2017 Investor Roundtable:General Discussion

[EinSV]

I may be too conservative in my estimates. It's easy to assume 75 GWh production for Tesla Energy at the Gigafactory before 2020 at 400 USD/kWh and 30% margin, leading to the conclusion 30 billion revenue and 9 billion in gross profit. It may be accurate, I don't know.

But there are some reasons why I'm a bit conservative:

- There is a lot of competition for TE. Currently Tesla has a massive lead when it comes to cost, but I expect this advantage to erode over time. BYD and others won't let Tesla take the market unopposed.
- 400 USD/kWh is fine for the current volume, but going from a few hundred MWh per year to tens of GWh per year, I think Tesla needs to offer more compelling pricing.
- In the short term (~2 years), I think the vehicles will absorb most of the Gigafactory output. Now, if the Model 3 becomes delayed, Tesla should have sufficient capacity to really focus on Tesla Energy, but I tend to think Tesla is not that far out of the ballpark with Model 3 production plans. (TE is really nice for derisking the Gigafactory, though.)

I would like to see Tesla start up Gigafactory phase three construction this year. This should bring a lot of TE revenue closer than my estimated 2019-2020 time frame. It would also allow Tesla to take greater advantage of thir current position in the market, and prevent their advantage from eroding as much.

I am very appreciative of your analysis -- I think it is very helpful.

I do think it is fascinating that even relatively conservative estimates regarding production and margin/earnings lead to SP guidance of $555-$736 in 2018/19, even assuming a P/E of 20 -- which is extremely low for a company growing at 50+% per year.

 

[W84M3]

Gents, the 100D is now available on tesla.com !

 

[Yggdrasill]

$3000 on top of the 90D. That strikes me as cheap. (Under 300 USD/kWh!)

Should be a big seller.

 

[Quesder]

$3000 on top of the 90D. That strikes me as cheap. (Under 300 USD/kWh!)

Should be a big seller.

Damn it. My wife was right. I should have waited until now.
My car is not under production yet. Is it too late to change?

 

[Ovulation]

Damn it. My wife was right. I should have waited until now.
My car is not under production yet. Is it too late to change?

The resale value is probably higher with the unlimited charging, the HUD comes next and with the Volvo guy coming they will hopefully catch up with the interior of other luxury brands ... It's about time with the model 3 coming, many may not see the point in buying a model S when the 3 cost half, with the same Spartan interior, without the parking issue.

 

[mrdoubleb]

$3000 on top of the 90D. That strikes me as cheap. (Under 300 USD/kWh!)

Should be a big seller.

Exactly! The spacing (in price) between 60D, 75D and 100D looks fair, with the P100D having a ridiculous premium - but that's ok, it is a supercar after all.

 

[RobStark]

Exactly! The spacing (in price) between 60D, 75D and 100D looks fair, with the P100D having a ridiculous premium - but that's ok, it is a supercar after all.

Tesla has to set aside rather large warranty reserves against all those Tesla Smiles.

 

[mrdoubleb]

So this is a little weird though... Earlier I was checking it on my phone and in the mobile version of the site all the versions are listed. but on the desktop site the 100D is "hidden", like the non-D versions of the 60 and the 75. So you actually have to select the 90D and then see 2 options: 90D and 100D.

Seems odd.

 

[W84M3]

Mhmmm price increase in EU seems to be stupidly high (+7.200 EUR vs 90D which is north of 7700 USD).

Wish Tesla would do something about prices here in Europe & really hope that's not gonna be their strategy for Model 3.

I understand shipping costs but upgrades should be roughly the same.

 

[Yggdrasill]

The currency changes are likley to blame. Here in Norway the upgrade costs 24,800 NOK, or about 2938 USD. The NOK has strengthened substantially against the USD since the last time the prices were updated, though.

 

[W84M3]

The currency changes are likley to blame. Here in Norway the upgrade costs 24,800 NOK, or about 2938 USD. The NOK has strengthened substantially against the USD since the last time the prices were updated, though.

Sorry, that's not gonna cut it. All configurations already increased dramatically in price last few years. How can an upgrade, added today, that costs $3.000 in US be $7700 in EU? Does not make sense.

Cheapest 60kwh non-D now is 86.800 EUR; I remember when it was 73.000 EUR, then 77.000 EUR. That is without any options, AP; ...

In EU these are high high-end prices.

 

[Ovulation]

Sorry, that's not gonna cut it. All configurations already increased dramatically in price last few years. How can an upgrade, added today, that costs $3.000 in US be $7700 in EU? Does not make sense.

Cheapest 60kwh non-D now is is 86.800 EUR; I remember when it was 73.000 EUR, then 77.000 EUR. That is without any options, AP; ...

In EU these are high high-end prices.

Well it seems to indicate that demand is not a problem, or they want to sell a lot of leftover 90d in the EU till the production of the new packs is at 100%, how knows, they seem confident to get away with it

I hope an analyst asks Musk what are the benefits of the new packs, beside the obvious that you can stuff more cells in it, are they cheaper, easier to manufacture, better to automate and so on

 

[hobbes]

Looked at Max Pain | Maximum-Pain.com for TSLA. The plot seems strange with put and call data seperated by a wide gap where they usually overlap and an unlikely high number for Max Pain - I guess that is a technical error? Or is the actual data like this and the flat gap can be interpreted that no forces from options expiry apply in that range, so the max pain estimate shouldn´t have any influence torday?

Does anyone have another idea?

 

[stef]

335 miles range

 

[vgrinshpun]

36.67% gross margin (300-190)/300, assuming that flexible printed circuit interconnections and heat pipe cooling likely introduced with new pack architecture did not lead to reductions in cost.

 

[schonelucht]

36.67% gross margin (300-190)/300, assuming that flexible printed circuit interconnections and heat pipe cooling likely introduced with new pack architecture did not lead to reductions in cost.

It's even more when a customer switches from a 90D on order to a 100D on order since then Tesla won't have to set aside the $500 for supercharger anymore. It's a very good move. Bit puzzled by the much higher price in the EU for the upgrade. Either it's an error that's getting fixed later. Or it's a precursor to a currency adjustment later (where 90D goes up and upgrade to 100D price goes down) or Tesla is production constrained and market research showed European customers where the most likely to 'try again later' if their current price target isn't matched.

 

[vgrinshpun]

We had a lot of concerns expressed lately about the lack of visibility of Model 3 production capabilities build-up. As a follow up to this there seem to be little interest expressed here to the details of the AJ note on expectation of timely soft start of Model 3 deliveries by the end of this year. There are two things worth noting here:

1. The change of prediction on the timing of Model 3 soft launch, according to the note, is a result of the GF visit and discussions with the suppliers : Morgan Stanley stopped short of predicting that Tesla will achieve its 2018 goals, but said it now expects production of 183,000 vehicles by that year, up from predictions of 114,000 vehicles. "We take this view following recent discussions with company management and suppliers following the Gigafactory visit," the analysts said. (via Marketwatch)
2. There was a lot of discussions about what Market might perceive as a successful launch as far as how many Model 3 cars will be delivered in 2017. If one assumes that Market sentiment will be in line with MS note, the "soft launch" in Q4 discussed in the note, which to me seems to indicate NO volume deliveries in 2017, should still drive SP to $305 by Q4.

 

[myusername]

Looked at Max Pain | Maximum-Pain.com for TSLA. The plot seems strange with put and call data seperated by a wide gap where they usually overlap and an unlikely high number for Max Pain - I guess that is a technical error? Or is the actual data like this and the flat gap can be interpreted that no forces from options expiry apply in that range, so the max pain estimate shouldn´t have any influence torday?

Does anyone have another idea?

I do believe max pain is screwed up... it looks like 50% of the calls were exercised early... also realize that max pain for this week just 2 weeks ago was $200... on normal weeks that kind of move isn't that strange... but with currently 1.6 million contracts out... i'm guessing the big move up was already cashed in on.

 

[vgrinshpun]

Speaking about introduction of 100D (non-performance) variants I am loving steady stream of demand levers being introduced by Tesla and chuckling when each of them is dismissed by bears as a "one time" "fast one" being pulled by con-man Musk on "teslarians".

 

[myusername]

Looked at Max Pain | Maximum-Pain.com for TSLA. The plot seems strange with put and call data seperated by a wide gap where they usually overlap and an unlikely high number for Max Pain - I guess that is a technical error? Or is the actual data like this and the flat gap can be interpreted that no forces from options expiry apply in that range, so the max pain estimate shouldn´t have any influence torday?

Does anyone have another idea?

also... the jan monthlies are always screwed up... these are a target for long term options traders and much of the OI was bought a year in advance with huge premiums... so, i've not seen max pain be effective on this particular week in the past... think about last year with TSLA... I believe it was in the $230s and TSLA was tanking under 180.