RE: Tesla Energy: $3.9 Billion Megapack Deal

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RE: Tesla Energy: $3.9 Billion Megapack Deal

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aussieninja in LeoFinance • 11 months ago (edited)

Agree that the TAM for home batteries is massive... especially with more and more blackouts caused by extreme weather.

Did you see Trump's speech at the RNC last night? He wants to end EV subsidies, end renewable credits and encourage Chinese EV auto manufacturers to set up shop in the US. Even with his proposed tariffs, the BYD Seagull will still be significantly cheaper than anything else on the market.

The end of the renewables credits will be really bad for Tesla Energy. I don't think the end of the EV subsidies will affect them too much, but BYD and others manufacturing in the US could be devastating for Tesla and the other US auto manufacturers.

Definitely interesting times.

11 months ago in LeoFinance by aussieninja

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taskmaster4450le 11 months ago

Agree that the TAM for home batteries is massive.

The TAM for utilities is even bigger. The megapack market is insane. I will be doing a video on that economics of that.

I saw the highlights. Yeah he wants to scale back the emissions that will affect automakers. That he can do.

The scaling back of the IRA is going to require Congress and changing the law. To do that, he has to A) capture the White House B) have the Repub control both houses of Congress C) Convince every Repub to vote for it (or get some Dems to cross).

That will be tough if states are benefitting. Politicians tend not to want to stop the flow of money into their state.

As for the Chinese, they can do the same thing under Biden. There is nothing stopping them from entering the US in this manner.

As I say there will be two car companies in the future: Tesla and the Chinese. Legacy auto is going to get crushed.

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aussieninja 11 months ago (edited)

I do think there is a lot Trump can do to hurt the IRA without repealing the actual laws... for instance he could defund the IRS so that clean vehicle tax credits take years to be processed (like he did with USCIS), for example. Or, put people in charge that just never implement the proposed changes (ie, the electrification of the USPS fleet).

Why do you think Tesla would survive the Chinese EVs? Chinese EV makers have a massive head start and have been heavily subsidized by the CCP, they've now made too many EVs for the Chinese market. Tesla vehicles are selling less and less each quarter (even without Chinese competition) - if they keep going with this trend they'll be in big trouble before the Cybercab hits the streets in 4 years. They haven't made any money on AI or robotics yet, and Tesla Energy isn't doing anything particularly innovative to compete with all the new market entrants into that space. Trump's policies will hurt Tesla Energy and if Biden stays in then Tesla/Elon will be charged by the SEC, EPA, FTC and NHTSA.

I really truly hope that $TSLA holders start to derisk... but I know they won't.

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taskmaster4450le 11 months ago

Maybe. We will have to see. There is a long way to election, let alone when he takes office if he does win. Ultimately, it will not matter to Tesla. Remember, Elon was against the bill to begin with. Repeal will only hurt those companies that are not producing profitable EVs, which is everyone in the US other than Tesla.

Chinese EV makers have a massive head start and have been heavily subsidized by the CCP

How do they have a massive head start? In what way?

The Chinese cannot make profitable EVs (with the possible exception of BYD).

Tesla vehicles are selling less and less each quarter - if they keep going with this trend they'll be in big trouble before the Cybercab hits the streets in 4 years.

Teslas costs are also dropping to. We will see how things change over the next couple quarters but the profit margin squeeze stopped on the vehicles. With the push towards buying down leases, all auto might be under pressure, so Tesla might resume that trend.

As for the next vehicle, next year is not 4 years away. They will have an economy rolling off the assembly line (not scaled production) by the end of 2025.

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aussieninja 11 months ago

Apparently BYD has been provided subsidies of at least 3.7 Billion from the CCP (Source) for years and they have a huge supplementary market in battery manufacturers (ie, CATL). The CCP support for EVs and green energy started in 2011 whereas honestly, I think the supporting industries have really only been supported in the US since the IRA (I know Tesla has been receiving subsidies since 2015).

So that's what I meant by a massive head start.

Wait...

They will have an economy rolling off the assembly line (not scaled production) by the end of 2025.

By 'economy' do you mean a $25Kish vehicle? I thought that was scrapped? Or are you talking about the Cybercab?

I was under the impression that Tesla vehicles usually took 4 years to go from announcement to production, with the CyberTruck understandably taking 5 years.

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taskmaster4450le 11 months ago

There are going to be two different vehicles, based upon the same/similar design. There is an economy vehicle which will have steering wheel and pedals like any other car. It will be for sale/lease.

The "cybercab" is one that can easily have those removed.

Both will incorporate parts of the next gen platform which is a different process. The initial plan was for the entire vehicle to be use the "box method" but they decided to incorporate parts of it into their existing production line processes (for now).

My guess is they set up a basic line in Austin for the engineers to fine tune and production will first start in China. Tom Zhu was moved back to China for a reason and I dont think it was to oversee a megapack factory. I believe the first production line will go into China with him tasked on scaling it.

He is the one who oversaw the development and production of Giga Shanghai.

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aussieninja 11 months ago

Oh, that's super cool. I'm sorry, I totally missed all of that news. Thanks for that.

While I know Elon is famously optimistic on timelines, I'm excited to see how this goes. An affordable EV is so incredibly important to the energy transition for the world.

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taskmaster4450le 11 months ago

A more exciting aspect to me is the recent development of the Tesla Semi. They finally started construction on that one and am following the drone footage someone shoots. They are about two weeks in and starting to make some headway.

That is also something I expect to be impactful in 2026.

Robotrucking is actually more interesting to me than robotaxi. 100% of the cargo is moved on trucks not owned by the end user (the consumer). That isnt the case with cars. Most people ride in their own vehicles, at least in developed countries.

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aussieninja 11 months ago (edited)

Absolutely! The emissions from trucking transport is absolutely massive so Robotrucking could be world changing... even if they needed people for the first and last 1% of the journey (maneuvering in and out of loading bays, navigating the first and last miles, etc) the savings are potentially enormous.... but it also shows that charging infrastructure needs to be incredible and sourcing enough battery materials to power the trucks with their cargo will be really important (maybe solid state batteries can help here).

If EV SUVs are quite a bit heavier than ICE SUVs, I can't imagine what the weight of an EV Semi must be.

I agree though, EV trucks and robotrucks are very exciting and hugely impactful and I hope very smart people are working on all the challenges to get them running smoothly and safely.

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