General Discussion: 2018 Investor Roundtable

[The Blue Owl]

Very good point @JRP3. I rarely charge my Roadster to 100% because I rarely need max range. When I do, I've learned to be double careful until it is enabled again, as you become so used to the regen slowing the car as needed most of the time. Likewise when regen is disabled due to low outside temperature. That said, it would be easy for them to program a reminder when an owner overrides the default standard regen to choose more aggressive setting. It reminds you regen will be disabled if SOC is over 90 or 100%, do you still want to set regen to high?

Or they could give a consistent experience by activating the brakes when the battery is full and progressively enable regen as the state-of-charge gets in the right range.

 

[N5329K]

One thing that irks me is all the Monday morning QB's that think Tesla somehow needs heir advice on running the company even though they are basing their advise on zero internal knowledge.

When it comes to running a car company, I have less than zero knowledge, internal or otherwise. But I have paid some attention to how startups succeed and how they fail. One common feature of many failures is Founder Syndrome: where a brilliant, charismatic leader has what it takes to create something new and important, but lacks the different skill sets needed to bring the new, important something to market, and to have it thrive there.
Mr Musk wasn't a Tesla founder, but he meets the "brilliant, charismatic" requirements. He brought these skills, plus his intense focus, to a failing car company and pretty much turned it around into that rarest of unicorns: a new American automobile manufacturer.
However, I do wonder if Tesla might be coming down with a case of Founder's Syndrome anyway, where some of the brilliant, charismatic leader's personal weaknesses....like encouraging (or mandating) "cool" and complex technological solutions to problems better solved more simply, or by regularly overpromising and under delivering, become a bug, and not a feature. We all can picture examples here.
Still, what he's already accomplished is pretty miraculous. But that very success can become a problem when the people he's hired (many with a lot of experience in running a car company) find it hard...or impossible...to disagree in any meaningful way other than quit.
Model 3 is make or break. I do think Tesla can pull this rabbit out of the hat. So far, so good. The real test will come when the car gets into the hands of the general public. And that should happen soon.
Meanwhile some Monday morning QB's just might have some valuable ideas (especially if they already work at Tesla). The more the merrier.
Robin

 

[RobStark]

One common feature of many failures is Founder Syndrome: where a brilliant, charismatic leader has what it takes to create something new and important, but lacks the different skill sets needed to bring the new, important something to market, and to have it thrive there.

The one HUGE difference between those failures and Tesla is that Elon has done it again and again.

Zip2
X.com Paypal
SpaceX
Tesla

Most charismatic founders are too afraid to do it twice, for fear of failing and having their reputations tarnished.

Cool technical solutions have been one of the differentiators between Tesla and the dozens of BEV startup failures too numerous to name all.

 

[bdy0627]

FWIW, after yesterday's CNBC debacle provided one worthwhile nugget--Tesla's response reiterating Q1 production guidance--I updated my ramp guesstimates, with the following changes based on how 2018 has proceeded thus far plus my gut feeling for the rest of the year. To be clear, these estimates are still worth exactly what you've paid for them--zero. I still enjoy the thought experiment.

I decided that assuming Tesla actually entered 2018 at 1k/week and went up from there was foolish, so I dialed back the start to 600/week and don't hit 1k/week until the 2nd week of Feb. I also dialed back the initial weeks of each successive quarter, assuming that while Tesla will hit its goals of 2500/week by end of March and 5k/week by end of June, each quarter will start out with the first couple of weeks remaining right near the prior quarter's goal. I also updated Q3 and Q4 for Tesla to not meet the 10k/week EoY goal, as they haven't reiterated that lately. I instead now have them at 6500/week at end of Q3, and 9000/week at EoY.

I'm aware that this will probably seem overly conservative to some here, but as overly conservative has won the day so far on the Model 3 ramp, my intention here was to see what 2018 full-year Model 3 production would look like from this angle. I understand that many think that the 5k-10k jump is 'just' adding a second line including all learnings from line 1, and therefore we're likely to see that jump achieved more quickly and with less stress. I would like to agree, but will believe that when I see it play out. Conservative is the word of the day for this exercise.

The good news is it's not all that bad. My 1/3 estimate is quoted above. The updated 1/26 estimate is: 16k in Q1, 47k in Q2, 76k in Q3, and 93k in Q4 for a total as of 12/31/2018 of 234k. This compares to the original 264k in my earlier estimate. The reason I think this is good is that despite all these more conservative changes, the full year has only dropped by 11% and still ends the year well over 200k Model 3s produced. Further, I think Tesla is still likely to deliver over 300k vehicles in 2018--which would be around 200% growth in volume in a single year. Assuming S/X don't grow at all and are right at 100k delivered in 2018, that would require all Model 3s produced by Thanksgiving to be delivered in 2018--certainly doable since they're virtually all US-bound this year.

100k to 300k in a year is still pretty incredible, IMO.

I think your ramp seems reasonable and not overly conservative. Mine is more conservative. One major consideration is whether the end of quarter estimates from Tesla are burst rates rather than steady rates. That makes a pretty big difference for the numbers. I personally think that's likely. As long as they hit at least burst rates, they can confirm guidance. If so, the first few weeks of the next quarter will actually be quite a bit less than the estimate for the end of the previous quarter. These might look shockingly low to some, and I hope Tesla crushes them. I think if Tesla beats them, it will be modestly. Here are my estimates for steady rates:
End Q1: 2200
End Q2: 4300
End Q3: 5900
End Q4: 6800
I think total Model 3 production for the year will be very close to 200,000.

 

[bdy0627]

Yeah, I’d rather my $ stay on TSLA earning me 40% returns than paying off my 3% loan... That said, I’m one of those people who are buying the base Model 3, although I will add EAP. I won’t buy FSD until it works.

Totally agree. No reason to consider FSD at this point but crazy not to buy EAP considering where we are likely to be in just a few years.

 

[Yuri_G]

Hey guys, I think the ramp is improving.

Instagram post by Elon Musk • Jan 28, 2018 at 1:29am UTC

 

[tinm]

Elon’s Boring Flamethrower: bad judgment and irresponsible. Wish he’d stay focused.

 

[BETA1019]

An old timer like myself really gets anxious around this time of the year when Tesla starts to announce full year guidance for the MS and X. While I think their numbers will be superb I hope they underpromise. MS thread is showing a 3 month waiting period, indicting demand remains strong. I use to love Porsche’s, but the S is so darn sexy.

I believe the extended waiting period has more to do with the pending refresh than it does a spike in demand. Though I could be wrong (hopefully) and it has more to do with people hearing about and seeing the 3 in showrooms, and actually going out and buying the S

 

[Yuri_G]

Elon’s Boring Flamethrower: bad judgment and irresponsible. Wish he’d stay focused.

All work and no play...

 

[Jonathan Hewitt]

50 years from now, new employees at The Boring Company during indoc will learn the fun fact that the company was initially funded by hat and flamethrower sales.

 

[Yuri_G]

1,000 ordered already, only 19,000 left!

Most entertaining fundraiser of all time?

Elon Musk on Twitter

 

[JRP3]

Elon’s Boring Flamethrower: bad judgment and irresponsible. Wish he’d stay focused.

He's allowed to blow off a little steam once in a while.

 

[Reciprocity]

Elon’s Boring Flamethrower: bad judgment and irresponsible. Wish he’d stay focused.

Or a very clever way to incinerate bears.

 

[Zaxxon]

He's allowed to blow off a little steam once in a while.

Or burn it off...

 

[avoigt]

European December EV Sales numbers:

Tesla Surges, But Renault Zoe Coasts To #1 In 2017 Europe Electric Car Sales | CleanTechnica

 

[sweter]

Elon’s Boring Flamethrower: bad judgment and irresponsible. Wish he’d stay focused.

There's only so much one person can do in a company of 35k employees, even the CEO. He's not gonna build all those Model 3's himself and fix every single bug himself.

 

[neroden]

How does this securitisation differ from the Warehouse agreement in terms of impact on Tesla?

As noted before, this is a longer-term securitization rather than a revolving line of credit. It'll probably have fixed interest rates rather than floating. The best way to think about it is that Tesla is locking in current interest rates in expectation of rising interest rates. This is IMO correct behavior.

 

[mongo]

P

As noted before, this is a longer-term securitization rather than a revolving line of credit. It'll probably have fixed interest rates rather than floating. The best way to think about it is that Tesla is locking in current interest rates in expectation of rising interest rates. This is IMO correct behavior.

And follows Tesla's approach with the SolarCity PPA. "Hey market, here's a low risk multiyear revenue stream, what'll you give me for it today?"

 

[neroden]

Great video by Galileo Russell from Hyper Change on how Seeking Alpha is biased against Tesla and its other flaws:

Edit: Also a little fun fact: my previous employer was hosting Seeking Alpha‘s website and I had more than a few times fixed server issues and recovered the site from outages (this was more than 5 years ago).

After going through that video, I'm now suspecting Seeking Alpha is actually getting paid to attack TSLA. Because their editors' behavior has no other rational explanation.

 

[aubreymcfato]

After going through that video, I'm now suspecting Seeking Alpha is actually getting paid to attack TSLA. Because their editors' behavior has no other rational explanation.

Funny thing is that there is our own @ValueAnalyst in the video (try 10:39, I canìt paste the right link in here).