Musk endeavours

[odysseus2000]

Tesla coming to the UK?:

https://www.tesmanian.com/blogs/tesmani ... tion-rumor

Regards,

[odysseus2000]

Germany ramps EV incentives and ICE disincentives:

https://seekingalpha.com/news/3580515-g ... ent=link-3

Regards,

[odysseus2000]

After 3 years, Siemens can only create 2x the battery capacity that Tesla already have in Australia:

https://seekingalpha.com/news/3580517-s ... ent=link-3

Regards,

[odysseus2000]

Electric van for the boring company?:

https://electrek.co/2020/06/05/tesla-el ... -official/

Regards,

[odysseus2000]

All the big legacy player should are churning out low cost, low range, low performance models. What thus is doing to their legacy ice business is rarely discussed, nor are there many test drive & living with the car type of video.

For some who lives in a city & who can park & charge these look attractive, but I would fear for my life if in an accident in one of these & the carry capacity is too small for me.

With this kind of marketing & production it seems inevitable that these early bottom up cars will depreciate very rapidly & that should spread the uptake of BEV.

Video with price, range & availability:

https://youtu.be/7NnJMlD3IV8

Regards,

[dspp]

We need to keep an eye on the Tesla growth rate. I make the simplifying assumption that Tesla would not be building auto-capacity if the corresponding cell-capacity would not be coming onstream in parallel.

Indications are that Shanghai will reach approx 500k capacity by end 2020 / early 2021, i.e. 200k of 3, and 300k of Y
https://www.teslarati.com/tesla-model-y ... -purchase/
https://www.teslarati.com/tesla-made-in ... es-online/
https://www.teslarati.com/tesla-model-y ... completed/

Indications are that Fremont will also be at 500k capacity by then
- sorry no link, just watching snippets

Indications are that Berlin will get to first cars in July 2021 (3 + Y)
https://www.teslarati.com/tesla-gigafac ... as-update/
https://www.teslarati.com/tesla-giga-be ... officials/

and that Europe insurance will align
https://www.teslarati.com/tesla-insuran ... expansion/

Indications are that Austin Texas is trying to get first assembled units out by end 2020 (!) (Y + cybertruck), though this sounds like KDK assy to begin with
https://electrek.co/2020/05/15/tesla-fa ... tin-texas/
- though that might be Tulsa OK (https://www.teslarati.com/tesla-tulsa-o ... challenge/) or they might end up with semi etc one day

Indications are that UK is back wooing TSLA, though I imagine Brexit (tarriff + state aid) issues will be front & centre
(again, that is how UK get redlined out a few years ago, not even making EU shortlist due to Brexit)
https://electrek.co/2020/06/03/rumor-te ... t-factory/

Rumours are that advance planning is going on for a second 500k China factory
- sorry no link, just watching snippets

Indications are that cell capacity is being prioritised for 3+Y over semi, hence semi delay to 2021
https://electrek.co/2020/04/29/tesla-se ... ric-truck/

That's quite a lot of capacity. And inside that is also cost reduction. And TSLA has previously been able to match demand to supply, so no reason to think they won't sell them all.

For some reason I can't get imgur to respond right now*, but I had pencilled in 574k vehicles in 2020, 856k in 2021, and 1280 in 2022. Looking at the list of plants and lines above that seems about right. Any comments ?

EDIT: Sorry, a point I ought to have made is that sometime in mid-2021 I estimate that TSLA profits exceed capital required for expansion. From then on they ought to be able to expand without requiring a capital raise. Clearly there will be something of a cv19 speedbump in 2020, but let's see how that pans out.



regards, dspp

* fixed

[odysseus2000]

Thanks dspp, super good and useful points.

The more I look at competitors the more I see a bottom up approach, rather than the top down of Tesla. It may be that there is room for both, but I think the margins on the bottom up with so many entrants will be low, whereas Tesla having a much better product can likely keep good margins.

If Tesla reach a Carnigie milestone of building new from profits from old then they should rapidly outdistance all the other legacy.

I believe that Tesla's application for a UK generation license is very significant and will have sent alarms blazing in UK generators, but likely not at board level, so I expect Tesla to hurt them before boards wake up and by then it will be a scramble to try and catch up.

Regards,

[dealtn]

I believe that Tesla's application for a UK generation license is very significant and will have sent alarms blazing in UK generators, but likely not at board level, so I expect Tesla to hurt them before boards wake up and by then it will be a scramble to try and catch up.

Why doesn't Tesla's application to Ofgem say why they want to generate electricity? I would have thought that would be necessary.

[dspp]

I believe that Tesla's application for a UK generation license is very significant and will have sent alarms blazing in UK generators, but likely not at board level, so I expect Tesla to hurt them before boards wake up and by then it will be a scramble to try and catch up.

Regards,

I can with 100% certainty (and I mean that) tell you that TSLA has been very visible at board level of UK generators, and all over the world, for all of the last decade. However most of them have been so involved with wrestling with the problems of their legacy businesses that they couldn't get too far ahead of the curve in a new business. That was a deliberate decision by them. The only one that tried seriously was Ecotricity, and he discovered that Musk is even slipperier than expected.

TSLA are applying for these licences all over the world. It is rather obvious why.

regards, dspp

[AJC5001]

I had pencilled in 574k vehicles in 2020, 856k in 2021, and 1280 in 2022. Looking at the list of plants and lines above that seems about right. Any comments ?

How does that compare with the annual replacement rate for the current car fleet? There are over 30 million cars on UK roads. If you assume average life of 15 years, it needs 2 million new cars a year to replace those scrapped. Even more will be needed if there is any move to increase the replacement of ICE cars earlier.

What about the rest of the world?

Adrian

[odysseus2000]

I believe that Tesla's application for a UK generation license is very significant and will have sent alarms blazing in UK generators, but likely not at board level, so I expect Tesla to hurt them before boards wake up and by then it will be a scramble to try and catch up.

Regards,

I can with 100% certainty (and I mean that) tell you that TSLA has been very visible at board level of UK generators, and all over the world, for all of the last decade. However most of them have been so involved with wrestling with the problems of their legacy businesses that they couldn't get too far ahead of the curve in a new business. That was a deliberate decision by them. The only one that tried seriously was Ecotricity, and he discovered that Musk is even slipperier than expected.

TSLA are applying for these licences all over the world. It is rather obvious why.

regards, dspp

Thank you!

That puts an even better spin on it from a Tesla perspective.

Regards,

[dspp]

I had pencilled in 574k vehicles in 2020, 856k in 2021, and 1280 in 2022. Looking at the list of plants and lines above that seems about right. Any comments ?

How does that compare with the annual replacement rate for the current car fleet? There are over 30 million cars on UK roads. If you assume average life of 15 years, it needs 2 million new cars a year to replace those scrapped. Even more will be needed if there is any move to increase the replacement of ICE cars earlier.

What about the rest of the world?

Adrian

Using standard logistics 'S' curves this suggests that if the rest of the auto industry adopts at rates approaching Tesla then all global vehicle sales *would be BEV sales by about 2030. Since average life expectancy of a legacy fossil fuel ICE vehicle is approx 14-years then by about 2045 pretty much all vehicles on the roads of the world would be BEV, with trivial remaining ICE.

Along that pathway, if Tesla continues to perform at this rate it would be delivering 1/3 of the worlds cars by 2030. That seems unbelievable. What is interesting is that if the legacy auto industry is slow to adopt BEV then Tesla (or an other BEV maker) simply wins even more market share and accelerates even faster. The reason for that is that legacy fossil fuel vehicles are now becoming increasingly uncompetitive. So as BEV enters any given segment with a competitive product then ICE implodes. There are also network & scale effects that pay to the advantage of any well managed BEV entrant, and TSLA is exceedingly well managed. That means any other BEV competitor is forced to be comparable to TSLA in competitiveness terms, which again plays against legacy ICE continuation.

I appreciate these numbers look fantastical, but they pass the test on both investment-rate-constraints (i.e. TSLA goes self-sustaining next year); and on 'infrastructure' build out rates (factories, chargers, mines, machinery, etc).

I watch with interest, and as a holder of some TSLA shares ......... and some RDSB ...... mmmmm

regards, dspp

*approx 77-100 mln vehicles/year depending on whether you make the upper cut off at cars, or light trucks, or everything heavier; and there is a similar light end cut off for trikes, motorbikes, etc. But approx 80mln/yr is about right.

[dealtn]

The reason for that is that legacy fossil fuel vehicles are now becoming increasingly uncompetitive.

For someone that has no "skin in the game" either way, can you briefly expand on this, as that's not how I would see things (at least presently) were I to be looking for a new vehicle. I appreciate I might be the outlier!

[odysseus2000]

Interesting video suggesting that Tesla will join the folk who are advocating using cars as batteries for the grid. This has the potential to provide dramatically more power than the new nuke station begin built by the Chinese and French.

Also battery powered oil tankers for around nation transport of oil.

How VW dealers put off folk who go there to buy electric.

Some stuff on the Dr. Goodenough glass battery

Video:

https://www.youtube.com/watch?v=0domc-YlOZQ

Regards,

[dspp]

The reason for that is that legacy fossil fuel vehicles are now becoming increasingly uncompetitive.

For someone that has no "skin in the game" either way, can you briefly expand on this, as that's not how I would see things (at least presently) were I to be looking for a new vehicle. I appreciate I might be the outlier!

1. If you read back through this thread you will find some posts where Howard and I looked at the Tesla model 3 vs the competitors from BMW, Audi, etc from the perspective of the total cost of ownership (tco) for a person buying (or leasing) them from new and cycling them after 3-years. I think it was a series of posts about a year ago. What we determined was that outside a congestion/emissions charging zone they were approximately equal, but that within a congestion/emissions charging zone there were very significant savings to be had from preferring the Tesla 3. With the most recent increase in the London charges that will have further improved, plus more cities are bringing in diesel (etc) bans on emissions that make any fossil fuel vehicle a risky ownership proposition. The more miles someone did the better the tco proposition was in favour of the Tesla 3. And if they have their own driveway and their own solar PV it gets a lot better (even before looking at added value from being part of a bidirectional virtual UK battery).

2. And similarly if you read through this thread you will find numerous market segment analyses in the USA market where the Tesla 3 has now taken approximately 50% of the US premium sedan (saloon) segment, leaving the remainder to be shared amongst BMW, Audi, Mercedes, Lexus. The reason is because of the product proposition as a whole, part of which is per 1 above, but there are many other aspects. Similar things happen in non-US markets when Tesla enters at the relevant scale.

3. And each year the cost/performance proposition in a Tesla 3 improves (or any other BEV), whereas that of the legacy dino-juice vehicle gets either marginally better or much worse depending on your 'lense'; and each year the BEV-makers enter a new segment. With the Tesla Y they are now into the CUV segment, which I think will also sell well in Europe where as I am sure you know the estate/hatch segment is much more important than in the US market. So year-by-year and segment-by-segment the balance tips against dino-juice.

4. I get a lot of flak from some folk since I personally am a bangernomics person. When a Tesla 3 is on its 4th owner cycle it might perhaps trickle down into my hands. At which point its battery will still be perfectly acceptable for my needs (https://electrek.co/2020/06/06/tesla-ba ... placement/) given that I generally buy autos at 150k miles and they go to the scrappy at about 250k miles (and about 14/15-years).

5. Don't get me wrong. I'm not saying TSLA is a good buy at this share price. That's an entirely different discussion.

regards, dspp

[odysseus2000]

The reason for that is that legacy fossil fuel vehicles are now becoming increasingly uncompetitive.

For someone that has no "skin in the game" either way, can you briefly expand on this, as that's not how I would see things (at least presently) were I to be looking for a new vehicle. I appreciate I might be the outlier!

It really depends on what your needs are.

If for example you need a car that can easily manage say 500 miles in a day, as happens in some big US States like Texas which has an 85 mph speed limit, then, at least for now, an ICE is probably most suitable.

Most people do not have such needs and it then comes down to more mundane things like fuel costs, luggage capability, city or country driving, acceleration, on board IT, music capability, safety etc etc.

On top of this are aspects of cost, longevity, depreciation and whether an individual has a strong interest in helping rid the air of ICE emissions or not.

All the analysis I have seen supports the thesis that BEV out perform ICE for most drivers needs, in all aspects (cost, acceleration, climate charges, driving experience etc etc) and that that out performance is almost certain to increase as politicians become more serious about getting shut of ICE cars.

Then within any particular users needs there are all the more subjective emotional things. Some on this board for example loath Musk and Tesla and would never buy Tesla, but would buy BEV VW or Toyota etc, others love Tesla and would not buy anything else.

Regards,

[dealtn]

So it sounds like it's marginal at the moment at best, and some of this is due to the subsidies and tax treatments that differ between BEV and ICE.

It will be interesting to see how this develops, but I don't share your optimism this will happen at the kind of pace you envisage.

I don't know enough about the company from an investment perspective but it looks way too "rich" for me. The car side doesn't impress me investment wise, but I appreciate there is more to the company than automobiles.

From a product perspective until I can get a practical usable 500 miles+ a day vehicle I can only see downside to BEV, and couldn't buy any BEV, let alone Tesla.

[dspp]

So it sounds like it's marginal at the moment at best, and some of this is due to the subsidies and tax treatments that differ between BEV and ICE.

It will be interesting to see how this develops, but I don't share your optimism this will happen at the kind of pace you envisage.

I don't know enough about the company from an investment perspective but it looks way too "rich" for me. The car side doesn't impress me investment wise, but I appreciate there is more to the company than automobiles.

From a product perspective until I can get a practical usable 500 miles+ a day vehicle I can only see downside to BEV, and couldn't buy any BEV, let alone Tesla.

Howard tends towards your way of thinking, but that was about the gist of the analyses we thrashed out between us. It was worth quite a few £k of advantage to the BEV, not a trivial number.

And taking 50% market share in the segments they enter isn't trivial either.

But each to their own.

The adoption rate I gave you was simply the central forecast in my own numbers, which I offered since you asked. There are faster and slower ones, I do not know what will happen.

The valuation concerns are valid. With a business like this one has to use PEG methodologies for valuation and things do tend to get scary.

regards, dspp

[odysseus2000]

dealtn
From a product perspective until I can get a practical usable 500 miles+ a day vehicle I can only see downside to BEV, and couldn't buy any BEV, let alone Tesla.

From an investment perspective it is often dangerous to view a business in terms of whether any particular investor would or would not buy a particular product. Something that happens regularly on this board. For example I regularly meet investors who tell me that Apple products are way too expensive and that they would never buy one. But the reality is that Apple is a very profitable business.

The more relevant investment perspective is how big is the potential buyer base. I make it a habit to ask anyone I meet about what they like and what concerns them and I get a good percentage who are concerned about the environment and during the lock down many spoke about how much cleaner the air was. During the lockdown I was out in the garden when a neighbour several hundred yards away started his petrol strimmer, something I regularly hear but otherwise never notice. But with so little traffic and the wind gently blowing towards me I soon smelled the two stroke exhaust. When there was no alternative to ICE then we all had to put up with this pollution, but that is no longer the case and from what I gather from folk there will be votes in this for the politicians who put forward an anti-ICE agenda as we are currently seeing in London.

This reduction in ground level pollution, reduction in co2 emission, renewable power with car storage etc are all potential vote winners and in my view are a great secular trends that will rapidly sweep away ICE. The development of multiple bottom up BEV cars by various manufactures tells me that it will soon become possible for cities to ban ICE engines. If that happens then the ICE market will collapse.

Regards,

[dealtn]

dealtn
From a product perspective until I can get a practical usable 500 miles+ a day vehicle I can only see downside to BEV, and couldn't buy any BEV, let alone Tesla.

From an investment perspective it is often dangerous to view a business in terms of whether any particular investor would or would not buy a particular product. Something that happens regularly on this board. For example I regularly meet investors who tell me that Apple products are way too expensive and that they would never buy one. But the reality is that Apple is a very profitable business.

The more relevant investment perspective is how big is the potential buyer base. I make it a habit to ask anyone I meet about what they like and what concerns them and I get a good percentage who are concerned about the environment and during the lock down many spoke about how much cleaner the air was. During the lockdown I was out in the garden when a neighbour several hundred yards away started his petrol strimmer, something I regularly hear but otherwise never notice. But with so little traffic and the wind gently blowing towards me I soon smelled the two stroke exhaust. When there was no alternative to ICE then we all had to put up with this pollution, but that is no longer the case and from what I gather from folk there will be votes in this for the politicians who put forward an anti-ICE agenda as we are currently seeing in London.

This reduction in ground level pollution, reduction in co2 emission, renewable power with car storage etc are all potential vote winners and in my view are a great secular trends that will rapidly sweep away ICE. The development of multiple bottom up BEV cars by various manufactures tells me that it will soon become possible for cities to ban ICE engines. If that happens then the ICE market will collapse.

Regards,

Define "soon"!

You are a long way from me on your "optimism" than I am on how quickly this "secular" change happens.