General Discussion: 2018 Investor Roundtable

[Causalien]

Production estimate based on VIN reported in Troy's sheet. At the very least, the 2k/wk rate looks strong and holding, we also see new high VINs close to 18000s in the last few days, which resulted in daily production rate increase in my model over the last 2 days:

Daily rate now ~350/day in the last 2 days, which correspond to 2450/wk.
View attachment 292639

Weekly total 2032 for 4/2-8 (Mon-Sun). If we look at 7 days from 4/3-9, matching the range mentioned in Tesla's delivery report, it could be ~100 higher due to increased daily rate in the recent 2 days.
View attachment 292640

I also continue to keep an eye on VIN reporting count. Now 8 days into April, it seems that April is definitely showing higher # of VIN report, as @Zhelko Dimic also posted. It looks to me ~50% higher than March.
View attachment 292641

What explains the spike at the beginning of every month from @Zhelko Dimic 's chart?

 

[kakamora]

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.

Weren’t those large storage facilities built to buffer supplies since it’s impossible to ramp up and down supply chain fast enough to respond to the 3 debottle necking/ s curve.

 

[Waiting4M3]

What explains the spike at the beginning of every month from @Zhelko Dimic 's chart?

Are you talking about the chart in Troy's google sheet for Model 3 Invites (below)? What is the spike that you're referring to?

 

[Waiting4M3]

Weren’t those large storage facilities built to buffer supplies since it’s impossible to ramp up and down supply chain fast enough to respond to the 3 debottle necking/ s curve.

Yes those are storage for production, the question is would Tesla spend the extra $ to pull-in parts order for the 5k/wk volume by 1 month?

If they don't have the visibility that all major bottlenecks are solved, it would seem unnecessary to spend the $ too early and let the parts sit, even if they have the room in their storage facility,

If they do have the visibility now, why do they continue to say 5k/wk by end of June? The least they should do is maybe go quiet on it for now, and surprise us in Q1 ER call in early May.

 

[N5329K]

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

Condensed version: Tesla doesn't buy ads, so Old Media hates them.
Personally, I kind of stop listening when someone cites "mainstream media" as some Dark, Organized Force for Evil.
Robin

 

[Starno]

Condensed version: Tesla doesn't buy ads, so Old Media hates them.
Personally, I kind of stop listening when someone cites "mainstream media" as some Dark, Organized Force for Evil.
Robin

Yes but also : the CEOs of those " mainstream media " are basically playing golf and having dinner with the CEOs (and top executives) of GM, Ford, VW, Exxon, .... so if the boss is basically good friend with someone whom Tesla is threatening. What do you think the employees(journalists) are incentivized to do ?

 

[Waiting4M3]

Yes but also : the CEOs of those " mainstream media " are basically playing golf and having dinner with the CEOs (and top executives) of GM, Ford, VW, Exxon, .... so if the boss is basically good friend with someone whom Tesla is threatening. What do you think the employees(journalists) are incentivized to do ?

A little on the paranoid side, but kinda like Sinclair group making local news anchors in stations they own read the same pro-Trump anti-media script?
Sinclair’s takeover of local news, in one striking map

 

[mongo]

Yes those are storage for production, the question is would Tesla spend the extra $ to pull-in parts order for the 5k/wk volume by 1 month?

If they don't have the visibility that all major bottlenecks are solved, it would seem unnecessary to spend the $ too early and let the parts sit, even if they have the room in their storage facility,

If they do have the visibility now, why do they continue to say 5k/wk by end of June? The least they should do is maybe go quiet on it for now, and surprise us in Q1 ER call in early May.

Is it a pull in? Or are they well stocked to begin with?
Suppliers: Tesla Model 3 Production Increasing

 

[N5329K]

Yes but also : the CEOs of those " mainstream media " are basically playing golf and having dinner with the CEOs (and top executives) of GM, Ford, VW, Exxon, .... so if the boss is basically good friend with someone whom Tesla is threatening. What do you think the employees(journalists) are incentivized to do ?

First and foremost, they're "incentivized" to attract eyeballs. Put "Tesla" in your headline and you attract lots and lots of eyeballs. That keeps the doors open. They could run a FUDster selling doom (and hoping to short) or a devoted fan selling unicorn farts. I don't think it much matters to most of them so long as the clicks cascade in.
Robin

 

[tander]

Got notified that tsla is “hard to borrow” right now from Fidelity and Schwab. I recall a long time ago someone said something about how if you are lending shares for shorting and there is a short-squeeze, the broker could end up giving your shares back and selling them without asking you. I’m not sure if there is any “legs” to that but if that is the case then I’d much rather miss out on the interest from lending shares and be able to keep them through a squeeze. Anybody done the homework on this and can verify? If it’s not the case then getting paid interest while holding stock seems like quite a win win.

Side questions:
You lose your right to vote your shares when you lend them, does that mean the broker wins the right to vote them or the shorter?
Also this is more of a broker question but are imo naked calls marginable? I have some naked imo calls and normal tsla shares in a margin account but I guess you can’t do short lending if it’s a margin account (with etrade at least) so I have to look at either adding a non margin account or give up margin status on current account.

 

[Rarity]

@tander -- see the relevant thread of a couple of years ago for a full discussion.

What are the risks involved with lending out your TSLA shares?

 

[elasalle]

.

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!!

Correction (just realized my dumb mistake), (but can't edit)
2k, 2.5K, 5K are weekly numbers ( 7 days), so
past quarter, 1K->2K would be 1K/7 = 142cars/day increase
this quarter, 2K->5K, would be 3K/7days = 428cars/day increase

 

[AudubonB]

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.

Just what population has a large majority of geeks and nerds? I think you're stretching more than a tad too far on this one.

 

[Ugliest1]

Condensed version: Tesla doesn't buy ads, so Old Media hates them.
Personally, I kind of stop listening when someone cites "mainstream media" as some Dark, Organized Force for Evil.
Robin

I totally agree with you, sort of. I'm reminded of the old saw, "Never assume a conspiracy when mere stupidity would explain it.".

Ok, seriously, not all reporters are stupid, but it seems that the vast majority are under orders to get that article published quickly in this age of clicks, and fact-checked journalism is a far lower priority as a result. The headline seems to be the most important thing (where truth definitely takes a back seat), and for that we can blame most editors. And, there *IS* a somewhat organized dark force for evil, conveniently named the Koch brothers, who are funding a lot of mainstream media.

 

[BornToFly]

I said this a while ago, that the lack of AWD at this point means the bottle neck is just as much at Fremont as GF1. If they were twiddling their thumbs at Fremont, waiting for battery packs, then working on AWD in Q1 would have made a lot of sense. Trying to get AWD going when the line is flying at 5,000/week in July seems far more difficult....

 

[AZRI11]

Dual motor production requires more employees. Only when at 5k week will we see it . No capital raise means spend as little money as possible while increasing production. Only weeks after 5k will you see other configurations.

 

[N5329K]

I totally agree with you, sort of. I'm reminded of the old saw, "Never assume a conspiracy when mere stupidity would explain it.".

Ok, seriously, not all reporters are stupid, but it seems that the vast majority are under orders to get that article published quickly in this age of clicks, and fact-checked journalism is a far lower priority as a result. The headline seems to be the most important thing (where truth definitely takes a back seat), and for that we can blame most editors. And, there *IS* a somewhat organized dark force for evil, conveniently named the Koch brothers, who are funding a lot of mainstream media.

True. There are propagandists and there are journalists. The propagandists are way better funded (they're selling you something someone wants you to buy) and have no obligation to the facts. That's what makes them propagandists. There are lazy reporters everywhere, too, and the iron rule has always been this: the more you know about a subject, the less reliable media reports on that subject will appear.
I know good, honest, hard working reporters and I know a couple of slackers who are not above engaging in a little fiction to add sizzle. The difference is, what happens when they're caught? Are they fired (as happens at the New York Times, for one), or are they promoted (I'm looking at you, Sinclair)? But you can't paint them all with a big, lazy tar brush and cry "Mainstream Media!" I bet it's possible to find good reporters who care about the facts even at Sinclair outlets.
It's "facts" that are becoming rare and endangered. Not just reporters who value them.
Robin

 

[JRP3]

Personally, I kind of stop listening when someone cites "mainstream media" as some Dark, Organized Force for Evil.

I'd say a group willing to spread falsehoods for their own short term gains fits that description quite well.

 

[Intl Professor]

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.

He makes science not fiction or un-fiction; he tickles our imagination with his into reality.

 

[ggr]

does that mean the broker wins the right to vote them or the shorter?

Neither. The person who bought the shares from the shorter can't tell that they were borrowed and sold short. They get to vote and get any dividend (not relevant for Tesla, yet).