2017 Investor Roundtable:General Discussion

[ValueAnalyst]

Tesla's current fleet size is ~250k cars. It was ~200k at December 31, 2016. If only ~30k Model 3's will be delivered in 2017, the fleet size will be slightly over ~300k at end-17.

That's only ~60% rise from end-16 to end-17. So what's with the rush to triple Superchargers in 2017?

Smothering doesn't add up. Even if the rise to 20k in December is exponential-linear-logarithmic (~50k in 4Q17, so 75% increase in fleet size), it still doesn't add up.

I'd like to correct this:

Tesla made the announcement that it would triple the number of Supercharger/Destination chargers in April 2016 during the Model 3 reveal event. Tesla's fleet at the time was ~125k.

So the fleet size will have nearly tripled from then to over 300k by end-17, so the plan actually lines up with fleet size.

During the final reveal event, Tesla may announce its plans for Supercharger network for 2018. We'll see...

 

[Buddyroe]

I think this possible explanation may be contributing to some extent, but if this was the full explanation, demand for Tesla's products wouldn't exceed supply to the level it does today, there wouldn't be such a massive and increasing number of model 3 reservations because complaints would be prevalent.

There are a lot of complaints. But, people don't complain about charger issues on the investing board. Do you read any other forums on TMC? (if so, you must do nothing but invest in Tesla as a full time job, hobby, and all other aspects of life outside of sleeping)

I often wonder if people that post here ever venture off this forum to take the pulse of the owners and see what they are saying. To me, it's a VERY important part of investing. Normally, the sentiment of owners or potential owners is felt in sales some time down the road. I constantly read the X and S forum to see what issues people are having. The biggest complaints right now are with AP2. People are stark mad about it.

 

[Reciprocity]

There are a lot of complaints. But, people don't complain about charger issues on the investing board. Do you read any other forums on TMC? (if so, you must do nothing but invest in Tesla as a full time job, hobby, and all other aspects of life outside of sleeping)

I often wonder if people that post here ever venture off this forum to take the pulse of the owners and see what they are saying. To me, it's a VERY important part of investing. Normally, the sentiment of owners or potential owners is felt in sales some time down the road. I constantly read the X and S forum to see what issues people are having. The biggest complaints right now are with AP2. People are stark mad about it.

People are crazy. Never had AP1 but talked with a guy from forum that I met IRL who had both. Most of the issues I have had relate to local roads. I mean it's really not made for every side street and nothing really is. It does a decent job and I use it all the time, mostly to help supply disengagement data, assuming Tesla captures a few seconds before and after every disengagement. On the freeway it has improved so much and taking to my new friend, he agrees it's better then AP1. I think much of the frustration comes from the fact that it's not really enhanced or differentiated from AP1 yet,and I get that. I'm mostly frustrated with the lack of high speed automatic breaking as I feel this is the single most important feature of the modern driver assistance solutions. And I know it's difficult, but I want it because I'm old AF and fall asleep alot, luckily not while driving yet.

I'm understanding because I get what happened with mobileye that lead to the need for a Tesla only solution and love the rest of vehicle so much that I don't care, but they gotta get this squared away in the next few of months for model 3.

In the greater scheme of things, the model 3 needs to be on time, so far so good, and ramp production quickly with good margins. The rest is minutia.

 

[neroden]

If anything, I think it would prevent potential buyers from putting a deposit on some of the other supposed electric supercars coming out (FF, Lucid, Rimac, Karma, etc.)

You're probably right, though I think anyone in the market for a Rimac is getting a Rimac. (And probably owns three dozen other cars too.)

 

[neroden]

There are a lot of complaints. But, people don't complain about charger issues on the investing board. Do you read any other forums on TMC? (if so, you must do nothing but invest in Tesla as a full time job, hobby, and all other aspects of life outside of sleeping)

I often wonder if people that post here ever venture off this forum to take the pulse of the owners and see what they are saying. To me, it's a VERY important part of investing. Normally, the sentiment of owners or potential owners is felt in sales some time down the road. I constantly read the X and S forum to see what issues people are having. The biggest complaints right now are with AP2. People are stark mad about it.

Well, bluntly, I never thought self-driving was going to work in the near term. I thought it was a stupid thing to propose, until I figured out that all the other automakers were advertising it. So Tesla had to advertise it too. As long as the other automakers are doing approximately as badly at it, Tesla's OK.

 

[neroden]

I have a question that I've been intending to ask for months. Why doesn't Elon give Panasonic an offer they can't refuse? (At least the battery division)

Capital conservation.

The car companies of the 1900s used franchised dealerships so that they didn't have to spend ALL THE CAPITAL to build out the system. Similar situation.

Musk is letting Panasonic pay for some (actually a lot) of the capital costs in exchange for getting a substantial portion of the profit. I wouldn't be surprised at *all* to eventually see a merger between Panasonic, or its battery division, and Tesla, but it'll probably be an all-stock merger. Tesla can't afford to buy out Panasonic (they have better things to do with their capital), and at this point Panasonic can't afford to buy out Tesla.

Despite Musk's desire to be "more integrated than River Rouge", he's actually only inhousing things when he has to: when using an outside supplier causes more problems than it's worth.

 

[Ulmo]

It was very enlightening for me to listen to W1 2016 earnings call again and I was stunned how much information they gave that you wouldn't understand until a year later and how accurate it was.

When I was pondering building an electric car company when I was 16 (circa 1987), I thought of and predicted many things that would happen, and most of them have come to pass with Elon's company some quarter century to three decades later. If you are intensely and successfully interested in a topic, you will see and predict a great many things. Then, as an observer of such a company, a lot of the information passed to you from the insider visionaries (and sometimes some exterior ones) at a successful new type of company will be able to tell you a great number of things years ahead of when you will witness them. Of course, nothing is certain, and more important, they almost certainly aren't telling you everything. So, there's an amazing amount of information they don't tell you that they also predict and prepare for, and what you do get to see of their predictions is a fairly curated subset, that has been curated over the decades in the minds of those who went into this field as visionaries, and to some degree, the people who work with them who are able to catch up.

In other words, what they predict isn't so amazing, and you should be ready and willing to accept that they are human just like us, and I think that will give a better context for their great successes and many failures. Oh, and, to those who have been thinking of similar things, a lot of the information which makes more sense to others after the fact already made sense to them the first time around, but there are still some things that are entirely in-house knowledge, that even outsider visionaries wouldn't always catch the first time around.

 

[ValueAnalyst]

People are crazy. Never had AP1 but talked with a guy from forum that I met IRL who had both. Most of the issues I have had relate to local roads. I mean it's really not made for every side street and nothing really is. It does a decent job and I use it all the time, mostly to help supply disengagement data, assuming Tesla captures a few seconds before and after every disengagement. On the freeway it has improved so much and taking to my new friend, he agrees it's better then AP1. I think much of the frustration comes from the fact that it's not really enhanced or differentiated from AP1 yet,and I get that. I'm mostly frustrated with the lack of high speed automatic breaking as I feel this is the single most important feature of the modern driver assistance solutions. And I know it's difficult, but I want it because I'm old AF and fall asleep alot, luckily not while driving yet.

I'm understanding because I get what happened with mobileye that lead to the need for a Tesla only solution and love the rest of vehicle so much that I don't care, but they gotta get this squared away in the next few of months for model 3.

In the greater scheme of things, the model 3 needs to be on time, so far so good, and ramp production quickly with good margins. The rest is minutia.

Is it possible that AP1 is similar to PW1 in that Tesla's so focused on PW2 (i.e. FSD) which will be so much better that Tesla hasn't prioritized improving AP1?

 

[Ulmo]

Who else here has seen the Model 3 side by side with a Model S since the down-selling began? I got this opportunity during the referral party. The Model 3 is much better than all the down-selling implies.

 

[Ulmo]

Anyone have a view as to why some Street analysts still have such a bearish view on Tesla's revenue outlook?

• Call option writers, put option holders (many big companies, market makers) have unexpired options in the red; every bit of "correct direction" for them (lower stock price) is good for their bottom line upon expiration or when they can offload them before expiration to the next sucker. Of course, that sucker will have wanted to hear a nice pile of bad news to believe the coolaid, because sometimes everyone on their side of the goat farm gets the sugared color water.
• Short sellers
• Every competitor
  • Oil
  • GM
  • Ford
  • Toyota
  • BMW
  • Mercedes
  • VW
  • Honda
  • Hyundai
  • Gas stations
  • OPEC
  • BYO
  • Unions
  • Utilities not positioned to do well with solar + battery + car to charge (other utilities would probably like to lobby for Tesla)
• To a lesser extent, some organized large buyers who want to buy more who want a cheap price

Wait, did you say there's a Chinese Wall? No, you didn't. But, they do exist. Just like any wall, they have their strengths and weaknesses.

 

[Ulmo]

Far more compelling than 1, 30, or 100s of RC M3s would be one M3 produced on the line without human intervention. ... The day that is confirmed with a video or pics will mark the day it is too late to buy tsla...

Pretty much, but there will still be room left for their other growing product lines (Truck, Tesla Network (self-driving), Solar Roof, Tesla Energy), plus some realizations along the way if they happen (like Solar Roofing if they ever do that, Trucking if they ever do that, and in case any of their long term competitors either start partnering or Tesla does something similar, like Amazon package delivery via autonomous whatevers). But for the medium term, I think you're basically right, but there's also the profit reports that come after that to look forward to, and those will themselves start worse than better then improve.

 

[Ulmo]

Agreed, but why plan for 2-3x rise in Supercharger and destination chargers by end-17 if the 3x increase in fleet size will happen by end-18?!

A possible explanation is that Tesla may be getting ready to ramp up 2018 production plans.

Another explanation is that it takes almost a year to ramp up SuperCharger buildout spurts. They were already behind for Model S & X, so the current expansion is enough for S, X, and Model 3's that are about to come out. Then, for the next spurt or so (around 2018), factory workers will tell Tesla "Yes, we DO want to visit ______" (fill in the blank), and Tesla muses, and thinks, aha! We should put a SuperCharger in location xyz. Then, Tesla opens up orders to Model S & X holders who reserved early, and the next group of needs will be fleshed. Then, orders open up to all reservation holders, then to everyone, and each half year, Tesla can update its buildout. Tesla is going to be behind on SuperCharger locations for many years, so they figured they want to be as little behind as possible now by at least starting out a little ahead. I bet this will be a fun area to see how well Tesla stays ahead of the wave; they'll probably try to surf it a little, even, as it approaches.

Edit: Then I found this:

2 reasons.

1) Supercharger network is not currently fleshed out enough to make S/X truly able to go anywhere without worrying about it
2) Construction and Permitting and such of SC sites can take months. Have to start now if you want to have them done in time for the 3 ramp.

He beat me to it.

I think this possible explanation may be contributing to some extent, but if this was the full explanation, demand for Tesla's products wouldn't exceed supply to the level it does today, there wouldn't be such a massive and increasing number of model 3 reservations because complaints would be prevalent.

1. @schonelucht was right, and it is not the whole explanation as @racer26 pointed out, but even so, this one point is OK for current buyers and res holders because they know:
   1. the buildout will happen
   2. they've seen prior buildouts happen, so they are confident in that assessment
   3. Tesla is less than a year behind in general in the SuperCharger buildout, so it's not super bad
2. Complaints are pretty well voiced, and we've seen Tesla slowly respond, then respond faster. (Those temp pallets must have already been worth their weight in Titanium.)
   
3. Long distance travel isn't the only purpose for an EV; they can get the EV, and use alternatives for any insufficiently SuperCharged pathways.

 

[ValueAnalyst]

• Call option writers, put option holders (many big companies, market makers) have unexpired options in the red; every bit of "correct direction" for them (lower stock price) is good for their bottom line upon expiration or when they can offload them before expiration to the next sucker. Of course, that sucker will have wanted to hear a nice pile of bad news to believe the coolaid, because sometimes everyone on their side of the goat farm gets the sugared color water.
• Short sellers
• Every competitor
  • Oil
  • GM
  • Ford
  • Toyota
  • BMW
  • Mercedes
  • VW
  • Honda
  • Hyundai
  • Gas stations
  • OPEC
  • BYO
  • Unions
  • Utilities not positioned to do well with solar + battery + car to charge (other utilities would probably like to lobby for Tesla)
• To a lesser extent, some organized large buyers who want to buy more who want a cheap price

Wait, did you say there's a Chinese Wall? No, you didn't. But, they do exist. Just like any wall, they have their strengths and weaknesses.

BYO? Somebody is having a fun Wednesday night.

I agree completely with your post. The stock is being artificially held down in hopes that something will go wrong with Model 3 rollout.

The problem is: it's now so low that bulls are waking up and buying more shares.

Something gotta give = short squeeze by 2Q18.

 

[techmaven]

So...

Elon Musk on Twitter

Going over the small nuances of Model 3 production. Very important that nothing sounds tinny.

Not quite sure what this means.

 

[AlMc]

So...

Elon Musk on Twitter



Not quite sure what this means.

I don't speak Elon either: Tinny as in the car feels 'solid' when you drive it/open close doors/hatches/frunk OR the robots are really quiet?

 

[Ulmo]

BYO? Somebody is having a fun Wednesday night.

Good catch. Apparently, I meant BYD.

I agree completely with your post. The stock is being artificially held down in hopes that something will go wrong with Model 3 rollout.

The problem is: it's now so low that bulls are waking up and buying more shares.

Something gotta give = short squeeze by 2Q18.

Yes, but there's all sorts of speed bumps that will happen, too. We can expect it to go up and down many more times. Long term holding should do pretty good.

 

[Drumheller]

I don't speak Elon either: Tinny as in the car feels 'solid' when you drive it/open close doors/hatches/frunk OR the robots are really quiet?

There was a Monty Python video with Elon's tweet.

I think it is about the perception, as you said. The Model 3 needs to feel solid. Also, the older Model S rattle on the inside. It's usually a metallic buzz coming from one of the pillars. Mine does. I've asked service to look for it when I was there for other reasons, but they haven't found it. So, I just turn up my music.

 

[Ulmo]

I don't speak Elon either: Tinny as in the car feels 'solid' when you drive it/open close doors/hatches/frunk OR the robots are really quiet?

Putting panels together, nothing gets any clacks, ticks, twarps, tongs, twangs, twongs, wombles, whumps, boings, blurps, or gonks, maybe? If you've been on the tour, you notice that in the Model S & X line some things flex but everything seems to land in the right spot. I could guess at some of the noises of evidence otherwise.

But, I have very very little idea.

 

[theschnell]

Regarding Elon's tweet about tinny. If you watch the video its all about funny sexual innuendoes. Don't forget what the Model 3 was originally called and what that spelled with the other models.

 

[scaesare]

There was a Monty Python video with Elon's tweet.

I think it is about the perception, as you said. The Model 3 needs to feel solid. Also, the older Model S rattle on the inside. It's usually a metallic buzz coming from one of the pillars. Mine does. I've asked service to look for it when I was there for other reasons, but they haven't found it. So, I just turn up my music.

I think we'd want it to sound "woody", no?

Like "caribou"... a good woody word.