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THE Electric Vehicle (EV) Thread pt 8

Discussions of conventional and alternative energy production technologies.

Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby pstarr » Thu 03 May 2018, 00:07:34

Outcast_Searcher wrote:ramping toward break-even.

Image
It's a ramp alright, a bone-breaking ramp . . . down
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Outcast_Searcher » Thu 03 May 2018, 01:43:29

pstarr wrote:
Outcast_Searcher wrote:ramping toward break-even.

Image
It's a ramp alright, a bone-breaking ramp . . . down


So you understand nothing of volumes, profit margins, trends.

Recently Tesla has been making over 2000 Model 3's weekly and still plans to be at about 5000 midyear.

Here's a little back-of-the-envelope math for you:

5,000 Model 3's a week averaging $50,000ish a pop at the projected 20% profit margin by year end. (Assuming year end volume is no better than 5,000 per week).

5,000 a week * 13 weeks is 65,000. 65,000 * $50,000 is $3.25 billion per quarter.

20% of $3.25 billion is $650 million.

So, that's an expected roughly $650 million profit from the model 3 quarterly by year end 2018, at 5000 production a week. 2019 with higher volumes and 25% profit margins means more like $1 billion quarterly profit from the Model 3, conservatively.

Now, think real hard and see how those numbers roughly compare with Tesla's current total quarterly losses. Note how those losses are leveling off now.

...

But let's pretend that doesn't matter at all since pstarr doesn't like BEV's, still thinks they're impossible, etc.

With an estimated 450,000 preorders in for the Model 3, demand doesn't seem to be a problem, BTW.

...

Or are you going to tell us this is impossible since "people can't afford to buy gasoline"?
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby kublikhan » Thu 03 May 2018, 07:59:53

Plantagenet wrote:Musk said it “wasn’t cool” for professional investors to ask him questions about Tesla’s cash burn or Model 3 deliveries and such so he cut off all questions from the professionals and went to pre-screened easy questions from Tesla fanboys submitted on YouTube.

Wow.

Someone should tell Musk it isn’t cool for him to never meet the sales goals he has been promising for years. It isn’t cool to burn through billions of dollars and never make a dime of profit. It isn’t cool for him to waste billions of Tesla investors dollars propping up money-losing Solar City investors.

Not cool at all.
I think I heard a story like this somewhere before. Where was it again?

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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Outcast_Searcher » Thu 03 May 2018, 10:29:12

kublikhan wrote:
Plantagenet wrote:Musk said it “wasn’t cool” for professional investors to ask him questions about Tesla’s cash burn or Model 3 deliveries and such so he cut off all questions from the professionals and went to pre-screened easy questions from Tesla fanboys submitted on YouTube.

Wow.

Someone should tell Musk it isn’t cool for him to never meet the sales goals he has been promising for years. It isn’t cool to burn through billions of dollars and never make a dime of profit. It isn’t cool for him to waste billions of Tesla investors dollars propping up money-losing Solar City investors.

Not cool at all.
I think I heard a story like this somewhere before. Where was it again?

Jeffrey Skilling

No question it's terrible optics. And Enron and the Skilling issue re the conference call certainly was the first thing that came to my mind.

OTOH, Musk has never been the staid, "empty" suit, putting a bland but positive spin on things type of CEO that the vast majority of large US companies have. He actually gets stuff done re engineering, instead of just shuffling paper and looking good in a suit.

So to me, he just needs some guidance to be more patient on the calls in the future. Will he listen to his handlers/advisors any more than Trump does? Time will tell.

However, beyond the optics, as I said above, the core case re the numbers is marginally positive, except for the year delay in the Model Y rollout, which was a negative surprise.

Here is a good summary of several auto analysts who have the full spectrum of opinions ( bearish to bullish) on Tesla, which confirm that overall, big picture financials are marginally positive from this quarter's results.

https://www.cnbc.com/2018/05/03/what-wa ... -call.html
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Cog » Thu 03 May 2018, 10:46:01

You know, you can only lose billions a year until someone notices it.
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby StarvingLion » Thu 03 May 2018, 11:17:12

Its entirely possible that the Model 3 will become as significant as the Austin Allegro

Austin Allegro: how the worst car of all time came to be made

https://en.wikipedia.org/wiki/Austin_Allegro

In total, 642,350 Austin Allegros were produced during its ten-year production life, most of which were sold on the home market.

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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby StarvingLion » Thu 03 May 2018, 11:26:36

Outcast_Searcher wrote:
pstarr wrote:
Outcast_Searcher wrote:ramping toward break-even.

Image
It's a ramp alright, a bone-breaking ramp . . . down


So you understand nothing of volumes, profit margins, trends.

Recently Tesla has been making over 2000 Model 3's weekly and still plans to be at about 5000 midyear.

Here's a little back-of-the-envelope math for you:

5,000 Model 3's a week averaging $50,000ish a pop at the projected 20% profit margin by year end. (Assuming year end volume is no better than 5,000 per week).

5,000 a week * 13 weeks is 65,000. 65,000 * $50,000 is $3.25 billion per quarter.

20% of $3.25 billion is $650 million.

So, that's an expected roughly $650 million profit from the model 3 quarterly by year end 2018, at 5000 production a week. 2019 with higher volumes and 25% profit margins means more like $1 billion quarterly profit from the Model 3, conservatively.

Now, think real hard and see how those numbers roughly compare with Tesla's current total quarterly losses. Note how those losses are leveling off now.

...

But let's pretend that doesn't matter at all since pstarr doesn't like BEV's, still thinks they're impossible, etc.

With an estimated 450,000 preorders in for the Model 3, demand doesn't seem to be a problem, BTW.

...

Or are you going to tell us this is impossible since "people can't afford to buy gasoline"?


Actually Ford recently stated that the sedan is an evolutionary dead end. GM isn't far behind. Maybe asg70 can give us another lecture on successful evolution

The Tesla Model 3 is a stillborn.
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby dolanbaker » Thu 03 May 2018, 13:25:28

StarvingLion wrote:Its entirely possible that the Model 3 will become as significant as the Austin Allegro

Austin Allegro: how the worst car of all time came to be made

https://en.wikipedia.org/wiki/Austin_Allegro

In total, 642,350 Austin Allegros were produced during its ten-year production life, most of which were sold on the home market.

Image

Allegro, Morris Marina yep, remember them well, especially the Morris's tendency to "skip" around corners at speed when the wheels jumped and landed about 20degrees further round.

The only thing wrong with the Tesla cars from what I can see is the poor build quality, meaning that they look like they were built by a cheap Chinese outfit.
The mechanics & electronics are second to none!

If Tesla does fail, hopefully the "skateboard" part of the vehicle will live on in another car.
Ronald Coase, Nobel Economic Sciences, said in 1991 “If we torture the data long enough, it will confess.”
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Outcast_Searcher » Thu 03 May 2018, 15:10:29

Cog wrote:You know, you can only lose billions a year until someone notices it.

Or until you lose less.

That's what Tesla is apparently on the path to doing, and then potentially profitable and then very profitable.

Like with all companies, it's not certain though. Since they are currently losing $billions, Tesla can't take too long to make the transition, at least most of the way.

So they're cutting capital spending to conserve cash, and ramping volumes on the Model 3. Over time, they'll be introducing more efficiencies into production to help reduce costs.

(Recent successful example, reducing time to create a Model 3 power pack from 7 hours to under 17 minutes).

https://www.teslarati.com/tesla-model-3 ... utomation/

That's about a 25 times improvement in a process that was cited as a major sticking point for Model 3 production.

So, no -- they can't lose $billions, or even $hundreds of millions indefinitely.

They now have $3.2 billion in cash, and they have debt coming due in 2019 that must be paid or rolled over. So the clock is running.

So the real question is how quickly can they greatly trim losses. Musk's claims about solid Model 3 margins (20%ish) by year end 18 and high volumes says it happens by year end.

The history of the Model 3 production IS the exponential increase Musk predicted. It's just slower than predicted.

But it's solidly there as the Bloomberg Model 3 estimator shows and the historical production numbers show.

https://www.bloomberg.com/graphics/2018-tesla-tracker/

If there weren't clear signs of a serious ramp up, I'd be in the bear camp. Since there are, I'm in the "wait and see, and deal in facts and figures instead of hyperbole" camp.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Plantagenet » Thu 03 May 2018, 15:44:37

Outcast_Searcher wrote: Musk's claims about solid Model 3 margins (20%ish) by year end


Well----thats the key, isn't it? Musk's claims have proven to be wildly overly optimistic in the past. Perhaps his latest claim will be proven true....or perhaps it won't. And if Musk is wrong again, then Tesla will be in serious financial trouble.


Outcast_Searcher wrote:The history of the Model 3 production IS the exponential increase Musk predicted. It's just slower than predicted.


If its slower then predicted then Musk's past prediction was overly optimistic, i.e. wrong.

Outcast_Searcher wrote:But it's solidly there as the Bloomberg Model 3 estimator shows and the historical production numbers show.

https://www.bloomberg.com/graphics/2018-tesla-tracker/

If there weren't clear signs of a serious ramp up, I'd be in the bear camp. Since there are, I'm in the "wait and see, and deal in facts and figures instead of hyperbole" camp.


Look at the last graphic in the Bloomberg Model 3 estimator. It shows that Musk has already made three overly optimistic (i.e. wrong) predictions of the rate of the ramp up. Even the estimate he made just last January is overly optimistic.

And even if they get their act together and master the production line and start producing many more cars, its not clear they will make any more money. Yes, Musk says they will have 20% margins on their car sales, but given his past history of wrong predictions, his credibility isn't very good right now.

The disastrous conference call just yesterday shows that....when analysts tried to ask Musk some serious questions about his predictions and numbers, Musk said it wasn't cool to ask him hard questions. Think about that...Musk couldn't answer hard questions about his predictions so he cut them off and went to a prescreened patty cake question from a fanboy on youtube. Wow.

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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Cog » Thu 03 May 2018, 16:10:45

Musk didn't make money on the Model S and Model X. Those are his higher end models. How does he expect to make a 20% profit on the Model 3? Its not happening. Every car he produces he loses money. The only thing you do with more volume is lose more money. I'm not even counting the costs of servicing and correcting the problems associated with his shoddy construction.
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Outcast_Searcher » Thu 03 May 2018, 16:17:58

Cog wrote:Musk didn't make money on the Model S and Model X. Those are his higher end models. How does he expect to make a 20% profit on the Model 3? Its not happening. Every car he produces he loses money. The only thing you do with more volume is lose more money. I'm not even counting the costs of servicing and correcting the problems associated with his shoddy construction.

And you know he can't make a 20% profit based on what? Facts? Your intuition?

Higher volume should help a lot.

The idea that "nothing ever changes" simply doesn't hold up in the real world.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Yonnipun » Thu 03 May 2018, 17:47:02

What do you think about tesla semis? I honestly did not think that an electric truck could be so light. It makes 0-60 mph in 5 second without the load.
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby baha » Thu 03 May 2018, 18:14:55

What a ride :)

You know what I like about Elon? He made a plan, he's working the plan, and he won't give up! He gets frustrated and pig headed and just keeps pushing. If you press him about the plan, he'll blow roses up your...and keep you waiting. It's OK. I know he will eventually get there. He is actually very close to the goal.

Part of his plan is to eliminate FFs for transportation. I support that plan...financially :shock:
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby vtsnowedin » Thu 03 May 2018, 20:53:44

Yonnipun wrote:What do you think about tesla semis? I honestly did not think that an electric truck could be so light. It makes 0-60 mph in 5 second without the load.
While a truck needs to be able to merge with traffic on a on ramp smoothly for safety that is not the bottom line on it's viability. It needs to be able to carry forty thousand pounds of cargo five hundred miles a day for equal or less then the competition. I think that is barely possible today but with just a bit of improvement in the battery technology or the price of diesel moving up to above $5.00/gallon it will be a winning business plan.
There maybe a period where the trucks moving relatively light goods are electric while the ones pulling full 80,000GVW stick with diesel. They can't switch them all overnight anyway so they might as well pick the low hanging fruit first.
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Armageddon » Thu 03 May 2018, 21:57:09

How are you going to make all these batteries with the lack of cobalt? Is there another source that can replace cobalt?
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Outcast_Searcher » Thu 03 May 2018, 23:29:49

Armageddon wrote:How are you going to make all these batteries with the lack of cobalt? Is there another source that can replace cobalt?

1). Which "lack of Cobalt" is that? As of 2017, there were roughly 8 million metric tons of estimated Cobalt reserves.

https://investingnews.com/daily/resourc ... -reserves/

https://www.statista.com/statistics/264 ... -reserves/

2). Tesla has announced its Model 3 battery packs use less Cobalt. They are at an 8 to 1 to 1 ratio of Nickel to Maganese to Cobalt. They claim this is superior to competitors' "next generation" battery technology, and they still have superior thermal stability.

https://electrek.co/2018/05/03/tesla-mo ... ty-cobalt/

3). Much of the metal in batteries can be recycled. With the price of Cobalt rising, companies are looking for and finding solutions utilizing less Cobalt. Given the history of materials and substitution in reaction to prices generally, this is not surprising.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Plantagenet » Fri 04 May 2018, 01:17:54

baha wrote:You know what I like about Elon? He made a plan, he's working the plan, and he won't give up!... If you press him about the plan, he'll blow roses up your...and keep you waiting. It's OK


Yup.

Musk has decided its "uncool" to answer questions from the bankers about how his business is going. But he seems to have forgotten that Tesla is already over a billion in debt to Wall Street and the banks, and in order to execute his plan he has to go back to Wall Street and the banks and beg them to loan him even more money.

But will Wall Street and the banks give Musk more money for his plan now that it is clear Musk has been just blowing roses up their ......?

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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Armageddon » Fri 04 May 2018, 07:36:04

Outcast_Searcher wrote:
Armageddon wrote:How are you going to make all these batteries with the lack of cobalt? Is there another source that can replace cobalt?

1). Which "lack of Cobalt" is that? As of 2017, there were roughly 8 million metric tons of estimated Cobalt reserves.

https://investingnews.com/daily/resourc ... -reserves/

https://www.statista.com/statistics/264 ... -reserves/

2). Tesla has announced its Model 3 battery packs use less Cobalt. They are at an 8 to 1 to 1 ratio of Nickel to Maganese to Cobalt. They claim this is superior to competitors' "next generation" battery technology, and they still have superior thermal stability.

https://electrek.co/2018/05/03/tesla-mo ... ty-cobalt/

3). Much of the metal in batteries can be recycled. With the price of Cobalt rising, companies are looking for and finding solutions utilizing less Cobalt. Given the history of materials and substitution in reaction to prices generally, this is not surprising.




I thought the extraction rate couldn’t meet the demand on cobalt when trying to mass produce the batteries?
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Re: THE Electric Vehicle (EV) Thread pt 8

Unread postby Outcast_Searcher » Fri 04 May 2018, 12:59:51

Armageddon wrote:I thought the extraction rate couldn’t meet the demand on cobalt when trying to mass produce the batteries?

Much of the short term rise in cobalt prices has been due to concern that this would be the case over time.

However, I just saw an article last night stating that given Tesla has announced using much less cobalt than expected in the Model 3 batteries and getting best in class results -- the change in expectation might well mean cobalt prices will now drop meaningfully.

https://electrek.co/2018/05/03/tesla-mo ... ty-cobalt/

http://www.mining.com/tesla-delivers-ba ... alt-price/

https://investingnews.com/daily/resourc ... batteries/

Cobalt prices have been turning down recently. Investors do try to look ahead.

http://www.infomine.com/investment/metal-prices/cobalt/

Also, part of the issue has been concern about political instability in Congo, which has nearly half the known supplies. If the price is high, it's not like production can't be expanded in politically stable places like Austrailia (which produced 5000 tonnes of an estimated 1.2 million tonne supply last year).

Again, economics WORKS via the pricing function, especially over time. Much less supply is needed than thought (battery manufacturers now know to work on engineering batteries with less cobalt to reduce price, based on Tesla's disclosure), and higher prices will very likely mean more supplies coming on line over time, if they're sustained.

Cleantechnia had a handle on this 3 months ago:

https://cleantechnica.com/2018/02/11/no ... ill-march/
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
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