2017 Investor Roundtable:General Discussion

[SBenson]

In that Bloomberg article referenced above, JB already gave us guidance: "It will probably be a few years before Tesla’s battery-storage sales are material enough to break out separately from automotive sales on quarterly filings, Straubel said."

That Bloomberg article, despite with a bullish headline, makes sense why Jonas valued TE at 0 for foreseeable future.

So we don't have TE. Model 3 is just 2K deliveries going by Jonas prediction, which I think is rather optimistic.

All we are left with is S and X, whose growth is very uncertain. S and X could get demand boost from quick EAP/FSD progress but that too has become uncertain... Maybe HUD will come out early Q2 and that will help some. That's the only sizeable 2017 item I can see now.

Overall I feel like 2017 is not going to be as exciting as I originally hoped.

Maybe 2018 with model 3 is the year we have been waiting for.

 

[Bgarret]

That Bloomberg article, despite with a bullish headline, makes sense why Jonas valued TE at 0 for foreseeable future.

So we don't have TE. Model 3 is just 2K deliveries going by Jonas prediction, which I think is rather optimistic.

All we are left with is S and X, whose growth is very uncertain. S and X could get demand boost from quick EAP/FSD progress but that too has become uncertain... Maybe HUD will come out early Q2 and that will help some. That's the only sizeable 2017 item I can see now.

Overall I feel like 2017 is not going to be as exciting as I originally hoped.

Maybe 2018 with model 3 is the year we have been waiting for.

Wow....it's still January, that's like giving up on your baseball team when pitchers and catchers report. Cubs won the World Series last year, miracles happen. The year is yet child, let it breathe a bit.

 

[Bangor Bob]

Question: Did I just hear the "SpaceX pusher" uses 2 Model S engines?

And has a top speed of 300mph. I think that's what I heard.

 

[SBenson]

Wow....it's still January, that's like giving up on your baseball team when pitchers and catchers report. Cubs won the World Series last year, miracles happen. The year is yet child, let it breathe a bit.

Markets are forward looking and so should we be.

 

[ggies07]

That Bloomberg article, despite with a bullish headline, makes sense why Jonas valued TE at 0 for foreseeable future.

So we don't have TE. Model 3 is just 2K deliveries going by Jonas prediction, which I think is rather optimistic.

All we are left with is S and X, whose growth is very uncertain. S and X could get demand boost from quick EAP/FSD progress but that too has become uncertain... Maybe HUD will come out early Q2 and that will help some. That's the only sizeable 2017 item I can see now.

Overall I feel like 2017 is not going to be as exciting as I originally hoped.

Maybe 2018 with model 3 is the year we have been waiting for.

Actually, I think that TE should be priced in and start to increase as the year goes on and Tesla informs us of their projects. Why? Because it took 94 days to build the one they are touting now, so it takes time. Stock price is always the future price right? These big projects won't be built as quick as a car, but should be counted for. We shouldn't have to wait as shareholders for the value of the company to be determined when they turn the switch on........

 

[JRP3]

So we don't have TE.

Tesla CTO: our energy storage is growing as fast as we can humanly scale it

Tesla CTO: our energy storage is growing as fast as we can humanly scale it [Gallery of new Powerpack station]

 

[Zhelko Dimic]

Tesla CTO: our energy storage is growing as fast as we can humanly scale it [Gallery of new Powerpack station]

Keep in mind that same CTO says sales of TE would not be material enough to break into separate line item for few years. So I conclude they scale very slowly

 

[EnzoXYZ]

Markets are forward looking and so should we be.

Why are we all so interested in past quarter sales numbers? To a point you're right but the past data gives future modeling some validation.

 

[AcesDealt]

edit: I lowered my margin target in model from 10% to 8%.

Getting to a 40B$ market cap would require something like 25B$ in revenue (Porsche-like), 8% margins (Toyota-like), and a perpetual growth rate of 6-8% (~20 P/E). That revenue could be 100k S/X at 100k$ and 375k M3 at 40k$. This gives 0$ to TE, TN. That doesn't seem particularly optimistic to me.

In particular, if they sell 375k M3 per year, they will almost certainly grow faster than 6-8%. It might be notable how close these figures are to the 500k 2018 guidance.

So my best theory about why the market has them at 40B$ instead of higher is pessimism about margins. So what event, believed by the market, confirms 20%+ type margins on the M3? That seems like the most plausible trigger for a SP increase. FSD related perhaps?

 

[JRP3]

Keep in mind that same CTO says sales of TE would not be material enough to break into separate line item for few years. So I conclude they scale very slowly

The two statements do seem to be somewhat contradictory, but I have no idea at what level TE needs to be at to break out separately.

 

[30seconds]

Keep in mind that same CTO says sales of TE would not be material enough to break into separate line item for few years. So I conclude they scale very slowly

Well TE is chasing a changing bar to what will be considered material. By Q4 of this year you may be looking at a $4B quarter in S+X+3 sales. TE would may need to be at least $200m (5%) for the quarter to be broken out.

 

[vgrinshpun]

Well TE is chasing a changing bar to what will be considered material. By Q4 of this year you may be looking at a $4B quarter in S+X+3 sales. TE would may need to be at least $200m (5%) for the quarter to be broken out.

The same Bloomberg Technology article indicated that Tesla's goal is to deliver 15GWh of battery storage a year by 2020. Assuming about doubling of TE production each year, this will require about 1GWh of battery storage delivered in 2017, which at current list prices would yield $400-500M in revenue. I am wondering if JB's statement was misreported by Bloomberg.

I asked Tesla's VP of IR, Jeff Evanson, for clarification and will share his response if I get one.

 

[racer26]

Not clear if Yates' dismissal tonight will continue to spook the markets in the morning as another orange swan event.

 

[RedSquirrel]

The two statements do seem to be somewhat contradictory, but I have no idea at what level TE needs to be at to break out separately.

He was probably referencing to the SEC guidelines of breaking out different business lines within the PnL. Either 10% of profits or 10% of revenues must be generated to be seen as material.
https://www.sec.gov/rules/final/33-7620.txt

 

[mmd]

Not clear if Yates' dismissal tonight will continue to spook the markets in the morning as another orange swan event.

With the malignant narcissist in the WH, anyone going full cash/gold? The way it's going, civil war may not be too far off. What are the safe havens for the ensuing turmoil? One colleague just sold all shares today. TIA.

 

[LST]

With the malignant narcissist in the WH, anyone going full cash/gold? The way it's going, civil war may not be too far off. What are the safe havens for the ensuing turmoil? One colleague just sold all shares today. TIA.

Frankly the current political US situation is deeply disturbing from an European point of view (..not only i know). I will try to refrain from ranting too much and name calling. I have never experienced anything like it, and i have been following US and world politics for the last 30 years. What is most unsettling is the impression that the new POTUS seems to have little or no comprehension of the concept of the separation of powers ("checks and balances") which is one of the foundations on which any democracy is built (and there are tons of other disturbing things, i will not go into for now). We see similar behavior here with the current Turkish government and that does not bode well. Escalation of such "interpretation" (taking over the justice, silencing the press etc.) of a won election (legitimate or not) leads to dictatorship. Now if such things happen in some third world country, the people of such country will suffer badly, but have little or no influence on world markets. But if these things are starting to unfold in THE biggest economy in the world, markets will react to the downside, more sooner than later. Protectionism and nationalism have never been good for any economy in the long run (sorry to lazy to post links to lang time stats on the theme).

To come back OT i am still very bullish on the long term outcome of the masterplan of EM, Tesla etc. In the current circumstances i don't see much of an upside short term, just because of the huge uncertainty this unpredictable administration is generating. Therefore i will exit all my leveraged positions, holding on to my core shares (TSLA) for now. I will reduce my exposure overall and go into more cash for other stocks.

Concerning gold, maybe already too late, but IMO has to be in any diversified portfolio with a weighting of 2-5%. If you really believe in a doomsday scenario, physical gold in small units, held under your matress...

I really hope the US system is strong enough to endure this rocky start of the new administration and finds ways to constructive politics.

 

[uselesslogin]

With the malignant narcissist in the WH, anyone going full cash/gold? The way it's going, civil war may not be too far off. What are the safe havens for the ensuing turmoil? One colleague just sold all shares today. TIA.

I am 55% cash but this is a combination of TSLA being on the high end of its multi-year range, the Shiller PE being historically very high, and of course Donald Trump.

 

[Bgarret]

It's like a race to see who can be the biggest, hypocritical..

Texas - "we want ya'll to site your gigafactory here, but don't try sellin' them 'foreign' electric cars here - call us when you make a truck."

Michigan - "In the interest of the consumer and competition, we will not allow you to sell, service or support that Hippy-Dip Cal-I-forn-i-a car here. Everyone knows you just smoke weed out there (damn, wish they'd legalize it here) and California is a completely different planet, much less country. Wait till the Donald slaps a tariff on your foreign cars and strawberries you socialist hippies."
(p.s. - can you please tell us how to build a compelling luxury sedan, it's a mystery.?!)

Indiana - "we get money from dealers. They good. Tesla bad. Tesla no sell here."

Indiana introduces a new bill to kill Tesla’s business model in the most unsubtle way

Yo, capitalist, Make America Great Again, US Manufacturing Rules!, VP Mike Pence - pull your hypocritical head out of your arse and let an American company, employing American workers, with world leading American technology sell cars in your backwards-assed state.

Or not, if hypocrisy is the currency in which you trade.

#Can'twaitforthatdustbin

 

[Irishjugg]

Frankly the current political US situation is deeply disturbing from an European point of view (..not only i know). I will try to refrain from ranting too much and name calling. I have never experienced anything like it, and i have been following US and world politics for the last 30 years. What is most unsettling is the impression that the new POTUS seems to have little or no comprehension of the concept of the separation of powers ("checks and balances") which is one of the foundations on which any democracy is built (and there are tons of other disturbing things, i will not go into for now). We see similar behavior here with the current Turkish government and that does not bode well. Escalation of such "interpretation" (taking over the justice, silencing the press etc.) of a won election (legitimate or not) leads to dictatorship. Now if such things happen in some third world country, the people of such country will suffer badly, but have little or no influence on world markets. But if these things are starting to unfold in THE biggest economy in the world, markets will react to the downside, more sooner than later. Protectionism and nationalism have never been good for any economy in the long run (sorry to lazy to post links to lang time stats on the theme).

To come back OT i am still very bullish on the long term outcome of the masterplan of EM, Tesla etc. In the current circumstances i don't see much of an upside short term, just because of the huge uncertainty this unpredictable administration is generating. Therefore i will exit all my leveraged positions, holding on to my core shares (TSLA) for now. I will reduce my exposure overall and go into more cash for other stocks.

Concerning gold, maybe already too late, but IMO has to be in any diversified portfolio with a weighting of 2-5%. If you really believe in a doomsday scenario, physical gold in small units, held under your matress...

I really hope the US system is strong enough to endure this rocky start of the new administration and finds ways to constructive politics.

I will never understand why people think that gold would hold any value at all in a doomsday scenario. At that point it's just yellow rocks.

 

[mickificki]

The hypocrisy lies in....

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