General Discussion: 2018 Investor Roundtable

[Duffer]

The potential for economic and political disruption that Elon can cause in the world dominated by Petro dollars is staggering. The end justify the means when it comes to holding onto that absolute control.

Unfortunately, now that Tesla is believed to be able to become profitable the FUD will probably be the least of Elon's worries.

 

[generalenthu]

All Musk needs is one intern to act as a Twitter gatekeeper with simple instructions:

Is it a fan/customer with a question to which you can provide helpful info? Go for it!

Is it a fan/customer saying something nice for which you can be grateful? Go for it!

Is it a positive article you can retweet? Go for it!

Is it a request for humanitarian help? Go for it!

Anything else? No! No! Hells to the no!

Haters gonna hate. Trolls gonna troll. Randos gonna rando. The only way to win is not to play.

Sort of like Obama's official Twitter. A PR team would operate, but Obama's tweets would be signed BO. But still vetted by someone else.

 

[dc_h]

This report has a really, really critical flaw:

The latter I refer to as “shadow mode” because the data streams in these vehicles (whether under manual or Autopilot control) is available to be used for training the neural networks that perform the various components of the perception-control task.
​

The problem is that the cars aren't transmitting data.

You can hook up any Model S/X/3 to a WiFi network and monitor the router usage. The payloads it's uploading are quite small (largest I saw was 20 MB), certainly not large enough to be either compressed or uncompressed video data, and especially not for 8 separate cameras. I can't test for 4G connections, but I doubt that Tesla would be using this to stream video, as it would get quite expensive.

Since the most challenging part of autonomous driving is rapid object identification from video feeds, it doesn't seem that Tesla cars are currently "uploading data" in any meaningful way.

And how are you getting this data? You don’t sound like a typical owner? Do you have a support team you Work With? Make it sound like you are almost oddly scientific, almost corporate?

 

[Reciprocity]

To extend this thought:

A moat keeps people out. GF1 doesn't keep anyone out of making electric cars. Tesla's cell chemistry does not keep anyone from making e cars. The supercharger network doesn't either.

No one is restricted from developing their own factories, cars, and chargers due to the existence of Tesla.

The true moat is the one OEMs have dug around themselves. The moat of short term profitability.

Look at Tesla, intial vehicle was low volume, high price, zero charging infrastructure. But it worked because the company was small and lean and didn't try to serve the mass market.

Then the S, original projection was maybe 20k cars a year. First ones had no supercharging. Then they started rolling out supercharging, starting where the cars were and extending out. S was also more popular than expected. Over time, Tesla, along with capacity and coverage (if not net profits) grew.

Flip to OEMs, they can do all the same things, if they are willing to be worse than Tesla at the beginning. They can't just turn on a supercharging network, it has to start somewhere and grow. They can't just find battery supplier availability, it must be developed. All that is required is to have a long term plan that is expected to be profitable at the end. But they want to keep the dividends flowing, and that is their moat.

I would agree except that the traditional autos are not making gigafactories. They are specifically not building battery factories or cell chemistries. They have instead chosen to just wait for someone else to do it. Which will lead to poor results and higher costs. Thus the moat.

I would also agree that the competition has built moats and burned down the draw Bridges so that they cannot get out.

 

[dmckinstry]

I bought my 3 because I knew it would be years before much else came out. Why wait? Why drive a gas sucking hunk of rust that spews pollution and noise? I was saving money for this a dozen years ago.

I'm not as flexible as you Rob, so I think I'll want an X as my next Tesla. I do have an order in for a 3, but that was for my daughter. Congrats on your new 3. I talked to a 3 owner yesterday at the Ellensburg Supercharger and he has had a friend who is 6"4" in the back seat without problems
BTW, I was at the Bellevue service center yesterday and today for my 8th "Annual" service, and they do have a red 3 on display now. I didn't ask about a test drive though.

 

[tti_7]

When do you guys think we will reach 100,000 Model 3 on the road ?

Within this Q. Let's throw something out there: The weekend after Labor Day. (a bit aggressive... I know, must be an EM thing)

 

[Remus]

The answers as to what is actually going on are already on this forum.

Finding them are an exercise left to the reader.

As a bonus, the answer that should alleviate your oh-so-genuine concern in California is also lurking around here.

Happy hunting!

What's the point? . I would rather he keeps that belief. It will serve him well.

 

[electracity]

[

I would agree except that the traditional autos are not making gigafactories. They are specifically not building battery factories or cell chemistries. They have instead chosen to just wait for someone else to do it. Which will lead to poor results and higher costs. Thus the moat.

I would also agree that the competition has built moats and burned down the draw Bridges so that they cannot get out.

Tesla doesn't own a battery factory. GM has said explicitly they designed the cell chemistry used in the Bolt.

What is true is that Tesla's supply chain is positioned to make hundreds of thousands of EVs. Most other manufacturers are only positioning to build tens of thousands of EVs.

 

[neroden]

So when did this transaction occur? Because the guy managing this fund is the one quoted in a bunch of FUD articles about being disappointed with Musk, with the implication funds would pull money out. lol

Yeah, that was spin. The manager at Bailie Gifford just told Musk to apologize and stop taking the bait on Twitter. Doesn't change his support for the company.

 

[neroden]

And didn't Fidelity reiterate support for management?

As they sold TSLA?

Fidelity has a lot of different funds and has been showing fund outflows. When you have fund outflows you generally have to sell everything you own, proportionally. They're often required to rebalance as well. That's all I'm seeing at Fidelity. (After Gavin Baker was quite rightly thrown out for harassing the staff, that is. His replacement was not as bullish on Tesla.)

 

[neroden]

It's not a viable solution to just ignore the short attacks. If there is a better way to address it, I would love to hear it, and I'm sure Elon would be interested to know too.

Bezos does an awful lot of "No comment, next question".

 

[neroden]

Within this Q. Let's throw something out there: The weekend after Labor Day. (a bit aggressive... I know, must be an EM thing)

We can predict this pretty exactly, actually. 24K by the end of June. Roughly 5K/week after that. So roughly 15 weeks (maybe 14). If they ramp up a little more, then, yeah, around Labor Day.

 

[sweter]

Tesla buyers are asked to pay back €4,000 EV incentive in Germany, Tesla says it will cover cost and fight decision

Nice move by Tesla. Can't imagine any other car manufacturer doing this

But I wonder if this is legal? In Poland it's illegal to pay somebody else's taxes. Dunno if that applies to whole of EU. Dunno if this is qualified as a tax either!

 

[SebastianR]

Tesla buyers are asked to pay back €4,000 EV incentive in Germany, Tesla says it will cover cost and fight decision

Nice move by Tesla. Can't imagine any other car manufacturer doing this

But I wonder if this is legal? In Poland it's illegal to pay somebody else's taxes. Dunno if that applies to whole of EU. Dunno if this is qualified as a tax either!

Lots of discussions in the German Tesla Forum on this one. My take is, that even if there may not be a grand conspiracy against Tesla in Germany, there is not much love lost for a player not playing for the home-team. So expect German bureaucrats to be particularly picky/boneheaded in cases like this. Nice move of Tesla in any case.

And no, Tesla would not be in trouble here: they can legally refund whatever they want. Note that this is not simply Tesla paying but Tesla outlaying the cash to owners until the court case is won.

Slightly OT but to highlight German thinking: A funny little story about German bureaucracy and car makers? Exhibit A - the Streetscooter - all the big German car makers refused to build the truck, but once it was built by German Postal Services the legacy car makers pulled every trick in the book to prevent it from coming to market. And guess what? The KBA (German authority that regulates which cars can be sold in Germany) denied Streetscooter the required license: Streetscooter in their thousands of off-the-shelf components and electric parts accumulated more than 1.6g of lead (approx 0.05oz) for the whole truck. There is a little known EU rule against lead in vehicles if all parts together weight over 1.6g.
Get this: the authorities that have not lifted a finger in decades of Diesel fraud all of a sudden found the most obscure and curious way possible to prevent Streetscooter from selling their EV legally... (Streetscooter changed a couple of parts, managed to be below the 1.6g lead, got their license and is the biggest EV maker for light commercial trucks in the EU now).

tl;dr: The Germans cheer for the home team, too. Expect triple scrutiny for outsiders.

 

[ValueAnalyst]

It's not a viable solution to just ignore the short attacks. If there is a better way to address it, I would love to hear it, and I'm sure Elon would be interested to know too.

Bezos does an awful lot of "No comment, next question".

Bezos doesn't even attend Amazon earnings calls. Since Elon no longer needs nor wants external capital, I believe this is the right approach for Elon as well. Let the man do what he wants to do, which is to move humanity forward through engineering. Just do it, and point to the scoreboard.

 

[SteveG3]

Not sure if this has been posted here, but, some detailed and encouraging comments re ongoing NTSB’s look at fires after high speed crashes.

Perhaps Electrek or Teslarati could cover some of these direct and reality based reassuring comments from NTSB specialist. Also helpful, local news reporter’s confirmation of a couple of safety organizations data backing up Tesla’s claim re the cars being 1/10th as likely to catch fire as a gasoline car. Journalism not completely extinct : )


Of some note re investing, reporter indicates NTSB is considering combining investigations before releasing its recommendations and suggests that could take a year.

Are Tesla Model 3s riskier than other cars? NTSB responds

 

[SteveG3]

When the dust settles,

-We’re at or within a couple of weeks of sustainable 5K/week

-A Detroit insider who has been harshly critical of Tesla in the past says all versions of the Model 3 not only look to be on course to be quite profitable, but far more so than any other EV

- 2-3 weeks from a Tesla update/earnings report where apparently shorts best move will be to claim that the investment to build 12K cars in June that will deliver revenues in July was somehow “burned cash” by a company supposedly teetering on bankruptcy as Tesla will likely reiterate confidence re cash flow positive & earnings in Q3/Q4 timeframe... and no need for financing a cash infusion

- Analysts who on average have $2.69 in 2019 earnings, which I see as likely 1/2 to 1/3 what will occur, are getting more and more squeezed by reality to raise estimates on units sold, revenues, ASP, margins and earnings (see above)

-Elon has given some indication that he will do some long form interviews (ie Joe Rogan show among others) very shortly. A platform where he has done very well in the boosting signal over noise, and, having just been sobered by running full speed into a wall re the repercussions of his not filtering strongly reactive inflammatory comments.

If you’re feeling somewhat emotionally spent, no need to let it cloud that so many very promising Tesla/TSLA circumstances are in the midst of becoming far more visible.

I strongly suspect we are in one of the very best transient windows of time where there’s a gaping discrepancy between sentiment re Tesla and clear strongly bullish new information being appreciated to scale.

 

[RobStark]

Nissan Offering $2,000 Cash Back On 2018 LEAF (In ZEV States)

And the press is running articles about soft high trim Model 3 demand.

 

[Drax7]

Here is a quick back of the envelope 2019 income statement guess:

Model s+x: 100,000 cars @$100,000 @30% gross margin = $ 3.0 bln

Model 3 : 400,000 cars @ $48,000 @ 25% gross margin =. $ 4.8 bln

Total Gross margin: = $ 7.8 Bln

Less:

SGA. = $ 4.0 bln
R&D. = $ 1.6 bln
Interest. =$ .596 bln
Total expense = 6.196 Bln

Net profit. = $ 1.604 bln

Shares outstanding. = .166 bln

Eps. $ 9.6

P/E of 40 is the most I like to pay for a stock

Stock price forecast. $ 384

Any thoughts ?

 

[SteveG3]

Nissan Offering $2,000 Cash Back On 2018 LEAF (In ZEV States)

And the press is running articles about soft high trim Model 3 demand.

I see investing in Tesla to a large extent to be monetizing the degree to which our news media is currently a PR operation of massively concentrated wealth rather than journalism.

(don’t get me wrong, I strongly like the products and mission as well).