2017 Investor Roundtable: TSLA Market Action

[neroden]

Ha, I got my TSLA at $37, bought my MS few month later, financed at .99% for 6 years, successfully paying the loan using proceeds of my trading, and keeping every one of these shares I bought at $37. Not selling these shares. Too risky to sell for me.

Heh. I bought my Model S in cash which came primarily from selling XOM and AmEx stock back in 2008. (Yes, I was sitting on a lot of cash for several years -- Great Recession spooked me about going back into the market.) I got into TSLA at $24.35 and accumulated more over the years, slowly selling other stocks and reducing my cash position; my last purchase was at $313.43.

It makes no sense to sell before Model 3 is in mass distribution.

And I'm still kicking myself for not buying way more TSLA early and for not buying when it was below $20. I was distracted at the time, though.

 

[Tslynk67]

This could be an indication of a refreshed interior coming soon.

Not sure about that - they just added a pile of new stuff - cycling the demo vehicles for new ones I guess.

I don't expect a refresh on the X yet, hasn't even been in production for two years. In any case, owners coming from the S to the X report that the interior is much more functional, air-conditioning is much better, and so on. So perhaps an S refresh might come first to fix a few of the niggles (coat-hangers anyone? )

 

[schonelucht]

There seems to be a push to sell inventory : According to, SoCal Jimmy, the guy that drove many discounted sales from this forum in 16Q3, it feels like those times are coming back. His OA has leases as low as mid $700 on 90D. Fantastic Tesla 90D Lease deals for someone ready to jump on it now - and then there is also Tesla offering cars directly on Autotrader Tesla Model S CPO Website - Now Live

 

[vgrinshpun]

There seems to be a push to sell inventory : According to, SoCal Jimmy, the guy that drove many discounted sales from this forum in 16Q3, it feels like those times are coming back. His OA has leases as low as mid $700 on 90D. Fantastic Tesla 90D Lease deals for someone ready to jump on it now - and then there is also Tesla offering cars directly on Autotrader Tesla Model S CPO Website - Now Live

Is it going to produce a major "hit" to the margins like I was told it would in 2016Q3 (it did not)?

 

[MartinAustin]

There seems to be a push to sell inventory : According to, SoCal Jimmy, the guy that drove many discounted sales from this forum in 16Q3, it feels like those times are coming back. His OA has leases as low as mid $700 on 90D. Fantastic Tesla 90D Lease deals for someone ready to jump on it now - and then there is also Tesla offering cars directly on Autotrader Tesla Model S CPO Website - Now Live

Hardware 2.5

 

[schonelucht]

Is it going to produce a major "hit" to the margins like I was told it would in 2016Q3 (it did not)?

I don't know what you were told. I do know you were telling me that quarter Tesla doesn't discount.

But no. It is not going to be major. If they manage to sell the extra 3k cars from inventory that I am hoping for, at an additional 10% discount, then we are looking at 1,3%. But that's assuming those sales are going to be straight sales, which they aren't. Most were lease deals in '16 and there is no reason to assume otherwise for this quarter. So the hit is not taken in one quarter but spread out over the leasing period (or alternative when the lease ends if residuals are set too high). All in all at most a few tenth of a percent this quarter.

 

[SBenson]

There seems to be a push to sell inventory : According to, SoCal Jimmy, the guy that drove many discounted sales from this forum in 16Q3, it feels like those times are coming back. His OA has leases as low as mid $700 on 90D. Fantastic Tesla 90D Lease deals for someone ready to jump on it now - and then there is also Tesla offering cars directly on Autotrader Tesla Model S CPO Website - Now Live

Interior refresh?
Battery upgrade?
AP HW 2.5?

All of them?

 

[Tslynk67]

Hardware 2.5

Doesn't really fit what has been reported:

Tesla has a new Autopilot ‘2.5’ hardware suite with more computing power for autonomous driving

“The internal name HW 2.5 is an overstatement, and instead it should be called something more like HW 2.1. This hardware set has some added computing and wiring redundancy, which very slightly improves reliability, but it does not have an additional Pascal GPU.”

“However, we still expect to achieve full self-driving capability with safety more than twice as good as the average human driver without making any hardware changes to HW 2.0. If this does not turn out to be the case, which we think is highly unlikely, we will upgrade customers to the 2.5 computer at no cost.”

For inventory P100D's there was a dramatic price-reduction when they bundled nearly every option in the standard pricing. Some cars literally dropped by €20k overnight. The one I have bought, I'm paying €154k (including taxes), versus an original price of €195k, or something like that.

 

[schonelucht]

Interior refresh?
Battery upgrade?
AP HW 2.5?

All of them?

All of them. I would also add

- Cash generation

 

[MartinAustin]

Doesn't really fit what has been reported:
we will upgrade customers to the 2.5 computer at no cost.

Fair point. This is getting like watching Apple's inventory of Macs at the Apple Stores. Whenever supply dries up mysteriously there is usually something new about to debut

 

[tftf]

Leaf 2 is a 40kWh battery with 160 miles range, and no DCFC on the lowest trim without option, limited distribution to un-interested dealers.
Bolt has no DCFC on the lowest trim without option, still has limited availability to a few states, and an un-interested dealer network.
*snip*

Basically all the examples you listed (with the exception of the upcoming Ioniq revision, the Bolt and the LEAF 2) are about short-range EVs from the present or past.

As I outlined in my post (and before that for years) wait until 2018-2021 for all large car makers to release long-range EVs based on dedicated platforms (which means many cars coming for each car maker).

To your examples:

- The LEAF 2 will almost certainly get a 50 or even 60 kWh option in 2018+, the rumored 40 kWh option is just the base option at an estimated $30k.

- The Honda BEV I mentioned is not the Clarity EV compliance car, but a new EV (one coming for China, one for the rest of the world).

- There are many other EVs in Europe or China you didn't list. To value a company on revenues and bottom line, look at global sales, not just NA sales.

All in all, well other 100 long-range EVs (from dedicated BEV platforms, not one offs!) will be released by large car makers until 2025.

In my opinion, the LEAF 2 will be the first global long-range mass-market EV at $30-40k.

The Model3 will cost well above $40k with just a few options, not really mass-market pricing (and the Model3 won't ship internationally until "late 2018", apparently that even includes Canada! 18 or more months away, not really a car one can buy...).

PS: Before someone shouts "missing SC network" that will also be taken care of with 450+ stations in just the first cycle over the next 30 months:

https://www.electrifyamerica.com/downloads/get/38726

(i.e. both CCS and Chademo charging at 150kW+ for highways and slower charging for urban areas).

 

[ev-enthusiast]

Did Guggenheim reiterate their buy rating and $430 price target today?

 

[jbcarioca]

Heh. I bought my Model S in cash which came primarily from selling XOM and AmEx stock back in 2008. (Yes, I was sitting on a lot of cash for several years -- Great Recession spooked me about going back into the market.) I got into TSLA at $24.35 and accumulated more over the years, slowly selling other stocks and reducing my cash position; my last purchase was at $313.43.

It makes no sense to sell before Model 3 is in mass distribution.

And I'm still kicking myself for not buying way more TSLA early and for not buying when it was below $20. I was distracted at the time, though.

I resemble those comments, although my 2008 sales were different. I was doing a large mortgage portfolio evaluation for a client considering buying the portfolio. I recommended against, they bought, they went broke. I made nothing out of it because I had insider knowledge, sadly, because the data were publicly visible for all the world to see. I did sell all my financials and sat out in cash until 2010 or so. I missed Amazon, but I did catch Apple and Tesla so I have nothing at all about which I can complain. Luckily my non-US portfolio was mostly unaffected and I held on to that. Although I do study 6-10 hours per day I know most of my good results have been lucky. My only recent foresight was selling US financials in late 2007/

 

[tftf]

The (bear) going must be really getting tough, another oracle is out of the hole over a sudden...

It's just Elon Musk announcing so many new "projections" and unrealistic deadlines lately (just three examples: FSD claims, Tesla solar capacity, Model3 ramp for 2018 after missing 2017 projections by a magnitude* - see my last posts for details) that's it's worth pointing out the reality vs projections gap once again.

And the competition is just warming up. The market will be flooded with long-range EVs in 2020-2025, as outlined above.

_____
* "100-200k Model3 in H2 2017"...yes, right. Where are they?

 

[Yonki]

S and X need a refreshed interior. I was expecting this at the Model 3 delivery event.

That's one thing that has surprised me - is the Model 3 actually shipping with the same 2011/2012-era hardware for the core UI/Nav/Entertainment electronics? I expected a big S/X refresh ahead of the Model 3 release so the 3 wouldn't be saddled with underpowered/ancient (in PC years) hardware at the get-go. But I haven't heard anything about a refresh. Unless they're having/planning to have the new AP hardware take over that function?

 

[D-egg-O]

It's just Elon Musk announcing so many new "projections" and unrealistic deadlines lately (just three examples: FSD claims, Tesla solar capacity, Model3 ramp for 2018 after missing 2017 projections by a magnitude* - see my last posts for details) that's it's worth pointing out the reality vs projections gap once again.

And the competition is just warming up. The market will be flooded with long-range EVs in 2020-2025, as outlined above.

_____
* "100-200k Model3 in H2 2017"...yes, right. Where are they?

I can't help but notice the "competition" arrival keeps getting pushed back. First it was 2019/2020. Now 2025??

 

[DurandalAI]

I can't help but notice the "competition" arrival keeps getting pushed back. First it was 2019/2020. Now 2025??

That's exactly what I was thinking. and oooOOooo, 450 chargers that charge vehicles that top out at 50kW? Talk about underwhelming. Not only that, I highly doubt the Leaf will get anything beyond the 40kWh battery in 2018. It's obvious Nissan is struggling, the Leaf 2 is not a complete redesign but merely a refresh in the same package. (Larger capacity battery, 30kW larger motor, and exterior styling changes.) We should bookmark his post and taunt him with it a year from now.

 

[tftf]

I can't help but notice the "competition" arrival keeps getting pushed back. First it was 2019/2020. Now 2025??

2018-2020 is when these long-range cars start to arrive (first iterations, Bolt, Leaf 2, Audi SUV, Jaguar SUV, Mercedes EQ etc.).

2020-2025 is when the market will be flooded with long-range EVs based on dedicated BEV platforms.

I haven't changed my forecast.

 

[tftf]

That's exactly what I was thinking. and oooOOooo, 450 chargers that charge vehicles that top out at 50kW? Talk about underwhelming..

Your question proves you haven't read my link for one minute.*

I wrote about 150kW+ (even 350kW+ for CCS) CCS and Chademo stations for highway charging stations - coupled with 50kW+ for urban/destination areas. It's all in the link....

______
* Same for most Tesla longs not reading the 10-Q apparently - that's how Musk can boast about 10 GW in solar capacity at Gigafactory2 and then hide in the 10-Q small print sections that Buffalo's Gigafactory2 will top out at just 1 GW "AT FULL CAPACITY". It's all in the latest 10-Q, clever....

 

[SBenson]

Bond price talk is at 5.25%

Even that is being considered as pretty aggressive pricing for the given rating. However, it seems like all but done at that price.