2017 Investor Roundtable: TSLA Market Action

[RobStark]

Its not going to get cheaper then asphalt because that product is only made to last 15 years,

My dad's asphalt roof is 22 years old. Without any maintenance or repairs.

 

[Richgoogol]

Based on historical data, do Adam Jonas notes move the SP or not?
IIRC they actually do move the SP and they move it in the direction intended by the corresponding note.

Based on the fact that he is one of the biggest bull for TSLA, I'd assume that it's gonna move a needle quite a bit. I am really hoping I am wrong though.

 

[ValueAnalyst]

Having just looked into doing a Tesla solar roof on a large home in the midwest, it is roughly 10x more expensive than doing an asphalt roof with solar panels here. Payoff on the asphalt/solar panels is way way quicker than the Tesla solar tiles. The only real argument for it is that it looks better than a traditional roof with solar panels. Let's see them out in the wild and find out about that, but I'm not sure that many of us will pay 10x more for a better looking roof that provides similar solar energy to an asphalt/solar panels roof. The infinity argument is limited since not many of us actually plan to spend infinity in our homes let alone even 20+ years. Perhaps it will maintain the value of the home better but that remains to be seen as well. I like the product but I wish it was a lot cheaper!

1. Are you excluding the cost of multiple asphalt roofs since an asphalt roof lasts only 15-20 years? Need to incorporate at least two, maybe three, at a cost of $15k each including labor cost for removal of old and installation of new.

2. Also, if the Solar Roof infinity warranty is transferrable to a new owner, and I believe that it is (although I'm not 100%), it doesn't matter if the current owner stays in the house for 20+ years.

 

[Reciprocity]

My dad's asphalt roof is 22 years old. Without any maintenance or repairs.

Lucky him. Hail and wind can destroy an asphalt roof quick. Also intense heat/sun can lower the life. Your Warrenty doesn't cover hail and wind.

 

[Reciprocity]

Having just looked into doing a Tesla solar roof on a large home in the midwest, it is roughly 10x more expensive than doing an asphalt roof with solar panels here. Payoff on the asphalt/solar panels is way way quicker than the Tesla solar tiles. The only real argument for it is that it looks better than a traditional roof with solar panels. Let's see them out in the wild and find out about that, but I'm not sure that many of us will pay 10x more for a better looking roof that provides similar solar energy to an asphalt/solar panels roof. The infinity argument is limited since not many of us actually plan to spend infinity in our homes let alone even 20+ years. Perhaps it will maintain the value of the home better but that remains to be seen as well. I like the product but I wish it was a lot cheaper!

Your doing the wrong calculation. Why would any expect there roof to pay for itself. You need to look at only the cost for the solar portion and compare that to panels. You would get more value from the tile roof then the asphalt, meaning your house will be worth more after the job is done with tile vs asphalt.

 

[moe.salih]

Your doing the wrong calculation. Why would any expect there roof to pay for itself. You need to look at only the cost for the solar portion and compare that to panels. You would get more value from the tile roof then the asphalt, meaning your house will be worth more after the job is done with tile vs asphalt.

This discussion doesn't belong here. Let's keep the threads on topic please.

 

[RobStark]

Lucky him. Hail and wind can destroy an asphalt roof quick. Also intense heat/sun can lower the life. Your Warrenty doesn't cover hail and wind.

I don't think he is all that lucky. This is typical around these parts.

We live in a desert with lots of heat/sun. But no real hail/wind damage here.

We don't know the fine print yet on Tesla Solar Roof.

 

[Sudre]

I don't know what crack everyone is smoking. Complete loss on me over here looking at the Tesla roof. I had a roof put on my house and it was over $12,000 in 2003. That roof was an imitation asphalt shingle 50 year roof (which really doesn't last 50 years.)
I just ran the price for a Tesla roof with no solar and.... ITS CHEAPER THE SHINGLES! $11,300.

I just had 12kW of solar put on my roof three years ago. It was over $55,000 not including credits and tax incentives. Tesla's solar roof is CHEAPER than my roof plus the my solar.

The problem is Tesla is not releasing the information like what is the kWh of the their roof.
I don't think people are actually doing the math or I am doing something wrong with the Tesla calculator.

 

[DurandalAI]

Lucky him. Hail and wind can destroy an asphalt roof quick. Also intense heat/sun can lower the life. Your Warrenty doesn't cover hail and wind.

I wonder if the warranty covering hail on a Tesla solar roof would negate increased insurance costs?
Anyhow, wishing I had extra $$ to spend on buying more TSLA today. It'll be a good buying opportunity. I'm hoping my $305 SP stop loss won't trigger, but if it does, oh well, I'll simply buy back in once it levels out again. I'm only looking to hedge on massive downturns, so even if I buy back at $305, it's worth it to me to spend the $6 to stem potential loss. I'm still up 54% overall, and I'm very long, but the last dip did allow me to get some more stock by having sold on my stop loss and then buying more on at the end of the dip.

I doubt that Jonas knows anything that we don't know, so I'm not worried on the long run. In Elon I trust.

 

[CyberDutchie]

Based on the fact that he is one of the biggest bull for TSLA, I'd assume that it's gonna move a needle quite a bit. I am really hoping I am wrong though.

No, he leaves the price target unchanged: $305

He uses a weird logic for that, which I don't quite understand. The downgrade is really nothing more than a change in their stock rating, from overweight to equal-weight.

 

[sahanim]

Shorts were reloading last week. This was perfect Canon fodder

 

[brian45011]

To be fair, the dot com bubble happened for very specific reasons

Y2K

 

[RobStark]

I don't know what crack everyone is smoking. Complete loss on me over here looking at the Tesla roof. I had a roof put on my house and it was over $12,000 in 2003. That roof was an imitation asphalt shingle 50 year roof (which really doesn't last 50 years.)

You paid $12 sq/ft for asphalt in 2003?

 

[DurandalAI]

I don't know what crack everyone is smoking. Complete loss on me over here looking at the Tesla roof. I had a roof put on my house and it was over $12,000 in 2003. That roof was an imitation asphalt shingle 50 year roof (which really doesn't last 50 years.)
I just ran the price for a Tesla roof with no solar and.... ITS CHEAPER THE SHINGLES! $11,300.

I just had 12kW of solar put on my roof three years ago. It was over $55,000 not including credits and tax incentives. Tesla's solar roof is CHEAPER than my roof plus the my solar.

The problem is Tesla is not releasing the information like what is the kWh of the their roof.
I don't think people are actually doing the math or I am doing something wrong with the Tesla calculator.

That $11,300 is insanely cheap. What's the SqFt of your roof, and general location? Seriously, I would consider swapping out my metal roof with something as low as 20% solar tiles if it is that cheap.. Time to take a look at the calculator.. Man.

 

[CyberDutchie]

@mulder1231 -- thanks for the update.

Out of curiosity, does Jonas add any color on why they haven't updated their production estimates since he says others in the market have (although the market is still forecasting well below Tesla's estimates, according to him). How does he justify his estimate of only 90,000 Model 3s in 2018, for example?

"Model 3 expectations appear to have recovered substantially over the last 4 months. Earlier this year investor expectations for Model 3 hit a trough with most investors we spoke with at that time expecting zero deliveries of the model during 2017 A series of subsequent reiterations from management and the spotting of release candidates testing on public roads have increased expectations of timing and volume significantly. Although we cannot quantify what the market expectation is at this point, we believe our forecast of 2k Model 3 deliveries this year is substantially below current market expectations. Looking to 2018, we believe our 90k volume forecast is also far below Street expectations, possibly one-half or one-third market expectations for Model 3 volume next year."​

He is sticking to his low-ball forecast. He just acknowledged that the gap is widening with other analysts. Therefore he must downgrade, because the street has gotten too optimistic in his view. A weird kind of logic, I agree.

This is how he again stands by his Model 3 forecast in the note:

We continue to forecast 2k Model 3 deliveries by year-end with 90k sold next year. We do not expect Tesla to pass the 500k mark in Model 3 deliveries before 2024. Roughly 25% of our price target is based on our valuation of a shared, automated transport service we expect the company to unveil shortly with what we estimate would be a fleet of 5,000 cars by the end of 2018, growing to over 100k units by 2022, more than 1 million units by 2027 and nearly 1.9 million units by 2030 at which point we expect Tesla to be executing nearly 120 billion miles per year or a 70bps share of the global miles market.

 

[racer26]

Man; you guys must all live in bungalow style mansions.

10,000 sqft roof on a house is humongous. I ran the numbers for my brother's 950sqft roof. It works, cheaper than asphalt, and without the 30% ITC (because we're in Canada.)

My brother's house is small at around 1000 sqft 1.5 storey, but even my parents 2020sqft 2-storey house (which is quite average in our area) only has somewhere in the neighborhood of 2000 sqft of roof surface area.

If you have 10,000 sqft of roof area, you probably only need maybe 20% of it active to generate your daily energy needs. My brother's house needed 95% active, which I don't even know if that's actually possible.

 

[Reciprocity]

I don't think he is all that lucky. This is typical around these parts.

We live in a desert with lots of heat/sun. But no real hail/wind damage here.

There is wind and hail in lots of places..to stay on topic, that means its good for investors.

So by your logic, your father would only have to replace his roof 4x more often then someone with a solar roof. He would have to have his solar reinstalled 4x as well. You can say, well he wont live to be 170 so its ok. But the value or lack there of is still part of the home. Meaning, if your father put on a solar tile roof on his house 22 years ago, it would still have a 78 years of life, whereas his current situation is that someone will look at the roof and say, "that thing needs to be replaced soon" and lower the value of the home by $10,000 or more.

The equation is simple. You are buying a $50,000 roof for your house it will add more value to home then the $12,000 roof regardless of solar. Solar would add another $20,000 in this scenario to both. Yes it will cost you $70,000 and you might think how that's expensive, but in 25 years, its still worth $50,000 and the other roof is worthless. But wait, why is the solar roof tile still worth the same? Because inflation. Its wroth he replacement cost. So in actuality, the the worthless roof is actually a $15,000 bill because it needs to be replaced immediately, before it causes even more costly damage. That super expensive tile roof doesn't seem so expensive anymore right? You dont have to live to be 170 to enjoy the value. When you list your house and your roof as an infinite warranty and looks unbelievable compared to the houses around it, then it will help you sell your house and you will get much of the value out. Your roof will actually appreciate for much of its life. Yes, it will actually become more valuable because you wont be able to replace it at the original cost.

Do I think people will think about this in making their decisions. Well, if I cant even get highly technical, solar fanatics to understand it then I guess I probably higher expectations then I should.

 

[Reciprocity]

Man; you guys must all live in bungalow style mansions.

10,000 sqft roof on a house is humongous. I ran the numbers for my brother's 950sqft roof. It works, cheaper than asphalt, and without the 30% ITC (because we're in Canada.)

My brother's house is small at around 1000 sqft 1.5 storey, but even my parents 2020sqft 2-storey house (which is quite average in our area) only has somewhere in the neighborhood of 2000 sqft of roof surface area.

If you have 10,000 sqft of roof area, you probably only need maybe 20% of it active to generate your daily energy needs. My brother's house needed 95% active, which I don't even know if that's actually possible.

This is a good example of why the solar roof will not be the right solution for everyone and that's ok. As long as its the right solution for 20% of the market, then it will be revolutionary and thus the stock price will go up..

Edit: Lets not forget solution that Sunpower and LG and Canadian solar has for solar roof tiles. Wait.. I forgot, no one has a solar roof tile that doesn't look like hot garbage. Tesla will be taking business from competitors where maybe it wouldn't have been able to play in before.

 

[landis]

When people get there car and start charging at home they will find what I did. Your electric bill goes up as your gas bill goes down. This was my experience and I went from 15 year payback to 5 year literally over night.

And heating oil bills can also be subsumed into solar calculations.

I have a preliminary quote from a few months ago from a local multi-disciplinary (solar, HVAC, insulation) local installer. I am still sitting on the fence because of imminent Tesla solar and power wall 2, and because the quote seems too good to be true. It was sized for current electricity (150kWh/week), plus 100kWh/week for M3, plus heating oil replaced with mini-split heat pump. It seemed to be a 0 year payback, and I was also getting whole house air conditioning for FREE.

In the northeast heating oil is common. My heating oil bill for a year is more than my annual (elected as wind sourced) electricity. The P+I payments on a 15-20 year home equity loan for 21 panels together with heating oil boiler replacement by multi unit mini-split heat pump was LESS than my current electricity + heating oil bills! There is sufficient spring/summer capture, for net metering here in PA to offset lower winter capture, which is why they want to install early in the year.

I presume the necessary site visit would add in some remedial insulation costs (to complement the insolation to satisfy the heat pump assumptions in the proposal, which are likely to add some years to the payback timeframe.

I have been primarily waiting because my 'hip' roof (with east, south, west, north facing sides) is ripe for replacement. OK, and just maybe because I am obsessed with all things Tesla. The roof calculator is recommending 70% active which I don't really believe, since Google sunroof project doesn't cover my zip code. However it could actually be plausible with active tiles on south, west, east (at least dormer portion) sides of the hip roof. The calculator showed $54K energy over 30 years exactly matching the cost of roof, with net from the credit minus the cost of the powerwall(s). I am still stalling because Tesla slate would look awesome on our two story quarry stone house built in the 1920's, and would remove the last bit of periodic outside maintenance on the home itself.

What I would really like to do is combine the proposal for heat pumps and insulation with Tesla solar and power walls.

Waiting for Tesla slate, financing M3, and unsure that we will stay long enough are the primary things holding me back. That and my wife is more interested in a 'tiny house'. So maybe some TSLA action over next years will make a tiny home for extended vacations in retirement possible.

Edit: fixed QUOTE markers.

 

[MartinAustin]

Already $3 higher than the low today... buying opportunity evaporating fast!!!