Battery Day Expectations For TSLA Shareholders

[Singuy]

I know many here became TSLA shareholders due to all the hysteria of the split or S&P announcement. Those events are fundamentally irrelevant to Tesla Inc. It may only be relevant to short term stock prices which is fine if you are in for the short term gain.

Tesla Drivetrain and Battery day is on Sept 22nd. This will be the single most important event in Tesla's history. To understand why, please refer to Tesla' mission statement, which is to accelerate the transition to sustainable energy. This is the goal of Tesla and Elon. We know Elon is laser focused on his mission, and does not disguise his company under some noble mission just to make money.

Many may not know, Tesla does not make their own battery cells. Panasonic is their main partner, but have also sourced cell from LG and CATL in China for car production. Understand the RATE LIMITED STEP to Tesla's mission is battery cell manufacturing. All this talk about competition, or even Tesla's own internal guidance for growth DOES NOT MATTER because there are NOT ENOUGH CELLS to displace even 5% of all ICE cars.

The purpose of Tesla battery day is for Tesla to demonstrate their brand new cell production line. An image has leaked and confirmed to be Tesla made cell. This cell is almost 6 times bigger than their current cell from Panasonic. Tesla also acquired Maxwell which helps reduce cell manufacturing time by 20% and increase longevity of the cell.

In summary, this cell to pack(meaning building battery cells and packaging them to form the skateboard battery) dubbed "road runner" line of production can potentially increase overall production by a factor of 10. Then Tesla will scale multiples of this line of cells and give us the roadmap to 2 terawatt hours worth of cell production/year. As a sense of scale, the entire world cell production for 2019 was 1/2 a terawatt (this includes all consumer electronics like for laptops and cell phones as well).

Not even talking about the advancements of the new Tesla cells (which is probably going to be about 25% more dense per wt and last a million miles), this level of production will enable Tesla's production to grow 50% yoy for the next decade. This will also drive the cost of the cars way down as Tesla may also show off their additional manufacturing and production process of cars/solar/gigafactories. If you guys haven't realized, Tesla have even improved how they build factories, as giga Berlin is currently ahead of giga Shanghai!

Sept 22nd is the birth of Tesla 2.0. It will be the game changing moment and demonstrating how Tesla can complete the mission at hand. This is the result of stagnant innovation from other auto companies and cell production companies to which has forced Tesla's hand. Just 4 years ago, Elon was really banking on other companies would follow by building cell production plants and increase manufacturing process to make the transition faster. Years later, Elon has lost faith in other company's ability and can only take matters into their own hands as time is the essence.

So when thinking about Tesla, please do not think of it as just a car company. It's a mission driven company determined to transition our world off fossil fuel. This means you will see the price of solar, batteries, storage stations, and Tesla cars to drop in prices while maintaining high margins beyond what is thought to be possible. Money talks so it's the only way.

[disneysteve]

Tesla cars to drop in prices

Do you actually thing Tesla will lower the price of their existing cars? Or is it more that they might come out with a lower priced model?

[Singuy]

Do you actually thing Tesla will lower the price of their existing cars? Or is it more that they might come out with a lower priced model?

All of the above. They will keep lowering prices until everyone is on electric. Their cash cow is actually software and cheap manufacturing.

[rennigade]

Im still not touching it with a 10' pole unless it becomes part of the s&p 500. I am hoping that the stock skyrockets though and tesla keeps innovating.

[bjl584]

I'm assuming all this increase in cell size and efficiencies gained in production time will lead to a longer battery life and more range for the car?

[Singuy]

I'm assuming all this increase in cell size and efficiencies gained in production time will lead to a longer battery life and more range for the car?

More range, faster charging, eliminate battery degradation, and cheaper cars(or higher margins). More importantly it can reduce the price of power walls or enable vehicle to grid which enables the ability for houses to become virtual power plants, selling and buying stored energy from each other vs from the grid. Tesla already piloted this in Australia and have developed the software for this called autobidder.

Total addressable market is multiple trillions depending on how fast Tesla can get these batteries produced.

[bjl584]

I see shares slipped a bit as Musk was trying to reel back some of the enthusiasm over the new battery cells

[Singuy]

I see shares slipped a bit as Musk was trying to reel back some of the enthusiasm over the new battery cells

His tweet had one part that's of expectations(unless you are high for thinking Elon can match world's production in a week's time) and the other tweet to be so freaken bullish. Buy as much batteries as possible throughout the world while matching their production by 2022 and still it's barely enough? Yeah revenue is doubling yoy for years to come.

[Singuy]

Here are my thoughts after learning the ins and outs of battery day...you guys might want to sit down for this.

I had Tesla solar panels and my Model 3 Lr for 2 years now. The entire package cost me 80k. If I were to finance this for 72 months, the total cost is 1300/month. Not exactly a small amount, however....

In the past two years, I have saved 4000 dollars in gas and 6000 dollars in electricity as well as zero dollars on maintenance. Not exactly a small amount either. This amount is about 416/month in savings.

So a typical household will pay 200-300/month of electricity, 380/month of a 25k car payment, and 150 dollars a month in gas. You will need 780 dollars a month to cover these mandatory expenses.

What if I tell you for 600/month, all of this will be covered for the first 72 months, and then zero for the rest of cars life?

This is the goal of battery day. Pushing out a 25k car in conjunction with 15k worth of solar panels will cover your mandatory expenses at a 20% discount for the first 72 months and then beats it by 100% until the car falls apart.

Elon was asked if they will have batteries for other car manufacturers to use. Even at the scale he said, he doesn't think there will be spare batteries.

This is how he gets to the amount of cars sold more than Volkswagen and Toyota combined by 2030. It is a ridiculous number but when you sit down and think about how transformative it is, you realize that not only will you get a car that gets better over time for 25k, but also decrease your mandatory spending down to zero eventually. Any car company that cannot give you this value proposition will die, end of story . Especially when Americans are trying to squeeze every last bit of money per month to make ends meet.

The future is going to be ridiculous. If Elon executes, then Tesla will be the most valuable company in the world, having a monopoly in transport and energy. You will not be competitive if you can't match this, so the competitors needs to put down checkers and start playing chess. It's not the big that eats the small, rather it's the fast that eats the slow.

[disneysteve]

zero dollars on maintenance

I've seen the lack of maintenance mentioned before with Teslas. I realize there's no internal combustion engine but it's still a car. It still has a bunch of moving parts, electronic components, tires, brakes, windshield wipers, etc. Surely a lot of the typical auto maintenance still occurs with a Tesla. How does all of that work?

[Singuy]

I've seen the lack of maintenance mentioned before with Teslas. I realize there's no internal combustion engine but it's still a car. It still has a bunch of moving parts, electronic components, tires, brakes, windshield wipers, etc. Surely a lot of the typical auto maintenance still occurs with a Tesla. How does all of that work?

Zero internal components that relates to the drive train require maintenance including brakes. You just need tires, wipers, and wiper fluid. I guess alignment is a point of maintenance as well. But for the first 40k miles I don't expect to spend a dime.

Battery rated for 350k miles, motor 1 million miles. Brakes 200k miles since you never use it. So drive train related maintenance will happen way after the wheels fall off.

Tesla has refined a lot of the components to last longer than prior years. The motor and battery didn't used to last this long. Also the earlier model S/X computer system had too small of a onboard memory which eventually failed. All of these things have been remedied after 2018.

[Jluke]

Singuy. I hope your analyses and winning streak continues. I have 10 shares (bad timing on purchase around $498 post split).

makes me want to buy 1 share for each of my kids.

[disneysteve]

Zero internal components that relates to the drive train require maintenance including brakes.

Why brakes? What is it about the Tesla that makes the brakes require no maintenance? How are they different than the brakes on regular cars?

[Singuy]

Why brakes? What is it about the Tesla that makes the brakes require no maintenance? How are they different than the brakes on regular cars?

Since a Tesla use a pretty aggressive regen braking system, the actual brake pads are never used. One pedal driving is the norm for most owners and it takes about a day to get used to it. It's very much like speedway at disney with the one pedal driving except it's way smoother. A typical person wouldn't even know you are just using one pedal.

[disneysteve]

Since a Tesla use a pretty aggressive regen braking system, the actual brake pads are never used. One pedal driving is the norm for most owners and it takes about a day to get used to it. It's very much like speedway at disney with the one pedal driving except it's way smoother. A typical person wouldn't even know you are just using one pedal.

Ah, that makes sense. Thanks for the explanation.