General Discussion: 2018 Investor Roundtable

[Ulmo]

Just for the lolz Don't Expect A Tesla Model 3 Before The End Of 2018, Analyst Reckons

Uhhh, I could have gotten one by the end of 2017 already, and two by February 2018.

 

[Ulmo]

This is pretty awesome! Watch the video, from a Musk fan.

Tesla fan makes 3D Elon Musk tribute video, and it's pretty darn awesome

There was almost a twist at the end.

 

[ValueAnalyst]

I think we may see the current 14-day period stay the same or increase before it decreases. If not, that would be one data point in favor of a ramp above the 2000/week range (but only one data point -- I think you have to look at the big picture).

Tesla registered 2655 VINs on March 23 (through 18540), 2041 more on March 30 (18541-20581), and another 4,793 on April 5 (through 25374).

If we see the next batch of VINs appear by about April 15 (16 days from March 30) that would be consistent with a solid 2000/week run rate (2655 VINs/9 days (April 6-15)*7 days/week=2065/week) -- any faster would be consistent with a run rate above 2K/week. But this is only one metric among many so I would caution against relying on it too much, especially since Tesla can decide to change how and when it assigns VINs to customers at any time and it also may vary based on geography, etc. Looking over short time frames can be especially prone to error. As one example, if they shut down production for two days to increase speed of the lines they might not need the next VIN batch as quickly so tracking VIN use might suggest a slowdown when in fact production rate has increased significantly.

But having said all that if we were to see the next batch reported in a week or so (~April 15) that would be one data point in favor of Tesla continuing to meet or exceed 2K/week.

As far as 5K/week I seriously doubt Tesla is targeting that by end of April and would be thrilled to see them in that range in July.

Could it be that, by sticking to 5,000 by June, even if the Grohmann line is in place and now ramping, Tesla has worked in a level of conservatism for potential QC lengthening due to the new line?

If that is the case, then the latest unexpected NHTSA registration of 2,915 on 4/6, one day after the big missile of 4,793, could indicate that the potential QC lengthening has not materialized, allowing for an upside surprise in the 1Q18 investor letter in early May: "We produced 4,000 units in the last week and expect 5,000 by the end of May."

 

[sundaymorning]

If that is the case, then the latest unexpected NHTSA registration of 2,915 on 4/6, one day after the big missile of 4,793, could indicate that the potential QC lengthening has not materialized, allowing for an upside surprise in the 1Q18 investor letter in early May: "We produced 4,000 units in the last week and expect 5,000 by the end of May."

This is the type of optimism we don’t need to speculate on. Elon knows best when he stated 5,000/week within about 3 months. End of May would be 2 months... having only 1-2 large vin registration is not enough data for us to even speculate on 5000 end of May. Please tapper your optimism because it will surely end with disappointment.

 

[ValueAnalyst]

This is the type of optimism we don’t need to speculate on. Elon knows best when he stated 5,000/week within about 3 months. End of May would be 2 months... having only 1-2 large vin registration is not enough data for us to even speculate on 5000 end of May. Please tapper your optimism because it will surely end with disappointment.

How do you explain why Tesla registered 7,700+ VINs in seven days?

 

[Jonathan Hewitt]

This is the type of optimism we don’t need to speculate on. Elon knows best when he stated 5,000/week within about 3 months. End of May would be 2 months... having only 1-2 large vin registration is not enough data for us to even speculate on 5000 end of May. Please tapper your optimism because it will surely end with disappointment.

Plus there are shorts on twitter TODAY saying Tesla isn't even doing 2,000 a week right now, that they won't ever get to 5K/week, would be lucky to get to 2.5k/week, and if through a miracle they ever got to 10K/week there wouldn't be enough buyers.

Sometimes I wonder if these people are secretly bulls talking down the stock price so they have time to buy more

 

[sundaymorning]

Plus there are shorts on twitter TODAY saying Tesla isn't even doing 2,000 a week right now, that they won't ever get to 5K/week, would be lucky to get to 2.5k/week, and if through a miracle they ever got to 10K/week there wouldn't be enough buyers.

Sometimes I wonder if these people are secretly bulls talking down the stock price so they have time to buy more

Those shorts are hoping the air drag spilling from their lips will slow the Grohmann line down. First it was they’ll be lucky to produce 2,500 MS, then they won’t get to 5,000, then 10,000, 25,000 etc. Bob Lutz: MX is unmanufacturable... next year it’ll be Tesla got lucky with 10,000/ week, but can they get to 20,000? The year after would be 500,000 was pure luck, 1M is where the line is drawn. I can’t even count how many times they’ve changed their arguments. The amount of FUD surrounding this stock is so ridiculous, a friend of mine quoted the article about electric being more expensive then gas.. but then again, he’s not a very bright fella. Maybe those articles/tweets are targeted at the less intellectually capable crowd, the ones that would spend their fortunes shorting TSLA and end up getting killed.

 

[larmor]

Plus there are shorts on twitter TODAY saying Tesla isn't even doing 2,000 a week right now, that they won't ever get to 5K/week, would be lucky to get to 2.5k/week, and if through a miracle they ever got to 10K/week there wouldn't be enough buyers.

Sometimes I wonder if these people are secretly bulls talking down the stock price so they have time to buy more

Sure some people make products, goods and services. Their service is to manipulate the news feed and hence move the algobots to move the stock price and hence make or lose money...

 

[JRP3]

Worth sharing with those who may not understand why Tesla gets so much negative press:

 

[bambam4171]

EM is as always cagey in his response. He said dual motor probably in July. Then he said we have to hit 5000/w first. What he didn't say is how long they would be at 5k/w before introducing the dual motor configs or how long it would take to incorporate dual motor into the manufacturing process. In theory, they could get to 5k/w in June and take a few weeks to add in and shakeout the dual motor steps in the process.

Think about it this way. July 1st needs to be full tilt, 100% as fast as they can go because the fed tax credits will either start to phase out this quarter or next. That is 100% certain. To do that, they must have dual motor and/or the smaller battery or there is no one to sell the cars to in the US.

The whole of Europe is desperately waiting for M3, I think the can send a few 10k our way in the current config.

 

[Waiting4M3]

How do you explain why Tesla registered 7,700+ VINs in seven days?

No good explanation exists as of now.

But the idea that Tesla can suddenly ramp up to 4k-5k/wk in early May is pretty unlikely IMO. I think it's unlikely that Tesla can just suddenly pull in the timeline for their entire supply chain by almost 2 months to do 5k by early May, even if Grohmann line can produce battery modules at that rate now.

Work it backwards, to produce 5k in early May, the cars must enter production at the latest in late April, which means order for parts probably had to go out by 2nd half of March. So, in late March, if Tesla knew Grohmann line was working that fast and they could hit 5k/wk by early May, why would Tesla and Elon still repeatedly say 5k/wk by June or 3 months? It would just cause more investor relations issue. If Tesla didn't know Grohmann line could work that fast, it would be irresponsible to order so many parts so far in advance and make Q2 balance sheet look worse.

I would not rule out completely that Tesla could pull-in 5k/wk so dramatically, but if you think it through, practically speaking it just seems very unlikely that they would, even if they theoretically could. It could cause a lot of complications and confusions among suppliers, and investors.

Edit: I mis-read VA's comment about 5k/wk being in early May, VA's comment actually is for 5k/wk by May end. It looks a little more feasible, but still I think it's a very small likelihood that Tesla would disrupt the timing of the whole supply chain to pull in the well-publicized 5k/wk target date.

 

[elasalle]

EM is as always cagey in his response. He said dual motor probably in July. Then he said we have to hit 5000/w first. What he didn't say is how long they would be at 5k/w before introducing the dual motor configs or how long it would take to incorporate dual motor into the manufacturing process. In theory, they could get to 5k/w in June and take a few weeks to add in and shakeout the dual motor steps in the process.

Think about it this way. July 1st needs to be full tilt, 100% as fast as they can go because the fed tax credits will either start to phase out this quarter or next. That is 100% certain. To do that, they must have dual motor and/or the smaller battery or there is no one to sell the cars to in the US.

His comments could be taken a couple of ways. Elon makes it seem like there is some doubt about dual motor before july1. But to me that would be a serious problem. Because it could be a limiting factor in how many cars they can deliver in the US by the end of Q3. At this point, it's seeming less and less likely that the tax credit will be preserved by Tesla pushing out deliveries in Q2 to hit 200,000 in Q3. So dual motor and other options are critical before the end of June, because they will want a queue of orders ready to be delivered July 1st - if they push out the 200k deliver and even if they don't.

Is it possible that Tesla knows that the tax credit will be extended? Maybe some back channel negotiations and lobbying? If not, I would expect to see ramping of model s/x as well. 3 shifts and so on, to pump up the inventory in anticipation of the demand spike.

Me thinks "optimistic" is something that better describes EMs response that cagey.

Also, the delivery rates like 2K/week, 2.5K/week, 5K/week are explicit goals, where as trying to keep US deliveries under 200K this quarter are "good to haves". Tesla, EM could be trying their best to meet that, as that is a very Elonesque thing to do, but is really not necessary. Lots of discussion on another thread on this, but just by delivering to more places, the US soft limits can easily be solved.

Now, going from 1K to 2K last quarter (roughly 90 days means a throughput increase of 1K/90 = 11 cars/day
For this quarter going from 2K to 5K, would mean 3000/90 = 33cars/day
Now if like what some are suggesting its 5K by end of April, it would be 3000/30 = 100 cars/day increase
Will leave the numbers for folks to decide what progress rate makes sense.

While from the get go, the M3 production lines have been planned for 5K/week capacity, ramping up based on what we know seems to be a challenge and needs to be done in minor steps. With each minor increase (say 2-5%) in output, I think all systems will need to be carefully monitored and then only next minor increase in ramp will take place.

Since we know some awd VINS have been getting registered, it is likely that a small amount is being continuously produced and tested (1st engineers, then employees etc etc)

Not really sure there are any back channels etc. One tweet and all channels can get disrtupted

~ Cheers!!

 

[Jeeps17]

This is why I will never buy another car from a legacy automaker (including EVs like Nissan Leaf). They ALL lobby to reduce emissions regulations and continue to push ICE over EV.

Same here.

Scott Pruitt is happy to oblige them, unfortunately.

 

[ValueAnalyst]

No good explanation exists as of now.

But the idea that Tesla can suddenly ramp up to 4k-5k/wk in early May is pretty unlikely IMO. I think it's unlikely that Tesla can just suddenly pull in the timeline for their entire supply chain by almost 2 months to do 5k by early May, even if Grohmann line can produce battery modules at that rate now.

Work it backwards, to produce 5k in early May, the cars must enter production at the latest in late April, which means order for parts probably had to go out by 2nd half of March. So, in late March, if Tesla knew Grohmann line was working that fast and they could hit 5k/wk by early May, why would Tesla and Elon still repeatedly say 5k/wk by June or 3 months? It would just cause more investor relations issue. If Tesla didn't know Grohmann line could work that fast, it would be irresponsible to order so many parts so far in advance and make Q2 balance sheet look worse.

I would not rule out completely that Tesla could pull-in 5k/wk so dramatically, but if you think it through, practically speaking it just seems very unlikely that they would, even if they theoretically could. It could cause a lot of complications and confusions among suppliers, and investors.

Where did you get "5k by early May?"

 

[Waiting4M3]

Where did you get "5k by early May?"

I mis-read the post from you

Could it be that, by sticking to 5,000 by June, even if the Grohmann line is in place and now ramping, Tesla has worked in a level of conservatism for potential QC lengthening due to the new line?

If that is the case, then the latest unexpected NHTSA registration of 2,915 on 4/6, one day after the big missile of 4,793, could indicate that the potential QC lengthening has not materialized, allowing for an upside surprise in the 1Q18 investor letter in early May: "We produced 4,000 units in the last week and expect 5,000 by the end of May."

 

[ValueAnalyst]

This is the type of optimism we don’t need to speculate on. Elon knows best when he stated 5,000/week within about 3 months. End of May would be 2 months... having only 1-2 large vin registration is not enough data for us to even speculate on 5000 end of May. Please tapper your optimism because it will surely end with disappointment.

There is data on the table that is contradictory. I provided a potential explanation, with which you disagreed without proof or support, falsely assumed that I was offering it as the likely explanation, refused to provide an alternative explanation, then gave me unsolicited advice.

 

[defc0n]

I’d be impressed if they doubled their production rate to 4k/wk by end of Q2. In my opinion that wouldn’t be anything to be disappointed about.

Hard to say what the stock price will do from now to Q2 deliveries then earnings, especially with macro craziness. But I personally wouldn’t be too optimistic.

Maybe the China trade issue goes away and both sides agree to lower tariffs and we see a sharp rise in macro, who knows? Or maybe talks deteriorate and the threat of increased tariffs starts to become reality, tanking the market further. In the short term, that’s probably a bigger deal for TSLA than getting to 5k by Q3.

 

[Mkorpal]

Elon has stated many times that the production ramp isn't smooth. It isn't build 200 cars today, 201 tomorrow, 202 the next day. It is flat for a time and jumps dramatically then is flat again. So yeah, trying to guess exactly where they are today, and where they will be tomorrow is just not going to work.

I do think there is a chance that the 5k/week target end Q2 could be intentionally conservative and it could come much quicker.

 

[UnknownSoldier]

How do you explain why Tesla registered 7,700+ VINs in seven days?

There are many possible reasons they did that and only one of those is they are suddenly making a million of them

 

[Causalien]

There was almost a twist at the end.

Watching this, I had a eureka moment.
Elon is a hero representing a class of people that wasn't well represented in popular culture. Which explains why he is able to command so much investor's money and have such a loyal following in its products. The geeks and nerds in the society represent a large majority of the population and command a very high salary base. Most have a childhood that they can probably relate to with Musk. Up until now, there weren't anything for this segment of the population to cheer on. Steve Jobs was one, but he was more of a marketer than the real representation of Geeks.

Strange how I never noticed this as I've only been looking at Elon from the investment point of view and only judge him on how trustworthy his words are at any given moment. The loyal following and popularity part always puzzled me.

This changes the situation a bit for me on Tesla. It is becoming something that is akin to what the population demands. Like Marijuana. When a population demands something, even if you have a war on drugs, it will eventually be legalized and taxed. It is a pretty fundamental change that has to be considered when investing in Tesla.