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Some interesting Reddit comments on Model Y: Yaro_S: "They are training techs already how to work on it. Delivered will start soon. No later than 1 month. Model Y has a few major changes. No PTC heater, radiator and condenser built into the car instead of being in the front like a traditional...

I agree with this except I think US tax rate should be 21% so Tesla and its auditors need to see greater than 50% chance of $1805m/21% = $8600m cumulative US net income to be able to reverse the full $1,805m valuation adjustment into profit. In reality the the adjustment should have increased...

I agree with @The Accountant that under Tesla's current accounting treatment, changes in the hedge value shouldn't impact the P&L, however I don't fully understand the accounting treatment Tesla is using, and it certainly seems possible that if they close this hedge they would reclassify the...

Thanks for this, I'd missed this possibility at Tesla. But if Tesla is going to get anywhere close to my 2020 underlying earnings expectations, I think they would likely recognise a substantial % of this $1.8bn valuation allowance as profit in the coming quarters. The future profit forecasts...

They have 3 different types of revenue here and may account for them all differently: 1) Customer supercharging one off purchases (Not clear if this is included in Auto revenue or Service revenue - likely low gross margin revenue). 2) Customer supercharging from unlimited free supercharging...

A key question for Tesla’s margin as it grows sales volume going forward is what operating leverage can it achieve? How much SG&A and R&D need to be added from 3Q19s annualised level of $3,720m to sustain double vehicle sales volume for example? In 3Q19 vs 3Q17 SG&A was down 9% & R&D was flat...

Odds that this was filed by Aaron Greenspan greater than 90%? (Who likely has never driven a Tesla but does hold a Tesla short position)

I think this chart is important because people very often underestimate the labour cost COGS % in autos. I've seen many people plug in a $30-35 per hour cost into their models and then are surprised at how quickly Tesla is achieving COGs reduction. As noted in this report, all in labour costs...

Market makers should delta hedge immediately and adjust the hedge in real time as the price and delta changes. However, they may sometimes start to unwind the hedge slightly before expiry (but probably not more than a day) - if they have sold call options and they reduce their hedge from 100% -...

At $200 share price shorts increasing their stake by $2 billion was 10 million shares. Now $2bn is just dumping 3.6 million shares. Doesn’t do nearly so much damage.

Copying this post from a thread I posted on Twitter. Reflex Research on Twitter Key variables for Tesla’s 2020 earnings are: Maximum potential production, Demand and like for like production cost reduction. What production capacity is Tesla building in 2020? Tesla ended Q4 with an annualised...

Disclosure - I own some of these $800 strike February 2020 calls. Obviously they are most likely to end worthless. But I talk often enough about these Tesla stock positive feedback loops I thought I might as well have a small bet on it continuing uncontrollably.

In March the FSD they were selling had no available features - I expect take rate was very low. In Q2 they bundled NAV on Autopilot into FSD and in Q3 they added Enhanced Summon. I'm sure there was a significant increase in FSD take rates when the product was restructured to include many of the...

My FSD take rates are from trying to reconcile prior revenue/gross profit/deliveries accounts and the $500m accumulated FSD deferred revenue balance. Apparently a Deutsche Bank analyst reported that Tesla IR had told them FSD had a 27% take rate. But i didn't have enough information or...

ASPs are real ASPs payed by the customer - so excluding credits, including 100% of FSD cost and subtracting no deferred revenue. The revenue line items in the P&L use further adjustments to the ASP to account for the deferred revenue/FSD etc.

4Q19 Earnings and Cash Flow Model:

I'm posting here given its a weekend, but if you have comments on the model please reply in the Earnings Projections Thread: Near-future quarterly financial projections Q419 Earnings Estimates: P&L Revenue $7,325m (+$1,022m QoQ, +$100m YoY): Gross Profit $1,430m Opex $970m Net Income $269m...

Tesla Model 3 SR+ & P and Model S & X US delivery estimates have moved to 8-11 weeks in the configurator. Model 3 AWD is at 7-10 weeks.

All Ihor is saying here is that convert holders likely already hold close to the maximum needed number of Tesla shares short because delta is already so high on these options - and hence further prices rises require a slower increase in the convert's short position to remain hedged. At a delta...

I think the majority of volume in Tesla stock every day is options market makers adjusting their delta hedge position through the day as the price moves and as their option contacts open and close. There is also likely a significant % of volume from equity market makers and short term traders...

BYD (global EV #2) Q4 sales were: BEV 23.5k (vs Tesla 112k), PHEV 9.9k, Commercial NEV 3.5k, ICE 88.7k, Battery capacity 1.77GWh (vs Tesla likely ~9.5GWh). For 2019 sales were: BEV 147.2k (vs Tesla 367.5k), PHEV 72.2k, Commercial NEV 10.2k, ICE 232k & Battery Capacity 12.3GWh. BYD's total 2019...

I explained the converts in detail a few days ago in the posts below. Its important to note that Tesla can choose to pay the converts in cash rather than new shares if it wants, but if it does choose to pay in shares, not only will it eliminate the $4.2bn debt, but it will also increase its cash...

Tesla bear raises price target 70% to $340 but current share price is already 35% higher. And yet he thinks Tesla could hit $1,900 or 10x the price target he had yesterday. He was recommending people short something that he thought could increase 10x?

I don't agree with these fatalistic views on the climate and think they are damaging to our hopes of doing anything to limit the damage. We know the climate is warming, we know humans are causing it and we know the more it warms the more it damages our lives, our planet and our economy. We...

Faster growth does come at the expense of short term profits due to higher R&D, higher product ramp costs, higher depreciation etc. However this just lowers profits, it does not make profits impossible. You need to look at every company in detail on a case by case basis to see where the growth...

Some retail investors and hedge funds do buy converts for both the debt and call option exposure. However, generally converts are bought by debt funds who either are not allowed or do not want the equity exposure. My assumption here for Tesla converts was 80% owned by debt funds, 20% by...

This is not MIC Model Y. I guess this order page has always been open. MIC SR+ Y is not going to cost ¥444k vs Model 3 at ¥300k. I agree its absurd to think MIC Y production is imminent. Though I think we could see cars before the end of 2020.

VAT is 13% and is included in Tesla's list price. Purchase tax was never included in Tesla's list price - it was 10% now it is 0%. Delivery fee also appears to be included in Tesla's list price in China and is not broken out separately. National EV incentive is received by the company and not...

Assuming 80% of converts are delta hedged, these are the changes in $ short interest. The estimate for 6-Jan assume real shorts have maintained the same $ exposure since the last Nasdaq report in mid December. This suggests real short exposure has varied between $7.2bn and $8.3bn and is close to...

Detailed internal documents leaked to Business Insider late 2018. Leaked documents reveal Tesla had an aggressive production ramp for its Model Y — but the company says that its plans have changed

I do agree that fossil fuel interests and ICE auto interests are a very likely a large force behind TSLAQ and Tesla short interest, but I don't think its as blatant and straightforward as oil companies directly shorting Tesla shares. Propaganda, lobbying and slander of competitors is standard...

I know we've discussed this before but I still disagree. In terms of large capex for short term gain - If the Paint Shop is the single bottleneck to taking Fremont from 10k 3+Y per week to 15k 3+Y per week, the capex payback will be extremely quick. And it can be justified even if Fremont...

Pump and dump too early. Distort to buy back in. It's an ugly look.

Tesla finished Q3 with 22.5k inventory. They disclosed this directly with their inventory days disclosure. Backing out the 15k Model 3 production vs deliveries delta means ~7.5k S&X at Q3. This is because over the years some have been written off and some assigned as permanent loaner vehicles...

Yes they should be able to do this. From Tesla's perspective it is essentially the same as choosing to pay the convert holders in cash. Just different processes in the finance department behind the scenes and a different announcement to convert holders.

The money they raise from selling Tesla shares short can be used to buy the bonds and then they can pledge the converts as collateral for holding the short position. So they are making 1-2% interest but committing no capital. However they do take credit risk exposure to Tesla.

Yes if they choose to pay in new shares they will both eliminate the debt and increase their cash balance. For example, for the Mar 2021 bonds, if the stock price is at $450 in March 2021, convert holders will choose to convert their $1,380m bond into 3.8 million shares worth $1,725m. Tesla's...

They can convert any time in the final 3 months, but would be giving up time value to do so.

Tesla can choose to repay the converts in cash (at the value of the equivalent shares) and it has hedged the call option on each bond (by buying call options itself) so it can fund these payments and avoid any new share issuance and dilution. Tesla partly funded buying these call options by...

I think the only thing holding back GF3 production is supplier component ramp. Tesla seemed to have no issues ramping its equipment to design capacity, but no point adding more shifts and more days per week to production until the suppliers catch up. Hopefully all on track to ramp to 3k per...

Interesting, I thought they had the same doc fee everywhere. So it looks like the prices are now largely the same in US and China. This likely means the Tariffs Tesla US pays on parts imports from China are ~ to the tariffs Tesla China is paying on the Powertrain/Batteries/Seats/Other...

Just to note on this price cut, as I posted before, China listed auto prices include 13% VAT but do not include Purchase tax (which was previously 10% but Tesla is now exempt). The EV subsidy is paid to the company and not to the customer in China, so this subsidy is additional revenue to that...

Thanks for sharing these links. It’s always worth reading the literature and I agree there is no way of knowing for certain how S&P 500 addition will impact the stock price, but it is possible to form a much more Tesla specific view than these generic studies. There are a number of omissions in...

Thanks for sharing these links. It’s always worth reading the literature and I agree there is no way of knowing for certain how S&P 500 addition will impact the stock price, but it is possible to form a much more Tesla specific view than these generic studies. There are a number of omissions in...

The Boring Company's main R&D project is finding a way to make it far cheaper and quicker to build tunnels. What is actually put in the tunnels is only an afterthought and not what engineers at The Boring Company are focussed on. Cheaper tunnels is obviously a great thing for mass transit as it...

@verygreen Further to this, I think it's fair to assume most of Tesla's Autopilot team is now focussed on training and testing the larger HW3 neural nets required for rollout of the FSD traffic lights and city streets features. Prior to Advanced Summon release, I expect most of the team was...

I agree with @Fact Checking here, it doesn't make sense to diverge the feature rollout between HW2/2.5 & HW3 if they are not actually making any use of HW3 yet. This triggers customer discontent and the need to accelerate hardware retrofits for no reason. It is relatively simple to just scale...

1. I guess nobody actually does get these high emission company cars anymore since the new more aggressive CO2 driven BIK rates. I think UK policy is likely heavily focussed on putting pressure on corporates to start the EV transition. Generally the ICE BIK rates are not particularly favourable...

BIK tax rates are paid on company cars because the car is a "benefit in kind" which is essentially a supplement to salary. In UK the BIK tax rate will be 0% on EVs from April 6th 2020, 1% in 2021 and 2% in 2022. This is down from 16% in 2019. This compares to a 28% BIK tax rate for the 124.5g/km...

What I find most exciting about the Netherlands sales this year is what it could mean for the UK next year. Norway has by far the most favourable EV policies (relative to ICE) but only had 148k car sales in 2018. Holland had 3x more car sales at 440k in 2018 and has had the second most...