buyers AND Tesla's able to get to near sales parity with VW BEFORE VW can put its best foot forward ... it's likely game over.

And based on this data, that point could come as early as next year, Q3 or Q4 if I had to bet ... and I'd also bet that's a good 3 years before VW thought they had to worry.

[GrussGott]

Lots of play in the media these days:

Tesla’s frenzied ride in the capital markets culminated on Monday in the company being the largest entrant ever be included in the S&P 500, the main benchmark stock index.
Tesla’s true believers are not paying for actual performance, but they are betting on Elon Musk as a visionary and the potential upside in the still nascent electric vehicle market.

The merits of that investment thesis diverge greatly from the current state of affairs in the automotive industry, and the broader economy.

BZZT - WRONG!

First let's acknowledge TSLA is driven by a lot of speculators (vs investors), including a lot of millennials & new retail investors, that said there's a lot of legit investors in there to (e.g., Ark, Wedbush, Vanguard, Goldman Sachs, Fidelity, JPMorgan - hilariously, etc), about 42% which is generally the sector (autos) average:



With that, the reason TSLA *INVESTORS* are investing is not necessarily autos - though there's a GIANT growth opportunity there obvs ...

Rather TSLA has at least 5 realistic vectors of revenue:

⑴ BEVs: in-flight, already profitable, no marketing costs, no dealer margin; growing demand, growing profit, falling costs; the Warren Buffett "golden triangle" of a great business

⑵ Consumer Energy: in-flight, profitable for the 1st time in Q3, growing demand, falling costs

⑶ Self-driving capability: in-flight, defined revenue stream, though still in pilot

⑷ Semi-trucks: in-flight, 2021 debut

⑸ Industrial Energy: in-pilot, 3 year successful pilot in Australia, California pilot under construction

BONUS

⑹ Consumer HVAC: rumored, likely prototyped, but no other information

⑺ Auto parts supplier: vendor sales of software, systems, energy, etc

⑻ Super-Charger Network: global install base, revenue from power sales & energy grid storage

⑼ Battery sales: Tesla building some of the largest battery capacity in the world

⑽ Contract auto manufacturing: Tesla has some of the largest BEV manufacturing capacity coming online with patented technology.


Arguably the only 2 companies to ever have such success with so many potential revenue vectors and little to no competition is Amazon and Apple.

Everyone viewing TSLA as an autos company couldn't be more wrong and it continues to be mind-blowing given how many times we've seen this same movie over the last 20 years and it always ends the same way: the startup wins.

The only difference with TSLA is the investors/speculators are AHEAD of market dominance instead of behind it as usual. Remember how Amazon was a no-profit books/CDs retailer with sloth-like fulfilment? Or Apple was dead DEAD!

I do.

[GrussGott]

Still no sales plateau - production target hit & exceeded despite covid

However some interesting notes:


• These are still TINY numbers!
• Though not THAT tiny, i.e., comparable to Porsche, Jag, Land Rover, et al
• No sales drop-off despite losing federal tax credit in 2018 (and Chinese tax credit this year)
• But you can see the effect of tax credits in Q4 sales numbers
• Model S is a 10 year old car, yet sales still surprisingly holding up, even increasing in sales
• Models 3/Y still growing

With competition coming online (Mach-e, e-tron, et al) Tesla must continue improving build quality, and must continue innovating to hold brand loyalty. If they do, they win, but it's a big ask and nobody's done it since Ford in the early 20th century.

[ABenLauda]

Overpriced piece of shit appliance. Cannot believe the rabid fanboyism and cult following.

[Mosaud1998]

You get excited to watch the new(or watch the news at all)

[NorCalAthlete]

If the new solid state batteries Ford is developing pan out, and Tesla doesn't match or beat, that could be a shift in the tide. It's rumored for 500+ mile range (vs 300 for Teslas).

https://www.bloomberg.com/news/artic...-start-in-2022

That being said, they don't expect them to be vehicle ready till 2026 or so - I'd be willing to bet the talent at Tesla beats them to the punch by 2024 or so. I've been very hesitant to buy in and now I'm kicking myself for not buying more (only have 10 shares I bought around $250). As pointed out above, they could very well materialize multiple income streams and skyrocket earnings once they solidify. Right now still seems to be foundation-laying mode and Elon's paving a very, very large foundation to build on. I'm thinking even at $700, this could still be worth buying into - Amazon's market cap is $1.6T. Apple's is $2.3T. At $660B Tesla is definitely no longer at the ground floor, but they're nowhere near the top yet either. I'd say I'm about 70/30 in favor of bullish on them.

[GrussGott]

Originally Posted by NorCalAthlete

If the new solid state batteries Ford is developing pan out, and Tesla doesn't match or beat, that could be a shift in the tide. It's rumored for 500+ mile range (vs 300 for Teslas).

In the 1890s a nerdy German orphan named Wilhelm Maybach started working on a side-hustle project secretly funded by his former German employer, Gottlieb Daimler; they called it "Project Phoenix".

Previously Daimler & Maybach had worked together at Nicolaus Otto's Gasmotorenfabrik Deutz, making new-fangled single chamber internal combustion engines; up until then steam engines were the shit, but Daimler, having discovered this teenage orphan machinist Maybach was a stickler for solving tough problems, recognized that internal combustion engines had real potential, so they went to work for Otto.

Daimler was the factory manager and Maybach was the Chief Designer. Despite improving Otto's engine enough to take orders, Otto took the credit which infuriated Daimler and eventually Otto fired Daimler, followed by Maybach.

Daimler & Maybach then moved into a Cannstatt (now Stuttgart) cottage where in 1885 they put a scaled-down version of an improved ICE onto a bicycle which Daimler's son famously rode for 2 miles hitting 7.5 miles/hour thus proving an ICE could power a human-controlled land vehicle. A year later they put a 1.1hp, 88lb IC engine into a modified horse-drawn carriage and drove it at 10mph.

Despite the success, Daimler & Maybach were still hurting for capital to expand, so in 1890 they partnered with a military industrialist named Max von Duttenhofer who became chairman of the new company, Daimler-Motoren-Gesellschaft. However within 3 months Maybach disagreed about so much with Duttenhofer that Maybach resigned.

That's when Daimler, still with Duttenhofer, started secretly funding Maybach's Project Phoenix: an ICE capable of 2HP ... but the secret wasn't just more power, it was a design innovation that would not only allow Maybach to double the power BUT TO KEEP DOUBLING IT! The design innovation was, of course, the multi-chambered ICE, and just 20 years later the automobile would be a pretty common sight.


But yeah, anytime during the 1890s - 1910s you probably could've read 100s of articles about how small the market for ICE vehicles was, how there was no way to create enough fuel for millions of automobile and how, even if you could, there'd be no way to distribute that fuel anywhere other than only the largest cities. How horses made themselves, how they ate fuel anyone could grow, and how there was no way rich carriage makers were going to let some little upstart like Daimler-Motoren-Gesellschaft take their business ... especially when horses were so cheap to make!

How Daimler-Motoren-Gesellschaft barely had any capital to operate and couldn't even make a profit! ICE carriages were obviously a niche product as there was no way to scale the production, the fuel, or the distribution to make an ICE carriage ubiquitous. Duh.


So, yeah, I totally agree with you - there will be battery advances, technology advances, manufacturing advances, energy distribution advances, et al and in 20 years it'll seem amazing to teenagers that anyone would want to drive an oldtimey steampunk contraption like an ICE automobile.

[GrussGott]

Important follow-on point:

Much like Maybach's Project Phoenix that doubled ICE power while cutting weight (and costs) by 30%, Tesla is doing the same with their new BEV architecture by making the battery part of the structure:


What people don't seem to get about Tesla BEVs (oddly given this is car forum) is:

(1.) Much like Daimler, Tesla treats the vehicle as a platform: a system of discrete upgradable components made to operate in unison by a keystone. E.g., like Zeppelin (dirigibles) and the Wright Brothers, in case of the airplane, the keystone is the fuselage - fuselé being French for spindle - tying together lift (wings), control (rudder/elevator), power (engine), and operator (pilot). In a Tesla the keystone is software! And, of course, the software itself can be upgraded in place, in real-time - not just modularly - to improve efficiency and power.

(2.) Most of Tesla's latest innovation is manufacturing. Tesla is ripped for its build quality, and it should be, however that's yesterday. As Tesla builds new plants it's also installing patented - and new - manufacturing capabilities (and design) to lower costs and drastically improve build quality and speed. "Build it right the first time" will provide additional cost savings.

(3.) Tesla has no legacy union pension costs, no legacy factory costs, no marketing costs, and no dealer margin. This means once a Tesla BEV starts getting close to ICE costs, it'll quickly drop below them as operational savings multiply.

Tesla is about 1 year away from selling a no-brainer daily commuter: way cheaper, way nicer, way faster than anything ICE, and no more special trips to the gas station.