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Krugerrand
Meow
Oh, noes! We've reached 'The Demand Has Plateaued' plateau. I'll be interested to see how that goes once the 3 is established and all the new tech comes out in the S/X down the line. Or if Tesla changes their thoughts on that and introduces new tech across the board. Who knows, maybe they discontinue S/X at some point?
PaulRocket
Member
Sounds familiar
This was said last year and I believe also two years ago... Hopefully this time it's true.
Krugerrand
Meow
Sounds familiar
This was said last year and I believe also two years ago... Hopefully this time it's true.
It's always a question of 'when', not 'if'.
RobStark
Well-Known Member
Why would they discontinue 100k sales per year at 30% margins than can serve as a test bed for new tech before using in the mass market cars?
RationalOptimist
Member
To me the most significant takeaways.
- model 3 reservations continuing to rise every week
- model S demand is being somewhat cannibalized but they're still confident of selling around 100k s and x this year
- model 3 production planning is going remarkably smoothly
- but the model 3 design won't let them get to the alien dreadnought manufacturing dream
- that will come w the model Y. The fact that he already knows the length of cable ducting for the Y is remarkable... and it's a 15x improvement on the 3. wow. what kind of design simplification happened there
- the key to being by far the world's best manufacturer, their goal, is in software development, and there they have the ability to leave every other manufacturer in the dust
- if they can achieve that, and he thinks all the steps to doing so are now 'obvious', then there's a clear path to $700bn market cap
- to launch 3-4 new gigafactories in coming few years, as suggested at TED, will probably mean more cap raises down the line, but only to facilitate massive growth
- tesla bus is being deleted from the masterplan 2, partly because rides will be cheap enough w/o
- version of model X could be designed to take 10-12 people. that shd be enough
- the semi can be built at really high margin, mostly from model 3 parts, eg multiple model 3 motors
- will offer materially better costs/mile/ton delivered than current state of the art
- surprisingly easy to design and build
- energy sales likely to grow dramatically by end of this year
- mobile eye functionality rebuilt by tesla in 6 months (almost true, not quite)
- overall they're executing well and he's feeling optimistic
I mean... the only way you can sell the stock given all that, is if you truly think he's bullshit artist. We'll soon be in a world where way more people have actually driven a Tesla. Elon could handle the calls a lot better for a casual listener. But for anyone who's tracked Tesla over time, all the writing is on the wall for a massive uplift in next 9 months.
- model 3 reservations continuing to rise every week
- model S demand is being somewhat cannibalized but they're still confident of selling around 100k s and x this year
- model 3 production planning is going remarkably smoothly
- but the model 3 design won't let them get to the alien dreadnought manufacturing dream
- that will come w the model Y. The fact that he already knows the length of cable ducting for the Y is remarkable... and it's a 15x improvement on the 3. wow. what kind of design simplification happened there
- the key to being by far the world's best manufacturer, their goal, is in software development, and there they have the ability to leave every other manufacturer in the dust
- if they can achieve that, and he thinks all the steps to doing so are now 'obvious', then there's a clear path to $700bn market cap
- to launch 3-4 new gigafactories in coming few years, as suggested at TED, will probably mean more cap raises down the line, but only to facilitate massive growth
- tesla bus is being deleted from the masterplan 2, partly because rides will be cheap enough w/o
- version of model X could be designed to take 10-12 people. that shd be enough
- the semi can be built at really high margin, mostly from model 3 parts, eg multiple model 3 motors
- will offer materially better costs/mile/ton delivered than current state of the art
- surprisingly easy to design and build
- energy sales likely to grow dramatically by end of this year
- mobile eye functionality rebuilt by tesla in 6 months (almost true, not quite)
- overall they're executing well and he's feeling optimistic
I mean... the only way you can sell the stock given all that, is if you truly think he's bullshit artist. We'll soon be in a world where way more people have actually driven a Tesla. Elon could handle the calls a lot better for a casual listener. But for anyone who's tracked Tesla over time, all the writing is on the wall for a massive uplift in next 9 months.
Krugerrand
Meow
Because it might not be 100k per year in sales. The possibilities are endless on what could happen. Don't make me list them. Remember S was only suppose to garner 20k MAX in sales per year.
larmor
Active Member
Tesla has 1/3 of US luxury car market. That was the mic drop moment of the call, or may be the mic actually dropped...
Zhelko Dimic
Careful bull
From letter:
Total Q1 operating expenses increased sequentially as the period now reflects a full quarter of SolarCity operating expenses, and due to $67 million of non-recurring charges related to the SolarCity and Grohmann acquisitions and the end of our work for Daimler.
Could this mean they fired Daimler and took charge for it!?! As opposed to letting contracts expire with other manufacturers...
Payback for Daimler selling Tesla shares - withdrawing all automation help? Wouldn't put it past Elon
Could be the reason that Grohman decided to leave
Total Q1 operating expenses increased sequentially as the period now reflects a full quarter of SolarCity operating expenses, and due to $67 million of non-recurring charges related to the SolarCity and Grohmann acquisitions and the end of our work for Daimler.
Could this mean they fired Daimler and took charge for it!?! As opposed to letting contracts expire with other manufacturers...
Payback for Daimler selling Tesla shares - withdrawing all automation help? Wouldn't put it past Elon
Could be the reason that Grohman decided to leave
thanks for that reminder.
it's easy to see how they would do, just leave the gross profit the same and strip out the part of opex related to the model 3. if that opex portion is 300m (1/3rd of opex). they would have operating income of around 50m, pretax income of -50m, net income of -75m, and gaap net income of near 0 (ballpark).
you'd have to strip 500m/quarter out of opex and then you could pull around $1.25 of eps for a $5 annual run rate... maybe profitable but not massively so relative to the share price. if i did something wrong here feel free to correct.
that said, the operational execution was very good this quarter wrt to asp's, gross margins, etc. the opex is just murder though. it's really really high. kind of reminds me of amazon in that way.
it's easy to see how they would do, just leave the gross profit the same and strip out the part of opex related to the model 3. if that opex portion is 300m (1/3rd of opex). they would have operating income of around 50m, pretax income of -50m, net income of -75m, and gaap net income of near 0 (ballpark).
you'd have to strip 500m/quarter out of opex and then you could pull around $1.25 of eps for a $5 annual run rate... maybe profitable but not massively so relative to the share price. if i did something wrong here feel free to correct.
that said, the operational execution was very good this quarter wrt to asp's, gross margins, etc. the opex is just murder though. it's really really high. kind of reminds me of amazon in that way.
Krugerrand
Meow
Great summary. I just want to note something that many already know, but a lot miss - Tesla moves like the wind and also bends with the wind. They are so not afraid to do a 180 on anything and move in a different direction.
No, if there was no Model 3, the company would be rated an a much smaller future earning potential, and the stock price would be much lower. What impressed me most about the call was all the emphasis given to the Model Y! That seems to justify an even higher price.
Krugerrand
Meow
RobStark
Well-Known Member
He said sales of premium sedans in the US is 100k and Tesla has 1/3 of it.
Last year Tesla sold 23k Model S sedans in the US.
Does that mean he sees sales in the US of Model S rising 10k units?
mmd
Active Member
Was listening to nice music after the call ended. Now the recording is being streamed again, if anyone wants to listen again.
So no real answers were given on Gigafactory cell output and US deliveries so far.
- Warnings on M3 osborning S&X. Intentionally crippling M3 to push folks to S&X. Tight rope.
- Model 3: Anti selling it, yet not disclosing the total M3 reservation count after last year. Sounds strange.
I would add to your line on 700bn market cap that the key to this next level is the machine that makes the machine which requires hugely more sophisticated software development than making cars. And he does not see any other company being able to replicate this. He is essentially calling the machine that builds the machine the mote that separates Tesla from the competition and launches it to stratospheric market caps.
RobStark
Well-Known Member
That was Elon speculating on the future in 2012.
He now has hard data. Like 51k Model S sales in 2016.
Anything could change.
New markets. Tesla Model S 2.0 might garner 1/3 market share in China,South Korea, and maybe significant share in Japan and Germany.
But for this year and maybe the next 2 ~50k Model S and 50k Model X seems to be the steady state situation.
Krugerrand
Meow
He didn't leave, he got let go. I suspect - knowing how Germans of that generation think - that he wanted to be loyal to current/past customers while Tesla wanted the company to be full on about Tesla.
Just a quick point on Model S/X. Yes, the current iteration of these vehicles has seemingly plateaued, but there are plenty of demand levers that remain unpulled. With all of Tesla's focus on Model 3 production, what is the point of pulling these and driving demand to 120k if that means they have to do a bunch of retooling on the S/X lines to match that demand this year? All of that capital (human and financial) is being utilized for Model 3, so it makes no sense.
Just a handful of levers off the top of my head:
-Interior refresh
-HUD
-Tesla Energy bundles
-More lucrative referral progam
-Fleet sales (discounted)
-ummm.... Advertising... heard that's usually something companies do.
As Elon said - production will be 100k and there will be the demand. Since it should be clear why they aren't growing production, that's all that matters.
Just a handful of levers off the top of my head:
-Interior refresh
-HUD
-Tesla Energy bundles
-More lucrative referral progam
-Fleet sales (discounted)
-ummm.... Advertising... heard that's usually something companies do.
As Elon said - production will be 100k and there will be the demand. Since it should be clear why they aren't growing production, that's all that matters.
Krugerrand
Meow
Don't disagree with any of that. I am just always reminded of how Tesla loves to streamline. Regardless, the fun has only just begun.
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