General Discussion: 2018 Investor Roundtable

[elasalle]

Did you happen to see GM's and FCAU's sales report?

Since you know about GM, can you share how many EVs GM sold this quarter?

 

[sundaymorning]

Many of the bear stories can never be defeated, because they're all spin. Have you read the postings from everyone? No one claimed that Q1 was going to profitable. And estimates of $750M - $1B Q1 loss are indeed the biggest loss yet, but why should it matter any differently now in the forums or when it's reported in the news cycle? All the news cycle does is create buying opportunities.

More importantly though:
- does the Q1 loss stop the production ramp?
- does the Q1 loss require a cap raise? (Tesla's report answered this, but much like the 2014 fundraising, they'll take capital if its offered on good terms just to expand faster)
- What does a Q1 loss mean to Tesla's SMP2 (Secret Master Plan 2)? - hint, no impact at all.

Therein lies the flaw with the bear thesis. Failure to meet time-based milestones is completely irrelevant. The biggest argument that might be valid is that the capital market freezes up, like during the great recession. That and a few other black swan events. So you're welcome to bet on that potentiality, or cover while you're ahead.

Bear thesis:
1. if it’s late it’s going to be BK.
2. Model 3 rampup is bad, it means more spending, so
best thing to do is don’t ramp?
3. Tesla Energy will never be profitable.
4. Competition will kill Tesla.
5. Competition is just around the corner.
6. The Bolt will outsell Tesla M3.
7. If it’s not the Bolt then the Leaf will outsell the M3.
8. The future iPace is going to outsell the MX.
9. The future Porsche will outsell S.
10. None of the above manufacturers will need a GF to
compete with Tesla.
11. Superchargers is not a moat.
12. Tesla has no moat.
13. Semi specs is unreachable
14. Roadster specs also impossible.
15. Mercedes can’t do it therefore Tesla can’t do it.

While I type this the stock is heading back into the $260s. Gas prices are at new monthly highs, Tesla is ramping further. Good luck bears, you’ll get what’s coming for you.

 

[Waiting4M3]

Some of my favorite parts of the delivery report:

"In the past seven days, Tesla produced 2,020 Model 3 vehicles. In the next seven days, we expect to produce 2,000 Model S and X vehicles and 2,000 Model 3 vehicles."

2k/wk sustained, better than most expected, Tesla listed to investors and didn't play game this time around, kudos.

"Given the progress made thus far and upcoming actions for further capacity improvement, we expect that the Model 3 production rate will climb rapidly through Q2."

Tesla knows that the planned ramp activities in Q2 will be easier/quicker than Q1.

"Q3 to have the long-sought ideal combination of high volume, good gross margin and strong positive operating cash flow. As a result, Tesla does not require an equity or debt raise this year, apart from standard credit lines."

Financially, escape velocity is coming next quarter, not cap raise, so Moody can take their debt rating and shove it, no one cares!

"Net orders for Model S and X were at an all-time Q1 record, and demand remains very strong."

Continue to fend off the Osbourne effect FUD. Kevin Tynan at Bloomberg is already at it, read his comment in Bloomberg's M3 tracker's update section, around 7:31:49 AM if you must.

 

[Waiting4M3]

Keep in mind that we are headed to a constitutional crisis. Either Trump is impeached in the next few months, or his behavior is documented with witnesses and hard evidence, and he is NOT impeached. Either one is a cause of instability and uncertainty. One of those WILL happen.

I'm prepared for this to continue for the next 2 years, gotta have a long term investment plan.

 

[schonelucht]

My model sees a loss of nearly $800M this quarter or ($4.70) per share. Gross profit $320M. Main assumptions : 4k margin improvement on S/X versus Q4. $8k profit contribution per additional Model 3. No ZEV credits. $45M revenue and $50M costs on the South Australia project. 10% growth on Energy outside SA, 10% decline on Service and other but 5% margin improvement. Everything else (R&D/SG&A/interest) same like Q4.

Cash drain of about $500M (mainly due to addition to inventory and capex)

I don't think the street will like such a 10-K. Hopefully Tesla is able to point to tangible additional progress in the Model 3 ramp by the time it has the conference call to support confidence that 5k/week is still in the cards.

 

[aubreymcfato]

I know it's not material, but in the very first day, Norway is already more than halfway close to April 2017 numbers ;-)
We'll see in the next days.

 

[Zaxxon]

I know it's not material, but in the very first day, Norway is already more than halfway close to April 2017 numbers ;-)
We'll see in the next days.

I was just looking at those #s and came to the same conclusion. Especially with Elon's 'slow it down' tweet, it's possible that this is just Q1 overhang. Like you said, we'll know in the next few days whether it surpasses April, 2017 and keeps going at this rate or whether today and maybe tomorrow are all we've got.

 

[EinSV]

Tesla sweeps the podium for US Q1 BEV sales according to insideEVs:

1. Tesla Model 3 8180
2. Tesla Model S 5300
3. Tesla Model X 4500
4. Chevy Bolt 4375
5. Nissan Leaf 2545

Monthly Plug-In Sales Scorecard

 

[DurandalAI]

Tesla sweeps the podium for US Q1 BEV sales according to insideEVs:

1. Tesla Model 3 8180
2. Tesla Model S 5300
3. Tesla Model X 4500
4. Chevy Bolt 4375
5. Nissan Leaf 2545

Monthly Plug-In Sales Scorecard

Why can’t an experienced car company like GM reliably ramp the Bolt production beyond 500 cars a week? They’ve had over a year for the ramp, and this small upstart called Tesla is already outselling them on each of their offerings versus GM’s single offering of the Bolt? Is GM on the decline? Can they no longer manufacture cars in volume? Answers inside my clickbait article..... Man, I should write articles for CNBC and Motor Trend.

 

[EinSV]

Also, it should be noted that the Bloomberg tracker, which has not yet been updated for this letter, is spot-on. It says 11,855 through 3/31, and Tesla's numbers are: 8,180 + 1,542 + 220 + 2,040 in transit = 11,982. That puts Bloomberg within 1% of actual.

That could be luck as we know their model has issues. But food for thought as Q2 progresses.

I disagree.

Even as of this morning Bloomberg is showing an estimated Model production rate of 1190 vehicles per week, which is off by 41%. From the posts I've seen, virtually every single person on this board did a better job estimating production at the end of the quarter than Bloomberg.

They did do an excellent job at estimating total production for the quarter (backward looking), so I give them credit for that.

 

[Cobos]

Tesla sweeps the podium for US Q1 BEV sales according to insideEVs:

1. Tesla Model 3 8180
2. Tesla Model S 5300
3. Tesla Model X 4500
4. Chevy Bolt 4375
5. Nissan Leaf 2545

Monthly Plug-In Sales Scorecard

An interesting issue here is Nissan sold 2100 Leafs in just March here in Norway!
So a 5,5 mill population country sold in one month 80% of the total US sales for a model for a quarter. It does put things in perspective

Cobos

 

[X Yes?]

Since you know about GM, can you share how many EVs GM sold this quarter?

No I haven't heard that sales number yet. It's not likely all that important. It's tough to make any money on EV's. They'll build what they can sell. As low fuel prices continue, they sold many high margin trucks and SUV's. So they can sell EV's at a loss. Earnings should again surprise on the upside. Check out FCAU too. Up nearly 4X in 1.5 yrs. Another company with real profits that will be dept free by July.

 

[defc0n]

@ValueAnalyst can you start writing a few Seeking Alpha articles about Tesla Model 3 outselling GM's Bolt to troll Anton Wahlman for me?

Related: https://seekingalpha.com/article/4119071-october-sales-chevy-bolt-outsold-tesla-model-3-12-1-278-1
Related: https://seekingalpha.com/article/4129402-november-sales-gms-bolt-outsold-tesla-model-3-9-1
Related: https://seekingalpha.com/article/4103729-august-sales-chevrolet-bolt-ev-sold-tesla-model-3-tune-28-1

edit: bonus points if you copy and paste his article and just search+replace the necessary values

 

[Oil4AsphaultOnly]

Tesla sweeps the podium for US Q1 BEV sales according to insideEVs:

1. Tesla Model 3 8180
2. Tesla Model S 5300
3. Tesla Model X 4500
4. Chevy Bolt 4375
5. Nissan Leaf 2545

Monthly Plug-In Sales Scorecard

That's the clearest window into the state of the competition that I've ever seen. To be outsold by cars that cost 3x more!

 

[X Yes?]

Why can’t an experienced car company like GM reliably ramp the Bolt production beyond 500 cars a week? They’ve had over a year for the ramp, and this small upstart called Tesla is already outselling them on each of their offerings versus GM’s single offering of the Bolt? Is GM on the decline? Can they no longer manufacture cars in volume? Answers inside my clickbait article..... Man, I should write articles for CNBC and Motor Trend.

GM is ramping up production for Europe and the rest of the world. I'm sure they prefer to use their production for profitable vehicles like trucks and SUV's that people want. With fuel price low, many consumers still need vehicles with the lowest overall cost per mile.

 

[X Yes?]

That's the clearest window into the state of the competition that I've ever seen. To be outsold by cars that cost 3x more!

Yep, those that sell the most EV's loose the most amount of money.

 

[Lbkmxp100d]

I disagree.

Even as of this morning Bloomberg is showing an estimated Model production rate of 1190 vehicles per week, which is off by 41%. From the posts I've seen, virtually every single person on this board did a better job estimating production at the end of the quarter than Bloomberg.

They did do an excellent job at estimating total production for the quarter (backward looking), so I give them credit for that.

I agree! Makes you wonder if they actually believe the numbers they are posting or trying to influence the market. Either way, it’s not good and they should search this forum for better informed people

 

[Waiting4M3]

GM is ramping up production for Europe and the rest of the world. I'm sure they prefer to use their production for profitable vehicles like trucks and SUV's that people want. With fuel price low, many consumers still need vehicles with the lowest overall cost per mile.

AAA: Spring gas prices could approach a 'tipping point' for drivers

On Friday, the AAA national average price per gallon of regular unleaded was $2.53, but the association forecasts the national average price will increase to as much as $2.70 per gallon this spring.

Sinclair attributes the higher prices to a combination of factors including "the effects of the production cutbacks by OPEC and non-OPEC foreign producers finally kicked in

According to Ward Auto, in 2016, 62 percent of U.S. vehicle sales were trucks, which includes pickups, SUVs and crossovers.

A new AAA survey asked consumers if there was a gas price point that would make them "change their driving habits or lifestyle to offset higher gas prices."

"We found $2.75 was the tipping point for about 20 percent of drivers," Sinclair said. "For 40 percent, it was $3 a gallon."

"And we're there, we're at that level in a lot of cities, a lot of metropolitan areas around the country," he said.

 

[X Yes?]

AAA: Spring gas prices could approach a 'tipping point' for drivers

On Friday, the AAA national average price per gallon of regular unleaded was $2.53, but the association forecasts the national average price will increase to as much as $2.70 per gallon this spring.

Sinclair attributes the higher prices to a combination of factors including "the effects of the production cutbacks by OPEC and non-OPEC foreign producers finally kicked in

According to Ward Auto, in 2016, 62 percent of U.S. vehicle sales were trucks, which includes pickups, SUVs and crossovers.

A new AAA survey asked consumers if there was a gas price point that would make them "change their driving habits or lifestyle to offset higher gas prices."


"We found $2.75 was the tipping point for about 20 percent of drivers," Sinclair said. "For 40 percent, it was $3 a gallon."


"And we're there, we're at that level in a lot of cities, a lot of metropolitan areas around the country," he said.

If fuel goes to $4 /gallon, M3 overall cost per mile, still not even close...

 

[Waiting4M3]

If fuel goes to $4 /gallon, M3 overall cost per mile, still not even close...

Gas price will kill GM's truck SUV sales like in 2008.

M3 electricity costs around $0.05/mile. A SUV at ~20mpg and $4/g is $0.20/mile, not even close.