2017 Investor Roundtable:General Discussion

[mickificki]

If Model S & X deliveries are strong and management indicates demand remains robust, Tesla is in very good shape. Frankly, I would not really care how the stock reacts in the short term, though I imagine it would bounce.

One question: Why is everyone so bullish right now on S & X deliveries? Can someone summarize that case? Sure, Norway deliveries are at a record; yes, management was pleased with demand at the time of the last conference call (a big relief for me); but for a strong quarter, demand would need to stay robust. I'm hopeful this is the case, but I have not seen other indications that would point in this direction. What are those other indications? I'm would greatly appreciate a quick summary, if someone cared to do so.

From 2nd qtr 2017 earnings call on 8/3/17:

"Elon:
In the case of Model 3, we're strived hard to simplify and make sure that it has everything essentially to be a fantastic car. If you see the reviews, the reviews are – one could not ask for better reviews. And I just thought I'd give you one little anecdote, which was – which I found quite surprising is that when we were giving test drives to – or the journalists were driving the car and doing test drives. About 80% of the journalists said that they would buy the car themselves. Most of the remaining 20% said probably. This is crazy. I've never seen anything like it.

So this is a very good sign. It should also be noted that one of our big concerns was that Model S, particularly, and Model X demand would suffer with the introduction of the Model 3. In fact, this has turned out to be the opposite situation. Model S and Model X demand increased with the release of Model 3.

Jon, would you like to just elaborate on that? We did express this as a concern.

Jonathan McNeill - Tesla, Inc.

Yes.

Elon Reeve Musk - Tesla, Inc.

And it was a big concern, but it has turned out to be a pleasant surprise.

Jonathan McNeill - Tesla, Inc.

Yes. I think that's right. Not only as Elon said, we expressed it is a concern. We had positive comps, both year-over-year and quarter-over-quarter in orders in the second quarter. But since then, orders have accelerated in July as we noted in our shareholder letter. And they've accelerated further since the hand-over event on Friday for the Model 3.

So, it clearly shows that S and X as our flagship products have a strong position in the market and strong demand. And that's super encouraging that we've got a strong product lineup with three cars that are proving to be very popular in their individual segments.

Elon Reeve Musk - Tesla, Inc.

Yes. In fact, I don't know – I think we mentioned some of this in the earnings letter, but just some of the key stats on, say, July orders for S and X were...

Jonathan McNeill - Tesla, Inc.

Yes. July orders were 15% higher than our Q2 average weekly order rate, so we accelerated off of Q2 into July.

Elon Reeve Musk - Tesla, Inc.

Yes.

Jonathan McNeill - Tesla, Inc.

And as we noted in the shareholder letter, deliveries grew by 53% compared to the Q2 2016 in a flat luxury vehicle market, so we're gaining share...

Elon Reeve Musk - Tesla, Inc.

Yes.

Jonathan McNeill - Tesla, Inc.

In a flat-to-down market, and the order has accelerated.

Elon Reeve Musk - Tesla, Inc.

So July was one of our best months ever.

Jonathan McNeill - Tesla, Inc.

Yes.

Elon Reeve Musk - Tesla, Inc.

Again, contrary to our expectations, I want to emphasize. Of course, who knows if this will continue, but all indications are that it will. So that's very exciting"

(above is from seeking alpha)

Also, I believe people having been looking at S and X forums on TMC and VIN numbers/registrations as well as inside ev's numbers and have extrapolated all that data to arrive at their numbers.

 

[racer26]

The bullishness on S/X is purely because of what the evidence shows. VIN tracking and the published data from Norway are both suggesting that 3Q17 has been very strong. Additionally, there was a large dump of vehicles into inventory in early September, and a sizable fraction of those have since sold. Canada is down to just 25 Model S vehicles in new inventory nationwide.

 

[GregRF]

It is now clear from the leaks that the software for Model 3 isn't ready. It's missing basic features like FM radio (and USB music!).

This probably accounts for a certain amount of the clampdown on information and may account for delays in delivery even if hardware production is going well. They may want to fix the software defects before the cars start being delivered to non-employees.

Small correction: USB music is working, PTFI showed it in a video, option only showed up in the software when a USB stick was inserted.

 

[ChrisA]

From 2nd qtr 2017 earnings call on 8/3/17:



Also, I believe people having been looking at S and X forums on TMC and VIN numbers/registrations as well as inside ev's numbers and have extrapolated all that data to arrive at their numbers.

I'm well aware of their comments on the 2Q results call.

Investors have been thrown off by judging VINs in the past -- why would these be reliable now?

Are Inside EVs #s based on anything other than sheer extrapolation?

 

[ChrisA]

The bullishness on S/X is purely because of what the evidence shows. VIN tracking and the published data from Norway are both suggesting that 3Q17 has been very strong. Additionally, there was a large dump of vehicles into inventory in early September, and a sizable fraction of those have since sold. Canada is down to just 25 Model S vehicles in new inventory nationwide.

Got it. Thanks, CA

 

[FredTMC]

The bullishness on S/X is purely because of what the evidence shows. VIN tracking and the published data from Norway are both suggesting that 3Q17 has been very strong. Additionally, there was a large dump of vehicles into inventory in early September, and a sizable fraction of those have since sold. Canada is down to just 25 Model S vehicles in new inventory nationwide.

Yes. I just checked EV-CPO again. Still only around 500 New Inventory cars listed for sale in the U.S.

Bottom line is we are NOT seeing a big supply of unsold new inventory cars sitting on lots. Demand seems high for inventory cars and we have every reason to believe that the MS/MX production rate is as high as it ever was

 

[mickificki]

I'm well aware of their comments on the 2Q results call.

Investors have been thrown off by judging VINs in the past -- why would these be reliable now?

Are Inside EVs #s based on anything other than sheer extrapolation?

inside ev's # have been somewhat close from what I remember.

the earnings call took place on 8/3, and even then musk and co. sounded very confident about the sales of S and X. maybe most are assuming that carried over to entire month of august and sept.

 

[esk8mw]

I've been a VIN counter for quite some time - though I haven't had a chance to dive in in detail this quarter.

As a general rule, in a quarter like this, VIN counting should actually underestimate the final deliveries total. This is because there's a clear push to move inventory cars which are often not produced in the same quarter. So, deliveries should outpace production in Q3 if I had to guess. And I tend to use VIN counting to measure production rate rather than deliveries for this reason.

Other positive factors - no mention of a shutdown this quarter that I can recall. This is good for 2-4k more production since there seems to be 1-2 weeks of shutdown per quarter quite often. Also Norway deliveries are known to be off the charts. Q2 call Elon mentioned July being a great month and S/X orders being up 15%. InsideEV numbers point to strong July/August numbers. I'm sure there's other stuff I missed. Bottom line - I'm expecting good news of the S/X front.

Disclaimer - VIN counting is a very inexact science. I tend to be bullish and I'm wrong a lot. I don't recommend investing based on my post. No purchase necessary. Void where prohibited. Results not typical. Offer valid in the lower 48 states only.

 

[austinEV]

I've been a VIN counter for quite some time - though I haven't had a chance to dive in in detail this quarter.

As a general rule, in a quarter like this, VIN counting should actually underestimate the final deliveries total. This is because there's a clear push to move inventory cars which are often not produced in the same quarter. So, deliveries should outpace production in Q3 if I had to guess. And I tend to use VIN counting to measure production rate rather than deliveries for this reason.

Other positive factors - no mention of a shutdown this quarter that I can recall. This is good for 2-4k more production since there seems to be 1-2 weeks of shutdown per quarter quite often. Also Norway deliveries are known to be off the charts. Q2 call Elon mentioned July being a great month and S/X orders being up 15%. InsideEV numbers point to strong July/August numbers. I'm sure there's other stuff I missed. Bottom line - I'm expecting good news of the S/X front.

Disclaimer - VIN counting is a very inexact science. I tend to be bullish and I'm wrong a lot. I don't recommend investing based on my post. No purchase necessary. Void where prohibited. Results not typical. Offer valid in the lower 48 states only.

Also, seasonally Q3 is strong.

My earlier pessimism about the Q3 delivery announcement is now flipped.


I do think that the results well be good-to-great S/X sales and virtually no model 3 (300-400) and we will get a positive story about how the model 3s are ABOUT to go crazy volume wise. This is a maybe-not-great story but the thing is, a terrible report is now priced in and that expected result is not terrible. We were at ATH a week ago based on the chance that the model 3 production was humming. In 3-5 weeks it will CERTAINLY be humming. In my mind what we have here is the mother of all entry points (second maybe to valentines day '16). Maybe today, maybe tomorrow but we may be looking at the last time we EVER see these price points. If good S/X results come in, that takes pressure off of the Q3 ER. The good story (this is a 100%: they will tell a good production story on M3 next week) will take pressure off of the M3 jitters. After that it is all good news coming in. M3's will start accelerating and it will be too late to buy in once there is data for that.

Also, even a "meh" delivery number will be a risk-off and we have a relief rally, but I think it will be better than "meh". I am buying this dip.

 

[neroden]

The tricky part of valuing Tesla is that it is such a unique situation. Previously, I've called it the first publicly traded, big cap, venture investment.

First since the 19th century (well, or very early 20th). There were quite a few back then -- I keep looking at that period.

 

[neroden]

Small correction: USB music is working, PTFI showed it in a video, option only showed up in the software when a USB stick was inserted.

Aha! Though I guess we don't know yet whether it has the severe breakage-causing bugs which are present in S/X USB music right now.

 

[neroden]

I am buying this dip.

I (slightly) overran my position concentration limit and (slightly) violated my price discipline rules between $340-$400, so I'm sitting tight for now. But if the market has strange bad reactions to the Australia party or the deliveries report and the stock goes under $320...

 

[AudubonB]

I have an idea for a proxy for VIN counting:

might one create a counter for TMC members' referral #s? Were we to take just USA - or NoAm - and accrete such data quarter by quarter, then correlate that to company-released numbers, couldn't we learn how representative a proxy that is?

Might be useful, might show incorrelatable noise.

???

 

[dautomated]

hey guys, I really like Elon Musk and am on the ship of Tesla recently. I've been wondering why there is such an incredible growth for both X and S registrations in Norway this month?

 

[RobStark]

Ford Introduces F-series Super Duty Limited, with a Price as Big as Texas


"The Super Duty Limited starts at $80,835 for an F-250, $82,010 as an F-350, and $87,100 in F-450 form. Ford boasts that buyers who check every box can drive that total up to $94,455. The Limited comes exclusively with Ford’s 6.7-liter Power Stroke diesel and four-wheel drive, with a choice of single or dual rear wheels."

The market for a $50k-$100k Tesla pickup is looking better by the day.

 

[esk8mw]

I have an idea for a proxy for VIN counting:

might one create a counter for TMC members' referral #s? Were we to take just USA - or NoAm - and accrete such data quarter by quarter, then correlate that to company-released numbers, couldn't we learn how representative a proxy that is?

Might be useful, might show incorrelatable noise.

???

Would this somehow result in me getting one more referral and thus the Arachnid wheels I've been lusting over for a year?

Then yes, this system should be implemented ASAP!

 

[Garlan Garner]

Is the stock going down because of the appearance of the lack of Model 3 production?

 

[Mike Smith]

Norway could reach 2500, assuming around 210 tomorrow and 100 Saturday. Already at 196 today.

 

[vgrinshpun]

Norway could reach 2500, assuming around 210 tomorrow and 100 Saturday. Already at 196 today.

Do not forget that numbers quoted are registrations by Norwegian authorities, which I would guess need to be obtained *before* a car is delivered. So it is reasonable to expect one or two days delay between registration and delivery numbers.

Obviously, deliveries in Norway are at record levels, but we should not count registrations obtain on Saturday as delivered in September, and, perhaps, not all cars registered tomorrow would be delivered by The end of the month.

 

[Navin]

Elon has a couple of Public appearances coming up in the next several days.

Tesla battery party
Mars event

For these two events - will there be a livestream and when are they exactly being held (US time)?

Appreciate in advance.