Q2 Earnings: Whats coming

[JBee]

I see you are one of those people:

Physically that glass is completely full.
Half with air half with water (which by weight is mostly oxygen)

In fact everything is full of something, at least some form of cosmic radiation, because nothing doesn't exist. If it did exist it would be something.

Hence I'm the type of guy that always has a full glass. Just full of what is the question.

Sponsored

 

[Diehard]

I agree with you mostly.

But I definitely got the impression that whatever they consider volume production to be… it’s not going to be by year end.

It’s likely they will produce some units in the near term and dial in the assembly line in the near term.

I would absolutely love to be wrong.

My reading (like it is palm reading) is that it does not make sense to make CTs until that problem is solved (it would cost $1,000,000 a piece if you can not produce in volume). They also tried to reassure the listeners that solving the problem is a matter of when not if. All of that to me (with a 700,000 place in line) means that for me CT is still a concept truck until this problem is solved even if there is a Beta parked at Trader Joe’s looking for chips. For all I know someone could figure it out tonight and they make the revision to the machines and process in a month or it could take another 3 years.

 

[JBee]

Hmm. I guess I listened to a different call. 4680 produced at Kato rd are validated. If they produced them why do you hear that 4680 has a problem? In fact they said several times that it wasn't a science problem that it was an engineering problem with the high volume process. So yes. 4680 is ready. The machines that make them at high volume are not ready.
But what does high volume vs low volume mean?

They also said they are setting up other 4680 lines to ramp up production (probably Berlin/Austin) which means they have the primary parts of the line locked down otherwise they wouldn't build them. You can't build what doesn't work.

The other thing is to understand the scale they are talking about. They said 100GWh by end of next year. Thats enough for 714,000 DM CTs. (Or nearly twice that in MYs)

When they start production is one thing, but how fast they produce them is another. For example if they start late but make lots of vehicles, you will still get your CT faster if you have a high reservation number. And I think that is what they are concentrating on, getting all the orders filled as fast as possible, the start date isn't as important then.

 

[VolklKatana]

Hmm. I guess I listened to a different call. 4680 produced at Kato rd are validated. If they produced them why do you hear that 4680 has a problem? In fact they said several times that it wasn't a science problem that it was an engineering problem with the high volume process. So yes. 4680 is ready. The machines that make them at high volume are not ready.
But what does high volume vs low volume mean?

I'm with you Dids, they are 90% of the way there, they just need to iron out the efficiency/scale bottlenecks. This means in theory (and hopefully practice), every day, they are making batteries and stockpiling them for when production starts. They will have these problems ironed out by the time the battery lines are installed in Austin. The first 6-8 months of CTs may very well all use Kato Rd batteries, which should be no different than those made in Austin eventually, with the exception being that they were made slower, and likely under a bit more scrutiny.

They are waiting on the press. Shortly after that is in, they will get the rest of the line dialed in with these production specs, and then I think we will start to see some of these first vehicles in employees hands for testing. This will be end of Q3, start of Q4, 2021.

 

[Ogre]

My reading (like it is palm reading) is that it does not make sense to make CTs until that problem is solved (it would cost $1,000,000 a piece if you can not produce in volume). They also tried to reassure the listeners that solving the problem is a matter of when not if. All of that to me (with a 700,000 place in line) means that for me CT is still a concept truck until this problem is solved even if there is a Beta parked at Trader Joe’s looking for chips. For all I know someone could figure it out tonight and they make the revision to the machines and process in a month or it could take another 3 years.

I suppose that’s fair enough. Though I don’t think calling it a concept vehicle is fair.

A concept vehicle is a one-off. Most of the time when they build them they put zero thought into manufacturing them. This is why the transition from concept to production always results in something completely different.

Manufacturability is a big part of why the Cybertruck is the way it is. It is almost the anti-concept vehicle in that way.

It’s the technology under the floorboards which hadn’t been finalized yet.

 

[Diehard]

One thing I either misunderstood or didn’t quite get was what they said about the problem: The pizza dough was OK in smaller batteries but started poking the layers once they started making bigger ones? I thought they have been making “4680”s all this time. Does that mean they have not made any at the right size that is OK? I am sure I am not getting something right here. Can one of you in the know demystify this for me.

 

[Crissa]

My reading was that the 4680 wouldn’t even be ready for the y. They will start the y with normal frame and 2170 batteries.

They have repeatedly said that the Y from Austin and Berlin would be a new model with the 4680s.

-Crissa

 

[Crissa]

One thing I either misunderstood or didn’t quite get was what they said about the problem: The pizza dough was OK in smaller batteries but started poking the layers once they started making bigger ones?

Oh, oh! I can answer this one.

Okay, when you make dough (or slurry or whatever) and then paint it onto a surface, you get bubbles. Now think of those bubbles, like in pizza, right?

Well, if you get a big bubble, it pushes all the sauce to one side. And whoever gets that piece is sad, because they didn't get sauce.

But what if you cut it into bigger pieces? And what if instead of sad, every big bubble caused all the pizza to burn down?

That's the problem they face. They need to make the pizza with fewer bubbles. It was okay if they had a bubble once in awhile with their 1/5th the size slices... They could just toss that slice on testing. But now that it's 5x bigger, well... That once-in-five slices they send bck to be re-sauced is once-in-every-slice problem.

-Crissa

 

[Ogre]

They have repeatedly said that the Y from Austin and Berlin would be a new model with the 4680s.

I thought they said if everything was ready for the Model Y except for the 4680, they would start manufacturing the Model Y with the 2170 cells as a fallback. Since it sounds like volume delivery of the 4680 cell is not going to be ready for end of year it seems likely there will be some Model Ys coming out of Texas with 2170 cells.

Edit: Found the quote from the transcript.

We will endeavor not to make that the case at Tesla. Let's see, the model lines in Texas, and made in Texas and Berlin, will look very much like the Model Ys we currently make, but there are substantial improvements in the difficulty of manufacturing. So for example, the Model Y made here and in Berlin will have a cast front body and a cast rear body. Whereas the one in California has a cast rear body but not a cast front body. We're also aiming to do a structural pack with 4680 cells, which is a mass reduction and a cost reduction.


But we're not counting on that as the only way to make things work. We have some backup plan with a non-structural pack and 2170s, essentially. So at scale production, we obviously want to be using 4680s and a structural pack. From a physics standpoint, this is the best architecture, and from an economic standpoint, it is the lowest cost way to go, so the lightest, lowest cost.

 

[JBee]

I just placed my 4th order for an Aussie CT TM just now.

The calculator says I'm position 2,635,468.

Do we really have that many orders now?

A decent brief overview transcript of the Q2 call:
https://www.shacknews.com/article/1...rnings-results-and-conference-call-transcript

 

[Crissa]

The calculator says I'm position 2,635,468.

What calculator did you use? O-o

...as a fallback..

Yeah, if something goes wrong with the 4680s. But that's like saying they have fire exits, it doesn't mean they will be set on fire.

-Crissa

 

[Ogre]

Yeah, if something goes wrong with the 4680s. But that's like saying they have fire exits, it doesn't mean they will be set on fire.

Yep.

But the impression I got from the call was that supply of the 4680 is likely not going to be ready for the Cybertruck production to start on time. That was super vague though, clearly they don't know quite when they will break through these issues. In their words, it's an engineering problem, not a physics problem.

With small runs, they can make the 4680 work and it's reliable. When they scaled it up, machinery started failing (Rollers were getting damaged). They have to figure out why it's failing. They've already ordered the equipment so they will need to upgrade the brand new equipment for the new process.

It's all a bit of a mess right now.

From the sounds of it, the 4680 + chip shortage are the big holdups on the Cybertruck though. Once they get the 4680 squared, things should move quickly.

 

[TruckElectric]

 

[Dids]

Oh, oh! I can answer this one.

Okay, when you make dough (or slurry or whatever) and then paint it onto a surface, you get bubbles. Now think of those bubbles, like in pizza, right?

Well, if you get a big bubble, it pushes all the sauce to one side. And whoever gets that piece is sad, because they didn't get sauce.

But what if you cut it into bigger pieces? And what if instead of sad, every big bubble caused all the pizza to burn down?

That's the problem they face. They need to make the pizza with fewer bubbles. It was okay if they had a bubble once in awhile with their 1/5th the size slices... They could just toss that slice on testing. But now that it's 5x bigger, well... That once-in-five slices they send bck to be re-sauced is once-in-every-slice problem.

-Crissa

The only problem with your analogy is that would make it a science problem and not an engineering problem.
My understanding was that it was the cathode squashing machine that caused bubbles.

@ 46:00
I took that to mean that folding the shingled tabless cathode sometimes caused bubbles.

 

[Raebrek]

Mr. Musk has been getting expert advice on how to make the batteries more quickly in low production until they get the full production bugs resolved.

Sponsored