dc_h
Active Member
I would guess they would prefer to do this quarterly. It will minimize costs, getting the best rate and they can carry leases for a month or two before securitization. Hopefully they are doing billion dollar tranches by q4.
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You mean if they start leasing Model 3s. Since currently you can only purchase them, either with cash or a loan. (I suppose you could do a non-sponsored third-party lease.)
Waiting4M3
Active Member
Yes even with such positive news, the article still manages to throw this in:
"A successful deal bodes well for Tesla’s future fundraising efforts, a perpetual concern for the company as it ramps up production for its Model 3 mass-market car. The company could burn through $4.2 billion this year, according to Barclays Plc analyst Brian Johnson."
You never see other company's investment being perpetually misrepresnted as cash burn, for example, you'll never see this below headline
Ford Expects $11B Cash Burn by 2022 To Survive EV Battle
RobStark
Well-Known Member
If Tesla turns consistent quarterly profits almost all news sites will drop the "burn" as Tesla invest $1b+ per quarter. All the legitimate ones at least.
It is a "burn" when you are losing money (or more specifically, cash flow negative).
They will be “burning” for years, including all profits...
Currently he burn rate is too slow for the peak benefit of share holders
Feel The Burn...
Currently he burn rate is too slow for the peak benefit of share holders
Feel The Burn...
ABS securitisation get's pretty complex. I think the majority of the $3.8b is unlikely to be available for securitisation. Some of the reasons for this are, in no particular order:
- Tesla would have warehoused or securitised these assets earlier if they could. The WA coupon on this securitisation is likely to be well under 2% when they just went out and offered junk bonds for 5.3% not that long ago. The rates on the warehouses are also well under the 5.3% of Tesla's bond offering. Why hasn't Tesla gone out and taken a $3b warehouse line? There would be plenty of banks out there ready to offer these facilities. Tesla can't get cheaper money than an efficient warehouse/securitisation.
- Looking at how hard Moody's hit them on this deal (50% RV loss assumption, <70% AAA note rating) it is likely that they haven't been able to get a rating any earlier than this. Fitch and S&P tend to treat new issuers harder than Moody's - this doesn't mean that they won't be able to securitise more in the future, but they will not get anywhere near the execution of a more established player
- Only one RA rated this deal. The standard is two or more, and it would be strange for Tesla not to try for more than one rating as it would provide greater confidence to the market.
- If the $3.8b of leases is global, they would have to build up a large enough pool to securitise in each jurisdiction. Min size is about a quarter billion USD for the economics to work - there are substantial establishment fees.
- Tesla Finance LLC (the sponsor and Tesla's financing arm, established in 2013) only has $830m of leases - why are the rest not included in this company? Are they required to stay within Tesla's main entity to meet covenants on other bond issuances? Are they leased on non-US vehicles? Who knows - but it seems unlikely that they are available to securitise in the US. My guess is that the difference between the $600m sold in this securitisation and the $230 left behind is that these loans need to season for a month or two, or are not currently performing.
- One of the big no-nos of structured finance is that the sponsor cannot provide additional credit support to a deal - Does the resale value guarantee provide this and therefore exclude these leases from being securitisable.
- Did Tesla have the correct wording in the T&Cs of their early leases (able to transfer/sell the loans without the lessee's consent)?
- There is extreme geographic concentration in this securitised pool. Are the remaining loans all in CA and geographic concentration would kill the rating if more CA loans are tipped in?
Juicy bits from Professional Driver On A Closed Course | BMW Car Club of America
A friend of mine needed a precision driver to entrust with a very special car for a short film promoting a very good cause. It was an extremely low serial number (single digit) of a certain company’s newest model. I’ll just say that if that company had a first name it would be Nikola, and its newest “Model” ends with the number of BMW’s most popular “Series.”
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This car is a game-changer; it will be relatively attainable compared to its predecessors, and it was even able to satisfy the driving bias of an old-school BMW-lover like me. I really didn’t want to like it, but I found little to complain about.
RobStark
Well-Known Member
There is all that plus buyers like to see 5 year residual values as well.
Model S has solid 5.5 year history now. Model X does not.
Tesla will have to pay the newbie price at some point.
Get started now. When they want to securitize Model 3 leases down the line they will have history in the ABS market.
I admit this doesn't really sound as good news:
Tesla hints at testing self-driving car prototypes outside of California
Tesla replied, so there's the chance they are in a good position with FSD but are testing outside California to avoid disclosing the data.
Further discussion also on Reddit:
Tesla has Zero autonomous disengagements for 2017, also has Zero miles in autonomous mode. (defined by CA law) • r/teslamotors
====>MODERATOR COMMENT BELOW<====
Tesla hints at testing self-driving car prototypes outside of California
Tesla replied, so there's the chance they are in a good position with FSD but are testing outside California to avoid disclosing the data.
Further discussion also on Reddit:
Tesla has Zero autonomous disengagements for 2017, also has Zero miles in autonomous mode. (defined by CA law) • r/teslamotors
====>MODERATOR COMMENT BELOW<====
Last edited by a moderator:
bdy0627
Active Member
It seems Tesla has become uncharacteristically coy regarding FSD. I don't necessarily expect a surprise announcement from them anytime soon, but I wouldn't assume they aren't moving ahead rapidly with the software. If they are behind others' progress at this point, they are undoubtedly working feverishly to regain the lead. I don't think there is anyway to know at the moment just where Tesla is compared with the obvious leaders in autonomous driving.
The fact that they write "autonomous mode, as defined by California law" (twice!) is interesting. Don't know what to make of it, but this could mean more than meets the eye.
"Keep you eyes on road, your hands upon the wheel"
- The Doors
"But not enough to disengage Autopilot"
-Elon Musk
Or is orange the new AP?
sub
Active Member
Don't think this was posted yet
Cleantech News
Edit: sorry not good with links. Article about model Y rumor, typical Hatorade included. Someone else can link maybe.
Cleantech News
Edit: sorry not good with links. Article about model Y rumor, typical Hatorade included. Someone else can link maybe.
zmarty
Member
In any case, this is very very bizzare. Completely unexpected. I do not see it as a good sign.
RobStark
Well-Known Member
I don't follow the autopilot issue closely but others here are more competent and up-to-date. Please correct any misunderstandings.
By some measures, including comparison with autopilot 1.0, the current autopilot falls behind or is more betaish than we would like. I think there are at least two reasons for this. 1) Tesla is doing this the hard way by letting a real driver's experience be sent to the AI main computer for it to learn from zero prior information. No software human magician used to develop the algos. I have also heard those in the know say only two cameras are being "audited" at present. No mention of radar inputs, gps, or microsound (? I've lost the right word) sensing of soft targets. Implementation should be slower by this method but eventually the finished product should be spectacular once all sensor data has been uploaded and analyzed. 2) I've read somewhere the current state of either the hardware, software, or both is such the damn machines take a very long time digesting what is inputed, not so much because the computing is so difficult, but the process of ingesting it is slow, probably just because of the volume of data. (Apologies, use of alimentary words needed because I'm not a computer nerd by any means.) If I remember correctly, there is an article by Harry Jerison who says our eyes and immediate neural linkages preprogram images into two dimensional frames before they are sent to the brain which is why others note babies seem to smile at faces way earlier than expected and, of course, this capacity aids in locating a source of milk.
Sorry to bother you smart guys, but can you clean up these understandings/misunderstandings?
Edit: Maybe I've used the wrong term. By AI I mean machine learning, if that makes a difference.
By some measures, including comparison with autopilot 1.0, the current autopilot falls behind or is more betaish than we would like. I think there are at least two reasons for this. 1) Tesla is doing this the hard way by letting a real driver's experience be sent to the AI main computer for it to learn from zero prior information. No software human magician used to develop the algos. I have also heard those in the know say only two cameras are being "audited" at present. No mention of radar inputs, gps, or microsound (? I've lost the right word) sensing of soft targets. Implementation should be slower by this method but eventually the finished product should be spectacular once all sensor data has been uploaded and analyzed. 2) I've read somewhere the current state of either the hardware, software, or both is such the damn machines take a very long time digesting what is inputed, not so much because the computing is so difficult, but the process of ingesting it is slow, probably just because of the volume of data. (Apologies, use of alimentary words needed because I'm not a computer nerd by any means.) If I remember correctly, there is an article by Harry Jerison who says our eyes and immediate neural linkages preprogram images into two dimensional frames before they are sent to the brain which is why others note babies seem to smile at faces way earlier than expected and, of course, this capacity aids in locating a source of milk.
Sorry to bother you smart guys, but can you clean up these understandings/misunderstandings?
Edit: Maybe I've used the wrong term. By AI I mean machine learning, if that makes a difference.
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dc_h
Active Member
I was wondering if anyone knows what is happening north of the Fremont plant. In the past I thought someone else owned the property, but it looks like it is being setup as a single development and I’m wondering if this is part of the plant expansion? It seems like there is enough space to double the plant size with this new space.
When I zoom on to street view the image reverts to some time past, not sure how far, but the additions to the south and north lot aren’t there yet, and the grading was not started. If this is Tesla, it would seem someone has encouraged Elon to really go all in on underselling.
When I zoom on to street view the image reverts to some time past, not sure how far, but the additions to the south and north lot aren’t there yet, and the grading was not started. If this is Tesla, it would seem someone has encouraged Elon to really go all in on underselling.
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