Tesla deliveries + Suggestions to management (Ep. 709)

In the fourth quarter, Tesla produced over 439,000 automobiles and provided over 405,000 automobiles. In 2022, automobile shipments grew 40% YoY to 1.31 million while production grew 47% YoY to 1.37 million.

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Tesla deliveries + Suggestions to management (Ep. 709)

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63 Comments

  1. It’s wild people are being negative about a 40% YoY growth. Any other company and it would be the greatest thing since sliced bread

  2. I would be very interested to understand your view on the 4680 battery situation. I see two problems
    1. Low power density at 86watt hour per cell giving less range than 2170 cars, on battery day the target was for 54% better energy density and the higher power density nickel cells don’t seem to have turned up, the nick on effect is that the power density isn’t enough for Cybertruck
    2. Low volumes, the target run rate was 100 GWh for 4680 by the end of 2022, actual was 3.9GWh 4% of target. This means that the model Y is having to be engineered to use both 2170nand 4680 which is ineffective, worse still the reason for 4680 was to cut cost by 50%, so no 4680 = no cost savings
    This seemingly small issue is in my mind far more concerning than it appears, what is your more informed view?

    1. Have you looked at other Battery manufacturers and how fast they invented, designed, invented, made prototypes, production lines and mass produced batteries?
      Elon is just a bit too enthusistic. Everything less than 5 years from start to using the cells is magic.
      Even building a new battery factory with known cells and chemistry, with existing supply chain in another country takes more than 3 years.

    2. I am not concerned about this at all… Battery day was just 2 years ago, what was presented were ultimate ambitions, what should be achieved when all is ironned out and at max production rates… It had a rough start, which Drew Baglino admitted and explained, but they are catching up quickly now… Berlin is also about to start production of 4680 cells.

      Concerning the Model Y design, Tesla has been accounting for this to happen from the get go, as they did not seem to have any trouble to start producing 2170 Model Y’s in Texas and Berlin. Similar with the Semi that, unexpectedly, also comes with 2170 battery cells… Cybertruck will be no different.

    3. @Wolfgang Preier Yes. Elon bought Maxwell 2 years ago which was the basis for the 4680 tech. Panasonic are coming on line this year and yes this does take time. However, it is not good that Elon / Tesla is constantly getting the numbers and timescales wrong (Dave’s point on expectations), but also if the 4680 turns out to be a technology dead end then the implications are serious.

    4. @Marcus Outdoors “Maxwell 2 years ago which was the basis for the 4680 tech” No they were NOT. The’ve already been sold again. Don’t you know?

      Tesla wanted the tech for the dry electrode coating which is not even beeing used in the current 4680 cells… Obviously it does not work as planned.

      Also not used is the silicone anode construct which was mentioned @ batteryday. The same problem, its obviously hard to implement in mass production. Whyelse does not anyone else have these designs? They are nothing really utterly new, they are a known factor, many have tried to imbed silicone into the anode and failed or did not have the clout to move it into mass production.

      The 4680 is a well constructed but still a much work ahead cell design which is needed for the structural battery pack. They could’ve used any other form factor but found with many back-o-napkin and structural design simulations that the cylindrical cell and this specific size gives them the most advanteges.

      TODAY!

    5. @Todd Morgan hi, I must admit I’d not watched The Limiting Factor for a while. It does point to the 4680 being a critical path item for the Cybertruck as it would make no sense to engineer the Cybertruck for the 2170 and Elon has stated he expects a B+ rated battery pack, unlike the C/D rated pack in the model Y. I do completely agree with the Limiting Factors analysis that there is scope for getting more batteries into the model Y pack which would give more energy density and range, but I am still confused / concerned on where they’re up to with the dry process manufacturing and battery chemistry. His companion video on the future battery tech comparing Blade etc with 4680 shows just how far back Ford are, but also is disappointing for me (maybe I need a reality check) in that the power density could still be only around 300 watt hours per kg by the end of the decade. I am also concerned that Tesla is so dependent on Cobalt which feels to me like a reputation killer. So reflecting on the two points of my original post on this, thanks to your pointer, I understand more (thank you) but I’m still concerned. Hopefully this is just the latest bout of production hell that Tesla will burst through.

  3. Seems like the biggest delivery problem was in Shanghai due to the plague outbreak? Could management have prevented that?

    1. If you think Tesla or anyone can prevent govt mandated shutdowns and buyers staying home, you’re not using your brain

    2. @Jordane Pellerin
      1. Is BYD doing well? I’ve heart that other brands are suffering in China too. AFAIK they achieved these impressive numbers by converting ICE production lines to EV, so it’s a one time thing, not sustainable. Also Tesla has far better margins on far more expensive cars.
      2. 47% YoY production growth is not terrible by any metric. Only deliveries missed guidance, and that can have many unforeseeable reasons.

    3. @Jordane Pellerin BYD is only doing well in China, and half of the vehicles that BYD sells are still hybrids. Being a CCP supported company, don’t you think the CCP govt would do everything in its power to make sure BYD succeeds in China?

  4. I agreed with all of the points Dave made, except the recommendation of Elon telling TSLA investors how he plans to rebuild Twitter. Twitter is a separate company from TSLA and is privately owned mostly by Elon. Elon’s decision to sell a portion of his TSLA stake to cover the purchase and on-going expense of running Twitter was his choice and which plan Elon has to rebuild Twitter should not have any long-term material impacts on the future of TSLA. Put it this way, does Twitter’s revenue (either up or down) affect the number of cars TSLA is able to produce or deliver? You can make an argument that if Twitter is not generating then Elon might have to sell more shares to cover the expense. But which investments that do not carry some levels of uncertainty and risk?!! Public sentiment is a complex and investment flow is even more complex. The more we talk about Elon and Twitter and our suspicion of what it may or may not do to TSLA only further distract our understanding of how TSLA operates in comparison to other businesses. So let refocus on TSLA’s core products and determine whether they continue to be more superior, or on par, or inferior to its competitors.

    1. @Charles Chen has there a time when Elon was able to meet the some proposed deadlines? What happen when the SPY and all major indexes continue to decline the next few quarters along with TSLA? Are you still blaming Elon for that 🤔. The point here is to not fuel the narrative or be subjected toward the narrative that someone wants us to believe.

    2. @C L The richest person always gets attacked, attacks against him ramped up massively on the day Elon became it.
      With Elon being publicly controversial it additionally impacts his and his companies public image.
      Public image as direct impact on the demand for the share, demand for the product, regulatory pressure and public pressure. Having the President criticising one is bad for business.

      I love what he did with SpaceX and Tesla, public politics is just a game where he can only loose. I don’t care if he gives money to one or both sides silently (probably a good idea), but publicly it is best to stay neutral.

    3. @Leon FA I agree with you about the political aspect. And please note this is regardless whether Elon owns Twitter or not. And Elon’s political view on Twitter has nothing to do with Elon’s business plan for Twitter. And this is my very point in my original comment. This is similar to Bezo’s secret love affair, did anyone question Bezo’s work hour devotion to Amazon before he decided to step down as CEO. We need to stay clear of highly biased narrative that can distract us from the long-term view.

    4. @C L It reminds me a bit of the days of m3 production hell, if he sleep too little he becomes a bit erratic. I wouldn’t care if he didn’t have a massiv spotlight shining on his every move. And I agree with you the long term future is what matters and regulatory pressure is a thread to it. Also listening to the smart critical voices is important, I really hope he does that and doesn’t just listen to yes men.

  5. I am wondering how Tesla can give guidance, regarding their strategy for upcoming lower prices, without triggering an Osborn effect? However, I do think their entire lack of communication with their customers is detrimental overall. I would guarantee the customer the lowest price in a 90 day window going forward. If the price drops after their purchase, they get a refund of the difference.

  6. I am tired of people telling how Elon should behave. If $TSLA comes with so many baggage because of Elon, why even bother investing. that’s a lot of headache IMO. Let Elon be Elon even $TSLA goes to zero but telling someone how to behave constantly is annoying.

  7. Would be useful to understand how many vehicles are already produced AND sold, but are in transit over quarter-end so therefore not included in delivery numbers. Might help bears understand demand status.

    1. Well, end of they year reports from all over the world that existing inventories were sold out! This means that most cars in ‘inventory’ end of Q4 are probably in transit.. aneqdotal prove is the Wuwa video of yesterday showing the Shanghai Port is packed with Tesla’s waiting for ships to bring them to Europe and other places.

    2. Only production matters since they aren’t doing waves anymore. Every car made are sold despite whatever nonsense is said about demand.

      47% YoY growth right under 50% as guided in Q3.

    3. Yes, I agree with you, but they should reiterate that point so that the bears understand there is no demand problem 😀

    4. What’s not to understand? What Kirkhorn ‘guided’ for in Q3 earnings call (which isn’t official guidance by the way, despite what many people believe. Tesla’s official guidance is 50% CAGR and they are beating that handily) is pretty much exactly what happened. Media and market will continue to spin the demand narrative though. Opportunity.

  8. Dave is absolutely right. In the real world. It better to under promise and over deliver than over promise and under deliver. Tesla is a solid company , but people hype up this stock for two reason. Following over hype YouTuber. Or believing Tesla will keep growing exponentially.
    tesla keep growing.

    1. @Jerry King How do you justify $50 stock price for TSLA? A $50 stock price would give Tesla a valuation of around $160 billion, which is below Toyota’s $188 billion. Toyota has nearly $200 billion in debt while Tesla has only $2 billion in debt. Tesla makes nearly as much profit as Toyota while selling a fraction of the cars.

  9. There may have been confusion with the words ‘delivery’ and ‘production’. Regardless, 40% increase in deliveries is going to look pretty good compared to legacy auto. Honda just reported a drop of 33% in 2022 sales compared to 2021.

    1. Funny thing is, honda had a similar drop In deliveries in 2021 over 2020. We can call this a compound decline. Ouch

    2. @truthjunkie3 Compared to which legacy auto? Porsche sells only 300k new vehicles a year but it’s worth as much as GM and Ford combined. Together GM and Ford sell more than 10 million new vehicles a year. How do you justify Porsche’s valuation?

  10. From the outside looking in, meaning outside the financial world, The “Guidance” thing is way over blown. Elon claimed approx 50% growth, and many said it was crazy. Now they come up short, 40%, but still have record performance, and its a fail.

  11. Great video Dave. Your rational, commonsense opinions delivered without hyperbole is appreciated. Happy New Year.✨🙏

  12. All good stuff except “what methods are being used to manage what effect his political tweets have on Tesla brand”… seriously, you must know this man by now? Someone asked similar question on that Spaces chat he was on from his plane and he said basically I’m not editing myself for anyone. Period.

  13. I am still holding Tesla shares and I am scare for what’s to come on the share price when the market open tomorrow 😵😵😵😵

    1. Sold all my tsla shares and bought back at $120 last week thinking we’ve reached the bottom. Will no doubt have to sell again tomorrow morning!

  14. You’re always unbiased and fair. A lot of the old Tesla centric channels I used to love have become like a cult now that they are afraid to point out anything bad about Elon. I appreciate your work a lot, Dave. You and Rob Maurer are the only ones I take seriously now.

    1. @Jason Bourne yes that guy is a moron and he used to even sell t-shirts that said “diversification is for idiots” WOW. I don’t think those fanboys are helpful to investors.

    2. @Jason Bourne Omg …he went down the cult road pre-Twitter . I used to watch faithfully, then he started bashing Dems/Liberals/Biden. Even if you’re not political, the divisive rhetoric can be a turnoff and undermine the conversation. Part of what l liked about Tesla was the community, it was cool to hv a common interest/goal. I don’t think they realize by splitting the crowd the way they do isn’t helpful, breaks up the “community “, spreading misinformation… it was just a mess. At this point, watching Elon on Twitter… I really don’t think he cares who he offends or what anyone thinks or what effect it has on his finances, as long as he’s “true to himself “.

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