@Freetrade_Team In you newsletter you said $TSLA relies on computer vision and cameras. Sorry, I am a nerd - please don’t forget the radar (forward-facing 160m) and ultrasonics (8m) :
The whole LIDAR/no LIDAR debate is not going away but at least that company (with Level 2 self-driving capabilities) has a bunch of cars on the road all over the world learning every day, while Waymo, Lyft. Uber (Level 5) are experimenting in certain areas.
If any of you are wondering what a LIDAR is - this talk by an ex-Waymo lead Chris Urmson - now with Aurora - is awesome (from 7:45 onwards):
I made a gif from the keynote of a woman in a chair chasing a duck as seen by the Waymo car:
The battle for the self-driving future is on.
Listen to this podcast by Lex Fridman (MIT deep learning professor) - who I have met and he is a humble smart man - if anyone is interested is autonomous vehicles:
George Hutz has money raised through big VCs:
Elon Musk on autopilot etc:
Jaguar has sold an average of about 190 I-Pace crossovers a month since U.S. sales began. Tesla, by comparison, was delivering Model Xs at a clip of about 550 a month in its first year on the market, beginning in 2015, according to InsideEVs.com estimates.
The Audi e-tron has been on the market in the U.S. for only four months, but during that time, it has averaged sales of about 745 units, InsideEVs estimates. In July, 3.5% of Audi’s U.S. sales were all-electric, and the company expects that number to climb to 30% by 2025.
Bloomberg Tesla tracker (23 August 2019):
Batteries made by LG Chem will be used initially in Model 3 cars manufactured in the plant near Shanghai, Tesla’s first outside of the U.S, said the people, asking not to be identified discussing a private matter. LG Chem batteries will also be used in Model Ys produced there once the compact crossover car is released, they said. Shares of LG Chem jumped.
The supply agreement isn’t exclusive to LG Chem, the people said, meaning Tesla could procure batteries from other suppliers as the Model 3 maker prepares to start production in China later this year, part of the EV pioneer’s push into what is the world’s biggest market for new-energy vehicles.
Tesla plans to use multiple battery suppliers for its China-made cars, the people said, and has also been in talks with top Chinese battery producer Contemporary Amperex Technology Co. Ltd. about a supply deal, Bloomberg reported in March. Tesla has a long-standing relationship with Japan’s Panasonic Corp., which makes batteries with the carmaker in Nevada.
LG Chem will provide Tesla with so-called 21700 type battery cells, which have more capacity than some older battery types, one of the people said. They will be made at LG Chem’s factory in Nanjing, which is about 200 miles (320 kilometers) west of Shanghai.
A unit of South Korea’s fourth-largest conglomerate, LG Chem is the world’s second-biggest manufacturer of lithium-ion battery cells, according to BloombergNEF. The company is seeking to reduce its reliance on chemical production by boosting sales of electric-vehicle batteries. It has supply deals with Volvo Cars to Renault SA and General Motors Co.
I quite like Tesla, unfortunately it doesn’t fit my requirements for me to invest
Speaking of batteries
We recently informed you about the Tesla Inspired Gigafactory in India which will be established with government support. Well, as it turns out, Tesla and a Chinese company called Contemporary Amperex Technology Co. Ltd (CATL) are interested in setting up large Lithium-ion factories in India.
Another Chinese company called BYD Co. Ltd. is also showing interest in snatching the Indian government’s tender worth Rs 50,000 crore. The news comes from an anonymous source at NITI Aayog.
CATL is a Chinese battery manufacturing company founded in 2011. It has three R&D centers located in China and Germany. In 2018, the company also announced a new factory in Erfurt, Germany. Companies like BMW have bought electric batteries worth €4 billion from CATL.
BYD is an electric battery and car manufacturer in China which specializes in making electric cars and buses.
The push to spend billions of dollars from the Indian government was proposed by the NITI Aayog and approved by the Expenditure Finance Committee. The proposal will now be approved by the cabinet and all the paperwork is supposed to be over by September 2019. After that, the international tender will be made available for bidding.
The officials have set up minimum bidding of 5 GWh and maximum bidding of 20 GWh to maintain balance.
Tesla Gigafactory In India: The Electric Vehicle Push Is Aggressive
It is 2019 and the Indian government is pushing electric vehicles quite aggressively. Some might even say at the cost of its current auto industry. Finance Minister Nirmala Sitharaman recently introduced a bunch of benefits for EVs in the nation’s latest Union Budget.
The Indian government has given the following benefits to ease the manufacturing and adoption of electric vehicles:
- Reduction in Customs Duty to manufacture electric cells in India in 2021-2030
- Tax rebates up to Rs 1.5 lakh and total exemptions up to Rs 2.5 lakh
- GST rate cuts on electric vehicles from 12% to 5%
Furthermore, in March 2019 the Indian government initiated the second phase of its FAME series which stands for Faster Adoption and Manufacturing of Electric vehicles. According to the scheme, those automakers, who qualify for incentives, will be given benefits from the Rs 10,000 crore allocated by the Indian government.
As earlier mentioned, the push by the government is so aggressive that the automakers of conventional vehicles are suffering from loss in sales. Maruti Suzuki recently reported a loss of 36% in sales, Mahindra Tractors reported a loss of 11% and almost 300 dealerships across India have been closed — resulting in a predicted job loss of 30,000.
There are several other factors that have contributed to the slow down of the sales in the Indian auto industry. Increased road tax, registration fees, mandatory 5-year insurance, and the upcoming BS6 norms are some of them.
Elon Musk has previously stated that launching Telsa electric cars in India is difficult due to high import duties. However, when an Indian student team asked him whether Tesla would come to India, Elon replied with a positive ‘yes’. However, he didn’t specify a particular date.
Electric Vehicles Are Not Last Resort
According to Maruti Suzuki India Chief R.C. Bhargava, the government shouldn’t phase out conventional vehicles, instead, it should reduce its dependence on oil imports. India is currently infamous for consuming almost 80% of imported oil.
The upcoming initiative to set up Tesla-inspired Gigafactory in India seeks to address that. Furthermore, after the installation of Indian Gigafactories, the load on the national grid, which suffers from infrastructure failure in several metro areas, will be reduced.
According to R.C. Bhargava, conventional cars and particularly diesel cars are always a scapegoat whenever air-pollution is discussed. However, a report from TERI confirmed that cars accounted for 28% of PM 2.5 air pollutants in the Delhi-NCR.
The Maruti chief echoed the accumulated voice of the entire Indian auto industry by saying that the government should redesign the GST tax rates for conventional vehicles.
Furthermore, he also suggested that the tax benefits for electric vehicles should also be passed onto hybrid vehicles, which currently are a more viable option for consumers due to the lack of charging infrastructure in India.
The Indian government aims to install six facilities with gigawatt-scale facilities by 2025 and 12-gigawatt scale facilities by 2030. India seeks to secure her energy needs by being capable of producing 175 gigawatts of renewable power by 2022 and 500 gigawatts of clean power by 2030.
The government is also considering offering a $1 billion dollar loan from different parties to promote local battery storage and manufacturing in India.
As of right now, there’s no domestic company in the country that has the ability to manufacture electric cells. All lithium-ion cells used in electric vehicles in India are imported from outside countries like China.
This is currently the main hurdle in the adoption of electric vehicles in India. The entry into the ownership of an electric four-wheeler is very high in India. The recently launched Hyundai KONA electric SUV is the only car in India with a decent range of 451 km, but it is priced at Rs 23 lakh, even after incentives.
Other electric vehicles like the Tata Tigor electric and Mahindra e-Verito have weak specs and a meager range of just 150-180 km on a single charge. On top of that, both cost around Rs 10 lakh making them quite inaccessible to the average Indian buyer.
However, strides are being made towards making electric cars affordable in India. There are a number of upcoming electric cars in India which will arrive in the market by 2020. A number of manufacturers like Hyundai are also investing a sizeable amount of money to make electric cars affordable in India.
Hopefully, in the next 5 years, electric cars in India will also overtake the sales of conventional vehicles as they have done in Norway and certain parts of Europe.ttps://fossbytes.com/tesla-gigafactory-india-chinese-electric-battery-company/amp/
Hong-Kong-listed BYD are kind of neat. They do - autos (including buses), handset components, and batteries+solar (photovoltaic stuff). I’ve been inside a few of them BYD e6 “Ubers”, they are alright I think, they do the job. As of 30 June, Buffett’s Berkshire Hathaway was the “largest” shareholder with nearly 25%, according to the latest 1H 2019 filing on the Hong Kong Stock Exchange.
If anyone is interested, the interim results are here.
On the public transportation side, they’ve been expanding as @Prince mentioned:
During the period, the Group successively received orders from all over the world including Portugal, Spain, South Korea, India, the Philippines,
(1H 2019 Management Discussion & Analysis (MD&A))
BYD may have also nearly matched Tesla or overtook it in terms of the total number of EV vehicles sold (including buses and stuff). Recently, they also posted awesome 1H earnings, apparently: https://insideevs.com/news/366569/byd-tripled-net-profits-h1-2019/
Hope nobody minds this awful-looking chart with great-looking data from InsideEVs.com:
BYD sales breakdown:
- Yuan BEV – 4,320 (47,804 YTD)
- e5 – 126 (26,221 YTD)
- Tang PHEV – 2,100 (26,274 YTD)
- Qin PHEV – 1,785 (12,857 YTD)
- Qin BEV – 1,200 (11,858 YTD)
- Song PHEV – 1,890 (8,586 YTD)
- Tang BEV - 570 (5,635 YTD)
- Song BEV – 99 (4,347 YTD)
- e1 - 1,120 (5,288 YTD)
- S2 - 2,080 (4,141 YTD) *New monthly record
- Song MAX PHEV - 720 (3,760 YTD)
Source - https://insideevs.com/news/365674/byd-plug-in-car-sales-slowed-down-china/
(Not sure why e6 is not mentioned neither here nor in the MD&A).
Meanwhile, Tesla may be looking to break ground in Germany for a Gigafactory soon:
Though it’s been in Europe for some time already putting cars together, including my pre-order probably:
It’s not well-known, but Tesla has had a “final assembly” factory in Europe for a long time.
The factory is located in Tilburg in the Netherlands and the automaker expanded the factory to a new 78,000 square-meter (840,000 sq-ft) facility back in 2015.
It is also expanding into Poland, Hungary, Romania and Slovenia:
Here’s an interesting article from Bethany McLean (journalist who covered Enron’s fraud):
I’ve covered solar panel (photovoltaic ones) companies in the past, they were all full of debt and some very large ones in the East were heavily subsidised.
Every company - irrespective of the core problem it is trying to solve, whether it is agriculture or transportation - needs to be a tech company to survive and thrive.
“Software is eating the world” - Marc Andreessen
(Andreessen Horowitz - a VC fund, investor in Airbnb, GitHub, Instagram, Facebook, Pinterest, Coinbase)
VW is going to pump EUR 9 billion to be more like Tesla - a vertically integrated hardware-software company. This shift will takes years.
VW Group is now going to take a similar approach to software, consolidating it all under one new internal group, similar to the way that financial services or the ride-hailing Moia exist alongside individual vehicle brands. And that means in the future, a single unified automotive OS will run on everything from a VW Polo to an Audi A8.
Senger also revealed that VW Group will be using Android for future versions of the MIB infotainment platform, in large part because of the robust third-party app ecosystem with that OS versus Linux. “I think we need to open up. So Android will come in cars, giving customers access to this enormous ecosystem. But really be careful how much Android you’re talking about. There are some brands really using Google’s automotive services; this is not our strategy. When you do this, you get a great package of function and services, no doubt. But you also have to open up all the car’s sensor data [to Google], and when I say all, it really is all sensor data,” Senger told me.
Volkswagen AG is bundling its software operations with an investment plan of about 8 billion euro ($9 billion) over the next three to five years, another step in the electric and connected-car shift that’s heralding massive change across the entire industry.
The combined operations will have a workforce of as many as 10,000 developers, Christian Senger, head of digital car and services for the VW car brand, said in a presentation at the Frankfurt auto show.
The manufacturer had earlier outlined a plan to pool about 5,000 digital experts into a single unit that will develop “vw.os,” a uniform software operating system across all new models that will be rolled out starting next year. The software can be used across VW’s vehicle underpinnings for electric, hybrid as well as combustion-engine cars, according to a company spokesman.
VW Chief Executive Officer Herbert Diess has mapped out a massive expansion in software and digital investments, and earlier this year started the rollout of the industry’s biggest automotive cloud with strategic partner Microsoft Corp. With the creation of the Car.Software unit, Volkswagen’s in-house tech development will rise to at least 60% by 2025 from less than 10% now, the carmaker said earlier this year.
As one analyst said on TV, if only Elon did not promise 100k, the share price would’ve reacted positively.
97,000 is huge. Wall Street analysts have never run a company
Tesla said it delivered 79,600 Model 3 cars and 17,400 Model S and X vehicles during the third quarter. That compares with 55,840 Model 3s and 27,660 Model S and X vehicles in the third quarter of 2018. Deliveries of the more expensive and aging Model S and X vehicles accounted for 18% of deliveries in the third quarter, about the same as the previous quarter but a sharp decline from the 33% they represented a year ago.
Tesla has told shareholders to expect deliveries this year to fall between 360,000 and 400,000 vehicles, a 45% to 65% increase from 2018. That target remains possible if the company can deliver about 105,000 vehicles in the fourth quarter. Analysts, according to FactSet, currently expect the company to deliver 106,000 units.
As Professor Damodaran said, if you buy a Tesla stock, you’re investing in Elon Musk.
Most Wall St banks’ analysts get paid to throw darts at the wall instead of doing actual research.
As a result, there’s additional fluctuations in the algo-trading dominated equity trading world.
FactSet put analysts’ consensus delivery expectations at 95,000, about 2% lower than what the carmaker ultimately reported. But the number of Model 3 deliveries, central to Tesla’s revenue growth, came in above consensus estimates. “This was an impressive delivery number for Tesla overall that should be viewed as a positive step in the right direction,” analysts at investment firm Wedbush emailed Tuesday. “Tesla beat the Street’s estimates in print but missed the 98k to 100k whisper expectations which will weigh on shares a bit as a knee jerk reaction.”
Tesla’s official guidance may not matter much, even when it makes its goals explicit. Tesla told investors (pdf) in its first-quarter update that “although we are driving towards higher internal goals, we reaffirm our prior guidance of 360,000 to 400,000 vehicle deliveries in 2019.”
Do you think that’s true? I prefer to think that they are actually trying pretty hard to perform accurate analysis and discover mispriced securities (possible exception: when they’re talking their book)… it’s just that they’re often wrong because making predictions is an extremely hard game.
Charlie Munger once said show him the incentives and he’ll show you the outcome.
Sell-side (bank or broker) analysts generate “ideas” and get paid through trading commissions. The more you trade the more they earn.
No reasonable Wall St analyst who covers 20-40 stocks will say—buy now and hold for 20 years. He’ll be out of a job.
Buy-side analyst who invest in the long-term are more likely to think ahead. But they earn money through generate returns on stocks + fees off assets under management, mostly. So their incentives aren’t always great either, as they are taking money from investors to go to another Goldman Sachs conference and pay for JPMorgan sell-side analyst research.
I know, right?
If you ask 50 independent analysts, who have never read each others’ research, for opinions, they will give you 50 different target prices based on models with different assumptions.
Put 50 analysts in New York City and you create an echo chamber.
Give them access to the internet, and the loudest voices win.
Fact - Goldman Sachs’ recommendation is more likely to move the market.
So, instead, maybe we should do own calculations, derive the price we are comfortable is—the intrinsic value estimate—and then wait for the market to hit that price.
The rest is a random walk.
But Tesla could be one of the most over- and under-valued stocks.
Valuation is an art done with numbers—so it’s part art part science.
How one money losing growth-stage “startup” markets itself
A few of his tweets may get him in trouble. Not everyone likes him.
But that one-man PR machine sends into space, disrupts at least two old industries, interacts with younger and older fans directly, and answers crowdsourced investor questions during earnings calls.
1. If you’re y and you know it, clap your hands
I think there’s a lesson in this CEO’s tweets somewhere. It’s year 2019 when youngsters are using Tictoc and Instagram and Snapchat, while Tesla is a cool brand among many and has some sticky and loyal users and followers.
Notice the feature requests through its software updates sent directly to the person in charge. And the boss sometimes responds despite running 2-3 companies.
2. Do androids dream of electric ?
A move to hire a Sheep Museum dude to run Tesla’s social media was just genius. Free advertisement yet again for a car company that doesn’t spend on ads. News companies ran this story all day.
TSLA’s stock price is not for the faint-hearted.