There are a couple of people in China I trust for feedback. They dont have a good macro perspective but they are honest and reliable. One is indicating Tesla is struggling to sell cars in China. Apparently, Chinas economy is really bad. Also, Tesla has had quite a few AufoPilot accidents in China that have caught media attention. This is why they are stepping up their export programming at the Shanghai plant. I have blown off negative news since 2016. It has always seemed like weaponized ignorance, in the best case. This news could easily be real. My guys think the cheap car (M2) has a good chance of re-energizing Tesla in the Chinese market.
I just read some stats out of China that are alarming, although good for Tesla. The stats show Tesla selling 750K EVs per year in China but other manufacturers, including BYD and NIO, are well down. Overall Chinese economic indicators show a crater where the Chinese economy used to be. As best I can tell, the economic war between China and the US is not going well for either side but far, far worse for China.
Tesla has had a few recalls which were exclusively handled by OTA updates. I'm not saying this one will be OTA, just that "recall" doesn't necessarily require physical interaction.
I've been looking at the dock expansion at Nankang, trying to figure out what it means. As best I can tell, this dock is exclusively used by Tesla for China export. This may not be the case but, if not, other uses are absolutely trivial. I've only seen car haulers at this pier. My visibility is limited to ground/drone/satellite images and video. Satellite images tend to be obscured by clouds, this time of year, so they only refresh a few times per month. We get drone coverage a couple of times per week. Still, speculation acknowledged. This dock appears capable of comfortably delivering 1.5M cars per year from Shanghai and it could easily carry 2+M with 24 hour loading. ***** segue ***** There isn't a lot of detail around Shanghai phase 3. We know it is where Tesla will build the $25K car but we don't know how many assembly lines or how much of the unused land parcel it will consume. We also don't know how much cell supply will come from Tesla's own production and how much will come from CATL or BYD. I'm going to assume Tesla has figured out how to assemble a fully painted car. That will dramatically cut assembly time (Note: they may have already figured this out but I suspect not). Further, I'm going to take a wild guess they will make cars in only two colors. It wouldn't surprise me if they make cars in a single color. Based on guesses and wild speculation, this would allow for 10 GA production lines in about half of the remaining land parcel. This unfounded speculations suggests phase 3 will be 1.5~2M annualized unit production. Phase 4 could be similar to phase 3. I don't see S/X production moving to Shanghai any time soon or perhaps ever. Phase 4 is more likely to be more ultra-affordable production. I disregard the idea of phase 3 being one monolithic project to consume the entire remaining land. It took Tesla 3.5 years to build out GS to where it is today. There is no way they are going to scope a project that won't bear fruit for 3.5 years. This puts the start of Model 2 production in early 2025. If this remotely close, it is possible Giga Shanghai could produce 5~6 million EV units per year by the end of 2027. That gives us plenty of time to buy cheap stock, devalued by corrupt media coverage, by the end of 2024. Further, consider the bake-off that has taken place between China/US/Germany. China has won this bake off, barely. The American contestant in Austin, TX has done surprisingly well for a close second place. Meanwhile, in Germany, anti-Tesla rhetoric and northern European union lead attacks have not encouraged Tesla to bring more production to the continent. Car production in Germany is not on the same level as China or the US and seems to be struggling. Tesla has plenty of automation and design in Germany, though. I assume these areas are doing well and moving Tesla forward.
Does anyone care about the level of detail I'm drilling into? Speak up or this content goes away. Shipping Glossary: ro-ro ship = roll on, roll off rtt = round trip time Nerdfest: Lifeless nerds have been tracking, at least, 12 ro-ro Tesla transport ships. Ship capacity averages 3200 units, with some up to 6000. Most of these ships redistribute Teslas throughout Asia but some bring cars to Europe. There is currently a ship steaming toward Angola, bringing Teslas to the African continent. Please notice that ro-ro ships travel substantially slower than cargo ships. Assumptions: - 3 full time ships cycling from Shanghai to Europe - All four ships have large capacity of 5000~6000 vehicles - RTT Shanghai to Europe of 16 days - These ships are operating continuously This gives us about 400K annual units landing in Europe from Shanghai. Consider this forward looking, as I believe this number is well beyond the number of units Europe has received from China in the last year. If they can bring 3 more ships online for the European conveyor, they will have a gross European import capacity of roughly 750K annual units. That is well beyond current Giga Berlin capacity and not far off the total design capacity of GB. The Fleet Apparently, the ro-ro fleet is extremely old with average ship age now at 40+ years. The oldest ships have very low volume, compared to the newest ships. New ships cost about $0.5B. I have no doubt Tesla is either partnered with someone who has ordered 3 or 4 new ships or they plan to launch their own fleet. I suspect it's the former. BTW, the dock expansion at Nankang should support a fleet of roughly 16 ro-ro ships so these numbers seem to fit together, along with Giga Shanghai expansion numbers. Politics The politics of European imports are certainly going to carry heavy weight on Tesla's future. They will have a dramatic impact in North America, also. Tesla plans to build the affordable car in China and Mexico. Governments could easily block imports and force local production, as they have done in the past. This will have a profound impact on Tesla. I've been watching Tesla's effort to sell into India and it has been an uphill struggle. India seems to hate China even more than they hate North America. If Tesla can obtain an import exemption, it will be exclusively for European produced vehicles. They have been trying to get this exemption as a test market for Teslas in India, as there is extreme risk with building a factory in India with unknown demand.
I've tried to stick to the technical aspects of Tesla. They have been phenomenal for many years. Tesla has many short term dangers and negative influences, though. Tesla could well go down significantly on the short term. It will be interesting to see how they play out. Long term, they continue to be the only auto manufacturer outside of China with thoughtful leadership.
I expect a public PowerWall 3 release event toward the end of January. This product should differ from previous generations by being available in medium volume at release and large volume by mid year. It wouldn't surprise me if 100% of them come from Shanghai but that is gross speculation. None the less, Tesla recently had a launch event for Mega Shanghai where storage will be manufactured and they made a bit of a big deal about it.
The Shanghai phase 3 expansion project, that started about a month ago, has not started. I just saw pics from a few hours ago and the land beside Giga Shanghai has no construction, or signs of construction, on it. It appears there is a rectangular patch that was graded but it remains dirt. So, expansion has not commenced.
Delivered 1.8M vehicles in 2023. I predicted 2M so I consider this a shortfall. They could have theoretically produced more, were it not for production and/or demand problems. BYD delivered 3M in 2023.
TSLA has been going down for 2 years. It will be interesting to see how this plays out. I think the US will just pull out of support for pure EVs if China gets too far ahead.
I dont understand why Tesla remains supported at $232. It seems like it should be well down from this level.
