2017 Investor Roundtable:General Discussion

[geneclean55]

Lets see where we are at by 4pm on Wednesday.
A bull flag down to around 320 would be a nice set-up IMO.

Lets not forget we were already around 314 three weeks ago. Also NASDAQ is in rampage mode, so TSLA should be generally going up regardless.

 

[BornToFly]

So lets assume that all goes as expected in the next 2-3 years. Model 3 takes off, TE takes off, GF's being built as planned, etc. At that point, I'm a little worried that the stock price would start to be affected negatively. This time, not by all the stupid FUD/bear arguments, but by unrealistically HIGH expectations from these same brain dead analysts. Does anyone else share that concern?

No, because by then Tesla will have over $100 Billion in annual sales to support a higher market cap.

 

[RobStark]

BMW holds out hope for 7 series

He(BMW USA Boss) wasn't talking about the Tesla Model S, which he sees as a direct competitor in Northern California but not as much in other parts of the U.S( cuase nobody buys Model S in Southern Cal). The Model S pulls more BMW buyers away from the 5 series than from the 7 series, Willisch said. Tesla sold 24,000 Model S sedans in the U.S. last year, nearly double that of the 7 series.

Incentive spending has been high in the segment. BMW spent an average of $12,544 per 7 series for all of 2016 and an average of $11,095 through the first three months of 2017, according to Autodata. In comparison, Mercedes spent an average of $12,998 on the S class in 2016 and $11,467 so far in 2017. The base 7 series starts at $84,095, while the S-class sedan starts at $97,525; prices include shipping. Base prices for top-level trims for both easily top $150,000.

 

[Gerardf]

Tesla Motors: And Now the Hard Part
<snip>
Tesla must reduce its S/X non battery [cost of goods sold] by $41.371 per car, or 66%, in order to achieve Model 3's gross profit target mid-point.

The problem is that your starting point seems to be that Tesla must be telling lies and scamming shareholders.

If you take the other position the same quote look quite different.

My position is that Tesla Roadster and S/X were brought to market with the final goal being to design and produce the build the Model-3 and -Y, as they are essential for reaching the company vision statement. Also I assume that all the 1.000's of peoplewho have now worked on this are not only very competent, but will also not able to all keep a big secret.. as big as them all working for so many years towards building a non-profitable product, while that products that is absolutely key for the survival of the company. And, I should also mention that the Tesla management would also run a real risk to end up in jail covering up such problem.. I assume people as financially independent as All key Tesla management and board memebers are not willing to take such risk.

Once you accept the assumption this is not all some piramide scam / Potemkin village / etc, etc.. scam, the statement you quoted is read and interpreted as a a very different one than you seem to do. Namely that it seems to say / imply that Tesla actuly must have found a way to bring down cost by that much !

Now, such savings this will surely also mean the S/X margins are about to benefit in a significant way from the production / purchase volumes scaling up and next level automation in the company.

In fact, that fits perfectly with Elon Musk's goal reaching overall gross margin of IIRC 30%, as that will require the S and X to have a GM of > 30 % to compensate for the somewhat lower expected Model-3 / -Y gross margins.

So, actually I see that quote you refer to as potentially great news !

 

[snellenr]

Just out of curiosity -- what is the likelihood of a stock split in the near future? I don't think I've ever heard Elon suggest what he thinks would be the "nominal/desirable" trading price would be (other than mentioning that it was too high right after the first big increase), but it seems like $300+ is getting close to the point where the company might want to cut it back down to somewhere in the $50-150 range to increase liquidity & small investor interest.

 

[FinFan]

First post. Long time lurker from Finland here.

I have a feeling that the first installations of the PW2 have been largerly unnoticed here. Do you think they have any affect on stock when this becomes more widely known? When do you guys think Tesla starts to really drum up the hype for PW? In think they are still largely hiding they cards. Is the backlog so big that they don't need to actively sell that product for a long time?

Appreciate the discussion here very bigly.

 

[RichardL]

Just out of curiosity -- what is the likelihood of a stock split in the near future?

Funny, looking at the price today I had exactly the same thought

 

[uselesslogin]

Just out of curiosity -- what is the likelihood of a stock split in the near future? I don't think I've ever heard Elon suggest what he thinks would be the "nominal/desirable" trading price would be (other than mentioning that it was too high right after the first big increase), but it seems like $300+ is getting close to the point where the company might want to cut it back down to somewhere in the $50-150 range to increase liquidity & small investor interest.

I'm pretty sure he was referring to the overall market cap rather than the specific per share price. I think splits now tend to be 7-for-1 and happen around $700. That is what AAPL and NFLX did anyway.

 

[gene]

First post. Long time lurker from Finland here.

I have a feeling that the first installations of the PW2 have been largerly unnoticed here. Do you think they have any affect on stock when this becomes more widely known? When do you guys think Tesla starts to really drum up the hype for PW? In think they are still largely hiding they cards. Is the backlog so big that they don't need to actively sell that product for a long time?

Appreciate the discussion here very bigly.

In the Powerwall threads I had read a few days back that Tesla/Solar City was rapidly moving people forward in the purchase process. Here in California the state of California is offering some new battery purchase incentives that are funded only up to a certain amount. This prompted me to pay a $500 deposit last Thursday. By Saturday I was already contacted by a Tesla Rep and I submitted images of my inverter and AC panel. We will see how much time it is until the install actually happens. So, to answer you, Tesla is actively selling the product.

 

[Chris Fox]

Call out to Elon & JB - I would enthusiastically install a giant Tesla logo on the south-facing solar roof half of this barn (approx 25' - 30' tall Tesla logo in red solar shingles in the middle and the remaining roof in black solar shingles) if I would be allowed to purchase the solar tiles and install them myself. It would create another great example of Tesla 'free advertising' as the roof can be seen from Google Earth quite easily. It was only 8:00 AM when I took this picture and there was enough solar on the roof to spin the electrical meter backwards so fast it would have taken off like this morning's SpaceX launch

View attachment 225139

Omg, do it if you ever get a chance!!

 

[FinFan]

In the Powerwall threads I had read a few days back that Tesla/Solar City was rapidly moving people forward in the purchase process. Here in California the state of California is offering some new battery purchase incentives that are funded only up to a certain amount. This prompted me to pay a $500 deposit last Thursday. By Saturday I was already contacted by a Tesla Rep and I submitted images of my inverter and AC panel. We will see how much time it is until the install actually happens. So, to answer you, Tesla is actively selling the product.

Yes, I used wrong word. I meant promoting the PW actively to the people who aren't already knowlegeable about the product. For example in TED Elon could have highlight the fact that PW2 is already shipping. Is is a form of antiselling, or is there just so much stuff going on that if felt like minor detail. I'm really looking forward to the ER, and questions about TE.

 

[Bobfitz1]

Tesla Motors: And Now the Hard Part

Well, there you are! Pacific Crest FUD writers prove Model 3 can't possibly reach the targeted profit margin! QED.
All the more impressive they proved it presenting no facts or math about Model 3 and it's major cost component to back up their claim.
If you believe Pacific Crest FUD is gospel, then jump in as a short now and reap the windfall.
dubito, ergo cogito, ergo sum translated for TMCs favorite troll: I doubt you think , therefore perhaps you are an advanced ICE chatbot.

 

[Chris Fox]

I think the coronation to TSLA becoming the AAPL of the auto industry implies doing so with higher margins and continued growth .

Back then in 2013 my long term target was to see TSLA as a trillion dollar company. Today I believe that it can and will see 2 trillion dollar market cap within 7 years.
The predictions just state an understanding that a shift is happening where high growth within a market now 100 years old. Add to that the trillion dollar opportunity that comes from Tesla energy .
I know the estimates sound ridiculously lofty but those of you that may of known my stance in 2007 when our first lover AAPL was shifting the paradigm within its field , may of seen the prediction we had of 650 billion market cap for her as being equally ridiculously

Higher margins is exactly what Tesla is planning with its Alien Dreadnought factories and design choices. For example, Tesla Model S's no longer have a metal roof option. Its glass only. This means the glass can be added near the end of production giving robots access to the interior of the car. If robots can install the interior, there won't be much need for line workers any more

 

[neroden]

You must be looking in a different place. From the Transportation Energy Data Book, Oak Ridge National Labs, 2016.

http://cta.ornl.gov/data/tedb35/Edition35_Full_Doc.pdf

Energy Intensity for the average car is 4,839 BTU/vehicle-mile. If you put 2.5 people in it, the math says 1935 BTU/passenger-mile.
If it is a Tesla, the number with 2.5 riders is closer to 1000 BTU per passenger mile.
View attachment 225044

For heavy railroads, 13 of 15 are less efficient than 1935 BTU/passenger mile with 2.5 people in the average car. The average is less efficient. Only Oakland and New York City are more efficient, and not by much. None is more efficient than 2.5 people in a Tesla.

For commuter rails, 3 of 22 are more efficient. Only Stockton, San Carlos and Alexandria Virginia are better. None is more efficient than 2.5 people in a Tesla:
View attachment 225049

Big empty boxes don't work, if you care about energy efficiency.

I was working with an earlier set of data -- probably when cars were less efficient.

The fact is, however, you aren't going to get an average of 2.5 people per auto, so it's academic. People have been trying to encourage that level of carpooling since the 1970s and it does not happen after 40 years of trying. So the railroads still win on efficiency hands down.

I should also point out that these numbers are with the current equipment, which ranges from old (1990s) to obsolete (1970s for Amtrak), so it's not very energy-efficient -- the railroad numbers will improve as the equipment is replaced. (Most of it still doesn't have regenerative braking! A bunch of the commuter rails and half of Amtrak is still diesel!) New equipment wipes out that advantage of Tesla.

Indeed, big empty boxes are not efficient; railroads are only efficient when they are full, which in the case of Amtrak is all the time now, and in the case of NYC commuter rail is most of the time, but in the case of some of the other commuter rails in the country is not often. But this is also why cars are not efficient. They're over half empty nearly all the time. (Highly efficient small two-seaters might change that.)

And then there's the parking problem.

I've been pointing this out to a lot of people a lot of times. Trains scale up to high volumes, but suck for low volumes. Cars are great for low volumes, but don't scale up to high volumes. It's not really that complicated. One way to put it: if you think you need a fourth lane of freeway each way, you're wrong, you need a train. If you have an uncongested two-lane road and no freeway.... a train is probably a terrible idea.

 

[neroden]

Actually the speed of boring will be directly proportional to the amount of soil that needs to be remove.

That's not the same as the price.

 

[neroden]

You know, there's been a lot of discussion here about underground tunnel boring for new and expedited routes to get from large, congested city centers to outlying areas and back again. Expand the potential for this use of new real estate to other uses. Like underground parking, warehousing, etc. Image the value in creating, out of thin air (or thick dirt) new cubic footage/acreage of space under cities, where before there was none. I know this would have to be somewhat further down the road for The Boring Company, but once it is proven that it can be done, the sky's the limit. Err, the ground's the limit. You know what I mean.

Remember those ant farms we had as children; where we could see the tunnels the ants created? Some tunnels are thoroughfares, and some are dead end areas for ant nurseries, etc.

He's planning this for Mars. At this point I'm sure of it -- remember that he's practically obsessed with colonizing Mars.

It just doesn't make sense on Earth, but on Mars, suddenly all the things which make it not make sense on Earth start to make a lot of sense. The surface is problematic due to radiation risk and thin atmosphere anyway -- if your alternatives are a dome or a tunnel, the tunnel becomes cheaper. Most of my criticisms become irrelevant on Mars. It'll be many generations before the number of Mars colonists is high enough to need trains due to high volume. Even the social criticisms can be addressed for the first generation by self-selection of the colonists.

There's a lot of unused real estate underground. I don't think anyone can say that they legally own it.

Legal rights were settled on this a long time ago -- I own my property down to the *core of the earth*, apparently.... It varies by state, though.

 

[Oil4AsphaultOnly]

You nailed it! This may be one of the most understated and unexplored topics on this board. I gained a new perspective for this after performing energy audits all around the state of Alaska. It is my sincere belief that as energy becomes more available at the point of use then there will be less emphasis on energy efficiency - for better or for worse. I am not talking about the half-hearted programs that the local energy co-ops and PUD's promote.....such as fluorescent light bulbs and more efficient hot water heaters. I am talking about entire new construction designs and remodel efforts. I do believe that it is a wonderful thing that we put a lot of effort into insulating and sealing home, and with sizing and selecting heat pumps to optimize efficiency. Those efforts are not only due to cost of energy, but also because the current grid will not support delivering what would be needed to cover inefficient growth. And in remote Alaska those efforts are because you can't afford - or sometimes can't even get enough fuel oil for heating delivered to you. That is in part why we see 'some' efforts by PUD's to buy new light bulbs for us.

Where does this go IMO? Once we have an option for a distributed grid, the first energy selection an informed home designer will make will be a solar roof with battery storage. This could drive the cost of construction down more than almost any other cost. I am currently building an example of this on steroids. It is a 36' x 60' Gothic Barn with an 1800 square foot man cave upstairs and 4500 square feet of roofing that I will soon need to cover. The gothic arches (radius walls that become the ceiling where they meet at the peak) are constructed so that the roof-line runs east-west so that 1/2 the roof is facing due south. The purpose for that is so that 2250 square feet of roof (south facing 1/2) will be able to collect solar. The gothic arch allows it to always have some portion of the roof at an ideal angle regardless of season. I have been anxiously awaiting the Tesla Solar pricing for many reasons, particularly because they offer a solar shingle solution for the south side that will match the non-solar shingles on the north side. But to your point regarding using more energy when it becomes cheaper - I could have built it for an R40 roof, but I don't need to. The insulation cost and effort on a 4500 sq ft roof would be huge. And the carbon footprint and global impact of the construction and distribution/delivery of that unnecessary insulation is not insignificant! If I simply install a solar roof on the south side and battery storage inside, I am afforded the opportunity to finish the inside in more traditional methods. I don't have to turn the whole building into a giant foam cooler chest because it is in itself a local energy generator. My usage of energy locally will go up as a result of a 'less insulated building', but my overall usage from the grid will go waaaaaaaaay down. I also believe my carbon footprint and global impact will go down 'at the time of construction' due to my material selection choices. Over the life of the building my carbon footprint and global impact will of course be much, much lower.

Call out to Elon & JB - I would enthusiastically install a giant Tesla logo on the south-facing solar roof half of this barn (approx 25' - 30' tall Tesla logo in red solar shingles in the middle and the remaining roof in black solar shingles) if I would be allowed to purchase the solar tiles and install them myself. It would create another great example of Tesla 'free advertising' as the roof can be seen from Google Earth quite easily. It was only 8:00 AM when I took this picture and there was enough solar on the roof to spin the electrical meter backwards so fast it would have taken off like this morning's SpaceX launch

View attachment 225139

Not sure how serious you are about the no roof insulation, but you might want to re-think that. Insulation in the roof would only be for retaining heat ... in the winter ... when there's less sunlight ... to waste on extra heating, which is what electricity isn't as efficient at producing in the first place.

This situation is definitely NOT a positive for Tesla solar roofs.

 

[neroden]

So the FSD video demo used only camera and GPS - no radar and lidar!!

My mind is officially blown. There was this chart published a month ago which said Tesla is behind GM etc on FSD. They might want to revise that.

Subtle point here. GM etc. may have better self-driving. But Tesla has cheaper self-driving which is good enough. And if they have that, they win, even if GM's design is technically better.

I've said repeatedly that one of Musk's special skills is cost-reduction engineering, a very rare form of engineering expertise. (Most engineers will just throw money at problems, in my experience.)

 

[SPadival]

for a bit of whimsy, the Tesla trucks will need a pair of faux exhaust stacks that blow giant, iridescent, bubbles to perhaps challange "coal rollers"

Or borrow a couple of nitrogen thrusters from SpaceX and put them on the semis in order to blow off any competition. Yesterday (or today in US) was the first time I saw the thrusters at work from a faraway viewpoint and they were amazing.

 

[neroden]

Has anyone estimated Tesla's Total Addressable Market?

In other words, if Tesla achieved 100% market share in all of the markets in which it competes, what would be its annual revenue?

I estimated this at $15T+ with a back-of-the-envelope calculation (literally), but it would be helpful if someone could share more specific figures.

The major global buckets of revenue I considered: Automotive (including cars, parts, service, mobility), Energy (generation and storage), Trucking.

I'd like to point out that once upon a time the ICE "carmakers" also made trains (the "electro motive division" of GM, for instance), and some of them also made airplanes or at least airplane parts (Rolls Royce aircraft engines). There is nothing to prevent Tesla from expanding into the battery-powered train and airplane markets, though others may get there first. So you might have underestimated the market share slightly.

Oh. There's also the entire roofing market. I'm pretty sure you left that out.

I don't find "total addressable market" useful because it's much too large and we know Tesla won't get anywhere near that big.