2017 Investor Roundtable:General Discussion

[bdy0627]

I'm wondering how long it will be until we get some professional reviews of the Model 3. Do you think Tesla will provide any of them for review early on? Or, do you think they will want to run through this initial small production and iron out issues before allowing any M3s to be reviewed? I'm guessing the latter, so it may be around September until professional reviews start coming in. Thoughts?

 

[Alketi]

1.a. I agree that Tesla will have competition, but they cannot scale up BEV production nearly as quickly as Tesla due to reasons I discussed in this article: The Problem With Tesla's Competition - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha

I agree 100% and would even take it further.

If you study the competition, there is no BEV slated to come online before 2019 (at the soonest) that will:

1.) Be priced in the $35K range
2.) Be built as a performance sedan/crossover (not a boxy hatchback)
3.) Have production capacity for multiple hundreds of thousands
4.) Be available in all states / countries, regardless of subsidy

The Bolt fails #2/3/4.

The iPace (the next Model 3 "killer") has been completely outsourced by Jaguar to Magna Steyr at an expected (full) production capacity of 10-20K. Additionally it will be far more than $35K.

BMWs 3-series will be 2020+ and more expensive.

Volvo will come online with 'something' in 2019-2020. Price and production capacity unknown.

VW is planning one model in 2019, with many more coming in the 2020s. They're the only company outside of Tesla that's serious about BEVs, solely due to their diesel scandal. Everyone else is prevented from such self-disruption by the Innovator's Dilemma, so most everything you read (at the moment) is just publicity.

My conclusions:

1. The Model 3 will have both a market and mindshare monopoly until 2019-2022.
Gene Munster thinks that Model 3s addressable market could be 11 million cars in the U.S. alone.

2. The Model 3 will have (effectively) unlimited demand during that timeframe.
In other words, demand will exceed 500K units per year, which is Tesla's planned production capacity.

3. Tesla's sales force will increase by ~250K persons by the end of 2018.
These are or course the Model 3 owners who'll be the first to own a BEV at their workplace and will take all their co-workers and friends for a ride. Unlike the Model S/X -- this car will be affordable by most.

4. The Model 3 will (in retrospect) be the second most important car ever built. It will change the industry forever.

5. Further advancements in autopilot will amplify all the effects above.
The car could (and likely will) be perceived as many multiples better than competing ICE vehicles.

As always, this isn't investment advice. Tesla can screw this up with a hardware recall, any form of lasting bad publicity, persistent losses, etc.

However, I believe the five points above are more likely to happen than not...

 

[Curt Renz]

24/7 Wall St this morning:
Electric Vehicles on Course for Explosive Growth

 

[MitchJi]

So... for investors, this first Model 3 is just following through on something previously announced. Its great, but doesn't count for very much at this juncture.

From Teslarati:

Tesla has completed the first production build of the Model 3, according to a tweet by CEO Elon Musk. The announcement comes less than a week after Musk revealed that production of the highly anticipated electric car was two weeks ahead of schedule and the first “SN1”, or serial number 1 car, would be completed on Friday, July 7.

The serial tech entrepreneur also revealed in Saturday’s tweet that venture capitalist and Tesla board member Ira Ehrenpreis holds rights to own the first Model 3 off the production line. However, Musk noted that Ehrenpreis gifted his rights to own the exclusive serial number 1 car to Musk for his 46th birthday.
It sounds like they are planning to go directly into production, not hold any back like the Chevy Bolt.​

 

[winfield100]

I think a GF in France looks possible. There's momentum with the French government removing all ICE from roads by 2040, and Tesla's deal with the French energy utility company Neoen in SA.

was not there some humungous building complex ill used in northern france ne

24/7 Wall St this morning:
Electric Vehicles on Course for Explosive Growth

"Demand for electricity will rise of course. By 2040, electricity consumption from EVs will rise to 1,800 terawatt-hours from just 6 terawatt-hours in 2016. EV consumption will account for about 5% of total global demand for electricity in 2040."
Thats a LOT of PV

Solar will need to go way up, and rejected energy way down
Energy Flow Charts, we have barely 22 years to do this

 

[Krugerrand]

I'm wondering how long it will be until we get some professional reviews of the Model 3. Do you think Tesla will provide any of them for review early on? Or, do you think they will want to run through this initial small production and iron out issues before allowing any M3s to be reviewed? I'm guessing the latter, so it may be around September until professional reviews start coming in. Thoughts?

Friends of Tesla will get to review early on, as usual.

 

[Intl Professor]

I was skeptical about whether Musk would release a photograph and ignorant about the impact. Some of the evidence is repeated here, but LA Times, Barron's, and others are giving Tesla a lot of free publicity—in some cases comparing its importance to the first Model T. As the Soviets used to say: good propaganda!

For us, techmaven's take is good enough!

2017 Investor Roundtable:General Discussion

 

[Krugerrand]

I was skeptical about whether Musk would release a photograph and ignorant about the impact. Some of the evidence is repeated here, but LA Times, Barron's, and others are giving Tesla a lot of free publicity—in some cases comparing its importance to the first Model T. As the Soviets used to say: good propaganda!

For us, techmaven's take is good enough!

2017 Investor Roundtable:General Discussion

Skeptical about Musk taking an opportunity to brag (if you will) about the accomplishments of his Team? Really?

 

[Intl Professor]

Skeptical about Musk taking an opportunity to brag (if you will) about the accomplishments of his Team? Really?

You're correct. He's got a lot on his plate, but then his reach spans the globe from at least Australia to Fremont, and being a literal dolt I didn't think someone else could take the picture, or delivery.

I think of Musk as a technical genius, but he's equally talented in finance and thanks to you I need to think of him as a media genius as well. There is, indeed, aside from Thumper's joke (if I remember rightly) a branch or more of silicon valley in Hollywood.

 

[anticitizen13.7]

I'm wondering how long it will be until we get some professional reviews of the Model 3. Do you think Tesla will provide any of them for review early on? Or, do you think they will want to run through this initial small production and iron out issues before allowing any M3s to be reviewed? I'm guessing the latter, so it may be around September until professional reviews start coming in. Thoughts?

Model S initial delivery occurred on June 1, 2012.

Motortrend published their driving impressions on June 22, 2012: 2012 Tesla Model S First Drive - Motor Trend, and Car and Driver published their article in their August 2012 issue: 2013 Tesla Model S - First Drive Review

I would expect Model 3 first impression articles to be published by major reviewers by the end of August 2017.

 

[Ulmo]

So... for investors, this first Model 3 is just following through on something previously announced. Its great, but doesn't count for very much at this juncture.

A little extra press.

 

[3Victoria]

Skeptical about Musk taking an opportunity to brag (if you will) about the accomplishments of his Team? Really?

Yes, many felt we would have to wait for the delivery party on the 28th. Kudos for the very good posts re the ramp up. It is not at all clear how fast this will go ... and I am sure even Elon would have to give a wide error bar to his projections ... its very dependant on process glitches. However parts supply seems to be in hand.

 

[Ulmo]

Skeptical about Musk taking an opportunity to brag (if you will) about the accomplishments of his Team? Really?

He wants to get marketing timing right. He'll titrate his bragging accordingly.

Edit: I looked up the definition of titrate. It's not exactly what I mean. So, more properly:

He wants to get marketing timing right. He'll brag according to targets in spacetime and type of delivery of brag and volume of brag.

In retrospect, my poor use of the word titrate seemed better.

 

[Krugerrand]

Yes, many felt we would have to wait for the delivery party on the 28th.

As evidenced, pictures can be shown of SN1 without revealing anything new (like say; about the non-existence of HUD and other interior spaceship-like stuffs).

 

[Starno]

I'm wondering how long it will be until we get some professional reviews of the Model 3. Do you think Tesla will provide any of them for review early on? Or, do you think they will want to run through this initial small production and iron out issues before allowing any M3s to be reviewed? I'm guessing the latter, so it may be around September until professional reviews start coming in. Thoughts?

Yes I guess around September-October as well. Except if Tesla wants to get some reviews early on to " pump the demand ", in this case we might get reviews by end of August.

 

[Krugerrand]

He wants to get marketing timing right. He'll titrate his bragging accordingly.

I disagreed with your post simply because it's SN1 of Model 3 - the significance is far too great to not be flogging pictures of it all over the Internet. And as I posted to 3Victoria, pictures can be shown without revealing what is still a mystery to us.

 

[JRP3]

Trick of lighting... in these pictures of that photo shoot, the trim looks aligned:

Imgur: The most awesome images on the Internet

Actually I'd say the opposite, the pics you reference are from farther away and at an angle which would hide the misalignment. The large, close, side on shot is much more likely to be accurate. That trim on the door isn't going to pop up like that because of lighting. I've seen other pre-production M3's with the same issue.

More obvious in the large version if you haven't seen it: https://pbs.twimg.com/media/DERHYrbW0AAtBFB.jpg:large

 

[techmaven]

They are ahead so far with the M3 ramp. Remember when Elon said does that mean that we'll produce cars in July of 2017. "Of course not."

Sure... but that's a big part of the reason why we are back in the 315's, in a likely trading range of 295 - 340. Right now, the July 2017 build of the first one can be seen as "faked" as it can be hand built to final, deliverable spec. But the financial performance and therefore the stock price is looking 3-9 months ahead and wondering what the next few quarters will bring. And specifically, is the volume ramp really going to be in Q3 or in Q4? That's why it is even more important that we, as investors, understand where Tesla stands in the ramp. And maybe the company knows their ramp at this juncture, barring unexpected surprises and maybe they don't. In any case, the new guidance for the ramp is already far better than the Model S and X.

Model 3 guidance: 30, 100, 1500+, x, y, 5000/week at some point
Model S: 12, 19, 43, 86, 300, 400, 1790
Model X: 6, 4, 5, 199, 270, 270, 1860

Overall, we are still stuck in the aftermath of the badly botched Model X launch. It causes a significant discounting of what the company says at times. And so we have a lot of volatility.

Too many weak longs sold out at the first real sign of trouble... it's part of having run up so far so fast. I did think we would drop, but I thought we would be in a new range... and we just need a little bit of re-assurance now I think to get back a bit. It took a NASDAQ roll over, a loosely coordinated bear attack that includes lots of media pieces, a disappointing but met-lower-end-of-guidance delivery number, and a missing sentence on number of cars in transit to get us here. I do think it's overdone. But the kind of news to get us back on track above $350 is going to be about production.

 

[NicoV]

I believe that either people don't believe the 5k per week estimate, or have not considered the implications. Sixteen hours per day x seven days per week equals 112 makes 45 cars per hour! I believe that a movie of the production line spitting out M3's at that rate would cause a substantial SP bump.

I believe that the chances of an unenthusiastic reception or a large number of cancellations are zero. Elon-Tesla have definitely been sandbagging on how compelling the M3 is.


They are ahead so far with the M3 ramp. Remember when Elon said does that mean that we'll produce cars in July of 2017. "Of course not."

Tesla is ahead, but I assume that their 'most unlucky supplier' has trouble to ramp in july/august, and that that's the real reason for the slow ramp in the summer.

 

[Lessmog]

94,000 Customers Without Power After Electrical Fire, Explosion at LADWP Plant in Northridge

Gee, I wonder what product can help you in this situation and save you money on a daily basis?

Big noise from Winnetka:

If that helps or not ...