2017 Investor Roundtable:General Discussion

[geneclean55]

About 1,400 vehicles were not delivered at the end of Q4 2016 according to the difference in imports and deliveries in 2016. However, that doesn't mean that is the only amount of overhang, but the limits of the data that we have and unknown intra-month and intra-quarter timing. That number is not part of the additional 1,679 vehicles imported into China in the first two months. From his previous article: The Tesla China Numbers That Elon Musk Won't Tell You
Note the big bump up in Q4. That's actually a good sign that Tesla is confident on production and demand on the S and X.

Hmm, so with the exception of q3, it looks like China delivers at least twice as many cars during 3rd month of quarter compared to months 1, and 2.

So 1356 licenses for Jan and Feb + 2712 for March + ~1400 overhang from q4 equals ~5500 deliveries for Q1 in China.

HK should have a great/one-off quarter due to volume deliveries of RHD MX, and also tax incentives going away.
Australia and Japan will also have first real volume deliveries of RHD MX this quarter.

My previous global delivery estimates for q1 might be too low.

 

[Lump]

Pacific Crest reiterated rating as equal rate.

WS ratings since ER on 2-22-2017

 

[techmaven]

IIRC, Elon said explicitly the port was closed due to pollution and the cars were sitting on the ships. So the ships already arrived at the port, but didn't get off the ships because the operations at the port were paused.

Anyway, providing the 1600 in first two months number is not far from true, there is quite a gap between the two pieces of information. The Chinese New Year was in end of Jan and usually there are at least a week-long holiday (many people do take off more than that). Clearing custom plus transporting to Tesla's locations for customer delivery usually take around two weeks time. So all in all I can understand a one-month gap between arriving at port and customer taking delivery. But two months and still this big difference is strange.

Here's the transcript from the January Gigafactory investor's meeting:
Transcript of the Gigafactory Q&A - Great stuff on GF1 • r/teslamotors

JB: Pollution closures in China

Elon: Yeh, exactly. It’s really ironic, we had 2000 cars on ships, waiting to dock in China at the end of last year, that could dock because of port closures due to smog, you know .. electric cars.

Also, Wheeler said this in the Q4 earnings:

We talked about in our deliveries press release, we had 2,750 cars that we missed delivering them by a couple of days. So, I think there's a little cross quarter timing going on there.

Which is obviously more than just China, but I suspect then that relaying the story about China, Musk was saying that they had about 2,000 vehicles that were delayed in offloading at the end of the year causing them to not be delivered in Q4, not that there were literally 2,000 vehicles sitting on ships on Dec 31st. As a result, a chunk of them if not most of them could be counted as imported in December, but not registered until January and February. It does seem that in some cases, import to registration can cross the month boundary as you can see in the 2016 data. But also clearly, sometimes they can push through within a month especially at the end of the quarter. I suspect they do the same kind of delivery logistics where the longest from import to delivery is imported first within a quarter, and the ones that can be delivered quickly arrive later.

 

[larmor]

I am a Tesla Fanboy, but honestly you make no mention of market cap at all.

Because they are creating a market, and know one can comprehend its value. They are creating the EV market. They are creating the battery market. They are creating the safe driving market with AI.

 

[Fallenone]

not that there were literally 2,000 vehicles sitting on ships on Dec 31st.

“we had 2000 cars on ships, waiting to dock in China at the end of last year,” I think this exactly means there were literately 2000 vehicles sitting on ships on Dec 31st. But anyway, these 2000 cars should have made it now. Only explanation is that there were 0 shipments to China in the first two months of 2017 and there were hundreds of cars used as showroom/loaners for the 2000 not delivered cars at the end of Dec.

 

[geneclean55]

I remember trying to figure this out by searching the news articles at the time we heard from Elon regarding the cars stuck at port. I went back just now to double check and it appears that the pollution that closed down highway traffic, factories, port operations etc occurred between December 16 and December 19. I don't believe that the cars were still stuck on ships 12 days after that.

 

[mmd]

So after two years, when tesla was ATH Sep 2014, what has changed that there remains resistance at 280?
Two car models instead of one.
High ASP per unit sold.
Increasing sales (& deliveries, derr, they aren't making $six figures for free).
Fixed problems in China market & found a partner to tango with.
Making the largest battery factory in the world to supply cars, and utilities as they replace aging generators.
Got a solar company to throw in solar (hopefully bundle with M3).
Making a FSD car, presumably based on a AI engine which is to improve car safety, not to determine if you like Marvels or DC comic movies, and which popcorn to sell to you.
Making a third smaller model, 5x in volume and 1/3x in price.
Improved efficiency in manufacturing, since time is actually money.

Here is where you are incorrect, or glossed over some facts.

High ASP per unit sold. => Still makes loss. That's worrisome, as when ASP will be lower, losses can increase.

Fixed problems in China market & found a partner to tango with.
-> Not sure what you mean. Tesla has been selling on Alibaba's T-mall long time ago, but results are not convincing.
Making the largest battery factory
-> More cash burn, more debt. More risk if the proposed businesses never go past the 'S curve' starting point.

Got a solar company to throw in solar (hopefully bundle with M3).
-> More debt; return less clear.

Making a FSD car -> No. Just putting high cost FSD hardware in the cars. Even EAP revenue can't be recognized. There is also doubt if even the hadware is sufficient for FSD, as Nvidia has other opinion.

Making a third smaller model, 5x in volume and 1/3x in price.
-> Not yet. Has promised to make, with a hasty schedule fraught with risk.

Improved efficiency in manufacturing, since time is actually money.
-> None proven yet.

And you missed (to mention a few):
- Botched Model X launch
- More debt, increased share count
- Over 30 electric cars now in the market
- Chevy Bolt beat Tesla by more than a year for the mass market long range EV.

So 1356 licenses for Jan and Feb + 2712 for March + ~1400 overhang from q4 equals ~5500 deliveries for Q1 in China.

There seems to be quite a bit of double counting here. 1400 overhang is what got registered in Jan & Feb. If there aren't many imports in Jan & Feb, then there will be less deliveries in March.

Pacific Crest reiterated rating as equal rate.

WS ratings since ER on 2-22-2017
View attachment 220493

Wow, when did Dougherty quietly lower the PT from $500->$375? That $500 was a ridiculous PT set by Andrea James, that Dougherty never bothered to fix after she left. She made a fool of herself with that PT. Well, at least she got a job at Tesla because of that I will be really curious to see her Excel sheet model.

 

[Fallenone]

I remember trying to figure this out by searching the news articles at the time we heard from Elon regarding the cars stuck at port. I went back just now to double check and it appears that the pollution that closed down highway traffic, factories, port operations etc occurred between December 16 and December 19. I don't believe that the cars were still stuck on ships 12 days after that.

This is great info and explains a lot. Thanks for digging it up.

 

[techmaven]

Hmm, so with the exception of q3, it looks like China delivers at least twice as many cars during 3rd month of quarter compared to months 1, and 2.

So 1356 licenses for Jan and Feb + 2712 for March + ~1400 overhang from q4 equals ~5500 deliveries for Q1 in China.

The 1,356 licenses comes from the overhang. If you look at 2016 data, clearly some vehicles take a while to get registered. In the case of China especially, deliveries != registration. We also don't know the effects of the shutdown in Q1. Likely all Chinese bound vehicles had to be made before the shutdown, so I don't think Chinese deliveries were affected. Still, we don't know how many vehicles Tesla allocated to China. If we assume the average between the Nov and Dec numbers, the number looks like:

1,356 registration in Jan and Feb
1,679 imported in Feb probably had few delivered in Feb, but assume some did
~300 delivered, but ~200 delayed from Q4 that weren't registered in time
~2300 newly imported in March, but ~400 miss delivery

The estimate is then ~4,800.

 

[steve3]

Okay dude! You got your wish. From now on I will not post my opinions here anymore . I'm actually making too much money to care one way or other and there is absolutely zero cause for me to post my insights for free on an unappreciative forum when I'm able to better use my time to make more money in a day than most traders make in a year. My option position alone is enough to buy me a stable of Teslas not even counting my stock position
So from here on I'll use my opinions to trade my own accounts and not throw my trading insights out there for free
Have fun!

@TrendTrader007 if you do indeed quit posting, I will miss your posts, and have previously expressed my appreciation for your sharing - both your insights and your style of expression. I learned to understand them, and grew to appreciate them, after seeing your interview with DaveT. But I hope you will reconsider in light of the reality that very, very few people understand where another is coming from, and some even feel free or even compelled to express their displeasure rather than pass over it. I read every page of both the general discussion and market action threads, and I just counted up...I have 35 posters on *igsnore*...just sayin', hope you stick around.

 

[DurandalAI]

Here is where you are incorrect, or glossed over some facts.

High ASP per unit sold. => Still makes loss. That's worrisome, as when ASP will be lower, losses can increase.

Making the largest battery factory
-> More cash burn, more debt. More risk if the proposed businesses never go past the 'S curve' starting point.

I edited out so much of your post in my quote, mostly because the majority of it isn't even worth addressing.
"Still makes loss" you say, but that's not a loss per car made, that's a loss for the whole operation due to.....
capital expenditure.
Which you're talking about with your term "cash burn."
Cash burn is when you have a bunch of millennials sitting around in a new IT vaporware company sucking down $150-300k salaries supposedly working on some vaporware product. Cash burn is what companies like Instagram and Twitter did before being acquired.

Cash burn is not when you are spending it on construction, acquisition of production equipment and other fixed assets. For how you seem to put it, you could equate it with a real estate developer buying land to build on and then sell as "cash burn" when really it's a change in asset type from liquid asset to a fixed asset. There is still a risk in that conversion, but it's not like Musk is having this money fly out the door in consumables or personnel expenses, the majority of these expenditures are in the acquisition of fixed assets.

Amazon's "cash burn" as you would have put it turned them into a retail behemoth that rivals Wal-Mart in scope in many ways. Tesla's "cash burn" is going to do similarly in rapid and massive expansion. Your term would have been appropriate prior to the release of the Model S, but at this point, using that phrase is a bit ridiculous.

 

[austinEV]

Cash burn:

Saying Tesla is burning cash is like saying someone building a house is destroying lumber.

 

[kenliles]

here's the live stream link for the SpaceX launch scheduled (couple of hours from now):
SES-10 MISSION | SpaceX

 

[Chop110]

Although I was hoping for a pullback to give me the opportunity to buy back in, I have to say I am pretty happy that the stock closed in the green for everyone that is choosing to ride it out.

 

[Ovulation]

I remember trying to figure this out by searching the news articles at the time we heard from Elon regarding the cars stuck at port. I went back just now to double check and it appears that the pollution that closed down highway traffic, factories, port operations etc occurred between December 16 and December 19. I don't believe that the cars were still stuck on ships 12 days after that.

Wasn't the question related to why a global manufacturing chain causes all sorts of problems? I didn't recall that Elon claimed the port closer had something to do with the missed delivery target.

 

[erthquake]

Another 50 MW (200 MWh) of Powerpacks ordered to be installed in SoCal over the next 12-24 months.

50 MW of new Tesla Powerpack 2 projects to be deployed for Southern California Edison

For reference, the recently installed Mira Loma substation was 20 MW (80 MWh).

 

[geneclean55]

Wasn't the question related to why a global manufacturing chain causes all sorts of problems? I didn't recall that Elon claimed the port closer had something to do with the missed delivery target.

That is correct. He didn't explicitly state that.

 

[winfield100]

A Preview Of Tesla's Q1 Deliveries - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha

utter %^&^%$#* drivel
a chart with "Produced but not sold Tesla vehicles. the 5 bars on the right side add to 40,000 vehicles PBNS

 

[racer26]

A Preview Of Tesla's Q1 Deliveries - Tesla Motors (NASDAQ:TSLA) | Seeking Alpha

utter %^&^%$#* drivel
a chart with "Produced but not sold Tesla vehicles. the 5 bars on the right side add to 40,000 vehicles PBNS

They seem to have forgotten the part where at some point, those vehicles are eventually sold (though maybe as 'used' or accounted for differently). Obviously there isn't 50k+ cars just sitting around somewhere.

 

[Ovulation]

That is correct. He didn't explicitly state that.

Cars stuck on a ship because of smog, he brought it probably just up to grab some laughs