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Tesla Q1 Battery Report // The Death of the 4680 Has Been Greatly Exaggerated

发布时间 2024-05-01 21:57:32    来源


My quarterly report on the Q1 earnings call from a battery perspective. This quarter there were again false reports on the 4680 ...



Welcome back everyone, I'm Jordan Geesege and this is The Limiting Factor. As usual, this quarter there's been some anxiety-inducing clickbait reporting on the status and future of the 4680 ramp, which wasn't helped by the departure of Drew Baglino, who's been the figurehead for the 4680 ramp. So today, I'll do my best to separate fact from fiction by looking at Tesla's advice from the Q1 earnings call. In short, Tesla appears just as committed as ever to the 4680 ramp, but they still have a long way to go before they achieve the scale and cost targets from Battery Day. Let's get into it. Before we begin, a special thanks to my Patreon supporters, YouTube members and Twitter subscribers, as well as RebellionAir.com. They specialize in helping investors manage concentrated positions. RebellionAir can help with covered calls, risk management, and creating a money master planned from your financial first principles.
大家好,欢迎回来,我是Jordan Geesege,这是《限制因素》。像往常一样,本季度关于4680电池量产进展和未来的报道引发了一些焦虑,而德鲁·巴格利诺离职也加剧了这种焦虑,他一直是4680电池生产的代表人物。因此,今天我将尽力通过分析特斯拉在Q1财报电话会议上的建议来区分事实和虚假信息。简而言之,特斯拉似乎像以往一样致力于4680电池生产,但在实现电池日所设定的规模和成本目标之前,还有很长的路要走。让我们开始吧。在开始之前,特别感谢我的Patreon支持者,YouTube会员和Twitter订阅者,以及RebellionAir.com。他们专注于帮助投资者管理集中持仓。RebellionAir可以帮助覆盖期权交易、风险管理,并从财务第一原则出发制定理财计划。

Let's start with the rumor mill and the reason for the title of the video. There was a light post article titled, Tesla's Major Adjustment, the disaster brought by going all in and solving it by going all in. That article was a meandering series of points on a number of topics, but on the topic of batteries, the key points were as follows. First, Tesla is sourcing cells from other suppliers. Second, some employees expressed pessimism about the 4680. Third, Drew Baglino resigned, who was VP of Powertrain and Energy Engineering at Tesla. Based on those three points, the conclusion of the article was that the 4680 was headed for a phased failure. The issue is that Tesla has always sourced battery cells from other suppliers that you can always find a disgruntled employee, especially on a week where Tesla announced mass layoffs, and that executives have to leave at some point. Correlation does not mean causation. That means there appeared to be no real proof supporting the claim that the 4680 was headed for a phased failure. My impression is that the author simply raised a series of points that would stoke anxiety and tied it all together by making an unsubstantiated claim. In other words, it seemed like clickbait. But even so, I was looking forward to the earnings call to see if Tesla's tone had changed on the 4680 project.
让我们从流言蜚语开始谈起,这也是视频标题的原因。有一篇名为《特斯拉的重大调整:全球投入所带来的灾难及其解决方案》的文章。那篇文章在许多话题上都有一连串的观点,但在谈到电池时,主要观点如下。首先,特斯拉正在从其他供应商那里采购电池。其次,一些员工表达了对4680电池的悲观态度。第三,刚刚辞职的Drew Baglino是特斯拉的动力总成和能源工程副总裁。基于这三点,文章的结论是4680电池注定会逐渐失效。问题在于,特斯拉一直从其他供应商那里采购电池,你总是能找到一些不满的员工,尤其是在特斯拉宣布大规模裁员的一周,高管们也会有离开的时候。相关性并不代表因果关系。这意味着似乎没有真凭实据支持4680电池会逐渐失效的说法。我的印象是,作者只是提出了一系列会引起焦虑的观点,并通过一个毫无根据的主张将它们联系起来。换句话说,这看起来像是标题党。即便如此,我还是期待着收益电话会议,看看特斯拉对4680项目的态度是否有所改变。

With that, let's get into the comments from the earnings call. The first comment was from Lars Moravie, who said, quote, 4680 production increased 18 to 20% over Q4, reaching 1,000 packs per week for Cybertruck, which is about 7 gigawatt hours per year. We expect to stay ahead of the Cybertruck ramp with cell production throughout Q2 as we ramp the third and fourth lines in Phase 1, while maintaining several weeks of cell inventory to make sure we're ahead of the Cybertruck ramp. Because we're ramping, Cogs continue to drop rapidly week over week, driven by yield improvements throughout the lines and by production volume increases. Our goal, and we expect to do this, is to beat supplier-based costs of nickel-based cells by the end of the year, end quote.

This is probably the most straightforward update we've had on the 4680 ramp, and it requires no translation. However, as usual, I'll add some color and context to what Lars said. First, last quarter Tesla advised that they had to retool the lines for the switch from the generation 1 4680 cell to the generation 2 4680 cell, which meant that production scaling had likely seen a setback but would rebound quickly. As a refresher, in October of last year, Tesla had reached a run rate of 5 gigawatt hours per year, and after retooling to move from the generation 1 to the generation 2 cell, they're now up to 7 gigawatt hours per year.

Second, Lars said lines 3 and 4 are ramping. However, he didn't clarify what he meant by lines. For example, the electrode coating lines, the assembly lines, or both. Last quarter, Drew seemed to indicate that they were using one coating line and three assembly lines. I'm assuming that what Lars is saying this quarter is that they're still using one coating line and now have four assembly lines running. Third, Lars said production increased 18 to 20% over Q4 to 7 gigawatt hours per year. If that trend continued on a quarter-over-quarter basis, that would mean only about 10 gigawatt hours per year by the third quarter, which is enough for a little over 81,000 Cybertrucks per year. If that happened, the Cybertruck ramp would likely get ahead of the 4680 ramp.

However, it's difficult to know why the increase in production rate was only 18 to 20%. For example, it could have been because they were focused on dialing in assembly lines 3 and 4 rather than running production through the more mature lines 1 and 2. Or it could be that they feel confident in their ability to increase output. And so rather than focusing solely on output, are more focused on improving yield rate. Either way, at least for this quarter, they've stated that they can keep ahead of the Cybertruck ramp. If that's the case, the next most important factor is cost. That brings us to the fourth point on Lars' comments, which is that he expects the cost of Tesla's in-house 4680 cells to be lower than the cost of cells from third-party suppliers by the end of the year.

Lars didn't specify if that included the $45 per kilowatt hour inflation reduction act tax credits. But I'm assuming it didn't include the tax credits. If that's the case, I'd guess that they're looking at a pre-tax credit cost target of about $90 per kilowatt hour or less by the end of the year at the cell level, and around $110 per kilowatt hour or less at the pack level. If they're able to achieve that, I suspect the next cost target will be $70 per kilowatt hour at the cell level.

Which Elon suggested 18 months ago in the Q3 2022 earnings call. But that, of course, likely wouldn't happen until sometime next year. Now that we've covered the key points for the 4680 ramp, let's take a look at the broader strategic picture for the 4680. Towards the end of the earnings call, Elon said, quote, we're making good progress on the 4680 ramp. But I don't think it's super important in the near term, and quote, here, Elon is providing the same advice that I've been giving for a few years now, which is that currently the 4680 isn't mission critical.

It'll be a great competitive advantage in the future after EVs have gobbled up most of the internal combustion market share. But that won't happen until later this decade. Until then, there's plenty of self-supply on the market to meet Tesla's needs. As I've said in the past, Tesla can take straw and weave it into gold. That is, they can take battery cells from any major cell manufacturer, put them in a vehicle, and turn a profit on that vehicle. Lars followed up on Elon's comment by saying, quote, it's important to note that the ramp right now is relevant to the Cybertruck ramp. We're not just going to randomly build 4680s unless we have a place to put them. We also have a lot of investments with all our cell suppliers and vendors. They're great partners, and they've done great development work with us, and a lot of the advancements in technologies and chemistry they're also putting into their cells, end quote.

That is, as long as the 4680 ramp can support the Cybertruck ramp, it's meeting Tesla's current needs, and for other uses, there's plenty of self-supply available from other suppliers. However, I do think while that's true, it's underplaying how useful a greater supply of 4680 cells could be. If Tesla had ramp the production lines quicker, and, for example, put those cells in the Model 3, the Model 3 would currently cost about $7,500 less in North America, and on the back end, they'd be getting millions of dollars of inflation reduction tax credits. That is, at this point, although the 4680 is only critical for the Cybertruck ramp, Tesla's certainly missing out on a lot of potential vehicle sales and profits by not using the 4680 cells in more vehicles. So, although Lars says they wouldn't randomly build 4680s unless they had a place to put them, to me, it looks like there are places Tesla could put them. So, what's going on here? My guess is that for the time being, they're confident that they can keep ahead of the Cybertruck ramp, but they're not confident that they could ramp the 4680 lines enough to support another vehicle model or trim. Other possibilities include that even with the IRA tax credits, the 4680 cells would still be more expensive than 2170s or prismatic cells, or that they're locked into contracts with suppliers and can't displace the cells in their current vehicles with 4680s. As for the comment about Tesla doing great development work with their cell suppliers and the advancements in technologies and chemistries that they're putting into their cells, my view is that they're talking about the road maps that every cell manufacturer has to reduce cobalt consumption, increase silicon content, and extend cycle life.
换句话说,只要4680电池能够支持Cybertruck生产,满足特斯拉目前的需求,同时其他用途还可以从其他供应商那里得到充足的供应。然而,我认为虽然这是事实,但低估了增加4680电池供应量可能带来的好处。如果特斯拉能更快地推进生产线,并且,例如,将这些电池用于Model 3,那么在北美,Model 3的成本目前会降低约7500美元,并且在后期,他们将获得数百万美元的通货膨胀减税。也就是说,尽管4680电池目前仅对Cybertruck生产至关重要,但特斯拉通过未在更多车辆中使用4680电池,肯定错过了许多潜在的车辆销售和利润。因此,尽管Lars表示,他们不会随意生产4680电池,除非有地方放置它们,但在我看来,特斯拉有可以放置这些电池的地方。那么,这里发生了什么?我猜想,目前他们确信能跟上Cybertruck的生产需求,但他们不确定能否扩大4680生产线以支持另一款车型或配置。其他可能性包括,即使考虑IRA减税,4680电池仍可能比2170电池或棱镜电池更昂贵,或者他们已与供应商签订合同,无法用4680电池替换当前车辆中的电池。至于有关特斯拉与电池供应商进行了良好的研发工作以及在其电池中投入的技术和化学成分的进展的评论,我认为他们正在谈论每家电池制造商都在减少钴消耗、增加硅含量和延长循环寿命的路线图。

There is probably some technology and tip sharing between the companies, but I doubt that Panasonic, for example, will be using Tesla's dry battery electrode coating process in their 4680 cells. Next, Elon said, quote, a big part of the 4680 and Tesla doing internal cells was a hedge against what would happen with our suppliers, because for a while, it was very difficult because every car maker put in massive battery orders, and so the price per kilowatt hour of lithium ion batteries went to crazy numbers, crazy levels. The orders from other automakers have declined dramatically. Tesla's seeing much more competitive prices from our suppliers. It's clear that a lot of suppliers have excess capacity, and quote, this was one of the most exciting things that was set in the earnings call. From the beginning of this channel four years ago, I raised the point that it might be too late for other western manufacturers to compete with Tesla, because Tesla had gained a first mover advantage. That's because even after going all in on EVs, it took Tesla over a decade to become truly profitable. And for other western automakers to do the same in EVs, it would take them at least five years to catch up.

I also stressed that Tesla was constantly improving their efficiency, so that five year lead might continue. That's turned out to be the case, and it appears that will lead well continue into Tesla's next generation of vehicles. With the exception of BYD, other EV manufacturers have attempted to compete, but still haven't been able to produce EVs profitably, which Tesla was able to do five years ago. Not only that, it's gone so bad for other manufacturers that they're regressing by pulling back on their EV plans and retreating to hybrid vehicles. That may help keep them afloat for a few years, but ultimately, the first principal's efficiency and benefits of EVs will win out.

In the meantime, all the battery cells that other western manufacturers ordered up but didn't use have created an oversupply of cell production capacity. That means lower cell prices for Tesla. The combination of Tesla's lower cell prices and Tesla's upcoming budget vehicles will only enhance Tesla's profits and scale and therefore competitiveness. So if Tesla comes out with a fully electric vehicle that's more appealing and lower cost than a hybrid, they'll sweep the table. As a side note, in my global lithium supply chain video, I said that Tesla might run into lithium supply issues somewhere between 2026 and 2028. I now no longer view that as likely.

However, it's not because I failed to assume that Tesla would eat the lunch of every other western automaker. I did. It's because Tesla didn't grow 50% last year, won't grow 50% this year, and probably won't grow 50% next year either. Whereas, in the global lithium supply chain video, to address the bull argument, I assume that Tesla would continue growing at a steady 50% per year. Since Tesla's growth rate has now dipped below that for at least a couple of years, any potential collision with lithium supply may not occur this decade, if at all. Moving along, the next comment was from, I believe, Karn Budiraj.
然而,并不是因为我没有预料到特斯拉会吞掉其他西方汽车制造商的市场份额。我是预料到了。问题在于,特斯拉去年增长并没有达到50%,今年也不会达到,明年很可能也不会达到。而在全球锂供应链视频中,为了反驳看涨论点,我假设特斯拉会保持稳定的每年50%增长率。由于特斯拉的增长率至少在过去几年下降,与锂供应的潜在冲突可能不会在本十年发生,甚至可能根本不会发生。接下来的评论来自我相信是Karn Budiraj。

Quote, What 4680 did for us from a supply chain perspective is help us understand the supply chain upstream of our cell suppliers. A lot of the deals that we struck for the 4680, we can also supply those materials to our partners, reducing the overall cost back to Tesla. We're basically inserting ourselves into the upstream supply chain by doing that. That's also been beneficial in reducing the overall pricing in addition to the excess capacity that these suppliers have. End quote, that is, even though the speed of the 4680 ramp has been disappointing, the 4680 project is still having a positive impact on reducing cell costs from other suppliers and giving them greater control over the raw material supply chain.

The next comment from Elon was quote, there are additional complications with government incentives like the Inflation Reduction Act, the IRA. It does complicate the incentive structure so that there's perhaps stronger demand for cells that are produced in the US than outside the US. But then how long does the IRA last? I don't know. End quote. To which Lars added quote, which is why it's important that we have in-house cells to hedge against all of this end quote, what Elon and the team are communicating here is that Tesla is positioning itself as best it can, regardless of what's happening with government incentives. So although potentially lucrative, the IRA tax credits are also causing market distortions and uncertainty. Let's look at two examples.

First, as Elon pointed out on X, one of the impacts of the Inflation Reduction Act or IRA tax credits is that the rules around the tax credits have changed much faster than it's possible to change a massive supply chain and production system. That's probably one of the reasons why the Model Y is now effectively cheaper than the Model 3 after tax credits, despite the Model Y being a vehicle that should cost thousands of dollars more. Besides the fact that Tesla's in-house 4680 ramp is progressing slowly, Tesla simply hasn't been able to adapt the supply chain quickly enough to get tax credit eligible cells and packs from any source into the Model 3.
首先,正如埃隆在X上指出的那样,通胀减少法案或IRA税收抵免的一个影响是,税收抵免的规定变化得比庞大的供应链和生产系统变化得快得多。这也许是为什么即使Model Y应该比Model 3贵几千美元,但现在Model Y在税收抵免后实际上比Model 3更便宜的原因之一。除了特斯拉自家的4680电池生产进展缓慢之外,特斯拉还未能迅速调整供应链,以便从任何来源获得符合税收抵免资格的电池和电池组投入Model 3。

Second, what if Tesla rebuilt their supply chain in a way that's fundamentally less efficient but allows them to earn money from IRA tax credits? Then a new administration reversed them later this year or next year. That could mean over time millions or billions of dollars wasted reorganizing the supply chain only to have it be less efficient overall. What that means is it may not be worth it for Tesla to go too far out of their way to chase tax credits and to only pursue them when it roughly aligns with their existing plans. For example, currently Tesla appears to be manufacturing some cell components in Germany and shipping them to the US to be assembled. Normally that might not make economic sense but with the IRA tax credits it does.

That's because the credits are to assemble the cells regardless of where the components came from. But Tesla had plans to build cell production in Germany anyways so shipping the components to the US doesn't fundamentally alter those plans. It may just be delaying them. In summary, despite the fact that there were news reports that the 4680 is headed for failure, the team at Tesla is indicating the opposite. First, they're continuing to ramp the new lines at Austin. Second, they have cost target goals to reach cost parity with external battery cells by the end of the year. Third, they stated that it's important to hedge against potential changes in cell supply and incentives. Fourth, by inserting themselves into the supply chain to supply their 4680 ramp, it's saving them money on their third party supplied cells.

Fifth, in the slide deck for the earnings call, Tesla placed the 4680 cell at the base of their ecosystem. With all that said, the 4680 ramp is still grinding rather than skipping along. First, in order to keep up with the Cybertruck ramp, they're using at least one coding line and four assembly lines. Those assembly lines in total have an annual production capacity of about 100 gigawatt hours, whereas they're currently producing only 7 gigawatt hours. So at least for the time being, Tesla appears to be leveraging extra assembly lines to make up for low output. Second, the delays with the 4680 ramp are limiting Tesla's ability to access IRA tax credits, which would reduce the price of the Model 3 by about $7,500 on the customer end and earn Tesla millions in production tax credits.
第五,特斯拉在季度电话会议的幻灯片中将4680电池放置在他们生态系统的核心。总的来说,4680电池的生产还在缓慢推进而非快速进行。首先,为了跟上Cybertruck的生产进度,他们至少使用了一条编码线和四条装配线。这些装配线总共的年产能约为100千兆瓦时,而目前他们只生产了7千兆瓦时。因此,至少在眼下,特斯拉似乎正在利用额外的装配线来弥补低产量。其次,4680电池生产进度的延迟限制了特斯拉获得IRA税收抵免的能力,这将使Model 3的价格在客户端减少约7500美元,并使特斯拉获得数百万美元的生产税收抵免。

As a final point, quite a few people have been asking what's limiting the ramp of the megapacks. According to Mike Snyder, the megapack ramp hasn't been limited. He also said that they have ordered visibility 12 to 24 months out, and they plan the build out of the project's several quarters in advance, which allows them to ramp the factory to align with business and order growth. My read of this is that ramping megapack production isn't a limiting factor for Tesla. However, I wouldn't be surprised if there's some bottlenecks turning orders into projects, which involves permitting grid connection queues and queues for transformers, which are currently experiencing a shortage.

Rohan Patel was working on the permitting and interconnect queue side of things, and now it appears that torch has been passed to Patrick Bean. So despite the recent executive layoffs, Tesla has a deep bench and will continue to work on expanding their megapack pipeline and the speed that they can deploy projects. If you enjoyed this video, please consider supporting the channel by using the links in the description. Also consider following me on X. I often use X as a testbed for sharing ideas, and X subscribers like my Patreon supporters generally get access to my videos a week early. On that note, a special thanks to my YouTube members, X subscribers, and all the other patrons listed in the credits. I appreciate all of your support, and thanks for tuning in.