1) It is sad how many people are against investment in space launch technology.
The narrative “Space is just a playground for billionaires” is not helped by those who focussed on sending themselves to orbit as an end goal, but why is space tech important?
2) More broadly, space launch tech is innovating towards a 100x reduction in launch costs and increasing the ease of access to space.
Why does this matter?
A) Disaster preparedness; With cheaper & quicker access to space we have better odds of addressing issues such as approaching asteroids & satellite wipeouts from solar storms. This is the same as investing in pandemic preparedness ahead of an unknown future event.
Analysts have an irrational urge to be “conservative” when forecasting the future, as if you are only wrong if your forecasts are too high.
The future is uncertain, so acknowledge the range of possibilities.
But try to be accurate, don’t try to be conservative.
Technology production volume vs cost curves & adoption speed once economic parity is reached are all well understood.
Forecasting absurdly slow rates of clean tech price declines & deployment growth deters investment in them & prevents policymakers supporting them as the solution
Thread on what drives technology production costs to decline with cumulative production volume:
This is unsolved tech & will be a radically new product with very different cost structures vs current options; the future is highly uncertain.
This justifies a huge disparity in opinions but many may have too high certainty in their views.
1) Will self driving cars require 2x or 20x average human safety to achieve regulatory approval in a given jurisdiction? 2) Will it take 1 year or 20 years to get to this level of safety?
3) Is the Tesla-like deep learning heavy, hardware lite, incremental progress on driver assistance, general solution approach best? Or is the Waymo-like deep learning lite, hardware heavy, moonshot leap, geofenced approach better?
1) Tesla's Autopilot driver assist product is now largely feature complete, but how much further does it have to progress to achieve reliability 3-5x greater than the average human & allow removal of human supervision?
2) This is the March of 9s.
Tesla’s self driving strategy from the start was chosen & optimised for this moment now; putting a system & infrastructure in place without data or hardware bottlenecks to allow largely automated progress for a feature complete AP on the March of 9s.
3) But how far do they have left to March?
Is Tesla 99.9% there, does it have 9,000x further to go or its it 33% there? It’s all a matter of perspective.
And most importantly does this all mean is Tesla 1 year away or 10 years away from Robotaxi level reliability?
1)A big question from Battery Day was how advanced were Tesla’s chemical engineering based innovations?
(Particularly vague references to new sulphate free processes).
Key to many of the advances, yet it wasn’t widely known that Tesla even had Chemical Engineering R&D teams
2) Part of the lack of detail in this section was likely due to protecting IP & partly because it would have gone over the audience’s head even more than the rest of the material. But was it also because these projects were less advanced than the rest? It is hard to know.
3) High level of speculation follows below.
In my view many of the cathode raw material innovations may have spun out of R&D work on Battery recycling, Battery materials & even waste water treatment at Giga Nevada.
I may be very wrong, but this looks like a proof of concept of Tesla's proposed new Lithium Clay + Salt + Water method. 1) The method appears to have been discovered by accident by SGS working on the Clayton Valley Lithium Project in Nevada, without them noticing the consequences
3) They decided the reason for this discrepancy must be because surface samples must have had "some component of surface enrichment in the form of water-soluble salts".
4)Then they finished and said ok, water doesn't work, we have to use expensive acids instead.
Tesla likely started the Roadrunner cell project in ~2013 & built general battery cell expertise since foundation in 2003. They have also acquired & hired decades of experience.
The analyst/media takeaway from Battery Day looks that Tesla only started the cell project ~a year ago
Tesla has many huge challenges still to solve (with big delay risks) to ramp Kato road cell production to 10GWh by the 3Q21 target (& full rollout of all the BD innovations isn't targeted until 3Q23) but I see a very large misunderstanding on how far they’ve already come already
Tesla revealed 50+ separate but elegantly entwined cell & raw material R&D projects. They're in varying stages of development & Tesla couldn't explain detail in 90mins (& for competitive reasons) but @elonmusk, Drew, @tbc415 & hundreds more achieved a huge step to ending ICEs
From @KelvinYang7's two independent sources (one of which is a supplier's stock offering filing) linked below, I now see very high probability that Tesla is preparing for a final Model Y production rate of 450k at GF3 (together with Model 3 at 200k).
It will obviously take time to ramp to target capacity which may not be hit until late 2021.
Tesla will also have to ramp demand otherwise it may not pull the trigger to ramp from 2 to 3 shifts.
It also needs to ramp cell supply (fortunately battery day is now very soon!)
I’ve been hoping for Tesla’s Gen1 roadrunner cells to deliver ~30% volumetric energy density increase vs Model 3 at pack level. This could be achieved with ~300-310 wh/kg vs GF1 cells at ~250 wh/kg.
Initially i expect largest progress to be cost, footprint & capex.
1) I don’t think Tesla’s battery day is about CATL, LG or Panasonic or even just Maxwell tech, it will be the reveal of Tesla’s in-house “Roadrunner” cell - likely the culmination of a 10 year+ project to solve cell capacity & cost with a bottom up redesign of Li-ion cell tech.
2) In my view Tesla’s cell design was largely complete when CTO & co-founder JB Straubel announced he was stepping down in July 2019, likely after thinking “My work here is done”.
3) Maxwell’s dry electrode tech is a key piece of the puzzle and Tesla has been testing their tech since at least 2016, however this IP only covers part of a very long and complicated cell production process:
How can Tesla progress from its current Autopilot product to Robotaxis? (continued - part 2)
1) What about the staff bandwidth bottleneck?
Tesla’s access to driving data is critical in my view, but it isn’t a magic bullet.
2) It still takes a lot of human input to solve each problem & Tesla has to first identify the most pressing problems/ important driving scenarios to solve & slowly work its way through the list towards rarer & rarer problems.
3) This is the march of 9s. The continuous quest to get probability of zero disengagements per mile to the next decimal place.
How can Tesla progress from its current Autopilot product to Robotaxis? 1) I think the AP driver assist product is an extremely valuable feature; Human+AP already looks statistically safer than human alone & it makes long distance driving far less tiring.
2) However, AP still looks far from capable of driving fully autonomously. Why is this, given Tesla's full access to data from the ~1 billion miles per month Tesla’s fleet is driving?
3) I put this down to two key reasons: A) Architecture capability bottleneck & B) Staff bandwidth bottleneck for solving more & more driving scenarios/problems.
1) Who else thinks data is likely to be key to solving Robotaxis?
For example, Alex Krizhevsky (behind Alexnet which kicked off the deep learning revolution in 2012), quoted after working at both Google and Waymo:
Some thoughts on Tesla’s Autopilot & Robotaxi strategy: 1) I believe Tesla has a unique & superior strategy for solving Robotaxis which I categorise as the Intelligence/Data heavy approach, based on the assumption that Robotaxis are a very difficult intelligence problem to solve.
2) This is opposed to the approach of the rest of the industry which I would categorise as hardware heavy, Intelligence/data light which is based on the assumption that self driving is a relatively easy intelligence problem. I’ll explain this more later.
3) Currently I still put a small probability on Tesla solving Robotaxis in the near to medium term, but given the huge cashflow this business is almost certain to generate if solved, Tesla’s Robotaxi potential has very high present value even with low probability of success.
1) Short term is all about potential Q2 profit & S&P500 inclusion which can have significant long term implications for Tesla's shareholder base and valuation.
But more important for Tesla's fundamentals and long term success is:
What will Tesla reveal on battery day?
2) Short answer with very large error bars despite the specific predictions:
I think Tesla will announce its Kato road facility in Fremont has started production of 40mm-70mm cells with +25% volumetric energy density and 3.6x volume vs 21-70 cells, at 80-85Wh per cell.
3) At pack level I expect 30% volumetric energy density improvement using a cell to pack design (no modules). So a ~104KWh pack could fit into the same volume as the current ~80KWh LR Model 3 packs.
A few thoughts on and hydrogen: 1) I support all genuine efforts to transition the world to clean energy, but I do not like Nikola or Trevor Milton.
2) Nikola’s investor materials are far too full of misinformation (often anti EV) and Trevor shows no sign of a deep understanding of the economics and physics of sustainable transport.
3) If you give $2bn+ capital to a charlatan, he may manage to build something eventually, but i think the capital would be spent far more efficiently by an EV, battery or solar startup who are further in the R&D journey & who’s CEO understands the engineering & business challenge
So far I am leaning towards total Tesla Q1 deliveries (3,Y, S &X) of 106k:
North America: 59k (flat QoQ supported by Y and stock wealth)
EU: 29k (-20% QoQ all due to Holland tax driven timing)
Asia: 18k (flat QoQ)
North America would be lower if supply chain disruptions in China impacted Fremont production during Q1.
Asia could be higher if cell supply and other suppliers ramp in March at GF3.
Why I think BEVs will reach >90% of global new car sales much sooner than you expect
1) Cheaper Product:
A) Electricity cost are 70-75% cheaper per mile than petrol or diesel.
2) B) EVs should be 70%+ cheaper to maintain (due to significantly fewer moving parts, no damaging combustion engine, regenerative breaking saving brake wear etc) once EV service networks reach economies of scale.
C) EVs can be built to last 2-3x longer than an ICE car (0.5-1 million miles). Tesla’s powertrain is designed to last 1 million miles. Batteries currently last ~0.3 million miles (and can be easily replaced) but Tesla is likely close to releasing its million-mile battery.