And to think. This Dr Jenning guy was all worked up over .001 terawatt. Hell, he almost took over the world with it from a nuclear plant. Imagine what he could do with a tera factory.
The tiny facility at Roadrunner is now one of the largest battery production facilities in the world. Think about that. They claim a 10x reduction in factory footprint and they have achieved that today. They will spend the next year, or so, improving the process yield and then start rolling this new battery production equipment out to other factories. I believe the Semi and maybe the Roadster will use the new format cells coming out of this facility I wonder how long it will take analysts to catch up to the most basic understanding of a production environment and how Tesla's innovations are going to change the world?
I've been considering the price trajectory of Tesla. Clearly, the graph between 2017 and 2020 shows substantial price suppression of an aggressive anti-Tesla media assault. I wonder if the over $400B valuation Tesla achieved a month ago is over-compensation for a company that became one of the best value stocks in the market. On the other hand, if a new company came in and promised 10x battery production scale improvement while increasing storage density by 50% and reducing cost 70%, they would probably gain significant traction with that narrative. Tesla is producing an early version of these cells now at medium volume and low yield. Add to that, Tesla has Grohman, the best battery chem engineers on the planet, a track record of success, and all the funding they need to achieve a tremendous new level of battery production. In light of the situation, $300~400B valuation does not seem unreasonable. I'm not saying it's justified. I simply don't know. What I am saying is the current valuation does not seem all that crazy.
Maybe i am oversimplifying it in my ape brain. But if batteries are the single most expensive and time consuming part of making the car. (And energy bottleneck). I think it stands to reason that shaving 50% from cost in actual cell produced, + 50% more efficient, makes same car require maybe 20% less of more efficiently made batteries. I understand the cars will not become infinite miles per charge. More capacity will also mean less batteries used for same reasonable range. Meaning less required per car, and same production means more cars. But also said batteries will be produced 50% faster. The tealized plus side from this is compounding. As is everything they do. the giga factories (named by how many watts they can produce in a yr) will literally morph into terawatt factories. Not the entire factory. But a single ramp from each factory! That is more huge than huge! this tech will essentially turn 1 tenth of a billion dollar factory into producing 1,000 times the factories original intent. That is my understanding. It would take 1,000 giga factories to produce what each giga factory will now be able to produce if so assigned to do so, (in terms of battery) before this tech was unveiled. Unless im missing something? the gains are completely compounded. a terawatt is one thousand gigawatts. A gigawatt is one million kilowatts.... That is a complete mind f***.
Take a banana out of petty cash, B Russ. Maybe VW will have summer students design a battery that is 10x better than Tesla's, produce billions of them in a short period of time, and drive Tesla out of business.
Perhaps people struggle to analyze changing rates problems, such as is happening at Tesla. CAFE standards require cars reach 47.7 mpg by 2026 while trucks need to reach 34.1 mpg by 2026. Trucks can achieve or get close this efficiency level using opposed piston engines. I do not believe it will be possible to achieve this level of efficiency with legacy designs. In short, they will have to deal with Achates Power to survive. Between OP engines and an aggressive BEV ramp, they might be OK. This is the only path I see. Legacy auto that cannot comply will be forced to buy eco credits. Enter Tesla. Tesla's road map to 10x battery manufacturing efficiency is the most brilliant business move of all time. Not only will it allow them to massively scale their operation while dramatically reducing cost, the substantially higher volumes will generate a lot more eco credits for them to sell. To paraphrase what Tesla's strategy means to legacy auto, "Check mate. You're dead." The government will have to blink or legacy auto will be dead. They simply cannot maintain this CAFE specification without causing financial devastation of the economy. Other countries, with the exception of Germany, are less likely to back off on the pressure to electrify the fleet. There will be plenty of voids for Tesla to fill. Climate will be enough worse in 2026 to cause worry and increase pressure but I doubt it will be sufficient as to have either political party decimate ICE vehicle production entirely. If Achates Power ever goes public, I will buy the hell out of that IPO.
Why would Tesla telegraph so much future tech? There is huge demand for their cars, they dominate the industry, and their stock performance is not exactly flagging. Who shares intricate detail of their core R&D effort with all competitors of a project that is a year away from fruition? It's ridiculous, on the face. It still doesn't make sense to me but I have a theory. The most reasonable explanation I can come up with is to put a gun to the head of legacy auto to put more effort into the BEV ramp. Legacy auto understands the industry dynamics I wrote about in the last post. They need to goose up their effort to purchase government influence or they will not survive. The alternative would be to start ramping their BEV effort but I expect legacy auto will more aggressively pursue the former solution.
He did murmur at one point, with a chuckle. Idk if during QA or the original presentation (we cant give all our secrets away). Maybe not verbatim, so no quotations. I think it was during the construction of the battery phase. i would imagine there is plenty yet to be discovered on that thing.
For sure, B Russ. You can be sure there is an inter-galactic rabbit hole behind that PowerPoint presentation. Meanwhile, battery engineers around the world are explaining to their bosses that what Tesla presented is not possible. Still, it was a move of extreme hubris on the part of Elon. Time will tell how it works out.
Battery technology has been sort of stuck for awhile. Since lithium ion. To simplify what Elon Musk is proposing with creating a bigger battery than the current 18650 model - imagine a flashlight, a Maglite, with 2 C batteries. A Maglite with 2D batteries would last longer. Same brightness. A Maglite using 3 batteries is brighter. 2 1.5v batteries vs 3 1.5 v batteries. Bigger battery, more capacity, longer range. Probably a longer charge time. Only if you are using the same number of batteries. If you have a bigger battery, but use a lesser amount of batteries, the math changes.I You could install more batteries in the current car. Just re-configure the battery bay to be larger. The car will weigh more. Maybe require more electricity to move the extra weight. for anyone who doesn't know, 18650 battery is small, used in a lot of small rechargeable LED lot devices, and commonly mass produced.
But its much deeper than that. The anodeless battery was much more intense than i anticipated. the method used to achieve it is nothing short of mind boggling to me. But im no battery engineer, either. Less material, better stability, less resistance from energy traveling from point A to B, causing less thermal resistance. Less batteries to make in faster time.
I never thought about the components in a Tesla battery pack. I would never have guessed thousands of little 18650 batteries. The new battery design is 48mm X 60mm. About the size of a D battery. In my cars, I have Optima. A big 6 pack of spiral battery cells. Not quite the same.
When someone hears "in 10 years": they see that it means "nothing right now". Hard to imagine that in 10 years, Tesla will be selling 20 million cars a year. The entire industry sells 17 million cars a year? So Tesla will sell more cars than all manufacturers combined? But I could be wrong. Tesla may be the only car sold in 10 years. When every car is a Tesla, and only Tesla is sold.. I am treating TomB16 to a Thai massage. I will be able to afford it. A lot of people do not accept 10 years worth of forward looking projection.I don't even accept the 3 month projection. I don't even believe guidance for the quarter. I want to to see what you have right now. Technology is funny that way.......when someone says, "we will have....". It translates to " we don't have it" Battery Day was as I expected. People who are fans got excited for Elon Musk. People who aren't fans, were looking for something more tangible. I was entertained for about 1/3 of it. After 20 minutes, I defaulted to watching porn. As for stock price, I don't blame Battery Day for market volatility. If every stock rose, with only Tesla dropping.....that was not the case. Bad timing. Like Buffett said about trying to time the market.
I respect that Tesla has a long term road map. It shows that they have a clue where they are going. Companies that can't see beyond a year or two have no place in my portfolio. Tesla has huge steps forward planed near, medium, and long term. I'm a very happy Tesla long.
Then there's a stock I recommend. This guy has a time machine. He reported from the.future. And the stock is going up. I sold my Tesla and put everything into this. You should too.
