2017 Investor Roundtable:General Discussion

[ValueAnalyst]

Has anyone seen anything recently on Chanos' TSLA short? He must have massive losses by now. My Google search did not come up with anything recent. Maybe I missed something but wondering whether he is trying to avoid attention for making what so far has been a very bad bet.

My guess is that he may have covered at least a portion.

Asset managers worry a LOT about what clients think of their portfolio. And at the end of the day, it's about keeping/growing client base, not directly about performance. This is why "window dressing" is a thing.

I'm in the process of expanding the client base of my firm, and I pay extreme attention to potential clients' performance expectations. If a potential client says, "if I give you $100k, what can you do with it in 6 months?" which actually happens more often than you'd think, I say "no thanks, we're not a good fit, buy an index fund."

I don't want to focus on daily/weekly or even quarterly results. That's not the way to produce superior investment returns, imo, and one short-term oriented, controlling client can really alter investment process if you're not careful.

But most asset managers will grow the client base at any cost and worry about the problem I described when they "cross that bridge." So if TSLA rises some more, shorts may cover just because of that. This is why you're seeing Einhorn say "small short" or some very loud shorts already covering a portion of their positions. I expect this to continue.

 

[ValueAnalyst]

This is what disruption looks like.

 

[22522]

OK, I have a background in electronics (and embedded software). I will be happy to share my thoughts on this.

It is not getting rid of the 12V battery they are after, the main thing is to very significantly reduce the wiring, as well as make it such that it can be installed by robots.

Note this is all just my speculation, but it could be a way to reduce cabling by a very significant factor.

There is another way of getting rid of wiring, that is consistent with self driving and the new dash - Just get rid of stuff!

The rear view mirror controls can be eliminated in two ways:
1) Use the cameras,
2) Put the driver's eyes in the same place every time, no matter how tall or short they are. (If you do that there is no need to adjust mirrors, as the factory setting is perfect for everyone).

The second way is kind of subtle, as it does require the pedals to adjust, (there are only two and they are no longer tied to the firewall) ... the seat and steering wheel are already adjustable.

A lot of wire reduction happens when you do this:

1. Rear view mirror adjust disappears (already mentioned)
2. Side airbags move out of the seats and into the B-pillar (or maybe door), as the seat is always in the same place relative to the B-Pillar. If you can get all the airbags into the fixed part of the chassis the wires get shorter.
3. Head up display adjustment controls disappear, if there is a HUD. A quarter of the cost and size of a HUD are required for adjustments to accommodate variation in the position of the driver's eyes - HUD is a pretty specific projection technology. If your eyes are not in the right place, you see nothing!

If you design a truck this way, you do waste space as crumple zone front of short legged people.
You get great side impact safety performance as every one is anchored off the B-pillar rather than the firewall.
The relationship between passengers is very consistent.

 

[ValueAnalyst]

This is from the latest Form 10-K filed with the SEC on March 1, 2017.

"Gigafactory 1 is being built in phases so that Tesla, Panasonic, and other partners can begin manufacturing immediately inside the finished sections and continue to expand thereafter. Gigafactory 1 is currently expected to attain full production capacity by 2020, which is anticipated to be sufficient for the production of approximately 500,000 vehicles annually as well as for the production of our energy storage products."

Since 2Q16, Elon has repeatedly guided for 500,000 car production in 2018 and 1 million ("maybe more") in 2020.

Why is the Form 10-K still showing 500,000 cars in 2020?!

 

[myusername]

you may want to check your math

https://www.bmwgroup.com/content/da...ds/en/2017/QB/Q1_2017_BMW_Group_EN_Online.pdf

BMW sold:

BMW1 units 503,445
MINI units 83,059
Rolls-Royce units 733
Total: 587,237 units

and had $20.7B in revenue for Q1.

that's an ASP of:

$20700000000/587237 = $35,249.82

ASP... $35k.

So if Tesla sells 4m cars and brings in $250B (math check here?)... that's an ASP of $62.5k.

Please tell me... how is it "schizophrenic" to find making this assumption completely absurd and borderline immature?

"if I can sell 20 glasses of lemonaid at $1 and get $20... then if I sold a million glass of lemonaid... I'd have $20 million!"

I'm totally aware that their revenues include Mini... but only 15% of their unit sales reported are not the main BMW line... so...

please tell me how Tesla is going to ramp to 2X BMW and DOUBLE their ASPs?

 

[Ovulation]

48:00 Dahn: "A lot of people ask me what are you doing with Tesla, have you any success ... and at this point, to tell you what we have been up to, I ask the video recording to be turned off"

then they jump to the Q&A

49: 35 Q: What is your lifetime goal of the battery?

Dahn: "As long as possible ... It's funny in the description of the project ... to get matching funds form the government, I wrote down double the lifetime of the cells used in the Tesla products ... we exceeded that in round one

At 56:28 Dahn gets a question if 100 dollar/kwh is achievable for Tesla, he get uncomfortable, his body language tells me he knows more than he wants to say and than strongly hints that yes it's doable. So encouraging news for us Tesla bulls.

Lot of the other content is pretty nerdy electrochemical stuff that probably shouldn't be analyzed by a guy whose background in electrochemistry is a chemistry for dummies book, which I picked up a few months ago. in a book store in Austria.

Chemie für Dummies. Das Lehrbuch: Amazon.de: Stefanie Ortanderl, Ulf Ritgen: Bücher

 

[vgrinshpun]

**Public Service Announcement**

Whoever can see the post above from certain user without name please IGNORE it.

 

[Starno]

https://www.bmwgroup.com/content/da...ds/en/2017/QB/Q1_2017_BMW_Group_EN_Online.pdf

BMW sold:

BMW1 units 503,445
MINI units 83,059
Rolls-Royce units 733
Total: 587,237 units

and had $20.7B in revenue for Q1.

that's an ASP of:

$20700000000/587237 = $35,249.82

ASP... $35k.

So if Tesla sells 4m cars and brings in $250B (math check here?)... that's an ASP of $62.5k.

Please tell me... how is it "schizophrenic" to find making this assumption completely absurd and borderline immature?

"if I can sell 20 glasses of lemonaid at $1 and get $20... then if I sold a million glass of lemonaid... I'd have $20 million!"

I'm totally aware that their revenues include Mini... but only 15% of their unit sales reported are not the main BMW line... so...

please tell me how Tesla is going to ramp to 2X BMW and DOUBLE their ASPs?

No,
1) Tesla will generate about 150B if it sells 4 million sold cars.

2) Then, it will generate about 135B from making all the apple, samsung.. devices (taking Foxconn place) : Tesla is creating the best manufacturing machine in the world. They'll be able to increase the speed rate of production by 10-20x what's Foxconn is currently doing.

3) It will generate about 50B from solar activity (total value of solar in 2023, estimated at 140B by 2023, in the US alone, assuming a 40% market share because competitors are lagging behind)

4) And about 50B from Tesla networks. (Uber generates today 6,5B annually, with self driving cars, we can expect an easy 10x increase of this activity).
-------

KPI to check if it's on the path :
February 2018 : For the 1)
May 2018 : For the 2)
May 2018 : For the 3)
November 2018 : For the 4)

 

[myusername]

No, Tesla will generate about 150B if it sells 4 million sold cars.

Then, it will generate about 135B from making all the apple, samsung.. devices (taking Foxconn place) : Tesla is creating the best manufacturing machine in the world. They'll be able to increase the speed rate of production by 10-20x what's Foxconn is currently doing.

It will generate about 50B from solar activity (total value of solar in 2023, estimated at 140B by 2023, in the US alone, assuming a 40% market share because competitors are lagging behind)

And about 50B from Tesla networks. (Uber generates today 6,5B annually, with self driving cars, we can expect an easy 10x increase of this activity).

Thank you... the original poster I was replying to was about to model $500b in 2025 because TE and TA should find "parity" then and TA should bring in $250B at 4m cars.

even your estimates with $185B from business lines that do not exist come to $385B.

 

[Bobfitz1]

Last week Electrik reported on Jeff Dahl's chemistry refinement which can greatly increase lifecycle at high voltage. The link appeared in TMC soon after, but if anyone commented on the import of the news I missed it. That being when Tesla incorporates this into the next set of battery changes/improvements, it means any Tesla vehicles - especially the Semi - can be driven a half million miles or more before their packs begin to reach end of life and must be replaced/recycled. Same benefit to future use as automated taxis. Same benefit to TE utility storage performance. Besides having a significant Kwh cost advantage over competitors, now TE storage will have double or triple the lifecycle of competitors. Partnering with Dahl and his research group is huge and the competitive benefits are just beginning.
One more set of facts for Tesla bulls and shorts to not comprehend and for TMC modelers to include in projecting future Tesla growth and profitability.

Tesla battery researcher unveils new chemistry to increase lifecycle at high voltage

If made into a car battery pack, 1,200 cycles would translate to roughly 300,000 miles (480,000 km) – meaning that a battery pack could still retain about 95% of its original energy capacity after ~300,000 miles – or 25 years at the average 12,000 miles per year.

Those results are truly impressive – especially since Dahn said that his team’s research is already “going into the company’s products“.

In his presentation – embedded below, Dahn demonstrates how they virtually removed the harmful reactions in the positive electrode – leading to what they describe as “superb NMC Li-ion cells that can operate at high potential.”

 

[TrendTrader007]

**Public Service Announcement**

Whoever can see the post above from certain user without name please IGNORE it.

Already on my ignore list along with a few others like value dude
I wish I could block them from seeing my posts as well, like on Twitter

 

[ValueAnalyst]

Already on my ignore list along with a few others like value dude
I wish I could block them from seeing my posts as well, like on Twitter

Instead of accepting you made a mistake by gambling in weekly OTM call options, which caused you to lose $500k+ in one day by your own admission, blame it and take it out on others.

Smart... Must be an effective way to learn from your mistakes.

 

[Hogfighter]

Can anyone explain to me why hedge fund managers like Einhorn are taken seriously by the public/media? Here's his recent performance at Greenlight Capital:

View attachment 226117

Wow.....so basically break even for the past 5 years. That's horrendous.

 

[winfield100]

Wow.....so basically break even for the past 5 years. That's horrendous.

Think a moment. He made a nice living. Paid for by others. He did well.

 

[moe.salih]

48:00 Dahn: "A lot of people ask me what are you doing with Tesla, have you any success ... and at this point, to tell you what we have been up to, I ask the video recording to be turned off"

then they jump to the Q&A

49: 35 Q: What is your lifetime goal of the battery?

Dahn: "As long as possible ... It's funny in the description of the project ... to get matching funds form the government, I wrote down double the lifetime of the cells used in the Tesla products ... we exceeded that in round one

At 56:28 Dahn gets a question if 100 dollar/kwh is achievable for Tesla, he get uncomfortable, his body language tells me he knows more than he wants to say and than strongly hints that yes it's doable. So encouraging news for us Tesla bulls.

Lot of the other content is pretty nerdy electrochemical stuff that probably shouldn't be analyzed by a guy whose background in electrochemistry is a chemistry for dummies book, which I picked up a few months ago. in a book store in Austria.

Chemie für Dummies. Das Lehrbuch: Amazon.de: Stefanie Ortanderl, Ulf Ritgen: Bücher

Also interesting to hear his thoughts about the competitive landscape around 1:06:00.

 

[150 kWh]

Chamath again today on CNBC:

Palihapitiya: Tesla's a very 'dangerous' stock to be short

 

[elasalle]

https://www.bmwgroup.com/content/da...ds/en/2017/QB/Q1_2017_BMW_Group_EN_Online.pdf

BMW sold:

BMW1 units 503,445
MINI units 83,059
Rolls-Royce units 733
Total: 587,237 units

and had $20.7B in revenue for Q1.

that's an ASP of:

$20700000000/587237 = $35,249.82

ASP... $35k.

So if Tesla sells 4m cars and brings in $250B (math check here?)... that's an ASP of $62.5k.

Please tell me... how is it "schizophrenic" to find making this assumption completely absurd and borderline immature?

"if I can sell 20 glasses of lemonaid at $1 and get $20... then if I sold a million glass of lemonaid... I'd have $20 million!"

I'm totally aware that their revenues include Mini... but only 15% of their unit sales reported are not the main BMW line... so...

please tell me how Tesla is going to ramp to 2X BMW and DOUBLE their ASPs?

All I know is I desperately want to trade in my BMW 328i for a Tesla Model 3.

Also, another fact, given Tesla's EV vision and success, every car company(the have and have beens) are trying to emulate it. To migrate to EV, each company needs to deeply depreciate all it's current assets and pay for their new ones.

 

[Starno]

Thank you... the original poster I was replying to was about to model $500b in 2025 because TE and TA should find "parity" then and TA should bring in $250B at 4m cars.

even your estimates with $185B from business lines that do not exist come to $385B.

-------------

Yes just like Amazon delivering fresh food in an hour was still unthinkable 10 years ago. Or creating Amazon Echo to order things for you, and manage certain part of your life.

What was Amazon already ? An online bookstore ?

--------------------

 

[racer26]

The difference between Tesla and Amazon is that if Amazon would not exit we would be fine, if Tesla would not exist there is high (or higher to downplay it) probability that the world will transform into a hell-hole. Cynics at wall street think that this fact is unimportant, but the history of Tesla shows it counts a f***ing lot, if Tesla wouldn't be something bigger than making money the whole operation would be belly up a long time ago.

Ehhhh. I'm pretty solidly convinced that man will be green and renewable when and only when it is economically the best choice and not a moment sooner.

Partly - that comes from applying pricing to the unpriced externalities (pollution), but it also comes from advancing the technology. We already see it. A Tesla is cheaper to operate than gas cars. Solar is roughly at parity with fossil fueled electricity, and still getting cheaper. As those things become more and more true in more and more places, we see an acceleration in adoption.

The reality is that continuing to suck the fossil fuel teat will eventually stop being a tenable action. At some point, the fossil fuels run out. Prior to that, their price will go up dramatically, which will quickly eclipse the cost of other options, and those options will then dominate. For now, fossil fuels are 'cheaper' because part of the cost (the pollution) is not attached to the user of the fuels.

 

[farzyness]

It appears that the 25% GM on Model 3 is becoming a huge focus as we shift into July being a (relatively) done deal for the launch. Based on Elon's guidance we shouldn't expect these types of margins until the product line(s) are fully operational. My question to the forum: will this cause some near-term pain until Tesla can prove this? Is the launch of Model 3 in July and 500k cars by 2018 already baked into the price?