Same old story on CT update

rrizzi7210

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I found a few takeaways during the earnings call today.

I believe that when the prototype was unveiled in November of 2019, Tesla set several automakers into planning mode for what could be done to capture as much as possible of the e-pickup market demand that nobody knew existed before that event, including Elon.

Elon and all the c-level execs knew more or less how long it was going to take to get GigaTexas online and production-ready. They probably figured, "What do we have to lose by building a game-changer prototype of what Elon wanted in a Tesla Pickup Truck." The problem with that is they showed their cards too early, and most of the big automakers "knew" they had to build prototypes and get them to market as fast as possible. Even if they cannot scale production to match demand, it won't matter because they also probably knew how difficult it would be (even for Tesla) to build GigaTexas and scale the manufacturing process of a new vehicle. The big automakers hedged their bets, and it looks like it might pay off now.

Then, COVID-19 hits, and everything changes. The Supply-Chain nightmare isn't even close to over yet. No one has a solution in place to solve the pent-up demand problem without increasing capacity only to catch up to demand AND then.....deal with the problem of "excess" capacity AFTER supply and demand achieve equilibrium. It is too risky to scale only to have to later abandon these massive fixed-asset investments. I won't even get into how the current political climate plays into this either.

Elon had two choices around this point. "Do we [Tesla] build the original prototype, or modify the prototype to be at least equal to or better than what the other companies have proposed in their prototypes?" It appears he chose the latter. Elon revealed during the earnings call today the question of how to produce "an affordable" CT. I think he has recently learned that the proposed cost of the latest CT prototype is far beyond what he finds "acceptable" for the typical pickup truck owner. When the single-motor CT was introduced at $39,900, the satisfaction from potential buyers was reflected in the number of orders that were placed, even though most of those orders were for dual and tri-motor variants. The price was still more than acceptable for these two more expensive variants.

Sometime later, Tesla removes the configurator from their website, and all pricing information is gone.

The problem is when the design team was tasked by Elon (of course) to improve the prototype based on what was learned when the big automakers revealed their prototypes; I think they did so for too long of a period without getting his feedback. Let's face it, Elon is "busy," and while he knew what was being done to the newer prototypes, he probably did not know what the consequences to the selling price were going to be. This is why he reduced expectations today by not saying anything new and not delivering details on a CT product roadmap. It must have happened in the last few days. He is basically "pissed off" at the design team and has to get involved in fixing the problem. He goes where he is needed most, which is another one of those situations.

Lately, he has been too busy with SpaceX. The same thing happened with the new engine for the latest rocket they are working on. He let almost all or all of the c-level execs in charge of the new Raptor engine production line go and personally went in on the weekends to "fix" the problems.

This is why when I read between the lines in the earnings call, he is saying that Tesla will "try" to produce the CT in Q1 of 2023, but I believe it will not happen. He does not even have enough data to know precisely when it will be, but if he were conservative (which he is not), he would have said Q1 of 2024. If they had done that, Elon knows he would have lost most of the momentum earned in late 2019 and early 2020, plus he would have told the competition that they won big on their bets.

Where does this leave us now? Well, like many others, I, too, am just about ready to order a Model Y Performance instead and will wait for probably a few more years to even see the first CT on the road. The problem is, what will I think when I start to see all the competitors' EV trucks on the road? With low confidence from Tesla regarding the CT, I might test drive one. Even though I don't feel that way today, I could change my mind 12 months from now.

The other issue is if Tesla "reveals" the new prototype and the price, it will be like taking candy from a baby for the competitors. They will do what they did before and repeat. They have the advantage in some respects, but in many other ways, they do not. They probably won't scale reliable battery production in less than three years. They don't have an L3 charging network as Tesla does, and they will learn from Tesla eventually.

In closing.....I was very disappointed to hear two things during the earnings call. The timing of choosing to talk about the humanoid robots was terrible. People, in general, are afraid of losing their jobs to machines, let alone humanoid robots. I think Elon even realized while speaking that he almost slipped and was going to talk about how much more efficient and more productive manufacturing could be if he just had them now instead of people. How often have we heard Tesla (or Elon) say that people in Fremont have choices about where to work. It's hard to get qualified people to build Tesla vehicles in Fremont. Maybe the humanoid robots are the answer to that problem. They don't quit, take breaks, get sick, complain or fight with co-workers.

I was disappointed to hear that Elon thinks that FSD will be ready by the end of the year. I want to go back and listen to precisely what he said again, but I think he said: "would be done by the end of the year." There is no way in the world that FSD Beta will be ready by December of 2022. Yes, the features in Autopilot might be 99.99999% or at least better than any human, but FSD Beta will not be there for at least another three to five years.

I am a software developer (and hardware designer) and have worked with embedded systems, neural network processing modeling, and many other areas within computer science for over 30 years. It has been by "day job" for over 30 years. While I am incredibly impressed with the progress so far, the next 1% of improvement will take another 90% of the time and effort spent thus far. I believe the problem is complex enough to be classified under what I would call the "law of diminishing returns." The progress vs. time graph is asymptotic, meaning the complexity and cost of increasing the performance of a system increases geometrically to the feature set or the inverse of the error rate.

I believe Elon already knows this, and he was hoping that Dojo would allow them to break through this barrier when they begin the development several years ago, through machine learning to improve the labeling system by order of magnitude or two. He could be correct, but during the earnings call, he even said he wasn't sure they would be successful with Dojo in the future. Dojo would only be used if the FSD development team felt the gains achieved with Dojo compared to GPU clusters increased. It might be too early to determine that, and I think the gains would be higher with Dojo if neural network processing can be shown to improve and solve the labeling problem as it stands right now. I think it will take several years to get there, regardless of how many existing Tesla owners are helping to train the models. FSD is the type of problem such that improvements occur when orders of magnitude in capacity or performance are achieved, meaning to double the benefits, you have to increase the performance or capacity by a factor of 10 and to gain four times the improvement; you have to increase performance or capacity by a factor of 100 and so on.

The only other way Tesla can deliver a working, useful replacement for human drivers would be for the DOT to work with Tesla to change the design of roads and highways, or for Tesla engineers to have a breakthrough in terms of how neural network processing is done and I am not talking about speed or depth here.

I'm not going to cancel my order for my CT, and I am around 113K in the queue, and I expect to see my CT (quad motor) in Q2 or Q3 of 2024. In the meantime, I will be a part of those buyers who continue to push Tesla vehicles sales upward and onward because I need to replace one of my existing vehicles soon.
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Dusty

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They're making so much money from the Model Y they'd cut off a finger before disturbing the cash cow. It's not chips--but dollars that put the CT on the back burner. A CT eats 4680s that could be put into several Model Ys at a healthier profit. They intend to pump out Ys like crazy in 2022.

Listening to the call, it really sounds like the CT is actually still in engineering and design as well. Musk is normally optimistic and his tone sounded like the CT is pretty far from done. I feel like I'm stuck like Chuck til least Q4 2023, at 17k in line (according to the "tracker" estimate).

I have no intention of buying an ICE vehicle, and I'm not doing the dealership sales experience ever again. That business model can go die in a fire.

The value of my Jeep isn't going to get much better after this Fall. Soooo... I may as well order an R1S and see if it gets delivered in 2 years.

Damn. What a kick in the nuts.
 
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charliemagpie

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Don't let the door hit you on the way out. Ha

Elon said today was a road map, and the products deserve their own separate updates. So the detail wasn't today… never was.

Engineering is done. We know already

Production will start end of this year/2023. We know already

Hoping at least 250,000 units per year. We hoped, at least.

I think anyone expecting to get their single or duel motor by 2024 were always up against it with over 1 million orders.

I, too, want it now.. But I don't understand the disappointment… what was the expectation… 1 million in 23 ?


For those with tri realistically waiting for 2023/24… I think got their wish today

By all means, get a Lightning lol In 2026
 

Quicksilver

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I've waited this long I guess I can wait some more.
My plan is to:
Drive the Nissan till it drops and then get a beater to fill the gap until my number comes up.
Put a grand a month in my Ameritrade account and buy more stock every time there is a dip or hopefully a split. I picked up one more share today while it was below a thousand.
Try to pay off the farm tractor and the new "Diesel Pig" before my CT is built.
Attend an Open House in Austin if they have one.
 

Dusty

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Don't let the door hit you on the way out. Ha

Elon said today was a road map, and the products deserve their own separate updates. So the detail wasn't today… never was.

Engineering is done. We know already

Production will start end of this year/2023. We know already

Hoping at least 250,000 units per year. We hoped, at least.

I think anyone expecting to get their single or duel motor by 2024 were always up against it with over 1 million orders.

I, too, want it now.. But I don't understand the disappointment… what was the expectation… 1 million in 23 ?


For those with tri realistically waiting for 2023/24… I think got their wish today

By all means, get a Lightning lol In 2026
Where did you get that production was starting at the end of 2022? He said "...2023 HOPEFULLY..." Not end of 2022. 2023... hopefully. That puts delivery (not production) at Q2 2023 at best with no delays. That means if you're more than 20k in line 2024 is the nearest you can hope for.

Engineering is NOT done. He said it repeatedly--there were "challenges" and that they were working on "making it affordable".

For me, it's prudent to start a plan B. A lot of people learned something over the last year, something that I've known for decades. Never wait until you HAVE to buy a new car. My Jeep is coming up on the time when I like to trade out for value and isn't a priority.

I'd rather have a plan for something in 2023. I don't feel like buying an ICE truck just because the CT isn't ready and my Jeep has become problematic. So I'm going to be honest, I'm placing an order for an R1S and then waiting to see which one arrives first. I want a CT more than anything, but not enough to end up with an ICE truck waiting for it to get to market.
 


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November 2019, the world was humming along, producing and innovating, the consumer engine was a juggernaut most folks were certain was on an ever-increasing trajectory... and then came Covid-19, cryptocurrency mining, severe weather events leading to chip fab production fires & shutdowns, droughts, the Suez Canal debacle, eventual supply chain collapse, deaths and early retirement, in some cases just out-n-out resignation, but hey, not blaming people working at low-wage jobs whose employers are reaping millions, sometimes billions (cough Walmart, cough) in profits at their expense...I'd quit, too. The traditional OEM's all suffered decreases in auto production, some stopping EV production all together (cough, GM, cough) which resulted in decreased sales, huge price markups and lots of excuses... oh, and there is no way in 'H', 'E', 'double-hockey sticks' I'm paying a $50,000 dealer markup, they can kiss my meager a$$ets!! Why, they can't even meet production quotas they forecasted in 2017 ("20 new vehicles by 2023", cough, GM, cough... unless they were talking about the 26 EV's they sold in Q4 2021...in which case I humbly stand corrected.) Who is the ONLY automobile manufacturer who grew their business by >50% year over year, built two new factories in about the same amount of time and created two new manufacturing processes (4680 cells and giga-casting) to accommodate even faster manufacturing times at even greater profit margins? The same company that will bring out the CyberTruck, Roadster and Semi, when they have the most efficient manufacturing lines, supplied by the most cost effective supply chains, making the world's best automobiles. It gives me another year to save up for CT, PLAID! Win, win! I think I should get that cough looked at... ;-)
 

Zabhawkin

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I am definitely in the undecided camp. I don't necessarily need to replace my truck as it is still reliable, but I have owned it for 23 years now and it is definitely showing its age and mileage. If it should die tomorrow I wouldn't have to replace it right away, however many of the options to replace it with currently have at least a year wait to get.
 

DMC-81

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John DeLorean didn't drag his feet. He worked tirelessly on the DeLorean project. The Proto-1 concept that he was sitting on in this picture had to be redesigned to make it production ready. A factory had to be built on a green field site, staff with no automotive manufacturing experience had to be hired and trained, so on and so forth before the first DeLorean ever rolled off the assembly line. He was cash constrained, eventually building cars in a war zone, and in an inflationary economic environment. The fact that he produced any cars at all is a miracle IMO.

Although Tesla isn't cash constrained, they are facing some of the same challenges with the Cybertruck. IMO, they can take all the time they need to get the CT right technically, and as Elon said, to make it affordable.
 


flowerlandfilms

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The extra year guaranteed that I can make the money to buy it.
Pretty great result for me.
Not to mention we will no doubt get a second reveal day of some kind with all the new features in... say 6 months?
Something to look forward to.
Happy to let them make fat stacks on Model Y's for a a year before diving back into the unknown.
 

QuanTim

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One thing is for sure: if Tesla are struggling with keeping up with demand and are production constrained due to supply chain shortage, then you can bet that other companies are too.

I believe Elon when he said that introducing any new model right now (or last year) would've disrupted their production of 3&Y, S&X - and I believe they are chip and battery constrained. I also believe that for everything they want to put into the CT right now, it would become too expensive for your average buyer, thus they would lose a lot of interest and thus it would likely become a niche vehicle only - not exactly in line with their mission statement. 3, Y & the CT are supposed to be their high volume cash cows, so they still need to find the balance of making the truck jammed with features, at a low cost, whilst keeping production volume high and not bleeding the cell supply line dry.

As an investor, I'm OK with their decisions so far. They only just became a net-profit company after more than a decade - what would it look like if they suddenly lose that momentum by trying to add a new product to the mix on an already strained company with two factories due to come online this year (Elon said even now they are have too many things going on)? This should mean my investments continue to be sound and Tesla continue to grow, add more cash to the pile, and more a better outlook for the future. Remember, the investor deck said something like "this is just the beginning of their journey"...

As someone who wants to one day drive a CT (I'll have to fly to the US and rent one out or something because I will be old and decrepit before it ever comes to the UK in any shape or form - so owning maaay be out of the question (I hope I'm wrong!)), I'll have to pause that dream by a few more years which, in the grand scheme of things, isn't all that bad.

(I do wonder about the focus on Optimus though... I think Elon either wants to accelerate to an economy where humans have more free time/less suffering plus enjoying the benefits that labour brings, or he's worried about some sort of economic collapse... either way it was a bit odd.)

(Edit: I also wonder why they "leaked" the new CT prototype. What was that about!? Just got everyone hyped about the roadmap for no damn reason... at least give us some decent video footage of someone having a real good poke around or something... that was a bit annoying tbh.)
 
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Crissa

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My Cybertruck order number is in the low 3000s, I bought Tsla @$28, I remember Musk saying a Tesla truck to compete with the f150 was a couple of years away.....in 2013! I've ordered an F150 and am confident it will be a couple of years old before my Cybertruck arrives....
How far back are you in the line? Gonna hafta be in the first half to even get a Lightning before 2024...

If you're a first day order like @Idea Of The Day or Transport Evolved, you'll prolly get it this year. Maybe.

-Crissa
 

Halemarine

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I was pretty dismayed when really nothing was said about the Cybertruck during the quarterly update today. Nothing about the features or pricing, just another delay in production. I know that my frustration is shared by all but when is this charade going to end?
As Model Y owner I'm beginning to question , if I made mistake canceling my Ford reservation?
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