PPrecise Market Analysis.
93 posts
If we’re comparing Robotaxi counts between OEMs, recommend counting those that have a TTBE (time to break even) of <1yr otherwise it’s more theater than a business.
There’s only one OEM rn that will achieve that consistently and continuously shrink that timeline…
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🤯 not sure markets are ready for this $NVDA
Gavin Baker@GavinSBaker
Interesting report from @theinformation that Nvidia will be able to make 1000 Vera Rubin racks per day, which is $630b per quarter. Actually a little hard for me to believe and haven’t checked the math, but wow if true. And Vera CPU racks and Groq LPU racks would be incremental to this. As would their new business model where they take a revenue share of neocloud revenue in return for guaranteeing offtake. I do think the latter point has not been well explored by analysts and is likely to be super important going forward.
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SFO supervised Robotaxi experience 👇 🔥
Zach Warunek@ZachWarunek
Incredible. All Tesla needs is just a few more cars. They even picked me up right outside baggage claim, no more hike to the uber lot
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The near and long term destruction of Iran economically is being grossly underreported and may ultimately end this conflict faster than any kinetic action.
The Strait is dead, will NEVER return to prior prosperity. The IRGC overplayed their hand.
Iran Open Data@IranOpenData
Not long ago, Iran was one of the Middle East’s largest economies, and its people were among the region’s wealthiest. Today, income per person has fallen below Iraq, Jordan, and Azerbaijan—a striking reversal in Iran’s regional economic standing. #Iran #MiddleEast #SaudiArabia #UAE #Israel #Jordan #Turkey
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New Grok commands to control more of the car (climate,etc) and adaptive navigation to your previous routines are pretty beefy updates 🤯 . Can’t wait for this update.
Tesla@Tesla
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Not surprising to see the cities that we’ve seen staging vehicles open themselves for @robotaxi service … $TSLA 👀 🔥
Tesla Robotaxi@robotaxi
Robotaxi now in Tampa & Orlando!
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Oh nice! Could have used this a few weeks ago!
Tesla AI@Tesla_AI
Our Bay Area rideshare service now goes to SFO ✈️
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The Tesla service experience is more streamlined and better than any car brand I’ve owned
Ryan Petersen@typesfast
What an amazing experience Tesla has created when you get a loaner while your car is in the service center. They connect your app to the new car and you just drive it off. The loaner has all your settings including saved addresses, Audible books, Spotify playlists. Even my garage door opener worked on the loaner. Footnote: I've owned Teslas for 10 years and this was the first time I had to do this.
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TL;DR @PoweredByEos COGS/ Gross Margins: Most conversations on this are lacking context and real-world experience. COGS (aggregate total mfg cost) and Unit Economics (per device COGS + cost of sales) have several line items and sources of input, all together these add up to the costs to produce and support a product. Yet all we tend to hear about is Line 1 vs Line 2, TC vs Thornhill... but there is so much more to this conversation. When a product line or operation is just starting, the gross margins are horribly negative and appear hopeless. As soon as there is a strong continuous demand signal (not start/slow/stop) and real scaling in the factory, the transformation on gross margins is quite dramatic. Here are some thoughts if you have the time for more detail:
1. The line: Line length, material travel, and line shape of Line 2 will definitely have favorable material impact on COGS, but I believe it's just a part of the puzzle. Worth noting the difference between line 1 and 2 here is atypical, the improvement w/line 2 is dramatic. Line 2 isn't really a copy-line of line 1, it's fairly transformational, almost a new line 1...
2. EOS will continually and iteratively re-design the Z3 to reduce COGS: No one is talking about the product itself, the Z3. EOS is absolutely making physical changes to the bill of material, part design, upstream supplier processes, and factory processes to reduce the cost of the final product. They roll these changes in as testing completes. Tesla is doing this for years after introduction of the M3 / MY for example and may be the best in the industry. In fact they've caught many analysts off guard with this surprising on gross margins due to this very fact. It's a continuous process for the lifecycle of the product. Another real-world example: I worked on one of the most successful mobile phone products in history and from the launch COGS (net of any special start up costs) to when we end of lifed the product, we cut the bill of material (the bucket of parts) and the total manufacturing cost per unit in HALF from launch. Yet the product looked identical to when it launched and actually performed better and had improved field reliability.
Successful products with long product life and low SKU count (possible w/the Z3) do this exact same thing. Of course the management team and staff have to do the work to make this happen. But the point is it's not all about the line and it's certainly not all about where gross margins are today.
3. Non-BOM factors: Things besides the design, the parts, and the manufacturing process also impact COGS dramatically. Things such as factory fixed cost absorption, utilization, warranty cost, distribution/logistics costs, post sales support, capex depreciation, etc etc. The FPUSA deal that increases backlog and puts a steady demand signal on the factory is likely worth several % of gross margin alone. I've both experienced this and analyzed this for other companies and have seen 5-10% of gross margin improvement from steady demand signals that increase utilization both in the factory and upstream at suppliers. Low utilization, down time, etc are the worst as your capex cost per unit increase and your labor is literally standing around getting paid for doing nothing and given this is a union shop, this is probably understated by 10x... Also, things like adding 2nd and third sources drive input costs down significantly. Competitive sourcing is the single greatest point of leverage and this was one of John Mahaz's 60+ projects. It's iterative and over the past year my guess is they've multi sourced many components.
There are countless other examples and what is great is most if not all can be actioned concurrently. Gross margins are a much broader conversation than Line 1 vs Line 2. There's also a pricing/willingness to pay attribute that could adversely weigh. The best thing EOS can do is just relentlessly execute COGS reductions and get to scale quickly...
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