Articles/megaposts by DaveT

[DaveT]

"Wow, the Model 3 is such a nice car!"

Somehow that runs in my head about 20 times a day for the past 2 weeks.

The car is far beyond my expectations.

I'm far more impressed by the Model 3 than I was when the Model S came out. The Model S is a great car for it's price range. But the Model 3 is a whole other story. It's an incredible, mind-blowing car for it's price range. So much so that it's hard to believe what Tesla has done. This car is going to blow people away. They don't know what's coming.

 

[bdy0627]

"Wow, the Model 3 is such a nice car!"

Somehow that runs in my head about 20 times a day for the past 2 weeks.

The car is far beyond my expectations.

I'm far more impressed by the Model 3 than I was when the Model S came out. The Model S is a great car for it's price range. But the Model 3 is a whole other story. It's an incredible, mind-blowing car for it's price range. So much so that it's hard to believe what Tesla has done. This car is going to blow people away. They don't know what's coming.

That does it. That was the final straw. I'm going to put in my reservation for a Model 3. I love my S but I don't need the larger size and I'm really intrigued by the 3 at this point. AWD for sure, as I'm in Wisconsin. I may go for the performance version too. Thanks!

 

[sundaymorning]

That does it. That was the final straw. I'm going to put in my reservation for a Model 3. I love my S but I don't need the larger size and I'm really intrigued by the 3 at this point. AWD for sure, as I'm in Wisconsin. I may go for the performance version too. Thanks!

Over the years Dave has been pretty fair about his assessment of Tesla. Glad to hear him give a thumps up to the M3. I hope you get your 3 soon and write about your own reviews.

 

[SteveG3]

Over the years Dave has been pretty fair about his assessment of Tesla. Glad to hear him give a thumps up to the M3. I hope you get your 3 soon and write about your own reviews.

good point. the fact that Dave has repeatedly pointed out times when Tesla has missed the mark in his view makes his enthusiasm about the 3 stand out even more.

 

[bdy0627]

Over the years Dave has been pretty fair about his assessment of Tesla. Glad to hear him give a thumps up to the M3. I hope you get your 3 soon and write about your own reviews.

That was my impression of Dave, which is why I gave his review a lot of weight. As for getting my Model 3 soon....

 

[DaveT]

Here are some articles I've posted to TeslaWeekly over the past few days.

Model 3 designed to be friendlier and less flashy

Boring Company is ready to start digging 6.5 mile tunnel under Culver City

Model 3 awarded Automobile’s 2018 Design of the Year

Why Elon Musk is worth his new $54 billion stock incentive plan

Investor Jason Calacanis: “Model 3 is best tech product since the iPhone”

 

[DaveT]

Here are some articles I've posted to TeslaWeekly over the past few days.

Model 3 designed to be friendlier and less flashy

Boring Company is ready to start digging 6.5 mile tunnel under Culver City

Model 3 awarded Automobile’s 2018 Design of the Year

Why Elon Musk is worth his new $54 billion stock incentive plan

Investor Jason Calacanis: “Model 3 is best tech product since the iPhone”

A few thoughts on these articles and why I posted them.

On the Model 3 design article, I thought Franz's comments that he designed the Model 3 to be more "friendly" was overlooked by most media outlets. I think it's significant because it shows Tesla's design strategy and how they are differentiating their products.

On the Boring Company article, almost all media outlets overlooked the very important FAQ document that the Boring Company submitted. It has some great info on what the Boring Company is doing.

On the stock incentive plan, I thought it was helpful to do a deep dive and actually calculate how much the plan is worth to Elon. Most media outlets didn't take time to calculate what the outstanding number of shares might be in 2028 when he exercises, thus their estimates on the value of the plan won't be accurate.

And lastly about Jason Calacanis' comment, I don't remember seeing any media outlets cover his recent twitter comments. But they are significant, because he's someone who is understanding the significance of the Model 3. Most people (even those who own or have driven it) don't fully understand what a monumental car the Model 3 is.

 

[clmason]

Dave, nice article on the Boring Company.

One thing I think is not widely known is the true final destination of the first tunnel. I'm pretty sure they are digging a route to Elon's back yard so he can loop directly to and from work. Iron Man has super hero envy, trying to build his own bat cave. He's already got a few Bat Mobiles.

 

[Fallenone]

Here are some articles I've posted to TeslaWeekly over the past few days.

Model 3 designed to be friendlier and less flashy

Boring Company is ready to start digging 6.5 mile tunnel under Culver City

Model 3 awarded Automobile’s 2018 Design of the Year

Why Elon Musk is worth his new $54 billion stock incentive plan

Investor Jason Calacanis: “Model 3 is best tech product since the iPhone”

Great posts, thanks Dave.

One comment on the operational milestones in the incentive plan not being aggressive enough, especially the EBITDA:

It could be those are just for show and to assure investors the company is not going to purely pump the stock to arrive there. And they also low balled it because if they don't, it is possible for the following scenario to happen: the company needs to grow by pouring tons of money in opex in order to achieve some strategic goal (semi perhaps), and if the EBITDA milestones are more aggressive than they are now, it could create a potential conflict between what the company should do and what can get the CEO compensated. So the whole plan is more about the market cap goals and the operational ones are just like "go and win the race and you will be generously awarded. oh and btw, don't murder people."

 

[JRP3]

I believe it's Jehn Balajadia, not John.

 

[DaveT]

I believe it's Jehn Balajadia, not John.

Thanks! Just made the change to the article.

 

[DaveT]

Just posted a summary of some of the VIN/configuration posts from TMC members, VINs closing in on #6000, and some of my thoughts on Model 3 ramp.

Model 3 VINs surpass #6000 as ramp continues

Updated: VIN #6396 reported.

 

[DaveT]

Some things I'm looking forward to in Q4 earnings. My guess is Tesla does a cap raise within 2 weeks following Q4 earnings. Perhaps using a new gigafactory location as a reason (and raising $2B+). Or doing a smaller raise ($1.5B) to give them more cash cushion during M3 ramp.

Tesla announces Feb 7 as Q4 earnings results date, here’s what to expect

 

[Starno]

Some things I'm looking forward to in Q4 earnings. My guess is Tesla does a cap raise within 2 weeks following Q4 earnings. Perhaps using a new gigafactory location as a reason (and raising $2B+). Or doing a smaller raise ($1.5B) to give them more cash cushion during M3 ramp.

Tesla announces Feb 7 as Q4 earnings results date, here’s what to expect

I think Tesla should definitely take advantage of this year where interest rates are still very low, and lot of cash on the sidelines to do a cap raise.
Once interest rates start raising over the next 2 years, it's gonna be harder. Investors are going to be more cautious and we're approaching an economical downturn.

 

[schonelucht]

Some things I'm looking forward to in Q4 earnings. My guess is Tesla does a cap raise within 2 weeks following Q4 earnings. Perhaps using a new gigafactory location as a reason (and raising $2B+). Or doing a smaller raise ($1.5B) to give them more cash cushion during M3 ramp.

Tesla announces Feb 7 as Q4 earnings results date, here’s what to expect

First line in that article reads Feb 17 instead of Feb 7.

You state that the cash balance end of Q4 could be as low as $2B. I think this is way too pessimistic. There are the deposits from the roadster and semi which should be sizeable and the sale of Model S/X out of inventory which should be a big boost to cash as well. Where do you see a potential $1.5B cash burn?

 

[erthquake]

Tesla also securitized about $400 million in SolarCity PPAs in Q4.

 

[DaveT]

First line in that article reads Feb 17 instead of Feb 7.

You state that the cash balance end of Q4 could be as low as $2B. I think this is way too pessimistic. There are the deposits from the roadster and semi which should be sizeable and the sale of Model S/X out of inventory which should be a big boost to cash as well. Where do you see a potential $1.5B cash burn?

Thanks, made the typo change.

I’m thinking $1B in capital expenditures in Q4 as guided in Q3 report. And maybe then cash used from operating loss ($400M?). This is offset by debt financing or things like securing Solarcity PPA (as erthquake) and roadster/Semi deposits. Somewhere between $800-1B used? So perhaps cash position lies between $2.5-3B at end of Q4.

I edited the article to expect a cap raise if cash balance is less than $2.5B.

 

[schonelucht]

Cash used by operations was $570M for the three first quarters total. I don't see how it can be $400M in the last quarter alone. In fact cash from operations will be positively influenced this quarter due to sales out of inventory versus addition to inventory in other quarters and deposits. The only thing that could ruin that party would be uncontrolled inventory growth on model 3 parts. But Tesla has always been clear that they have very generous and long payment terms on them, so it should not be a concern. In general though I agree it is a good time to raise cash. Equity or (convertible) debt, I really don't know.

 

[NOLA_Mike]

RE: Cash on hand, has anybody been tracking the number of orders/deposits collected for the upcoming Semi?

 

[DaveT]

Cash used by operations was $570M for the three first quarters total. I don't see how it can be $400M in the last quarter alone. In fact cash from operations will be positively influenced this quarter due to sales out of inventory versus addition to inventory in other quarters and deposits. The only thing that could ruin that party would be uncontrolled inventory growth on model 3 parts. But Tesla has always been clear that they have very generous and long payment terms on them, so it should not be a concern. In general though I agree it is a good time to raise cash. Equity or (convertible) debt, I really don't know.

@schonelucht Yes, $570M... $70M net cash used from operations in Q1, $200M in Q2, $300M in Q3. Perhaps $400M is too high for Q4, considering they did sell a lot of Model S/X cars. But Model 3 will likely be very, very low margin or even negative margin. And I'm expecting operating expenses to have slightly increased. So, perhaps it might turn out to be similar to Q3, $300M cash used in operations. What's your guess?