Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Pras]

Look, it’s not the end of the world. Whether they shutdown for a bit or not is inconsequential at this point.

The market is insane and the SP was going down a lot regardless if Tesla delivered 60,000, 83,000 or 100,000 cars this quarter.

Tesla will be fine. They’ve planned and prepared for a recession and the like. They are as well situated as any non-toilet paper company could be.

Everybody needs to chill out and quit stirring the righteous indignation and fear-mongering pots. Shut your phone, laptop, Internet device off and go have copious amounts of sex, walk around the block for some fresh air, save a stray cat, and reflect on all the things you should be thankful for.

And with $2.3b of new cash they can sit easy. I remember last year the secondary offering was in anticipation of a recession and now we have an additional $2b. Whatever people say, the bankruptcy risk is near zero at this time, wasn’t the case a few years back.

 

[Fact Checking]

I wish I could agree, but I can’t. The order makes its own intent clear:

http://acphd.org/media/559658/health-officer-order-shelter-in-place-20200316.pdf

The intent of this Order is to ensure that the maximum number of people self-isolate in their places of residence to the maximum extent feasible, while enabling essential services to continue, to slow the spread of COVID-19 to the maximum extent possible. When people need to leave their places of residence, whether to obtain or perform vital services, or to otherwise facilitate authorized activities necessary for continuity of social and commercial life, they should at all times reasonably possible comply with Social Distancing Requirements as defined in Section 10 below. All provisions of this Order should be interpreted to effectuate this intent. Failure to comply with any of the provisions of this Order constitutes an imminent threat to public health.

They also define a large list of exempted essential businesses, which applies to Tesla too.

Cars are essential elements of everyday U.S. life, is it your argument that they are not? Fremont primarily produces cars for Americans right now - many of those future Tesla owners having firm plans to utilize those cars during the Covid-19 crisis. Tesla's Fremont factory is an essential part of the auto-parts and auto distribution network.

We tend to think of Teslas as fun vehicles that bring joy - but they are also essential products that bring people to work, allow them to avoid dangerous public transportation, allow them to purchase food and medicine, or allow them to drive to a hospital in an emergency.

IMO it is your reading of the order is entirely against the spirit of the directive.

 

[MD70]

We need a statement from Tesla re if the factory will be closed or not. Alternatively can someone local contact the authority to ask if Fremont is closing or not.

 

[Singuy]

They also define a large list of exempted essential businesses, which applies to Tesla too.

Cars are essential elements of U.S. everyday life, is it your argument that they are not? Fremont primarily produces cars for Americans right now - many of them having firm plans to utilize those cars during the Covid-19 crisis. Tesla's Fremont factory is an essential part of the auto-parts and auto distribution network.

We tend to think of Teslas as fun vehicles that bring joy - but they are also essential products that bring people to work, or to a hospital in an emergency.

IMO it is your reading of the order is entirely against the spirit of the directive.

Tesla can make an argument that they have no inventory per se since every order already has an owner. So if we are talking about the importance of moving people, one can argue Tesla is as important as a gas station. Many people who are waiting for their car are already off their last lease.

 

[LJS22]

We need a statement from Tesla re if the factory will be closed or not. Alternatively can someone local contact the authority to ask if Fremont is closing or not.

Musk is probably looking at options. I wonder if he could replicate model 3 tent in a different state like Nevada?

 

[Fact Checking]

Tesla can make an argument that they have no inventory per se since every order already has an owner. So if we are talking about the importance of moving people, one can argue Tesla is as important as a gas station. Many people who are waiting for their car are already off their last lease.

Exactly. Other situations:

• Old car broke down and they need a new car.
• The new Tesla is for another family member, who can avoid public transportation that way.
• New Model S/X has Biodefense Mode, to protect particularly vulnerable family members.
• An EV can be charged even if there are gas shortages.
• etc.

To argue in the U.S. that cars are not "essential products" is grotesque.

 

[abasile]

Cars are essential elements of U.S. everyday life, is it your argument that they are not? Fremont primarily produces cars for Americans right now - many of them having firm plans to utilize those cars during the Covid-19 crisis. Tesla's Fremont factory is an essential part of the auto-parts and auto distribution network.

Hopefully, Alameda County will agree. I certainly do. When we took delivery of our Model 3, our family truly needed another car, as the Model 3 was replacing a vehicle that had been totaled by a driver who rear-ended us.

 

[jerry33]

We need a statement from Tesla re if the factory will be closed or not. Alternatively can someone local contact the authority to ask if Fremont is closing or not.

As of an hour ago, my X was on track for delivery on the 27th.

 

[Pras]

Troy Teslike is still expecting 98k deliveries in Q1 but has a lot of caveat attached to his estimate. Let’s see.

 

[Mkorpal]

Tesla can make an argument that they have no inventory per se since every order already has an owner. So if we are talking about the importance of moving people, one can argue Tesla is as important as a gas station. Many people who are waiting for their car are already off their last lease.

I wouldn't be shocked if Tesla doesn't know.

 

[ZachF]

They also define a large list of exempted essential businesses, which applies to Tesla too.

Cars are essential elements of everyday U.S. life, is it your argument that they are not? Fremont primarily produces cars for Americans right now - many of those future Tesla owners having firm plans to utilize those cars during the Covid-19 crisis. Tesla's Fremont factory is an essential part of the auto-parts and auto distribution network.

We tend to think of Teslas as fun vehicles that bring joy - but they are also essential products that bring people to work, allow them to avoid dangerous public transportation, allow them to purchase food and medicine, or allow them to drive to a hospital in an emergency.

IMO it is your reading of the order is entirely against the spirit of the directive.

A more sensible thing would seem to to me to be, to have the workforce take healthcare-worker levels of precaution at work, and telecommuting if they can, and quarantine the older people who are most at risk.

 

[StealthP3D]

OK, Elon did the right thing, and indirectly (and in a very smart manner) admitted that his corona virus stance was wrong. He is now tweeting potential cures for the virus. I predicted (got a ton of disagrees for that) that Elon would during the weekend do the grown up thing and admit he was wrong -was off by one day

No, Elon never admitted his Coronavirus stance was wrong! Unless I missed it in which case you should provide a link to support your misleading claim.

Tweeting that it's dumb to panic is not to say the Coronavirus doesn't need rational and logical solutions. Your logic here is irrational. I mean, like whatever, seriously, I'm supposed to be all like, making sense or something? I mean, gag me with a spoon!

Do you have a link of Elon's supposed admission that he was wrong about Coronavirus? I didn't think so.

 

[Cherry Wine]

Third Row Podcast on Twitter

we're hearing reports of service appointments being canceled or rescheduled in the Bay Area

Doesn't bode well for factory staying open.

 

[Artful Dodger]

Maybe I'm stating the obvious, but the short term financial ramifications of a 3 week shutdown would be quite significant, correct? Like on the order of a billion dollar Q1 loss? And this would obliterate any chance of S&P inclusion for maybe a year.

I'm not trying to promote FUD if someone could better estimate the costs of a 3 week loss of product, that would be informative...

Lol, settle down, it's no where near $1B loss:

• Tesla is BATTERY CONSTRAINED; not production constrained
• GF1/Sparks will continue at full speed; likely increase shipments to Shanghai
• Fremont, when back on line, will quickly consume any excess inventory of bty packs
• worse case for Q1 is 150M deferred (not lost) profit; then have Q2-4 make that up

Cheers!

P.S. Tesla is BATTERY CONSTRAINED

 

[Ameliorate]

Musk is probably looking at options. I wonder if he could replicate model 3 tent in a different state like Nevada?

Haha thought for a second you were talking about Elon buying TSLA calls/LEAPS, then I read the next sentence. Share buyback would be funny after cap raise. Cap raise at 900 again. (No indication whatsoever of this)

Afterhours seems positive. Anyone thinking the market liked the US taking some serious precautions? For all I know the medical system collapsing was priced in and recent actions somewhat alleviates that risk.

 

[Right_Said_Fred]

After having read the lockdown order I do not see any chance the Fremont factory can stay open. Some have argued that producing/delivering new cars is essential (for safety, for replacement of a wrecked or broken car). But if that is the case then it's also essential to keep delivering tv's (need to be able to follow the news on corona) or refrigerators (need to be able to store food for a longer time to avoid going to the supermarket too often). The authorities would probably laugh at those arguments.

More important, it would be completely contrary to the spirit of the order: to keep people at home as much as possible to prevent further spreading of the virus. Stretching the exception of essential services to include building and delivering cars with thousands of workers would certainly backfire on Tesla.

 

[Unpilot]

Everybody needs to chill out and quit stirring the righteous indignation and fear-mongering pots. Shut your phone, laptop, Internet device off and go have copious amounts of sex, walk around the block for some fresh air, save a stray cat, and reflect on all the things you should be thankful for.

So close to a perfect line of thinking...so close.

 

[Unpilot]

Seems appropriate.

 

[StealthP3D]

In St Louis they are already not shutting off service if you don't pay. That is for water, sewer and electricity. Sure you may have to pay up later (months? year?) but how long can a utility hang on when everyone that can not make an income from home is not paying bills? Serious question.

The higher the payment default rate goes (or the more collections cost) the more a regulator allows the utility to raise rates. This gets to the heart of why utilities are known as being rock-solid and steady investments (if not somewhat boring with non-exceptional returns). It's the closest thing you will get to guaranteed profits in the business world. But the profits will be very ordinary in size.

 

[Fact Checking]

A more sensible thing would seem to to me to be, to have the workforce take healthcare-worker levels of precaution at work, and telecommuting if they can, and quarantine the older people who are most at risk.

The Fremont line worker workforce is generally very young - and quarantining based on age might be age discrimination.

But Tesla should give all workers who feel at risk the option to not go to work though.