2017 Investor Roundtable: TSLA Market Action

[SteveG3]

Do you expect Tesla to achieve its stated target of 10k/w Model 3's by end-18?

It's clear that the revised guidance for 5K/week is late Q1 next year. As I heard the quarterly call, once 5K/week is reached, Tesla will assess what the 10K/week ramp will involve, and the target date for the ramp will then be set based upon balancing minimizing capital expenditure and maximizing ramp speed. Elon offered some context in that discussion, to my recollection saying something like, ~at that point, we'll decide whether it makes the most sense to attempt the ramp in say 9 months, 12 months or 15 months~.

While this was not explicit official guidance, and I wouldn't assume the 9, 12, or 15 numbers were deeply thought through, it seems a pretty clear indication that current thinking is that the very end of 2018 would be the very best case scenario, and it's part of a range that currently looks about 6 months wide.

tl;dr I think our best current information on the 10K target is something like December 2018-June 2019.

 

[elasalle]

It's clear that the revised guidance for 5K/week is late Q1 next year. As I heard the quarterly call, once 5K/week is reached, Tesla will assess what the 10K/week ramp will involve, and the target date for the ramp will then be set based upon capital expenditure and the preference to ramp quickly. Elon offered some context in that discussion, to my recollection saying something like, ~at that point, we'll decide whether it makes the most sense to attempt the ramp in say 9 months, 12 months or 15 months~.

While this was not explicit official guidance, and I wouldn't assume the 9, 12, or 15 numbers were deeply thought through, it seems a pretty clear indication that current thinking is that the very end of 2018 would be the very best case scenario, and it's part of a range that currently looks about 6 months wide.

tl;dr I think our best current information on the 10K target is something like December 2018-June 2019.

If we achieve 5K/week by Q1( a big if) , it means we scaled from 0 to 5k/week in 3 quarters.
So another 5K to 10K in another 3Q's should be very achievable (IMHO)

 

[SteveG3]

Sure he hedged his bets by saying production hell and all that but he put out some numbers for specific months which are obviously not even close to being met. It seems as if production was not continuous for a while and basically stopped for a short period. The 7 Model X's produced in relation to a 50K year production rate vs the 30 Model 3's produced in relation to a 500K production rate is comparable. I don't think the problems with the 3 are at the same level of the issues with X but it's not looking like production will be anywhere near the numbers Elon projected for this year, and maybe not even next year. Not that I'm surprised in the least or overly concerned, just saying it like it is, as I see it.

I think more than hedging his bets, Elon was speaking to two audiences. To Tesla's workforce and suppliers, the message was "this is the ideal blueprint, we have to nail this"... to the investment community and consumers, "I can't tell you what will rip up our ideal blue print or by how much, but, we are entering a hellish process, not an ideal one, don't expect ideal results." I think it was a pretty good effort at making more suppliers take the timeline more seriously, while letting investors and consumers paying attention not to expect the ideal plan to happen.

 

[augkuo]

Why do you say this is for the 5k/week ramp?

My assumption is that everything that they are doing is for the 5k/wk ramp and seeing how that goes before they start anything for the 10k/wk ramp.

 

[SPadival]

Chanos piling on, thinks Elon will leave in 2020 so now is a good time to short more REUTERS SUMMIT-Shortseller Chanos adds to Tesla bet, predicts CEO will leave | Daily Mail Online

I guess that is the only hope left that the mayor of shortsville has to offer to his inmates.

 

[TradingInvest]

Chanos piling on, thinks Elon will leave in 2020 so now is a good time to short more REUTERS SUMMIT-Shortseller Chanos adds to Tesla bet, predicts CEO will leave | Daily Mail Online

Bring it on Chanos! I will watch this explode in his face and end his questionable career.

Chanos is the guy who disclosed he was shorting BABA (when the stock was around $65), now it is at $181. He shorted CAT and CAT more than doubled. He shorted China for years saying China's situation was 1000 times worse than Dubai, but China is doing fine after all his FUD.

Now he is saying Elon will leave in 2020! Talking about spreading FUD. Elon said he will NEVER leave Tesla. I think what's really happening is Chanos is running out of money to short more, now he is begging other people to short. Without new shorts depressing it, this stock would jump to $500 in a month, and that jump would push it to $2000 because of short squeeze. He knows how dangerous the situation is for shorts. So he keeps pushing/begging other people to short more.

 

[SteveG3]

If we achieve 5K/week by Q1( a big if) , it means we scaled from 0 to 5k/week in 3 quarters.
So another 5K to 10K in another 3Q's should be very achievable (IMHO)

I don't know if you had the chance to listen to the call. They gave us a bit of a glimpse of the difference between the two ramps. While going to 5K was about building and using new equipment, going from 5K to 10K is about figuring out what can be optimized from the 5K to get to 10K with little expenditure (i.e., speeding up robots), and what will just need an additional set of equipment.

It's easier (quicker) but more expensive to go to the store and just buy all new tools to do a new job than rummage through the supply closet and spend time to figure out what old tools can be rigged to do a new job (and spend time reworking those tools), and only then go to the store and buy the tools for the parts of the process you couldn't rework the old tools to do the new job.

 

[JRP3]

I think it was a pretty good effort at making more suppliers take the timeline more seriously, while letting investors and consumers paying attention not to expect the ideal plan to happen.

Valid points.

 

[aznt1217]

So we have from now to 2020, let's make hay while the sun shines

I'll take that bet.

 

[surfside]

It's clear that the revised guidance for 5K/week is late Q1 next year. As I heard the quarterly call, once 5K/week is reached, Tesla will assess what the 10K/week ramp will involve, and the target date for the ramp will then be set based upon balancing minimizing capital expenditure and maximizing ramp speed. Elon offered some context in that discussion, to my recollection saying something like, ~at that point, we'll decide whether it makes the most sense to attempt the ramp in say 9 months, 12 months or 15 months~.

While this was not explicit official guidance, and I wouldn't assume the 9, 12, or 15 numbers were deeply thought through, it seems a pretty clear indication that current thinking is that the very end of 2018 would be the very best case scenario, and it's part of a range that currently looks about 6 months wide.

tl;dr I think our best current information on the 10K target is something like December 2018-June 2019.

maybe i was hearing what i would like to hear, but it wasn’t 100% clear to me whether elon was referring to the amount of time to ramp to 10k per week from the start of production or from the time they reached 5k per week.

Anyone else have any thoughts on that?

surfside

 

[elasalle]

I don't know if you had the chance to listen to the call. They gave us a bit of a glimpse of the difference between the two ramps. While going to 5K was about building and using new equipment, going from 5K to 10K is about figuring out what can be optimized from the 5K to get to 10K with little expenditure (i.e., speeding up robots), and what will just need an additional set of equipment.

It's easier (quicker) but more expensive to go to the store and just buy all new tools to do a new job than rummage through the supply closet and spend time to figure out what old tools can be rigged to do a new job (and spend time reworking those tools), and only then go to the store and buy the tools for the parts of the process you couldn't rework the old tools to do the new job.

my answer was regarding "if they can achieve" vs "how they will achieve it".

That said, ramping to 10K will be a mix of both, making existing system more efficient as well as increasing capacity where needed.

We already have e.g. of trying to make things more efficient - for the Battery module redesign in section 2 in GF, it was also mentioned that they have a new design where later when they add the new line/unit, it will do work of the existing 3 units/lines combined.

+ plans to scale to 10K, including redesign, procurement etc will definitely happen even before 5K/week rate is met.

 

[Curt Renz]

Chanos piling on, thinks Elon will leave in 2020 so now is a good time to short more REUTERS SUMMIT-Shortseller Chanos adds to Tesla bet, predicts CEO will leave | Daily Mail Online

This is interestingly close to the first anniversary of a mini-hedge fund manager and perpetual TSLA FUDster presenting his short selling case to major hedge fund managers at the Robin Hood conference when the shares closed under $190.

 

[3Victoria]

... going from 5K to 10K is about figuring out what can be optimized from the 5K to get to 10K with little expenditure (i.e., speeding up robots), and what will just need an additional set of equipment.

It's easier (quicker) but more expensive to go to the store and just buy all new tools to do a new job than rummage through the supply closet and spend time to figure out what old tools can be rigged to do a new job (and spend time reworking those tools), and only then go to the store and buy the tools for the parts of the process you couldn't rework the old tools to do the new job.

So, I think the plan is: assess the 5k line ... how easy is it to optimize? They will attempt push it to 7k, 8k, if that is inexpensive and relatively easy. Then they could simply duplicate the line to achieve 14 or 16k/week. They will also be juggling Y, Semi, roof, etc., so road map may change.

 

[SteveG3]

my answer was regarding "if they can achieve" vs "how they will achieve it".

That said, ramping to 10K will be a mix of both, making existing system more efficient as well as increasing capacity where needed.

We already have e.g. of trying to make things more efficient - for the Battery module redesign in section 2 in GF, it was also mentioned that they have a new design where later when they add the new line/unit, it will do work of the existing 3 units/lines combined.

+ plans to scale to 10K, including redesign, procurement etc will definitely happen even before 5K/week rate is met.

The point raised was the most recent comments for ramping to 10K was 9 to 15 months. I took your response to that as saying ~if we could go from 0 to 5K in 9 months, 5K to 10K should be easy~ That’s why I responded with my memory of why Elon said going to 10K may take longer. That is, I agree it would seem the second half of ramp would be as fast or faster than the first half, so I shared what Elon had offered re why that may well not be how things will happen.

 

[elasalle]

cross referencing Pictures of production Model 3s 20 M3 in playa vista

 

[Krugerrand]

Chanos piling on, thinks Elon will leave in 2020 so now is a good time to short more REUTERS SUMMIT-Shortseller Chanos adds to Tesla bet, predicts CEO will leave | Daily Mail Online

Nobody leaves the simulation, including the perpetual shorts. Everyone has to play their role.

 

[SteveG3]

So, I think the plan is: assess the 5k line ... how easy is it to optimize? They will attempt push it to 7k, 8k, if that is inexpensive and relatively easy. Then they could simply duplicate the line to achieve 14 or 16k/week. They will also be juggling Y, Semi, roof, etc., so road map may change.

Kind of. It sounds more about assessing many production processes. I think it’s for as many of those as possible what can we rework some and speed up at minimal capex to get to 10K/week, and what do we need to go and buy a second copy of. I’m sure they’ll be happy to find places that can be leveraged beyond 5K even if it doesn’t get to 10K, but, the real prize is where they can optimize to 10K and avoid buying new equipment.

It was actually a pretty dense call, I’ll try to have a second listen.

 

[zdriver]

Ihor Dusaniwsky on Twitter

Ihor Dusaniwsky‏ @ihors3 24 minutes ago
$TSLA short interest increased to $8.8 billion. Almost 950k additional shares shorted in the third quarter. Stock borrow rate is 0.50% rebate. Shorts up $188 million in mark-to-market profits today on 2.1% price drop and $635 million month-to-date.

 

[kbM3]

If we achieve 5K/week by Q1( a big if) , it means we scaled from 0 to 5k/week in 3 quarters.
So another 5K to 10K in another 3Q's should be very achievable (IMHO)

You are not thinking like Elon. Elon is thinking going from 5K to 10K is a chance to entirely redesign the manufacturing process

 

[mongo]

Ihor Dusaniwsky on Twitter

Ihor Dusaniwsky‏ @ihors3 24 minutes ago
$TSLA short interest increased to $8.8 billion. Almost 950k additional shares shorted in the third quarter. Stock borrow rate is 0.50% rebate. Shorts up $188 million in mark-to-market profits today on 2.1% price drop and $635 million month-to-date.

How can they tell if shorts are up, vs down less? I mean sure, when TSLA goes up at all I think to myself, "I'm up" even if it is below where I bought, but I don't claim to be net positive.