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Messages - crandles

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1
Arctic sea ice / Re: "Stupid" Questions :o
« on: June 15, 2019, 03:46:30 PM »
I agree that the 'Lefty' spoils it all a bit.  ;D

I wondered if it was a case of deliberate plausible deniability: If questioned, he could say he was left handed rather than it referring to political beliefs.  ;)

2
Policy and solutions / Re: Tesla glory/failure
« on: June 14, 2019, 07:28:50 PM »
Quote
Automotive sales $(000s) 3,508,741
Cost of revenues
Automotive sales $(000s) 2,856,209

Therefore gross profit on auto sales $652,532,000

Looks like an 18.6% margin (despite reporting
Quote
Automotive gross margin – GAAP 20.2 %
which includes leasing) note margin is on sales so it isn't 100 on 500, more like gross profit of (569/.814 -569) = $130 million (rather than the $142 million I suggested earlier using 20% margin).

Increasing deliveries 50% which falls in the 90-100k guidance makes $326 million difference or a little less than half of the $702 million loss. Maybe the remaining $376 million loss isn't sustainable because this includes those deliveries after delays but maybe production can be cranked up a little further without China factory, and or further cost savings ...

.

Re Bobs *
Unlikely: much more likely invoiced daily or billed by end of month at the latest. Possible or even likely not paid for so the cash has not yet gone out of Tesla Bank account.

Anyway the transaction is, if billed the effect (more than one way of getting here) is
Dr Stock (balance Sheet asset) Cr Creditors (bal sheet) and it doesn't hit P&L at end of q1.
If for some reason not billed at end of month then it is
Dr Stock (balance Sheet asset) Cr Accruals (bal sheet) and again it doesn't hit P&L at end of q1.

When the cash goes out it is Dr Creditors Cr Cash; both Balance sheet items so again no effect on P&L account.

It is when the sale occurs that the income and cost of sales hit the P&L.

(Dr are debits which are assets (bal sheet) or expenses (P&L). Cr are credits which are liabilities(BalS) or income(P&L). Bank statements are from banks point of view so this may not be what you are expecting if you are used to seeing dr and cr on bank statements.)

3
Policy and solutions / Re: Tesla glory/failure
« on: June 14, 2019, 05:46:35 PM »

BTW shifting numbers in ones mind, based on wishful thinking, has brought millions behind bars

Shifting numbers in ones mind gets done a lot and little wrong with that. If based on wishful thinking you may well be deluding yourself but if the reasoning for doing the adjustment in your mind is reasonable then I have no real problem with thinking 'what if'.

OTOH If you start shifting numbers in official sets of figures that shouldn't be so adjusted.... then you are asking for trouble with the most minor form of this trouble is that it likely comes back to bite you probably when you are much less able to deal/cope with it.


Is the narrative of delays in deliveries due to first time shipments to various countries that can be expected not to occur again believable? I would lean towards yes, but with a but: If deliveries are guided to increasing by 50% in q2 over q1, is it believable that stock will go down? Anyway the effect of this increased deliveries seems to be a much bigger and more important adjustment that should be done for what we should expect of q2 numbers, and it just so happens to include the effect of the one off delays to inventory delivery. It still doesn't wipe out the loss but does make a good dent in it.

I am also trying to say: better to think of future: i.e. better to think what will q2 be like rather than considering what would q1 have looked like if those delays hadn't happened. The delays did happen, so move on to what is sustainable going forward.

4
Policy and solutions / Re: Tesla glory/failure
« on: June 14, 2019, 12:05:15 PM »

OK, you lost me there.  Let's start with the balance sheet.  Profits and losses are not calculated on balance sheets.  A balance sheet is just a check to see if all assets and liabilities are included which needs to happen for the balance to end up as zero if one is subtracted from the other.

Now, here's a copy of Tesla's P/L page from their Q1 2019 10-Q report to the SEC.  You're saying that the inventory in transit is included in these numbers?

If you are lost, then just accept you are wrong.

I indicated the inventory is in the balance sheet at end of q1 not in the P&L. When you sell the cars for $711 million, you recognising this in the P&L as income in Q2. However, you also have to recognise the cost the $569 million which is money spent in Q1 but this went to the balance sheet as an asset not yet as an expense in q1. In q2 the inventory asset has disappeared ie it gets transferred to the P&L in Q2 as a cost of the sale.

Recognising the sales early necessarily means you should also recognise the cost of sale early as well. Neither sales nor cost of sales have been recognised in P&L by end of Q1. You can only do a pseudo adjustment that recognises both the sales and the cost of sales, else it is a complete fairytale adjustment.

This is basic accounting, and I am a chartered accountant and am not the only one telling you this. You are not going to win this argument.

5
Arctic sea ice / Re: "Stupid" Questions :o
« on: June 13, 2019, 05:45:14 PM »
4.If all the ice melted and the oceans rose , wouldn’t there still be a huge net gain of habitable land overall?

There may well eventually be large gains but it takes time to melt out the permafrost and make it usable rather than having constant subsidence as permafrost slowly melts.

Sea level rise is also slow.

Which comes first is one question.

However, even if we can be sure there will be sufficient replacement habitable land, moving whole communities/cities is going to be very expensive. Even in places safe from sea level rise, our infrastructure is built for what weather we expect. If that changes it is going to be costly whether we scrap what we have and rebuild or to try to fix things.

6
Arctic sea ice / Re: "Stupid" Questions :o
« on: June 13, 2019, 05:28:24 PM »
2.Hasn’t the ice been slowly declining since the end of the ice age, pretty much continuously?

No, the decline acelerated in recent years.

Connolly et al 2017 has some long term ice extent graphs.
When does the ice start reducing?

(and what do you suggest correlating this to in
https://xkcd.com/1732/ )



7
Arctic sea ice / Re: "Stupid" Questions :o
« on: June 13, 2019, 04:50:16 PM »
The information and postings here are brilliant, thank you very much for them.

I’m not a scientist but am interested in the future , for my Grandchildren , so I have a few questions that if answered , might help me understand the issue better.

1.If there were a time I could have walked on the same piece of ice from here in Long Island all the way to Wisconsin, doesn’t that suggest that ice comes and goes naturally and man adjusts?

2.Hasn’t the ice been slowly declining since the end of the ice age, pretty much continuously?

3. Could a natural event like a volcanic eruption, bring enough cooling to regrow the lost ice and stop the long term patterns of continued loss?

4.If all the ice melted and the oceans rose , wouldn’t there still be a huge net gain of habitable land overall?

Not asking about the politics just wondering if the worry is real or would life just change a little and both people and animals would evolve and adapt as they always have.

Thank you in advance.

Sounds like a few denier talking points which won't get you many friends round here. Is this just a drive by posting or are you going to want to participate and understand replies? If you are not going to participate, there seems little point wasting time giving replies.

But assuming good faith, a quick reply to the first question.

"The Wisconsin glaciation extended from approximately 75,000 to 11,000 years ago."
https://en.wikipedia.org/wiki/Wisconsin_glaciation

Not much civilisation around then so it doesn't really say anything about ability of civilisation to cope with such changes. Even if it did indicate civilisation could adapt that might only be to a slow rate of change and it wouldn't say whether it can or can't adapt with a faster rate of change.


8
Policy and solutions / Re: Tesla glory/failure
« on: June 13, 2019, 01:31:06 PM »
Well if it isn't Bob Wallace himself!
While I disagree with your specific point (finished goods if sold would have made Q1 profitable), I am happy to see you posting again here after a long hiatus.

I did not say that if the money from in transit goods were received in Q1 that the quarter would have been profitable.  I said that the loss would have been around $133 million, about 20% of what is seen if one ignores increased goods in transit.


I am also very happy to see you back posting here again.

However, on this point you are misguided.

If the goods in transit increased $569 million. That $569 million is in the balance sheet. At a 20% margin then on sale of these goods revenue of $711 goes to the P&l but the stock on balance sheet also gets moved to cost of sales on the P&L which gives a net $142 million gross profit to reduce the loss. So the $702 million loss get reduced to $560 million.

There is a big difference from a $133 million loss to a $560 million loss.

That $.7bn is not as easily reduced as you are suggesting. If they are guiding 90-100k deliveries then the above effect is included in the guided deliveries. So probably more relevant to look at this guidance for Q2. That is ~50% up on q1 and increasing vehicle gross profit by 50% does not wipe out the $.7bn loss but will significantly reduce it. Now if q3 can do higher volumes than q2 without new production lines maybe they can get to profitability but is significant increase likely now?  When china factory starts producing then further volume and reduced transport costs should be possible and I am sure capital costs will be much reduced from experience with other lines.

So there is a route to profitability through growth but neither quick nor easy. At other extreme, bankruptcy isn't imminent unless there is something really bad hidden from my view.

Ho hum: Neither one extreme nor the other: there is plenty of room in the middle but I guess that isn't particularly exciting.

9
Policy and solutions / Re: Tesla glory/failure
« on: June 13, 2019, 12:34:50 AM »
Quote
Tesla has a positive gross margin (i.e. not selling a dollar for 90 cents, despite your jokes) but it hasn't proved yet that the rest of its expense structure can be fit inside that gross margin. Q2 results should be interesting.

Much has been made of Tesla's Q1 2019 loss of ~$702 million.  But I've read almost nothing about how 'soft' a loss it was.  Here's a quote from Tesla's 10-Q for the quarter.

Quote
Finished goods inventory included vehicles in transit to fulfill customer orders, new vehicles available for immediate sale at our retail and service center locations, used vehicles and energy storage products. As this was our first quarter delivering Model 3 vehicles outside of North America, finished goods inventory has increased as there are longer lead times associated with finite production capabilities at a single factory from which all Model 3 vehicles are shipped globally.   
   


Finished goods in transit in millions

Q1 2019   $2,215
Q4 2018   $1,581
Q4 to Q1 Increase $569

$569 million of the $702 million loss, 81%, was products finished, sold, and on the way to buyers.  Tesla does not record product sales until they are in the hands of buyers.  Tesla's actual Q1 losses were closer to $133 million. 

Been through this before. Stock is on balance sheet. Sell that stock only releases ~20% margin to the P&L A/c.

The $.7bn loss is huge. Increasing vehicle sales by 50% as guided does not wipe it out.

10
Policy and solutions / Re: Tesla glory/failure
« on: June 12, 2019, 03:02:55 PM »

- “Decent shot” of a record Q2 “on every level”

Does that include profit? I'm skeptical of that given the previous guidance was for (significantly reduced?) losses. But maybe it just means turnover and production, order and delivery quantity numbers?

11
Policy and solutions / Re: Tesla glory/failure
« on: June 06, 2019, 12:17:03 AM »


To service and sell 500 cars a year you need stores, employees and service centers. Creating that infrastructure requires capital expenditure that is amortized.  The problem is that you can't simply build that infrastructure instantly. It takes time to build and after it is built it has cost.  If you have the infrastructure to support 500k cars a year but you are not yet selling 500k cars a year, that will show as losses.

Another example, R&D. Tesla does many things under R&D that other automakers do as capital expenditures. It had a high cost but the reward is super advanced cars.

I believe AP development runs under R&D. I'm not sure about the HW3 chip.

I would accept that depreciation is highly likely to be charged at full rate during a ramp up phase and therefore this is valid if you are talking about Q2 2018. Currently, well maybe a small fraction of the depreciation can be attributed to this and thus some of the Q1 loss can be explained away in this manner. Depreciation isn't a cash item so there is a bit of a problem if we are talking about cash burn, but I brought in attribution to explain away Q1 loss so I'll give you some of that but it looks like a bit of a sliver of the loss.

R&D if expensed yes but then I don't think I really disputed that. It was the 'building factories and supercharger networks' part of your sentence that I picked out.

R&D is great if you can bring it to fruition and profitably use it. No huge reason to think SpaceX doesn't have the necessary time. The cash burn is hopefully substantially less with significant car sales growth so the cash pile will last longer than the ten months Musk quoted which was intended to be motivational not indicating Tesla would actually go bankrupt. Hopefully that allows enough time to bring other products to cash generation phase.

12
Policy and solutions / Re: Tesla glory/failure
« on: June 05, 2019, 03:06:14 PM »
I don't understand why the tesla fans post such rubbish as to say they believe Musk (even things like still believing funding secured was true).

Why not adopt a defence more like:

Musk is a showman. Speaking of a showmen, do we care if Barnum had zero evidence appropriate to calling Jumbo the largest elephant that ever lived?

What do you mean by things like
Quote
SpaceX's 60 satelites, fake

There is data showing their orbit characteristics,


There are photos of a train of satellites:
https://twitter.com/cgbassa/status/1133831192074231808
https://twitter.com/marco_langbroek/status/1132064132390379520

Do you mean the satellites don't exist or something else like they are only test models not ready to sell services now or ever (but future versions are likely to be operational)?

13
Arctic sea ice / Re: When will the Arctic Go Ice Free?
« on: June 05, 2019, 02:22:43 PM »
Slow transition thread started in July 2014, and I think gompertz shapes were discussed well before that. Here are a couple of 2012 links that mention gompertz in 2013 and 2012 2011
https://forum.arctic-sea-ice.net/index.php?topic=540.0
http://www.realclimate.org/index.php/archives/2012/04/arctic-sea-ice-volume-piomas-prediction-and-the-perils-of-extrapolation/
https://neven1.typepad.com/blog/2011/04/trends-in-arctic-sea-ice-volume.html


Since such dates has gompertz or straight line been a better predictor?

.

As thickness at max reduces and approaches a meltable thickness, the loss goes up as albedo goes down. Once under the meltable thickness then the volume loss in that area goes down and temperature goes up. Over time more and more of the area gets under the meltable thickness so there is certainly the potential for the volume loss to go down. Temperature goes up but it is in wrong places to melt ice so it has to increasingly travel further. It isn't clear whether this temperature increase overcomes the reduction in available ice to lose effect. However the pattern seems to be that there was increase in volume loss but perhaps it is now going down.

I don't think this is conclusive either way, but if you think the loss will continually increase then the shape of the loss trends seems a bit odd (not definitely ruled out but a bit odd). If you think the loss will increase then decrease again there is nothing particularly odd in the shape of the volume loss data.

14
Arctic sea ice / Re: When will the Arctic Go Ice Free?
« on: June 05, 2019, 01:15:29 PM »

Oh, sorry, my fault Crandles. I think your trendline is fitting.

Fitting as in a good fit, or as in overfitting?

If overfitting, how many more years data with this being a better predictor than straight line is needed till you think that is the general shape?

15
Arctic sea ice / Re: When will the Arctic Go Ice Free?
« on: June 05, 2019, 12:22:00 PM »
Is it straight or curved?

For how i see this, a straight line would be magical.

We are at the beginning of a massive conversion event. Why would the sea ice find a new equilibrium this early in the process? Doesn't sound logical to me.

horizontal extrapolation would indeed be magical, and I don't believe that as noted. This question was about shape of trendline not of the extrapolation. Which is better fit straight diagonal line though data or curve I have drawn? (obviously curve but that is of course capable of fitting data better with more parameters/degrees of freedom. Sorry if this wasn't clear.

16
Arctic sea ice / Re: When will the Arctic Go Ice Free?
« on: June 05, 2019, 12:05:16 PM »
I think it is better to show data from beginning than selecting 2000 as starting point.

Note: I don't believe the completely flat trendline at the end, I think it will continue downwards but at a fairly slow rate.

Is it straight or curved? Perhaps not clear enough to be statistically significant, particularly with April.

While residuals are uncorrelated, I think there is still good reason to think shape of trendlines will be somewhat similar between April and Sept: Less volume means more area becomes thin ice and open water so albedo drops and more energy is absorbed ....

If curved then the way this shows seems to be the way it is going.

Also an understanding of the data and processes helps draw conclusions. When Piomas and other models were run with huge initial step change, half the ice thickness at beginning of melt season the models showed that some ice remained. So the models had very little ice loss in such a year. If this is where we are going then the curves I show (but still going a little down at the end) are more like what we should expect.


17
Policy and solutions / Re: Tesla glory/failure
« on: June 05, 2019, 01:51:22 AM »
Was Tesla “burning cash” or were they building factories, supercharger networks and amazing software?

Anything spent on building factories and supercharger networks would be capitalised so you cannot attribute the large Q1 loss to that. Possibly also applies to software development?

Nor can you attribute it to debt repayment.

Tesla fans do seem to just want to believe all sorts of explanations that are not really adequate/valid explanations.

Large loss apparently will remain even if you increase car sales 50% (as guided for q2) with the same gross margins and expenses. But maybe q2 will be better than such adjustments suggest because of fixing other problems, expense cost cutting and so on. Seems like they need rather huge cost cutting and if this materialises I may wonder if they have just delayed expenses rather than actually cutting them. (Just 2 top people having to authorise all spending sounds like recipe for delay to me.)

18
Policy and solutions / Re: Electric cars
« on: June 03, 2019, 04:28:51 PM »
Which would you prefer a new model 3 with all the latest physical fixes and lower initial purchase price as battery costs fall (and more competition) that can do a million miles
or
2 year old model 3 that can do a further 9 hundred thousand miles?

So, I think there will be some depreciation.

Having said this, "rational expectations" for ICE used car prices. If people expect the ICE used cars to depreciate very rapidly then it will be self full-filling prophecy as people try to protect themselves against loss in value of an ICE car ... by buying electric. This tends to make things happen quickly, but I am not sure the supply of electric cars will be able to keep up when this starts to happen. Maybe that causes people to hang on to old cheap ICE cars rather than buy new expensive ones and this explains why ICE car sales are currently so poor.

19
Consequences / Re: Worst consequence of AGW
« on: June 03, 2019, 03:05:21 PM »
Tony, I knew about Asia, but does Africa have monsoons too?
And what does AGW do to monsoons?

http://www.clivar.org/african-monsoon

20
Policy and solutions / Re: Carbon Capture and Storage (CCS)
« on: June 03, 2019, 02:55:57 PM »
That is news to me, would you please provide a reference for renewables being cheaper than natural gas?

https://www.lazard.com/media/450784/lazards-levelized-cost-of-energy-version-120-vfinal.pdf

Unsubsidised costs:
Utility scale solar thin film $36-44
Wind $29-56
Gas Combined cycle $41-74

Graph on page 7 seems to indicate they crossed to be cheaper in 2015. However, I don't think this includes storage costs. But battery prices are also falling rapidly.

21
Science / Re: Magnitude of future warming
« on: June 01, 2019, 04:04:01 PM »

At 10 degrees, the average temperature of the planet will be about 24 degrees Celsius. It will be more tolerable for people. But if this value is exceeded, the planet will turn into a total desert.


Please tell me I am reading this wrong. You are not suggesting that a 10C rise in average temperature will be more tolerable are you?

Sounds a bit like like one foot in liquid nitrogen and one in boiling water such that average temp is a nice comfortable level so everything must be ok.

22
Where can I get the most recent data for this poll?

https://ads.nipr.ac.jp/vishop/#/extent/&time=2019-05-31%2000:00:00

Or click the graph (1st on third row) on graph page https://sites.google.com/site/arcticseaicegraphs/
then click 'Extent Graph' tab

23
Arctic sea ice / Re: "Stupid" Questions :o
« on: June 01, 2019, 12:24:33 PM »
Two points define rate of growth but not acceleration but there is that 228 figure and curve looks smooth, so we can try different curves and see if any matches the 228 figure.

I just opened a spreadsheet, it is easy to play about with the numbers:

I tried various steady growth factors. To get from 0.6 to 4.1 seems to require rate to be about 1.01485 times the previous year. This gets to 238 by 2010. Fairly close.

(A steady increase in the rate going from .6 to 4.1 gets a total of 308. So steady growth factor was much nearer than this.)

That is only two types of curve tried. It is quite possible that a different type of curve could do it. Another possibility is the curve might actually be a compound like 1% growth rate for first x years then 1.9% for next y years .....

Wikipedia says things like
Quote
This network was used, in combination with satellite altimeter data, to establish that global mean sea-level rose 19.5 cm (7.7 in) between 1870 and 2004 at an average rate of about 1.44 mm/yr (1.7 mm/yr during the 20th century).[30] This is an important confirmation of climate change simulations which predicted that sea level rise would accelerate in response to global warming. In Australia, data collected by the Commonwealth Scientific and Industrial Research Organisation (CSIRO) show the current global mean sea level trend to be 3.2 mm (0.13 in) per year, a doubling of the rate during the 20th century.[31][32]

Not too difficult to play around with a spreadsheet to try things out.

Suspect you could get quite different answers by 2100 by assuming different curves. Not quite enough info for me to tie it down. Could try measuring height of line at various points to try to help constrain it but the line looks quite thick and I am therefore not to sure if this will help or if measurement error in this will mean it won't help.

Spreadsheet is probably easier than calculus. Either way need to know details of the curve.

24
Policy and solutions / Re: Tesla glory/failure
« on: May 29, 2019, 02:57:12 AM »

>So, essentially, how does the repayment of capital get recorded? 
Dr Liability A/c
Cr Bank A/c
Both balance sheet accounts

>"This time it came out of profit from the prior two quarters.  But at the end of the year that money has to be accounted somewhere as it is profit which was spent to repay debt, even if it did not come from the same operating quarter."

Not following this at all. Why prior two quarters?

The interest is a separate transaction:

Dr Interest (P&L Account)
Cr Liability Account (Bal Sheet)

And the third type of transaction is the original advance of the loan
Dr Bank
Cr Liability A/c
(both Balance Sheet accounts again)

The net effect of the three transaction types (from loan start to after full repayment) is
Dr Interest
Cr Bank

(Dr = Debit = Expense(P&L) or Asset(BS), Cr = Credit = Income(P&L) or Liability(BS) so 'Cr Bank' is money going out of bank account. Yes confusing to some; bank statements are just that  statements from the Bank's point of view not the customers point of view.)

25
Policy and solutions / Re: Tesla glory/failure
« on: May 29, 2019, 01:21:38 AM »
OK I'll take that, I have never been line by line, but debt repayments (or possibly interest on them, can't remember), figure in the P&L calculations I've seen.

Only the interest on debt goes through the P&L.

26
Policy and solutions / Re: When will CO2 emissions peak?
« on: May 28, 2019, 04:41:58 PM »
So I'm left with my bottom line question intact: what dataset are you using?

The greatest confidence is in the BP data. But in 2018 they will be only in the next month. Therefore, I limited myself to a preliminary assessment Global Carbon Budget.

BP do a statistical review of world energy and other such things.
This has a table with a note which says:

Quote
Notes: The carbon emissions above reflect only those through consumption of oil, gas and coal for combustion related activities, and are based on ‘Default CO2 Emissions Factors for
Combustion’ listed by the IPCC in its Guidelines for National Greenhouse Gas Inventories (2006). This does not allow for any carbon that is sequestered, for other sources of carbon emissions,
or for emissions of other greenhouse gases. Our data is therefore not comparable to official national emissions data.


So is the measure for this poll aimed at being anthropogenic CO2 emissions, excluding breathing but including CO2 which will come from methane leakage which breaks down to CO2 over time and also other anthropogenic emissions such as cement production, land use change like deforrestation etc?, or
 
anthropogenic ff related emissions (including leakages, flaring but not other emissions like cement land use change)?, or

anthropogenic ff consumption converted to CO2 (including or excluding CO2 from flaring, leakages etc)? or
... ???

Edit: BTW The total line for 2007 through 2017 says
Quote
Total World 30078.7 30381.8 29714.2 31074.2 31970.5 32317.8 32802.0 32886.8 32851.9 33017.6 33444.0
(Million tonnes of carbon dioxide)

27
Policy and solutions / Re: The Boring Company
« on: May 25, 2019, 05:40:56 PM »
No sled or tracking wheels, max speed 127mph

2 min "race" video.

https://twitter.com/boringcompany/status/1131809805876654080

Asked "Just on autopilot?"
Elon replies "pretty much" (take that as you see fit)

28
Policy and solutions / Re: Tesla glory/failure
« on: May 25, 2019, 12:57:38 PM »

Tesla is making cars at a profit.  In fact, in Q1, it made a profit, the profit was just less than the debt it had to pay back at that time.

Just not true. Paying back debt does not affect profit, just removes a liability from the balance sheet. There was a big loss in Q1, unaffected by debt repayment.

29
Policy and solutions / Re: The Boring Company
« on: May 23, 2019, 03:22:43 PM »
I did wonder if the 10*faster was:

half the diameter so 4* less material to remove,
working near 100% of time instead of 50% stopped to fit tunnel panels
which leaves only 25% faster rate of material removal to get to 10* the speed.

Even so, 25% faster down a smaller tunnel likely requires some innovation.


Is it likely there has effectively been a tunnel building cartel that overcharges and doesn't bother trying to innovate to do it more cheaply? Small number of companies with quite high barriers to entry so I don't think it sounds completely implausible.


30
Policy and solutions / Re: Tesla glory/failure
« on: May 22, 2019, 03:21:31 PM »
Quote
-Tesla has cut their prices in the last 9 months about the same amount as their gross margin had been. How can they possibly make money?

By decreasing the cost through scale and manufacturing efficiencies.

Scale? Seriously?


the volume weighted average battery pack fell 85% from 2010-18, reaching an average of $176/kWh.
https://about.bnef.com/blog/behind-scenes-take-lithium-ion-battery-prices/

31
https://www.bbc.com/news/science-environment-48265217

(Quote ish) Slams on brakes, gone from thinning 20m a year to thickening by 20m a year[/quote]

Wow quite some thickening!

32
Arctic sea ice / Re: When will the Arctic Go Ice Free?
« on: May 15, 2019, 09:53:52 AM »

In other words, you can be correct to say, "there's a 99% chance of rain tomorrow" even if it doesn't end up raining. The truth of your statement is based on past events (patterns) and not on what actually comes to pass.

This is what makes the IPCC, and for that matter, all model pathways, of limited value. Since our knowledge is extremely limited on these matters. It can be correct to consider something improbable even if it ends up happening. That is why ASLR is always talking about "fat tailed risk" and the precautionary principle.

'Correct to say' is an odd term to use in this situation when it cannot be falsified and moreover someone else might have a better model that predicts a different percentage.

A single probability percentage prediction is unfalsifyable but I used term 'better model'. This relies on testing a lot of random situations which might not be indicative of skill at the current situation so is still somewhat problematic but it might be a reasonable indication. In this sense, one model may appear better than another model. 'Correct' is likely to be unobtainable because it is always possible that someone could find some other factors to use in some currently unknown way to improve the skill of your model.

'Makes the IPCC of limited value'
Think I disagree here too, at least to some extent. There is a danger that what you said conflates chaotic weather and fairly stable climate. With chaotic weather, a better model than a random guess might be practically impossible, whereas with fairly stable boundary issue problem, progress may well be possible and using best models may well yield more reliable results. Then using the most expert models is sensible.

There is also the one prediction unfalsifyable but can test a large number of predictions to get a sense of which model is better.

Also, It is only possible to talk about 'fat tail risk' in a situation where you can compare models.


So, I am getting impression that you are implying too much from a single prediction being unfalsifyable but maybe that is me inferring too much from what you said.

33
Science / Re: 2019 Mauna Loa CO2 levels
« on: May 07, 2019, 02:21:43 PM »
See reply #122 from dbarce, their was a correction in the measurement, and 4.48 does not stand.

Actually it is Scripps (measure posted on CO2.earth) daily measure of 415.09 for May 3rd that does not stand. The 4.48 is the weekly difference shown on ESRL:
Quote
Week beginning on April 28, 2019:     414.32 ppm
Weekly value from 1 year ago:     409.84 ppm

AFAIK that 4.48 still stands.

Definite up and down spikes in 2018 on ESRL whereas 2019 looks noisy over long period:


34
Policy and solutions / Re: Renewable Energy
« on: May 07, 2019, 01:24:38 PM »
Thanks, oren.
I heard somewhere that fossil fuels get subsidies too. Is that true?
What would it be like if there were no subsidies, not for nuclear, solar, fossil...any power source?

Some large numbers are thrown around.

Certainly subsidies in some countries like Venezuela.

A large part of large numbers are actually fossil fuel externalities and whether that is really a subsidy depends on your definition.

Other things like allowances against taxes maybe subsidies but if there are whole other taxes levied, is an allowance against that really a subsidy? Seems complicated to tell in many such cases.

http://mustelid.blogspot.com/2018/12/how-large-are-global-fossil-fuel.html

35
Arctic sea ice / Re: When will the Arctic Go Ice Free?
« on: May 06, 2019, 06:31:52 PM »
Alternatively, you could (more correctly?) argue it *can't* be above max volume.

It can't go above max volume in terms of water volume. In term of heat it can certainly go past max negative heat.
Fair point. The graph referred to is showing ice volume change.

"will it go down enough to offset the increase in "other heat inflows"?" is also a good point.

Quote
Quote
Same area but thinner and the energy gathered by the ice is likely to go up not stay steady or go down. We have had a lot of this as thick MYI disappeared. (~2000-2012?) We have reached the end of this rapid thinning and now we are getting more of the area shrinkage with volume.

The graph showing losses for 2007-2018 already takes that mechanical feature of Arctic melt somewhat into account as it doesn't include the years when ice was significantly thicker. Even so, losses are greater now that the ice is thin than when the ice was thick.

I wasn't particularly referring to mechanical strength. Thinner ice converts to open water more easily and that has albedo consequences meaning much more of the insolation is captured. Then if ice is nearby, currents are likely to move the heat to the ice. But if the ice is a long way away then then likelihood of that heat being transferred to the ice is much reduced.


Quote
For the Maximum volume a linear extrapolation works very well. For the minimum it doesn't. That's why I include two versions. One takes the satellite data set as the Arctic system, the other assumes there was a state change in 2007 and data before that is meaningless. Hopefully, we get to see how they change over time.

A less technical answer would be that  linear extrapolation is what it is. It assumes that exactly what happened in the past will happen in the future. It is naive because it is a fact of life that things change. But it is insightful because it is also a fact of life that things tend to repeat.

Straight line is sensible when you expect the same physics to be in play or has shown to work well and there is no reason to expect change ....

36
Arctic sea ice / Re: When will the Arctic Go Ice Free?
« on: May 06, 2019, 01:30:10 PM »

The bottom trendline bothers me, for a specific reason; it's a proxy for the annual heat entering the Arctic.

That isn't decreasing, *can't* decrease past a hard limit described by that total insolation + other heat inflows.

I'd be highly surprised if it really could drop below 17,000km3/year.  I doubt it can remain consistently below 18,000km3/year.

That's the value I'm actually watching to determine when we hit "ice free".

>"*can't* decrease past a hard limit"

Alternatively, you could (more correctly?) argue it *can't* be above max volume.

Anyway there appears an issue with your version: If the ice gathers heat from the same area then "total insolation + other heat inflows" will not go down seems sensible. However if the ice shrinks to a smaller area then isn't it logical that the heat energy that the ice can gather from "total insolation + other heat inflows" is also likely to go down?

Same area but thinner and the energy gathered by the ice is likely to go up not stay steady or go down. We have had a lot of this as thick MYI disappeared. (~2000-2012?) We have reached the end of this rapid thinning and now we are getting more of the area shrinkage with volume.

So is a horizontal or straight line extrapolation appropriate?

37
Policy and solutions / Re: Tesla glory/failure
« on: May 05, 2019, 02:45:24 PM »
My view is that in the old days, before the Accountancy and Audit Professions threw away any pretence at probity, these Environmental/GHG Credits payments by PSA would not be classified as general automotive revenue.

This is because the income is temporary and not part of the ordinary operations of the business. Essentially it is a windfall arising from external factors - i.e. Fiat's dumbness, and is therefore extraordinary income. Including it in general automotive income distorts the calculation of the underlying profitability of the motor manufacturing operations of the business. It flatters to deceive?

But I am sure the practice is legal, or at least not illegal. And credit where credit is due - screwing 2 billion bucks out of Fiat's stupidity is pretty cool.
__________________________________________________________

I would be confident it is not extraordinary income (edit: nor exceptional income) it is income from ordinary activities. Edit: Far too normal to be exceptional or extraordinary.

I don't know US GAAP well and it may be possible to find a different place for it, maybe in UK a company might use an 'Other income' line. I don't know what other US companies do and if aggregated with other things, it seems like it might be difficult to find out. To me, it does seem to belong to the automotive division rather than a different division like energy and storage. So I don't see anything wrong but that could be my lack of US GAAP knowledge.

38
The rest / Re: SpaceX
« on: May 04, 2019, 07:40:24 PM »
Perhaps best video footage so far of landing onto droneship from CRS-17 mission.

(The 4th was with them today  ;) )

https://www.youtube.com/watch?v=AQFhX5TvP0M&feature=youtu.be

39
Science / Re: 2019 Mauna Loa CO2 levels
« on: May 04, 2019, 06:30:41 PM »
Highest couple two of three highest days ever recorded:

Quote
May 03:     414.81 ppm
May 02:     Unavailable
May 01:     414.88 ppm
April 30:     414.52 ppm
April 29:     Unavailable

(other one is
March 18:     414.84 ppm)

40
Policy and solutions / Re: Direct Air Capture (of Carbon Dioxide)
« on: May 01, 2019, 05:36:10 PM »
The problem with direct air capture of CO2 is what to do with it afterwards.  CO2 has roughly 2.7 times the mass of the original hydrocarbons, so need places with lots of room or where it can be reacted with basalt to fix it as CaCO3.  You could pump it into the ocean where there is plenty of buffer capacity, but that isn't good for the ocean biosphere.

Building materials, carbon composites in place of aluminium / concrete / bricks sounds like a good idea to me but whether it can be made cost effective (or nearly so and mandated by building regs) remains to be seen.

41
Policy and solutions / Re: Tesla glory/failure
« on: May 01, 2019, 02:27:25 PM »
But we’re still hoping for an East Coast gigafactory, soon!

Sigmetnow 'identifies' herself as 'Tesla'? Tesla is a car manufacturer. It's 'a thing', a corporation. It's not a 'religion' led by a Yogi.

We could be an east coast business development group, or an environmental group (albeit with perhaps a bit of green BAU which you don't like) or Sigmetnow plus spouse or .....

It seems to me that you are rushing to denounce this without stopping and figuring out what it means let alone whether you should denounce it.

42
Policy and solutions / Re: Coal
« on: May 01, 2019, 12:59:50 PM »
The cost of lithium-ion batteries has plunged 85 percent in a decade, and 30 percent in just the past year
I couldn't see a reference source for this claim. Do you know where they get this from?

I would guess the 85% comes from

https://about.bnef.com/blog/behind-scenes-take-lithium-ion-battery-prices/

In December 2018, BloombergNEF published the results of its ninth Battery Price Survey, a series that begin in 2012 looking back at data from as early as 2010. The annual price survey has become an important benchmark in the industry and the fall in prices has been nothing short of remarkable: the volume weighted average battery pack fell 85% from 2010-18, reaching an average of $176/kWh.



(never mind this being 8 years not 10.)

but that doesn't seem to support 30% in past year

see also
https://about.bnef.com/blog/behind-scenes-take-lithium-ion-battery-prices/
for answers to comments like
“Current prices are far lower than this in reality.”
“Current prices are far higher than this in reality.”
“Batteries will fall much faster than you are forecasting.”
“Battery prices are increasing, not falling.”
“What comes after lithium-ion?”

43
Policy and solutions / Re: Tesla glory/failure
« on: April 29, 2019, 04:30:27 PM »
So what you are saying (or Musk is saying), is that the "learning curve" from Q1 is not to actually try to deliver so many vehicles??


I think I interpreted "reduce the wave" to mean they are going to reduce the wave not eliminate it completely immediately.

So will move from
1st half of quarter 100% export
2nd half of quarter 100% domestic

(This maximises quarter end cash equivilents but is poor use of resources as everyone doing deliveries in last 10 days of quarter instead of their actual speciality)

but they won't immediately go to
1st half of quarter 50% export, 50% domestic
2nd half of quarter 50% export, 50% domestic

For Q2 it might be more like
1st half of quarter 80% export, 20% domestic
2nd half of quarter 20% export, 80% domestic

as a partial step towards getting to their eventual aim.

Is there any reason for the eventually aim to be any more even than something like
1st half of quarter 60% export, 40% domestic
2nd half of quarter 40% export, 60% domestic
?

(All above figures need to be adjusted a bit if there are more domestic sales than exports or vice versa)

44
Arctic sea ice / Re: "Stupid" Questions :o
« on: April 29, 2019, 03:57:30 PM »
I see it.  I also see how much cold is being lost in the next 2 weeks.

What I'm asking specifically for is if it seems normal during the spring PV transition for high pressure to move rapidly from equator to pole without so much as half a trip around the world?  Nevermind from both East and West at the same time.  Are we okay?

I'm a long time lurker here, probably for more than 5 years. Just decided to post now, great forum. Just a question though from someone who is a total layman. Can cold actually be lost? When the cold air from the arctic is forced out into lower latitudes, does this actually change the equation at all or is all the heat/lack of heat in the system conserved in some way? Thanks.

My answer is more along the lines of asking what system are you considering.

If considering whole Earth then if you replace cold air in arctic with warm from further south by winds then you are also moving cold air out of the arctic to more southerly latitudes.

If what you are considering is just the Arctic then this has warmed up (cold lost if you want).

The arctic can and does also warm up by solar heat in summer.


If we are considering the whole planet, there are some high latitudes that are warmer than normal and through solar heating less more loss of heat to space this area will tend to gain heat more slowly than normal. There is also colder than normal more southerly latitude which will tend to gain heat faster than normal through solar heating less lower loss to space. These tendencies are in opposite directions but unlike wind redistributing heat, these tendencies are not perfectly balanced being affected by things like clouds etc.

I guess the winds effects redistributing heat may not be perfectly balanced either particularly if they winds are changing altitudes which affects rate of heat loss to space. Again this is more of knock on effect than direct effect of wind.

Not really sure if this is getting closer to answering your question or not. Perhaps saying what systems you are trying to consider: Just Arctic/ Earths atmosphere/ other might help people provide sensible answers

45
Policy and solutions / Re: Oil and Gas Issues
« on: April 27, 2019, 09:26:23 PM »
price parity by around 2022
https://thedriven.io/2019/01/23/report-predicts-21m-ev-2030-price-parity-2022/

Total cost of ownership parity before then if not already.

> "charge up" as easily as I can gas up now

Who wants to breathe toxic fumes at a gas station? Plugging in at home is surely easier (no special journey) than inserting nozzle at gas station (assuming possible). Depending on your driving needs, that may only account for 90-98% of days and the rest, for the moment, you may well need to plan in advance where you are going to charge up and it take longer but that will certainly get easier with many more options in future for where you can charge up and leave it unattended while you do something useful.

If you see this as offputting, then perhaps you need to reassess importance of AGW and what you are willing to do to reduce impact you are having?

46
Policy and solutions / Re: Tesla glory/failure
« on: April 26, 2019, 03:13:16 PM »
If they actually deliver 90k-100k cars the cash position should improve thanks to profits.

What profits?


Doing a different calc, 90k-100k vehicle deliveries for Q2 has been suggested. 63k deliveries in Q1. If they manage 50% more deliveries 94.5k then the automotive gross profit gets increased 50% from $.65bn to $.975bn an improvement of $.325bn and this reduces the loss by less than half.

If we get the automotive margin to increase back to 25% from 20%, that would be an enormous stretch unless you believe they have really struggled with lack of some parts but still had all the labour and other non part costs. Then automotive gross profit goes from $.65bn to $1.31bn.
This enormous stretch still doesn't quite wipe out that massive $.7bn loss in Q2. I am much more inclined to believe the 25% automotive gross margin is unlikely to return in the next few quarters.

Maybe Q3 becomes profitable only because of Fiats payments to pool vehicles?

Could be some other changes but that $.7bn is hard to erase, particularly just by growing sales.

47
Policy and solutions / Re: Tesla glory/failure
« on: April 26, 2019, 02:18:27 PM »
$630m revenue, yes maybe. But gross margin is near 20% and that stock is in balance sheet. So that is only around $125m of the $700m loss. Nowhere near enough to bring "near break even".

That's backwards isn't it?  The net manufacturing cost was $511m and the expected profit was $125m.  So the sum carried on the balance sheet was the $511m manufacturing cost and not the expected 20% profit.

The $125m is the difference between what was carried on the balance sheet and what was expected to be earned with the delivery over and above manufacturing costs.  Simple delivery at 0% profit would have net the $511m carried on the balance sheet as a net cost of operation.

Not sure what you think I have backwards. Revenue $630 million, 20% gross margin is $125million (or $126million) so the stock on balance sheet is $505 million. Maybe I could have stated that more clearly. I have no idea where your $511m came from.

Anyway you were claiming the $630million brought Tesla near break even.

Quote
So Tesla had manufactured and started delivery of vehicles which would, if they had actually been delivered, brought Tesla to near break even.

but it is actually more like reducing the $700m loss by about $125million or 18% reduction in the loss which I don't think constitutes bringing near to break even.

48
Policy and solutions / Re: Tesla glory/failure
« on: April 25, 2019, 06:49:53 PM »
I don't understand what his happening with energy storage.  Tesla states:
Quote
Energy storage production in the second half of 2018 was limited by cell production as we routed all available Gigafactory 1 cell capacity to supply Model 3. Some Gigafactory 1 cell production has been routed back to the energy storage business, enabling us to increase production in Q1 by roughly 30% compared to the previous quarter.
...
Energy generation and storage revenue in Q1 decreased by 13% over Q4 2018. This decrease was mainly driven by lower solar deployments that fell from 73 MW to 47 MW sequentially, which was partially offset by a 2% increase in storage deployments.

An increase in production by 30% but sales by only 2%. Does this mean they also have a sizeable inventory of energy storage?

I certainly hope so. However gross margin falling from 11.5% to 2.4% also sounds awful. What causes that large a gross margin drop? Maybe they have had to write off some of that increased production/inventory?

49
Policy and solutions / Re: Tesla glory/failure
« on: April 25, 2019, 05:19:43 PM »
$630m revenue, yes maybe. But gross margin is near 20% and that stock is in balance sheet. So that is only around $125m of the $700m loss. Nowhere near enough to bring "near break even".
The stock is on the balance sheet, yes. Inventories increased by $700m during the quarter. However, I don't think gross margin of transit/inventory vehicles is reflected in net cash flow. In the $1.5B cash loss, cost of those vehicles has been realized but revenue has not (shown as $676m loss in operating assets and liabilities). I could be wrong on this, I'm just an amateur observer. 

So while revenue from vehicles in transit wouldn't be enough to bring operating income to break even, it would be enough to bring cash flow to break even before debt payment.  Cash flow seems to be the more relevant metric over the next few quarters.

Yes re not in cash flow. I am an observer who happens to be a Chartered Accountant, and while not expert on US GAAP, I know that much.

However break even cash flow from operating activites is a terrible position. There was $.3bn in investing activities and $.65bn in debt financing and while the latter may be high in this quarter, you are very unlikely to get net income from these. Even total cash flow zero if extended forward means the fixed assets get used up for nothing.

Doing a different calc, 90k-100k vehicle deliveries for Q2 has been suggested. 63k deliveries in Q1. If they manage 50% more deliveries 94.5k then the automotive gross profit gets increased 50% from $.65bn to $.975bn an improvement of $.325bn and this reduces the loss by less than half.

If we get the automotive margin to increase back to 25% from 20%, that would be an enormous stretch unless you believe they have really struggled with lack of some parts but still had all the labour and other non part costs. Then automotive gross profit goes from $.65bn to $1.31bn.
This enormous stretch still doesn't quite wipe out that massive $.7bn loss in Q2. I am much more inclined to believe the 25% automotive gross margin is unlikely to return in the next few quarters.

Maybe Q3 becomes profitable only because of Fiats payments to pool vehicles?

50
Policy and solutions / Re: Tesla glory/failure
« on: April 25, 2019, 03:58:01 PM »
Interesting figures.

Now maybe let's see why the markets are not so worried about Tesla right now.

Tesla made a loss of ~$700m
Tesla had 10600 vehicles in transit at the end of Q1 and could not make delivery due to the protracted transit time.
The average price of a Tesla Model 3, delivered, reached $60,000 in 2018.

So Tesla had around $630m in direct revenue floating around the Ocean at the end of the quarter.  Probably more because we know that the Model 3 configurations going to the international market were premium models.  But let's stick with that figure for a want of better evidence.

So Tesla had manufactured and started delivery of vehicles which would, if they had actually been delivered, brought Tesla to near break even.

$630m revenue, yes maybe. But gross margin is near 20% and that stock is in balance sheet. So that is only around $125m of the $700m loss. Nowhere near enough to bring "near break even".

Stock in balance sheet was up from $3.1bn to $3.8bn. So it may well be possible to release a little less (going to have some not none in international transit) than $.7bn in cost and $.875bn in revenue. So it is looking like less than $.175bn doing it this way.

Certainly can't release that revenue without also wiping out that stock asset.

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