dennis
Model S Plaid
No, because Tesla puts R&D in operating expenses rather than in COGS. Exactly like every other tech company.
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DragonWatch
Small FootPrint
Food for thought, and in some respects, ordering a second portion.
Recently Tesla/Elon has suffered, yet again, attacks on timing of new products, production, and hype. As some may recall, I suggested we relax, and let the dust settle. The dust has settled, and it is more or less as we suspected. Some of us were extreme one direction or another in our verbiage or thoughts unexpressed.
Slightly off topic.
While I am not in a position to report vins, I am seeing in and around Olympia, WA one and most likely two Tesla’s a day, each time I am out and about. Based on the frequency of my wife allowing me to get out of the basement
Between MS & MX, the MX is winning. I have surmised that someone in my neighborhood has also bought a blue MX just like mine. In my little world, I am impressed/happy to see more of the Tesla’s on the roads near me. This has only happened over the last two or so months.
Back on target, oh I mean topic.
Please do not lose focus on what this man (Elon) is doing above all, Tesla is revolutionizing how we think, period, end of story. Please note, this is personal to me ~ soldiers in the end make it personal, otherwise. . .
Elon’s tweeting is not offering blame, lying, or cowardly behavior as demonstrated by other high profile leaders, and I use the term loosely when I say leader for some. Elon’s tweets are warning orders, you know me I am talking tactically again. Some have surmised his tweets are just setting high expectations for employees and investors; I disagree almost totally. The almost is my back door escape in the event I am wrong Elon, in my probably not viewed humble opinion, through his warning orders is giving notice to the the world of his next bold move. You may have played this in your youth, “ready or not, here I come.” Remember the GM CEO sniveling and whining about Tesla about a year ago, now you see the tax incentive under attack, and what about other manufacturers finally, and I do mean finally declaring they are going EV. None of this would have come to light, if it were not for Elon’s tweets or public announcements over the years. You could view it like taking a 2x4 to a stubborn mule. At some point, the mule will move. My view, experience, tells me that his Tesla internal guidance is filtered through Tesla managers down to the lowest person on the food chain. The average employee may gulp when Elon tweets something, but my guess is they stand tall and focus on the task at hand to achieve his internal guidance because of the guidance from top to bottom.
Leadership.
Iron fisted leaders more often than not are failures. Having lived my life as a following leader, university level professor of leadership, and frontline leader; Tesla is not a success because Elon micromanages (leads with an iron fist) every single nut and bolt, each and every seat cover, hood, or mirror; no, his team players, his managers, TESLA as a corporation has a senergy unparalleled today almost anywhere on the stock market. I wrote an article on leadership, surprised the hell out of me ~ they published it in the Field Artillery Journal, around Jan-Feb 1984 “The Sadow Effect.” I blamed micromanagement/iron fisted leadership on poorly trained officers during Vietnam, today I would modify it since I was caught in the vacuum between too many officers/NCOs and hardly any officers to share their knowledge and expertise. As I and other contributors have stated here, Elon during production hell periods, sleeps, eats, and ~ well, you get the idea, lives at the center/front lines of the problem/battle directing, and contributing to the solution. An iron fisted leader, would entertain the blame game aimed at an undefined goal, or objective. Not to mention being anywhere but on the front lines. The best senior leader I ever followed willingly, woke me up at 0300 (3 am) took me back into the planning room and told me, we were the only people in the room, that my artillery guidance for his brigade was the best he had ever read ~ it met his battle concept exactly as he invisioned it. I do not give a crap about what I wrote, what made the difference was that he took the time to wake me up and tell me himself. During that battle simulation, I was lucky during that two month period to obtain two or three hours sleep a day 24/7.
Those of us investors, owners, hedge fund managers, financial advisers, and trolls are just bystanders much like the people that would come out on the weekend to watch the Johnny reb and the blue bellies kill each other in cold blood. You know us better by the term bear and bull, or maybe short and long. We do not know what is truly happening inside camp Tesla. We are bystanders regardless of jersey. We do not have a copy of the orders, we cannot obtain first hand knowledge of what the captain, lieutenant, or sergeant is either thinking or putting into action.
Case in point, some of you have read this part before:-(
In the late 1970’s culminating in July 1983, my MLRS field artillery battery was dumped into Europe, the first. I got ten launchers instead of nine because no one command structure wise was prepared tactically to know what to do with the spare vehicle that was not allocated manpower to maintain it. As a battery we were structured to operate autonomously as a mini-battalion, but again the greater command structure did not know what to do with us, and they stole my survey ~ GPS (the first). While the department of the army allocated big bucks (no not daddy war bucks) for us to buy locks, tents, and others war materials, the European command structure saw fit or reallocate the funding leaving my soldiers without needed tools of the trade, and facing a very cold winter. Our operational status was 0% for months, because the computers did not always cooperate. Funny how in those days everything was a black box, instead of a hard drive, ram, or motherboard. I pulled in all the officers and their NCOs and listened to their maintenance stories, verified by my XO (not like the song Xs and Os ~ for god sake) he was my #1. Bottom line ~ I excused the all but my XO and First Sergeant, and told them what to write up in my training guidance which each platoon would execute weekly during their matenance checks. The plan was to drive in a large circle, mile or so, from the motor pool ending back in the motor pool. Along the route, the launcher crew would perform different tactical functions utilizing all the primary tactical functions, like uploading/downloading, and a couple of fire missions. By forcing the on board computers to be used more frequently, they worked more frequently. You may have heard of this technique, you know how you used to be told to leave your computer running 24/7. Bottom line ~ we went from 0% to 100% operational status. The plan went viral and I made sure my XO, by name got the credit, not me. I had to deal with the hate of jealous officers that believed they could have done a better job, or in some way more elite than I. I had to deal with the hate generated, not because of me, but because the other officers and enlisted soldiers saw their own jobs going away. I was scheduled to receive the first HUMMVs, but production was not meeting demand ~ really. So, we got new and used jeeps instead:-( After that command, and still a gluten for punishment, through formal command lines I asked if I could become the S-3, operations officer, of the second and last European battalion. Well, I pissed off yet another senior officer since the Corp commander assigned me the job, and the recent graduating major from the command and general staff college was being replaced by a mid grade captain. Rumors were that I was headed towards becoming a Jedi officer, that never happened. I found out that in 1987 the Russians knew me by name, that was not a current political trend; they believed in knowing their enemy.
I try NOT to tell you this as patting me on the back, but think about Tesla’s position in the world. With the deployment of my battery the US told the Russians we were deploying a rocket launcher that with one of twelve rockets could render a football field useless. No tweets in those days, not even cell phones. The rocket launcher broke more than it worked. Probably my fault for telling the soldiers to push it to the limits, so we could improve it. We were under a microscope! Tesla producing the roadster, followed by the MS gave the auto industry and fossil fuels tangible evidence of the threat Tesla posed. I could have delayed the fielding if I had not given my thirteen drug users a second chance. Talk about a bottle neck ~ I was ready to choke the NCOs involved on the positive side of the urinalysis. Maintenance nightmare? You think falcon wings were a pain in the a$$ design? Try lifting, and rotating twelve ready to fire rockets, and have the computer system relay the launcher within seconds of each rocket firing. I joked that we could do it twelve times faster and better. What message did Tesla/Elon send when he moved up the production of the M3 to 2017? How many bear stories have been written about how say Toyota has been thinking of piggybacking off the Prius line to go all electric? Do you remember how it was the customers/end user that finally convinced Toyota of the plugin version? Okay, no bear stories, but it is the typical traditional ICE automotive perspective.
Today, years, and years later ~ no one cares what it took to put that new technology on the ground, but everyone is happy to have it. The rocket launchers, the GPS, the HUMMVs and all the other equipment associated with the fielding. The ones not so happy are Jeep assembly line people, cannon bunnies, old traditional surveyors and others. Oh, I almost forgot the intranet, you know too well the internet side of life today, we were the first secure WiFi guys on the block
So, if I made the story clear, you can see the parallels and maybe begin to grasp what it is that Tesla/Elon is trying to accomplish. No, I have not dealt with depression here, but it was real and painful, but again ~ I probably would do it again. Somethings differently, but hindsight has always been 20/15
One thing I learned as that captain, and that’s that I could do anything I wanted to do as long as it was not against the law, immoral, or unethical. I used to tell my college computer students that they could do my lesson learned, and one day a student asked how I did it; I replied that I just did not do anything that was against the law, immoral or unethical. He smiled, at least someone did. I also told the entire class a couple of weeks into the session, targeting the girls, that they had to forget all the crap they knew about being a girl and create the fearless person that could achieve fulfillment.
Bottom line ~ I am no better or worse than you. While experience counts; sometimes it helps when shared. We all have opinions, just as we all have butts. Am I always right, hell no:-( If you have to be right; ask yourself if being right is worth killing a person, place or thing to prove your point.
Friday finally turned green for me. Thursday my gut told me we were at or close to the bottom. That was reinforced by my buy of 16 more shares at $320 on Tuesday. And then again I could be wrong:-( At which point I will have to tell my wife, I did the best I could. I think that was the sequence, if I was off a day one way or the other please just give it a rest.
Production has been stalled, but as I have stated during my tour of the plant; a lot of parts are prepositioned, ready to go. Tesla stated run times have been tested in their 3Q17. So, my day dream is that once the last adjustment is made in the bottleneck; instead of a period of hell, it will turn into ~ all hell breaking loose going into a full on run. It is easier to prepare a customer with a delay and then cheer them up with a sooner than expected delivery. Reminding us all, Tesla counts deliveries only, not sales or reservations.
Again, my writing is not about me ~ do not lose your focus. Keep your eye on Tesla and let the cars passed Also, I have tried cleaning up my writing, I just hope you are not too critical of how I said it, but what I hoped to convey.
Everything is a gamble or risk. If I did not risk failure, I would not have graduated from schooling or college, I would not have waited out the draft and avoided the military sevice, I would not have stood up against a marine (and kicked his a$$), I would not have conned my wife into marrying me forty-four and increasing years ago, and I would not be on the Tesla band wagon
While I love the money, I am not in this just and only for the money. I believe in Tesla, because out of life I would like someone in this day and age to show me the pony after all this poo I have had to dig through just to call it a life
Bruce
Recently Tesla/Elon has suffered, yet again, attacks on timing of new products, production, and hype. As some may recall, I suggested we relax, and let the dust settle. The dust has settled, and it is more or less as we suspected. Some of us were extreme one direction or another in our verbiage or thoughts unexpressed.
Slightly off topic.
While I am not in a position to report vins, I am seeing in and around Olympia, WA one and most likely two Tesla’s a day, each time I am out and about. Based on the frequency of my wife allowing me to get out of the basement
Between MS & MX, the MX is winning. I have surmised that someone in my neighborhood has also bought a blue MX just like mine. In my little world, I am impressed/happy to see more of the Tesla’s on the roads near me. This has only happened over the last two or so months.Back on target, oh I mean topic.
Please do not lose focus on what this man (Elon) is doing above all, Tesla is revolutionizing how we think, period, end of story. Please note, this is personal to me ~ soldiers in the end make it personal, otherwise. . .
Elon’s tweeting is not offering blame, lying, or cowardly behavior as demonstrated by other high profile leaders, and I use the term loosely when I say leader for some. Elon’s tweets are warning orders, you know me I am talking tactically again. Some have surmised his tweets are just setting high expectations for employees and investors; I disagree almost totally. The almost is my back door escape in the event I am wrong
Elon, in my probably not viewed humble opinion, through his warning orders is giving notice to the the world of his next bold move. You may have played this in your youth, “ready or not, here I come.” Remember the GM CEO sniveling and whining about Tesla about a year ago, now you see the tax incentive under attack, and what about other manufacturers finally, and I do mean finally declaring they are going EV. None of this would have come to light, if it were not for Elon’s tweets or public announcements over the years. You could view it like taking a 2x4 to a stubborn mule. At some point, the mule will move. My view, experience, tells me that his Tesla internal guidance is filtered through Tesla managers down to the lowest person on the food chain. The average employee may gulp when Elon tweets something, but my guess is they stand tall and focus on the task at hand to achieve his internal guidance because of the guidance from top to bottom.Leadership.
Iron fisted leaders more often than not are failures. Having lived my life as a following leader, university level professor of leadership, and frontline leader; Tesla is not a success because Elon micromanages (leads with an iron fist) every single nut and bolt, each and every seat cover, hood, or mirror; no, his team players, his managers, TESLA as a corporation has a senergy unparalleled today almost anywhere on the stock market. I wrote an article on leadership, surprised the hell out of me ~ they published it in the Field Artillery Journal, around Jan-Feb 1984 “The Sadow Effect.” I blamed micromanagement/iron fisted leadership on poorly trained officers during Vietnam, today I would modify it since I was caught in the vacuum between too many officers/NCOs and hardly any officers to share their knowledge and expertise. As I and other contributors have stated here, Elon during production hell periods, sleeps, eats, and ~ well, you get the idea, lives at the center/front lines of the problem/battle directing, and contributing to the solution. An iron fisted leader, would entertain the blame game aimed at an undefined goal, or objective. Not to mention being anywhere but on the front lines. The best senior leader I ever followed willingly, woke me up at 0300 (3 am) took me back into the planning room and told me, we were the only people in the room, that my artillery guidance for his brigade was the best he had ever read ~ it met his battle concept exactly as he invisioned it. I do not give a crap about what I wrote, what made the difference was that he took the time to wake me up and tell me himself. During that battle simulation, I was lucky during that two month period to obtain two or three hours sleep a day 24/7.
Those of us investors, owners, hedge fund managers, financial advisers, and trolls are just bystanders much like the people that would come out on the weekend to watch the Johnny reb and the blue bellies kill each other in cold blood. You know us better by the term bear and bull, or maybe short and long. We do not know what is truly happening inside camp Tesla. We are bystanders regardless of jersey. We do not have a copy of the orders, we cannot obtain first hand knowledge of what the captain, lieutenant, or sergeant is either thinking or putting into action.
Case in point, some of you have read this part before:-(
In the late 1970’s culminating in July 1983, my MLRS field artillery battery was dumped into Europe, the first. I got ten launchers instead of nine because no one command structure wise was prepared tactically to know what to do with the spare vehicle that was not allocated manpower to maintain it. As a battery we were structured to operate autonomously as a mini-battalion, but again the greater command structure did not know what to do with us, and they stole my survey ~ GPS (the first). While the department of the army allocated big bucks (no not daddy war bucks) for us to buy locks, tents, and others war materials, the European command structure saw fit or reallocate the funding leaving my soldiers without needed tools of the trade, and facing a very cold winter. Our operational status was 0% for months, because the computers did not always cooperate. Funny how in those days everything was a black box, instead of a hard drive, ram, or motherboard. I pulled in all the officers and their NCOs and listened to their maintenance stories, verified by my XO (not like the song Xs and Os ~ for god sake) he was my #1. Bottom line ~ I excused the all but my XO and First Sergeant, and told them what to write up in my training guidance which each platoon would execute weekly during their matenance checks. The plan was to drive in a large circle, mile or so, from the motor pool ending back in the motor pool. Along the route, the launcher crew would perform different tactical functions utilizing all the primary tactical functions, like uploading/downloading, and a couple of fire missions. By forcing the on board computers to be used more frequently, they worked more frequently. You may have heard of this technique, you know how you used to be told to leave your computer running 24/7. Bottom line ~ we went from 0% to 100% operational status. The plan went viral and I made sure my XO, by name got the credit, not me. I had to deal with the hate of jealous officers that believed they could have done a better job, or in some way more elite than I. I had to deal with the hate generated, not because of me, but because the other officers and enlisted soldiers saw their own jobs going away. I was scheduled to receive the first HUMMVs, but production was not meeting demand ~ really. So, we got new and used jeeps instead:-( After that command, and still a gluten for punishment, through formal command lines I asked if I could become the S-3, operations officer, of the second and last European battalion. Well, I pissed off yet another senior officer since the Corp commander assigned me the job, and the recent graduating major from the command and general staff college was being replaced by a mid grade captain. Rumors were that I was headed towards becoming a Jedi officer, that never happened. I found out that in 1987 the Russians knew me by name, that was not a current political trend; they believed in knowing their enemy.
I try NOT to tell you this as patting me on the back, but think about Tesla’s position in the world. With the deployment of my battery the US told the Russians we were deploying a rocket launcher that with one of twelve rockets could render a football field useless. No tweets in those days, not even cell phones. The rocket launcher broke more than it worked. Probably my fault for telling the soldiers to push it to the limits, so we could improve it. We were under a microscope! Tesla producing the roadster, followed by the MS gave the auto industry and fossil fuels tangible evidence of the threat Tesla posed. I could have delayed the fielding if I had not given my thirteen drug users a second chance. Talk about a bottle neck ~ I was ready to choke the NCOs involved on the positive side of the urinalysis. Maintenance nightmare? You think falcon wings were a pain in the a$$ design? Try lifting, and rotating twelve ready to fire rockets, and have the computer system relay the launcher within seconds of each rocket firing. I joked that we could do it twelve times faster and better. What message did Tesla/Elon send when he moved up the production of the M3 to 2017? How many bear stories have been written about how say Toyota has been thinking of piggybacking off the Prius line to go all electric? Do you remember how it was the customers/end user that finally convinced Toyota of the plugin version? Okay, no bear stories, but it is the typical traditional ICE automotive perspective.
Today, years, and years later ~ no one cares what it took to put that new technology on the ground, but everyone is happy to have it. The rocket launchers, the GPS, the HUMMVs and all the other equipment associated with the fielding. The ones not so happy are Jeep assembly line people, cannon bunnies, old traditional surveyors and others. Oh, I almost forgot the intranet, you know too well the internet side of life today, we were the first secure WiFi guys on the block
So, if I made the story clear, you can see the parallels and maybe begin to grasp what it is that Tesla/Elon is trying to accomplish. No, I have not dealt with depression here, but it was real and painful, but again ~ I probably would do it again. Somethings differently, but hindsight has always been 20/15
One thing I learned as that captain, and that’s that I could do anything I wanted to do as long as it was not against the law, immoral, or unethical. I used to tell my college computer students that they could do my lesson learned, and one day a student asked how I did it; I replied that I just did not do anything that was against the law, immoral or unethical. He smiled, at least someone did. I also told the entire class a couple of weeks into the session, targeting the girls, that they had to forget all the crap they knew about being a girl and create the fearless person that could achieve fulfillment.
Bottom line ~ I am no better or worse than you. While experience counts; sometimes it helps when shared. We all have opinions, just as we all have butts. Am I always right, hell no:-( If you have to be right; ask yourself if being right is worth killing a person, place or thing to prove your point.
Friday finally turned green for me. Thursday my gut told me we were at or close to the bottom. That was reinforced by my buy of 16 more shares at $320 on Tuesday. And then again I could be wrong:-( At which point I will have to tell my wife, I did the best I could. I think that was the sequence, if I was off a day one way or the other please just give it a rest.
Production has been stalled, but as I have stated during my tour of the plant; a lot of parts are prepositioned, ready to go. Tesla stated run times have been tested in their 3Q17. So, my day dream is that once the last adjustment is made in the bottleneck; instead of a period of hell, it will turn into ~ all hell breaking loose going into a full on run. It is easier to prepare a customer with a delay and then cheer them up with a sooner than expected delivery. Reminding us all, Tesla counts deliveries only, not sales or reservations.
Again, my writing is not about me ~ do not lose your focus. Keep your eye on Tesla and let the cars passed
Also, I have tried cleaning up my writing, I just hope you are not too critical of how I said it, but what I hoped to convey.Everything is a gamble or risk. If I did not risk failure, I would not have graduated from schooling or college, I would not have waited out the draft and avoided the military sevice, I would not have stood up against a marine (and kicked his a$$), I would not have conned my wife into marrying me forty-four and increasing years ago, and I would not be on the Tesla band wagon
While I love the money, I am not in this just and only for the money. I believe in Tesla, because out of life I would like someone in this day and age to show me the pony after all this poo I have had to dig through just to call it a life
Bruce
@DragonWatch, thank you for that post, and the reason you are able to write it.
Reading it, I had a thought which may be pure fantasy on my part.
Maybe Elon is trying to protect average people type personal investors who have gotten swept up in the short fever. He knows what the plan is for production, what the numbers will be, just not exactly when. Like the groaning of an overloaded beam or dam, he is trying to warn those below/ downstream "This is going to happen, get out while you can".
Is he human? Yah.
Do the negative stories hurt? Yes.
Does he want everyone to get hit with the hammer of reverse-Enron? I don't think so.
So what can he do? Give the most fact based optimistic timeline, and hope they listen.
It's too late to warn when the flood has already arrived.
Reading it, I had a thought which may be pure fantasy on my part.
Maybe Elon is trying to protect average people type personal investors who have gotten swept up in the short fever. He knows what the plan is for production, what the numbers will be, just not exactly when. Like the groaning of an overloaded beam or dam, he is trying to warn those below/ downstream "This is going to happen, get out while you can".
Is he human? Yah.
Do the negative stories hurt? Yes.
Does he want everyone to get hit with the hammer of reverse-Enron? I don't think so.
So what can he do? Give the most fact based optimistic timeline, and hope they listen.
It's too late to warn when the flood has already arrived.
Came back from a deserved(?) holiday and break of all things Tesla (not completely, I tried). I am probably missing it, but I don't find any serious discussion on the conference call nor the 10-Q. Where should I look?
For now I am reading the transcript of the call. A bit puzzled by the inventory. Not so much with their plan to reduce it (I was hoping they'd already do so this quarter). But specifically that they need to scale down production? From every single metric it's clear demand is really strong and higher than current S/X production capacity. Inventory will draw lower naturally even if they keep production up, so why go an extra mile?
For now I am reading the transcript of the call. A bit puzzled by the inventory. Not so much with their plan to reduce it (I was hoping they'd already do so this quarter). But specifically that they need to scale down production? From every single metric it's clear demand is really strong and higher than current S/X production capacity. Inventory will draw lower naturally even if they keep production up, so why go an extra mile?
JRP3
Hyperactive Member
I bought more during the dip and am quite happy about it. When possible I have always bought more on severe drops and have never regretted it, (other than regretting I couldn't buy even more.)
curious if anyone has studied the debt covenants attached to the recent aug 11 issue of senior secured notes.
the way i read these the most restrictive of the covenants is that new secured debt added after these notes has to be less than 2.75x trailing 12m ebitda. ebitda dropped a bunch this quarter, and based on producing only a few thousand model 3's the rest of the year will be similarly low next quarter. if i am interpreting this correctly, it means tesla's ability to add any kind of secured debt will shrink down to $1.2-1.5b after the end of q4 2017.
i suspect this is why they talked about much more disciplined capital spending on the call.
i don't want to go deeper down this wormhole until i feel good my interpretation is correct so wondering if anyone else has studied the situation?
the way i read these the most restrictive of the covenants is that new secured debt added after these notes has to be less than 2.75x trailing 12m ebitda. ebitda dropped a bunch this quarter, and based on producing only a few thousand model 3's the rest of the year will be similarly low next quarter. if i am interpreting this correctly, it means tesla's ability to add any kind of secured debt will shrink down to $1.2-1.5b after the end of q4 2017.
i suspect this is why they talked about much more disciplined capital spending on the call.
i don't want to go deeper down this wormhole until i feel good my interpretation is correct so wondering if anyone else has studied the situation?
JRP3
Hyperactive Member
I'm not a huge fan of Cramer but his recent piece accurately reflects my attitude on the stock:
Whither Tesla and Facebook -- Jim Cramer's Top Thoughts
They can produce 90% of the S/X cars with 66% of the workers, as they are removing an entire shift due to efficiency improvements. Furthermore, they will make up the extra 10% again in the next few months due to further improvements. Seems like a good opportunity to allocate those workers to Model 3, rather than needing to hire more Model 3 workers and perhaps lay off one of the S/X shifts later.
Another reason to view this as good news is that presumably they can now increase Model S/X capacity by 50% at some point in future without a new line, just by adding back the third shift. It might take some time for suppliers to be able to do that though, and of course they will want to wait to see how demand for the S/X holds up as wait times for the 3 go down.
Also there might well be some significant upgrades for S and X, so the production can moderate a bit while they incorporate the changes. The ostensible reason, to move the third short to the Model 3, certainly makes sense too.
Are you referring to section 4.07(c) from the 10-Q as follows
2017-Q3 10-Q said:
The way I read it there is a limit up to which Tesla may create new debt without additional guarantees for note holders. That limit is the greatest of 3 amounts. One of those amounts is $3B. That means the limit is at least $3B. Also, the section refers to 4.07(a) which only says that should new debt be higher, the notes in question should be unsubordinated to it.
They innovated in detecting when the cars are being emissions tested vs driven in real life. They built software to pollute more in reality. Audi also did some R&D on how electric cars should sound - Audi developing powertrain sound of the future for R8 e-tron - getting them to actually drive is secondary - they must sound good first.
Your reading is correct IMHO. That is a standard covenant in any secured debt transaction in order to ensure that the security position will not be compromised by future financings. You did not point out that the $3.0 billion is Aggregate Debt. This is a significant constraint unless Tesla actually delivers the expected growth from Model 3, in which case the second or grid limit will probably be the ruling one.
FWIW, this does not seem to be very onerous to me. They only are constrained if things go very much wrong. If things go very much wrong we all will have more material problems anyway. At least that's my point of view.
You are right. I missed that. I thought it was just new debt but it is not. Sorry @luvb2b ! Anyway, it's Model 3 or bust for Tesla regardless so I agree with you that in practice if this convenant were a problem next year, there are bigger issues anyway...
Was anyone else surprised when Elon gave the 200k production number for 3 & Y combined for China GF? I know it was “at least”, but it still surprised me as did the timeline.
If he actually meant what he said I guessed the suggestion is that the Chinese factory would structurally resemble Tilburg. I was surprised mostly because I imagined this would be much more ambitious. Maybe we'll see more announcements of other facilities in China.
dennis
Model S Plaid
The third shift is not a full shift. It was added 9 months ago to reduce overtime and repetitive stress injuries among the factory workers. Musk also said during the CC that they couldn't increase S/X production significantly without additional capex.
dennis
Model S Plaid
I don't see Tesla moderating production to incorporate the changes so much as reducing production to draw down the inventory as low as possible in Q4. That way when (if?) they introduce a new interior at the beginning of Q1 they will have fewer inventory cars that need to be discounted. I know it is a subtle distinction, but every time they have made a significant product upgrade they have ceased production for several weeks to incorporate the changes.
sundaymorning
Active Member
I think Tesla wants 2-3 of these factories, which can easily be expanded similar to Reno.
I wonder whether they will do an interior refresh before emerging from Model 3 production hell? I assume that they want all of their top production and engineering resources available to work on the Model 3. While an interior refresh is not the most difficult task imaginable, I would think it would take considerable attention to make sure all goes smoothly in production. Since Model S and X demand seem to be doing just fine, why not hold off for another quarter or two and keep "all hands on deck" for the Model 3?
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I'm guessing they are subtly signaling an update to S/X "soon". Probably meant to do it just about now, but bottlenecks got in the way and also made it both unneeded and a bit dangerous. Elon said S/X will always top 3, and it keeps value and price high; and margins, obviously.
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