Hey Shakers! In this issue of EV Shakeout we look at Telsa's 10Q SEC filing and check out their incredibly efficient CAPEX patterns, a look into Arcimoto, and check out the battle of the AI's - a nice comparison on who might win the race to full autonomy in the auto industry.
A Breakdown on Tesla 10Q SEC Filing
Last week Gali at Hyperchange did an amazing job zeroing in on a nugget in the SEC filing uncovering Tesla's CAPEX details (CAPEX is expenditures and how much a company will invest ahead of time on future growth).
You can find the full SEC document here. This video focuses on page 45 in the filing.
In the document Tesla states"We currently expect our capital expenditures to be at the high end of our range of 2.5 to $3.5 billion in 2020 and increase to 4.5 to $6.0 billion in each of the next two fiscal years." (quoted under section Trends in Cashflow, Capital Expenditures and Operating Expenses)
What does this mean for Tesla?
The amount of CAPEX per vehicle is falling tremendously considering the fact that Tesla is moving into increase in cell production and since Tesla's market cashflow is $14.5 billion they don't even have to raise capital for these future investments.
Tesla has ability to use revenue from approximately 1.5 factories to fund construction and growth of 3 more factories.
Because of their CAPEX they can build more cars, 4680 cells, cathodes, and perform in house mining operations.
They can do all this with just 4.5 to $6 billion.
A real example of this set in motion is the ramp up of Model 3 at $5 billion and the number continues to drop with the ramp up of Model Y production, Model 3 Giga Shangai and construction of factories in Austin and Berlin. Let's look at Hyperchange's Hyperchart below:
When we look at the ratio of dollars spent to the rising volume of vehicle output it displays an incredible amount of efficiency. Gali explains how the billions spent now is for a massive competitive advantage years from now. Tesla again raises the bar giving itself another major leap over Legacy Auto Makers.
Arcimoto, A Compact EV
Photo Credits Arcimoto
Check out this badass little electric FUV (Fun Utility Vehicle) built by Arcimoto, something I've been looking at it as a potential cost effective commuter.
📺 Watch their intro video.
What's so cool about Arcimoto is their mission, this is what sets them apart from a lot of other EV manufacturers. Have a look:
"Every Mile Matters... Catalyzing the shift to a sustainable transportation system."
Saving the planet by reducing harmful pollution and saving hours lost in "gridlock traffic."
Aiming to create a "ride-hailing peer to peer platform" for fleets of small shared vehicles. Making it "...affordable for riders, reducing traffic and emissions, and free up parking space for communities."
At the moment autonomous tech for Arcimoto is in R&D and they believe in the future of autonomy that will save millions of lives lost to car crashes due to human error.
Arcimoto's longterm plan is to build Arcimoto Manufacturing Plants across the world to produce lower cost FUV's in local markets reducing freight and boosting the green economy.
Spec Sheet:
Credit Arcimoto
Pre order yours today for only $100 here.
The Battle of AI's
Chicken Genius of Singapore has an idea of who could win the race to full self driving cars, will it be Mobile Eye?
Waymo and Cruise both use Lidar laser technology, however Teng (AKA Chicken Genius Singapore) says "Lidar is not weatherproof and has lots of limitations". SpaceX uses Lidar to dock Crew Dragon but it is interesting to see that Tesla is not using it in their cars.
In his video Teng says "Waymo and Cruise both have operators standing by to intervene every 5 to 10 miles." This does not seem sustainable for full self driving capability. Teng speculates that both companies could fail because both Waymo started 11 years ago and has spent a total of $3.5 billion and Cruise who started 7 years ago has spent about $2 billion on tech that is not able to drive without human guidance.
Check out a real life demo with Kyle Vogt CTO of Cruise and Sam Altman CEO of Open AI as they look at the self driving aspects of Cruise's product.
Another player in the AI driving market is Coma AI, built as a "front only" sensor AI prediction tool utilizing 2D images frame by frame but has many limitations. Like Coma's strategy of using 2D images Mobileye does something similar (and similar to Tesla) with several vision sensors (like the one in your smart phone). The difference is Mobileye and Tesla place theirs all around the car, not just on the front.
Even though the input is in 2D images produced frame by frame, the software converts several frames of images into a 3D image. An interesting fact is that our eyes see images in 2D and our brains convert them into 3d, modern AI is being created parallel to what our brains our doing.
With this Tesla and Waymo definitely have a good chance with the technology they are using, the question is "who will get to FSD first?" This deserves a follow up question asked by the Chicken Genius Singapore himself:
"Which company has the ability to solve the most amount of edge cases wins?"
Mobileye's advantage is that they have 50+ million vehicles equipped with their technology on the road and it is currently being shared with other manufacturers. But they still have not quite achieved a way to solve the most edge cases.
The winner here is Tesla, with one major advantage, Vertical Integration. With Tesla's cars on the road edge cases have and are being uploaded to their system. The Autopilot team trains the AI with these cases and then re-uploads them back onto the car. It is now a proven fact since the release of FSD Beta, this process happens in 2 to 3 days.
In conclusion, Legacy Auto Makers (LAM's) will have to make their cars with over air software updates if they want to make any progress in the vehicle autonomy market, a tricky competition to say the least.
👁 Eye on The Market
Last week was a rough week for Wall St as we approach election day here in the US, a lot of uncertainty in the air resulting in share prices taking considerable dips. Opportunists see it has a time to buy shares at a "discount", what do you think?
Today we have a breakdown from Koyfin (if you haven't monitored the market yet with them, you're missing out, link here ), this is how I plan to present Eye on The Market in the future.
Shoutout to Stuart Sim writer of Finlister for the Koyfin recommendation in response to my question in the last issue An Investment Opportunity.
Koyfin's system gives us a better look at 3 important sections in the graph above.
Section 1 shows each company's share price.
Section 2 displays a company's market cap.
Section 3 shows the company's share volume.
As of Friday all shares on my watchlist fell $TSLA is at -5.55%, $XPEV -6.47%, $LI -2.18%, $VWAGY -1.64%, and $FUV -7.23%.
If you noticed, I have added Arcimoto ($FUV) to the watchlist and will likely buy several shares.
A quick question...Do you want access to my EV Dashboard on Koyfin❓❓❓ Next issue I'll show you how!
I am not a professional investor, just an individual holding shares in Tesla and Nio. Any information in this newsletter is not financial investment advice, for advice seek a financial advisor.
What I'm Reading this Week 📖
My First Tesla: A Childhood Dream Come True by David Havasai
It’s Time For Transparency In The Electric Grid by senior energy analyst Michael Jacobs
First look at Tesla’s new UI and driving visualizations for FSD beta in action This is an excellent writeup on the latest in Tesla's FSD tech written by Simon Alvarez
That's a wrap Shakers! If you have enjoyed this issue, please share it and let me know what your thoughts were. Have a great week!