2017 Investor Roundtable: TSLA Market Action

[MitchJi]

MitchJi are you planning on kicking off your leveraged strategy?

No firm plans yet.

Leaning towards doing it in phases.

 

[ValueAnalyst]

If the Shanghai news is confirmed, we touch 400

I don't know... I think TSLA will conquer $400 anyway sooner rather than later, but for China news to be significant, imo, it would have to be accompanied with some positive details such as larger production capacity, favorable JV terms, quicker than Gigafactory 1 timeline, etc.

 

[MitchJi]

I have listened to Jeff Dahn's interviews, in which Jeff points to significant improvements that are being implemented in Tesla's products now.

He corrected that statement and said not yet.

 

[austinEV]

I sold my weeklies earlier so that caused it to go up. You all owe me.

 

[ValueAnalyst]

NO

You spoke too early, my friend.

I've been proven too conservative too many times to never say never when it comes to Elon & Team.

Remember this?

I laughed so hard when I saw this. I thought to myself, "what a jokester this Elon!"

Six months... it took six months for an impossible joke to become a reality.

Six months.

 

[Reciprocity]

I don't know... I think TSLA will conquer $400 anyway sooner rather than later, but for China news to be significant, imo, it would have to be accompanied with some positive details such as larger production capacity, favorable JV terms, quicker than Gigafactory 1 timeline, etc.

The more I think about the JV terms the less I think it matters. The prevailing belief is that the downside to a JV is that Tesla is forced to share profits. Well the JV will also share in the expenses. Do we really expect Tesla to actually have large profits from the JV in China in the next 5-10 years as they expand to multiple GFs. I am bad at math and stuff but here we go:

$45k ASP with 25% tax would be $11,250 more in total price to consumers. Let's say for every 5K you lower the price your market goes up 2x. So lets say the market for Model 3 is 1M per year from a single GF. If the price was $11.25k more the market would shrink fast to just 250K cars. Yes, Tesla would get the entire net profit on those 250k cars if they where built in the US and shipped over or they could split the 10% net profit with a Chinese JV and just raise the price on the cars in China by $2,250 to offset the JVs cut (not that I think they would). The net would be 1.125B revs on 250k cars at 10% net profit vs 2.25B for 1M cars at 5% net profit. I will take door number two, thanks. Again, only the net profits from China would be split after Tesla builds multiple of the 10-20 GFs worldwide in China. Maybe 3, maybe 4? Tesla wont have profits in China for decade while they build to 5-6M cars a year and all the while the JV is funding half the costs.

But, but, the JV is going steal all of Tesla's ideas and do it themselves. Just like they have done so successfully with the Iphone where Apple has 34% Market share and 90-104% of the profits? I see the same future for Tesla and the JV does not scare me.

 

[EinSV]

You spoke too early, my friend.

I've been proven too conservative too many times to never say never when it comes to Elon & Team.

Remember this?

View attachment 232328

I laughed so hard when I saw this. I thought to myself, "what a jokester this Elon!"

Six months... it took six months for an impossible joke to become a reality.

Six months.

Today is Thursday here in California (not Friday). But maybe you are somewhere on the other side of the Intl date line?

 

[mejojo]

You spoke too early, my friend.

He said "NO" to FRIDAY. I'm sure he meant "YES" for TODAY.

 

[ValueAnalyst]

Today is Thursday here in California (not Friday). But maybe you are somewhere on the other side of the Intl date line?

Hahahaha oh boy. I had 4 hours of sleep last night...

Days kinda blur for me. I like 8- hour work days so much that I do 'em twice a day.

I'm on the East Coast US.

 

[elasalle]

The more I think about the JV terms the less I think it matters. The prevailing belief is that the downside to a JV is that Tesla is forced to share profits. Well the JV will also share in the expenses. Do we really expect Tesla to actually have large profits from the JV in China in the next 5-10 years as they expand to multiple GFs. I am bad at math and stuff but here we go:

$45k ASP with 25% tax would be $11,250 more in total price to consumers. Let's say for every 5K you lower the price your market goes up 2x. So lets say the market for Model 3 is 1M per year from a single GF. If the price was $11.25k more the market would shrink fast to just 250K cars. Yes, Tesla would get the entire net profit on those 250k cars if they where built in the US and shipped over or they could split the 10% net profit with a Chinese JV and just raise the price on the cars in China by $2,250 to offset the JVs cut (not that I think they would). The net would be 1.125B revs on 250k cars at 10% net profit vs 2.25B for 1M cars at 5% net profit. I will take door number two, thanks. Again, only the net profits from China would be split after Tesla builds multiple of the 10-20 GFs worldwide in China. Maybe 3, maybe 4? Tesla wont have profits in China for decade while they build to 5-6M cars a year and all the while the JV is funding half the costs.

But, but, the JV is going steal all of Tesla's ideas and do it themselves. Just like they have done so successfully with the Iphone where Apple has 34% Market share and 90-104% of the profits? I see the same future for Tesla and the JV does not scare me.

Nice write up.

My 2 cents.
I think it matters because the question being asked before was:
"How can Tesla produce 500K cars in 2018 ?" with the assumption that this would all happen in Fremont

 

[geneclean55]

So ATH as resistance, and then... Upper BB?

 

[mickificki]

what's the target for the upper BB?

 

[geneclean55]

what's the target for the upper BB?

395

 

[winfield100]

was there a buy of (aggregated) ~280,000 shares around 10:05- 10:15 or so?

 

[geneclean55]

It needs to power thru 383

 

[FredTMC]

My Ameritrade news feed for TSLA says tesla released a statement about china.

Anyone seeing anything?

Ameritrade news feed is a joke

 

[ValueAnalyst]

The more I think about the JV terms the less I think it matters. The prevailing belief is that the downside to a JV is that Tesla is forced to share profits. Well the JV will also share in the expenses. Do we really expect Tesla to actually have large profits from the JV in China in the next 5-10 years as they expand to multiple GFs. I am bad at math and stuff but here we go:

$45k ASP with 25% tax would be $11,250 more in total price to consumers. Let's say for every 5K you lower the price your market goes up 2x. So lets say the market for Model 3 is 1M per year from a single GF. If the price was $11.25k more the market would shrink fast to just 250K cars. Yes, Tesla would get the entire net profit on those 250k cars if they where built in the US and shipped over or they could split the 10% net profit with a Chinese JV and just raise the price on the cars in China by $2,250 to offset the JVs cut (not that I think they would). The net would be 1.125B revs on 250k cars at 10% net profit vs 2.25B for 1M cars at 5% net profit. I will take door number two, thanks. Again, only the net profits from China would be split after Tesla builds multiple of the 10-20 GFs worldwide in China. Maybe 3, maybe 4? Tesla wont have profits in China for decade while they build to 5-6M cars a year and all the while the JV is funding half the costs.

But, but, the JV is going steal all of Tesla's ideas and do it themselves. Just like they have done so successfully with the Iphone where Apple has 34% Market share and 90-104% of the profits? I see the same future for Tesla and the JV does not scare me.

JV is more than just math; it's about getting the government's blessing to access a market that is 2-3x the size of US market.

Also, you may be making too many assumptions that are simply unknowable at this time.

 

[geneclean55]

My Ameritrade news feed for TSLA says tesla released a statement about china.

Anyone seeing anything?

Ameritrade news feed is a joke

This?
Tesla says exploring China car plant with Shanghai government

 

[mmd]

My Ameritrade news feed for TSLA says tesla released a statement about china.

Anyone seeing anything?

Ameritrade news feed is a joke

Yes. it was an announcement about a future announcement.
Tesla says exploring China car plant with Shanghai government

(Reuters) - Tesla Inc (TSLA.O) is exploring the possibility of establishing a Chinese manufacturing plant with the Shanghai municipal government, the U.S. electric carmaker said on Thursday in a statement.

Tesla said it expects to "more clearly define" its China production plans by year end.

"How can Tesla produce 500K cars in 2018 ?"
Sure it can. Define the plan on Dec 31st; produce 500k cars in China in 2018 beginning the next day.

 

[DurandalAI]

My Ameritrade news feed for TSLA says tesla released a statement about china.

Anyone seeing anything?

Ameritrade news feed is a joke

Can't be much worse than Yahoo Finance. lol