2017 Investor Roundtable:General Discussion

[winfield100]

Vanguard does this automatically under the cost basis tab. I only periodcally pay attention to money and investing as I think right now, my job is earn it through work activities. But I discovered no path to affording a Model 3 in the middle of next year by that method. So I did this - This is a picture of my IRA stock holdings as of this morning:

View attachment 228605

A few things to note.
You can test whether you believe you should be holding, or recommending, by actually buying. Hence the Friday buy. If I thought buying on Friday was a bad idea, I should have sold. I have essentially turned everything into cash in the last month and reallocated. This 'everybody out' practice is good discipline. Some famous guy used to get completely out every December. I tend to do this in April and May, triggered by tax returns. I sold Amazon, Tesla and Volkswagen and did what you see above - all Tesla.

The financial picture this April said, If one 'IRA year' of Tesla stock gains will not pay for the 3, I cannot buy it.

By the way, listening to some O'Neill guy, he says what matters is how the stock performs in the last month/(time period) rather than what you paid for it. So the view above, and the view you are asking for, teaches bad trading practices. Better to leave out what you paid, altogether.

My Model 3 financing objectives, crossed with the value of my IRA, and the year time frame, (as I just now recognized that I could not complete the purchase transaction), has nothing to do with whether the stock is the best available investment.

That being said, I like what Tesla is doing. If they can manage the stock price, which is not their stated mission, well enough to let me pay for the 3, Elon will see what was once 'short money' being used to buy his electric cars.

There is joy in that.

i am confused just a tiny bit. does the chart say you made 4.17% in a month of trading? how much slippage did you lose to taxes and comissions? The only place i can trade w/o tax consequences or commish is my TSP account, but only 2x / month or i get a "timeout" in a money market acct of 0.41%.
simply by using 20, 50 and 200 day SMA's, "i eeked" out a nice 1.4% gain in 2 weeks

 

[RobStark]

It's entirely possible tesla only makes "fully loaded" cars first. If you want a stripped down base model, you are back of the queue.

Tesla has done this in the past (ModelS). With all the FUD BS emphasis on M3 not being a profitable car, I'd only make loaded ones first.

But Elon already said simplest cars first. To assure quality.

 

[22522]

i am confused just a tiny bit. does the chart say you made 4.17% in a month of trading? how much slippage did you lose to taxes and comissions? The only place i can trade w/o tax consequences or commish is my TSP account, but only 2x / month or i get a "timeout" in a money market acct of 0.41%.
simply by using 20, 50 and 200 day SMA's, "i eeked" out a nice 1.4% gain in 2 weeks

Let's be more explicit on the math... looking at the 50 shares bought a month ago for $15,392 that have appreciated by $865.

I have not sold these and do not plan to for over a year. So $865/$15392 is 5.6% for that month. I think these numbers are post commission of about $7 on the buy side. Selling commission is not in there yet.

I can buy and sell from my phone, as long as I let the funds settle. I prefer to trade after hours, which Vanguard lets you do, if you place limit orders. There is less of a market then, so price moves further and faster. As long as you are not the one with a burning need to make the transaction happen, it works OK. Some people seem to trade there to manipulate the stock price, leaving room for the tiny investor to go along for the ride. It is also after I get home, so I can take a glance and make a decision.

So the short answer is $7 commission with funds that are in a rollover IRA.

 

[EinSV]

But Elon already said simplest cars first. To assure quality.

By the time Model 3 is in non-employees hands there will likely be some differentiation between FSD and EAP. If that's the case, given the imoortance of logging FSD miles to Tesla's future perhaps the folks ordering FSD jump to the front of the line. If not, then certainly the folks ordering EAP within each group (starting with current owners) seem likely to get priority. Costs are sunk so flipping the switch is close to 100% cash in Tesla's pocket and takes no extra work. I don't know whether the other options will matter all that much since only RWD models will be available initially.

 

[MartinAustin]

re: Neodymium... it goes into loudspeaker magnets, not just motor magnets.

re: Osborning... I am one of those people who physically had enough money to buy a Model S but would never do it unless there actually was a car with "essence of Tesla" out there to buy. In other words, I could have bought an Audi A8 but never would do it. I drove a $16,000 Honda Civic for 11 years before getting the Model S, and the Model S unlocked the money in my bank account in the process - in a way that no BMW or Audi could have.
It follows that there are some people out there who have enough money to buy a Model S but are reticent about doing it... they just haven't unlocked the money yet. However, when the Model 3 comes along, it's a no-brainer. That is not really an Osborning effect - but the Model 3 also has the same "essence of Tesla" that the Model X and Model S have - it's a desirable BEV. Each of Tesla's products is eating into sales of its others. We should not be worrying about this. A long time ago, people who wanted "essence of Tesla" but who generally drove SUVs bought the Model S, because that's all there was. Once the Model X was available, naturally they don't buy the Model S - but the company hasn't suffered.
The real place where Osborning is occurring is the other brands - where Infiniti, Acura, even Porsche and so on are seeing emptier dealership lots in the USA. People simply aren't visiting those places like they used to, due to Tesla, and especially the Model 3. Dealers haven't really been reporting this, but it will become more evident through the end of this year. Tesla doesn't have anything to worry about re: Osborning IMO.

re: base model first... putting to one side the fact that Elon tweeted about it... it makes a lot of sense to start with the base model.
1) it is physically the easiest car to put together. Tesla can't afford to take any chances with supplychains or manufacturing problems.
2) as new versions of the Model 3 are released, it will keep the Model 3 publicity juggernaut moving along nicely.
3) the base Model 3 is a long way from the Model S and will help avoid the Osborning problem. Releasing the fully-loaded dual motor car first would naturally pit it against the S75.
4) The base price of $35,000 is $27,500 after the Federal tax credit, and before other state incentives. It will work well for Tesla that this will demonstrably be the cheapest long-range BEV - cheaper than the Bolt. Fully-loaded Model 3 would leave the Bolt with that spotlight.

re: something special - I'm not sure why Elon would make the factory go to the expense of spraying one Model 3 in Signature Red, and then parade it around on some public test-drive, without intending to sell the Model 3 with that colour. So I'm going with that colour as the founders' colour. That said, I'm not sure why he revealed the colour at all, if it is indeed something he is trying to keep a secret.

 

[22522]

However, when the Model 3 comes along, it's a no-brainer.

Only if you can make the payments!

 

[Reciprocity]

It's not just idle speculation, Elon said I think in a post earnings call that they would come to S/X by the end of 2017. The reason? How about 10,000 reasons, which is roughly how much the gross margins go up with 2170, assuming gigafactory1 is running smoothly.

Probably more like $7500 for the biggest battery, but could be more as they ramp battery production and further reduce costs.

 

[ValueAnalyst]

I don't understand why you keep stating that Tesla will be able to produce substantially more cells per square feet of factory space than they are able to produce at the GF1! Doesn't make any sense unless you can explain how they can do that.

What is the benefit of acquiring Grohmann if not to increase max production capacity per Gigafactory to beyond 1m cars/yr?

What is the current bottleneck/limiting factor for cells per sq ft of factory space? Labor? Materials? Technology? Can't they add lines? Can't they speed up lines to beyond the blur that it is today? Wondering your thoughts on this.

 

[FredTMC]

But Elon already said simplest cars first. To assure quality.

Fully loaded RWD cars

 

[RobStark]

Fully loaded RWD cars

That would not be the simplest.

 

[Buddyroe]

Man, you guys will talk about anything. Even when there's nothing to talk about, there will be posts about nothing.

 

[pz1975]

Man, you guys will talk about anything. Even when there's nothing to talk about, there will be posts about nothing.

Kind of like this one?

 

[Reciprocity]

Man, you guys will talk about anything. Even when there's nothing to talk about, there will be posts about nothing.

Word up yo.. What you got?

 

[MitchJi]

What is the benefit of acquiring Grohmann if not to increase max production capacity per Gigafactory to beyond 1m cars/yr?

What is the current bottleneck/limiting factor for cells per sq ft of factory space?
Labor?
Materials?
Technology?
Can't they add lines?
Can't they speed up lines to beyond the blur that it is today?
Wondering your thoughts on this.

Grohmann acquisition is mainly to help them implement improved production of cars and probably solar panels and tiles.

Definitely not labor or materials. The lines are integrated. To speed up the production they need to either speed up the existing lines, or squeeze more lines into the same space. It's possible that they might be able to speed up the cell production machines and maybe Grohmann could help Panasonic do that, but by how much? And what good would that do unless they also increased the output of the goop drying and cell aging for example? If its as easy as just adding more lines don't you think that they would have already done that? I can't absolutely say that it's impossible but it seems highly unlikely. When JB and Elon described the reasons for the cost reductions they mentioned the costs associated with developing large scale cell manufacturing equipment. It's kind of similar to designing and testing a car. At some point they start building cars. Now that they have gotten the production of cells pretty much optimized they can replicate it much faster and for less money. It is possible that Elon's Production Epiphany came late in the game and that combined with the experience of building the first lines that now they know how to make substantial improvements. But if that is true why wouldn't they implement those changes in subsequent phases GF1?

I'll try one more way to describe the limitations of the ways that they can use Grohmann. If you told me that they are working with Grohmann to improve their production of falcon wing doors that is believable. Fitting more complex robots into a limited space. But how can Grohmann help them fit more electrolyte mixing vats or the huge lines of separator coating and drying areas or the huge areas used for cell aging into a given amount of space?

 

[Curt Renz]

(Moved from market action thread)

Curt, are you sure about 1 and 2? Elon has stated publicly that employees are first in line. Ordinarily I wouldn't argue with something coming from a store / service center employee, except we have so many examples of them giving out wrong information in the past. It's all over this board for as long as I've been here. Typically we are far better informed than the store employees.

First Tesla Model 3s To Be Delivered To Company Employees

Perhaps:

0.5) Fremont & Hawthorne Tesla/ Space X Employees
1) X & S
2) Tesla employees at other locations

So as not to add to the confusion, I've posted a response in the thread in which this conversation originated:
2017 Investor Roundtable: TSLA Market Action

 

[ValueAnalyst]

Grohmann acquisition is mainly to help them implement improved production of cars and probably solar panels and tiles.

I'm not so sure about this, because Elon guided for 150 GWh/yr capacity in may 2016, almost a year before the Grohmann acquisition.

If there's one thing I learned in my decade of m&a career, it's that there are a million ways a deal can fall through, and it is not done until the fat lady sings. He must have thought 150GWh/yr could be achieved without Grohmann. And if Grohmann can speed up battery production lines, I would think Gigafactory 1 can be ramped up higher.

Definitely not labor or materials. The lines are integrated. To speed up the production they need to either speed up the existing lines, or squeeze more lines into the same space. It's possible that they might be able to speed up the cell production machines and maybe Grohmann could help Panasonic do that, but by how much?

That IS what I'm talking about. Grohmann will likely play a role in automating/speeding up the existing lines to increase max capacity to beyond what Tesla/Panasonic can do on its own (i.e. 150 GWh/yr).

Who knows by how much... Can't know that without knowing internal plans/documents on tech etc. No clue. But what I do know is that, if not for this, why acquire Grohmann? And it's not to "implement" 150 GWh/yr, because Elon wouldn't have guided for that in May 2016, if Grohmann was required to reach that capacity.

And what good would that do unless they also increased the output of the goop drying and cell aging for example? If its as easy as just adding more lines don't you think that they would have already done that?

Well, they HAVE already done that, when they raised the max capacity guidance from 50 GWh/yr to 150GWh/yr. So it's definitely doable, although probably not "easy."

I'll try one more way to describe the limitations of the ways that they can use Grohmann. If you told me that they are working with Grohmann to improve their production of falcon wing doors that is believable. Fitting more complex robots into a limited space. But how can Grohmann help them fit more electrolyte mixing vats or the huge lines of separator coating and drying areas or the huge areas used for cell aging into a given amount of space?

Maybe I'm wrong, but I think Grohmann is about speeding things up, not fitting more things into a given amount of space. I think the latter is the responsibility of Tesla engineers.

Obviously, we're both making a lot of assumptions on this, but that's my take.

My whole reasoning eminates from one point: if Tesla can achieve 150GWh/yr on its own or with Panasonic, as Elon's comment from may 2016 would suggest, then why acquire Grohmann? There has to be an added benefit.

We'll probably find out at the time of the additional Gigafactories. My best guess is that next-gen Gigafactories will show dramatic improvements in both vertical integration and production rate.

 

[22522]

Grohmann acquisition is mainly to help them implement improved production of cars and probably solar panels and tiles.

Definitely not labor or materials. The lines are integrated. To speed up the production they need to either speed up the existing lines, or squeeze more lines into the same space. It's possible that they might be able to speed up the cell production machines and maybe Grohmann could help Panasonic do that, but by how much?

I'll try one more way to describe the limitations of the ways that they can use Grohmann. If you told me that they are working with Grohmann to improve their production of falcon wing doors that is believable.

Yeah, I kind of agree with what you are saying, but may have some information that was only availible in a window of time.

Here is what you are saying: Panasonic is great at machines that build small things at rates that are blindingly fast. But not so great at bigger things, perhaps. Grohmann is great at machines that build big things, but likely can't hold a candle to Panasonic on the small stuff.

Here is the information that you may not have as it just flashed for a moment in the last 24 hours ( kind of like the battery guy's best ever MIT talk): assembly of the cells into the packs that go into the vehicles is the rate limiting step for production of the Model 3 (and probably why the standard labor on the S and the 3 are so similar). What was published was slow to the point of "it must be a typo!"

Grohmann can likely help a lot with that medium level assembly. Putting the battery pack together is so vital that whatever they have to pay the German automakers for breech of contract is likely worth paying. They need to dog pile that problem for the next 8 weeks. Maybe with two different concepts until they prove something is reliable. It is a hard problem.

Of course, I may have misread the focal plane shutter journalism on the subject. It was almost a slit moving past.

I have no doubt it will get solved by mid August. Grohmann can help.

 

[MP3Mike]

My whole reasoning eminates from one point: if Tesla can achieve 150GWh/yr on its own or with Panasonic, as Elon's comment from may 2016 would suggest, then why acquire Grohmann? There has to be an added benefit.

But Tesla was contracting with Grohmann before they bought them, so it could that Grohmann is what helped them go from 50GWh/yr to 150GWhr/yr... Buying Grohmann allowed them more access that was less expensive.

 

[Dynastar]

I've been thinking about EAP/FSD and pricing. My understanding is the new AP 2 hardware is less then $1k, so most of the $8k FSD costs are software development. With the 3 those costs are going to be spread over a much larger number of cars, so either Tesla is going to print money or the cost is going to come down.

Elon previously said he expects 3 ASP to be $42k, which is only $7k in options. Maybe I'm delusional but I have a hard time imagining buying a 3 and not buying EAP, much less FSD once it's more then just a buzzword. It would be like buying an early S without the tech package, which did happen but was pretty rare. I wouldn't be surprised to see EAP come down to $3k or so.

 

[MitchJi]

Maybe I'm wrong, but I think Grohmann is about speeding things up, not fitting more things into a given amount of space. I think the latter is the responsibility of Tesla engineers.

They tripled the capacity by installing three times the capacity in the same space, which as you say doesn't require Grohmann.

My whole reasoning eminates from one point: if Tesla can achieve 150GWh/yr on its own or with Panasonic, as Elon's comment from may 2016 would suggest, then why acquire Grohmann? There has to be an added benefit.

Sigh. Tesla also produces cars, Solar panels and cells, and roofing tiles. And car motors and inverters,