odysseus2000 wrote: redsturgeon wrote:
Yes, but if you have flat land, where do you put the stored water, or are you suggesting pressurising the water in a tank and letting it out. In which case I believe capacity does against you, better as I understand it to pressures gas, e.g. the welding cylinder I buy contains if I remember correctly over 2000 psi or 2000/14 approx 140 x atmospheric pressure. That stored energy could be used to do work, e.g. spin a generator.
Water towers or mine shafts? I was not aware that water could be practically pressurised and I think pressurising gases has some benefits but it was mainly the lifting heavy weights bit I was referring to.
Yes lifting weights is a way to store energy, but you need some structure to provide the height. This could be mines, water towers are not that tall & not rated for heavy loads as far as I know.
For many real-world areas where people live in large amounts, i.e. the primary global load centres, these are predominantly within 50-miles of the sea and on flat land. Mine shafts are a rarity and worth exploiting for gravity storage where they exist but that is a niche use-case. Building storage towers is capex-heavy and uneconomic. Putting dedicated long-distance HV transmission to the high ground areas for (gravity) pumped storage hydro is uneconomic, but it is economic where the HV transmission can be shared with other users to get higher capacity factors on the HV lines. That is why (say) Norwegian proposals are viable, but most are not. Kinetic storage is very high cost and has many serious drawbacks, but does have applications in some very specific use cases (esp. naval ones), bur even there it will have to compete with other technology pathways that have mass scale adoption / learning advantages.
Batteries will - imho - be the primary storage solution to resolve grid intermittency for most of the world's use cases. That is the adoption pathway that is happening right in front of us.
The price of Tesla does not fully take into account the storage & autonomy plays. It is currently only priced as a high-growth automotive manufacturer. Tesla is currently averaging (Q1-2017 >> Q3 2019) 33% yoy revenue growth and 9% qoq revenue growth. Average underlying GM% over the same period is 19% varying in individual quarters from a low of -5% to high of 35%, using the blended methodology I have used before. Using GAAP numbers they have again averaged 19% but been as low as 12% and as high as 25%.
This is blistering and sustained growth at a healthy GM% with fantastic capital efficiency and which has extremely disciplined cash flow.
The traditional automotive sector is watching a new kid come on the block, and give them all a case lesson in how to restructure their industry in broad daylight with full transparency about what is going on, at a global level. Musk has read Christensen et al and is dealing the playbook straight at the incumbents.
If you look at Supercharger connector contention ratio it is healthy at 34-49 vehicles per connector. Likewise destination connectors are healthy at 18-30. That is of course not counting all the private (domestic & work) charger locations, or the public access charger networks. The only EV you can currently buy and drive in pretty much any of the major populated countries is a TEsla. All the others still suffer from range anxiety due to a combination of poor batteries; too small a battery; poor efficiencies (km/kWh); and restricted charger networks.
Vehicle sales per location is generally steady at about 240/qtr. Vehicles maintained per (location+mobile) is stable at 520-640. Inventory is stable. That shows they are scaling quite happily and can roll out the model into each new territory as they see fit.
And that is before getting to the storage game and the autonomy game. There is also some tantalising glimpses that they may be using their scale to create a defensible moat in solar PV deployment by attacking the soft deployment barriers, but I remain unconvinced on that.
At a annualised EPS of $7/share and at the Q3 2019 end quarter share price of $240 that is a P/E of 34 which is nosebleed territory.
But when you look a it on a PEG basis with a 33% yoy growth that is a PEG of 1.03, so that is bang on the fair price range (1.0 is fair price PEG). Admittedly it might not be fair price at today's $328 but I didn't buy at $328 and am not rushing to do so.
Then you have to look at whether the 33% can be maintained over the next 2-4 years and I would say, absolutely it can. Let's do the maths, Fremont is currently doing (Q3 2019) 96,1555 cars per qtr, so 384,620 cars/yr. The sum is 384,620 x 1.33^4 = 1,203,479 cars/yr.
OK, that's the maths so now lets look at the industrial reality. The Shanghai factory is starting to come onstream and the Y is coming onstream next year. Both have battery capacity in place and/or planned to allow them to grow to become full. So that is 500k cars/yr from Shanghai by the 4-yr point, and 700k cars/yr from Fremont by the 4-yr point. That's 1.2 mln cars/yr. Er, that is bang on the 33% annualised growth I laid out. These are the numbers the Tesla board will be looking at, and what they are aiming for as their mid-case scenario.
That's before taking into account any capacity adds from the semi; the pick-up, or the German factory. They represent the high case.
Those of you who are looking at individual quarter yoy or qoq comparisons are being blindsided by the 'steppy' nature of the capacity adds.
Those of you who are dissing the company and the valuation are not doing the maths.
That's before noting that the network effects of the charger network are becoming easier; that fixed cost absorption is becoming easier; and before allowing for any value ascribable to storage, to autonomy, to solar, or even to robotaxi wet dreams ! Those represent the very high case.
I have been tooling around China the last week in a BYD which is a competitor to TSLA. Buffet / Berkshire Hathaway are invested in BYD. Personally I don't see any comparison - I'd pick the Tesla any day. Judging by what's on the road in China the market is fully primed and ready. (I have been there on work related to the Chinese HV grid ....)
For sure there will be surprises and upsets. Especially with quarterly volatility. But I have about 4% of my portfolio in TSLA and I'm smiling. I might even consider buying on dips if my spare funds allow.
PS. if you want go tohttps://ir.tesla.com/investor-relations
specifically https://ir.tesla.com/events-and-presentationshttps://ir.tesla.com/static-files/47313 ... 61bce15da4