General Discussion: 2018 Investor Roundtable

[Waiting4M3]

I meant reservations representing $20B in sales. $16B would probably be more accurate using the $42.5K ASP estimate and 373,000 reservations as of May 2016. Tesla has 373,000 Model 3 reservations as of May 15, after 8k cancellations and 4k duplicates

Edit: @mongo and @Reciprocity beat me to it ....

The original discussion was why didn't TSLA shoot up after April 2016 when M3 reservation #s came out. The $20B future revenue is very impressive, but my take is that the market saw that $20B as being 3+ years away, and wanted to wait to get into TSLA at a less risky time, closer to M3 production start. In the mean time, shorts and traders saw it as opportunity to bash TSLA down because short term cash flow would look bad due to Tesla spending to gear up M3 production in 2016 and 2017.

 

[Reciprocity]

Seeing more VIN assignments and they seem to be mostly west coast, which leads me to think they are going to try to deliver at least some portion of these vehicles or they would be assigning VINs to east coasters for delivery next quarter. Very similar to the way they do orders and deliveries for S/X with Europe, Asia and places farther way early in the quarter and then east coast US and finally the west coast of the US by the end of the quarter.

Just anecdotally, I am seeing a lot of 10k VINs but also seeing a ton of 6-7-8's still. I just dont get how they are doing this. Its clear they are building in batches based color, but not wheels. The batches seem to be sized different based on demand, this seems all logical. But I still dont get the wide variance of VINs unless the CNBC article was at least somewhat true that parts needed to be re-worked before the cars could be assigned to someone and delivery setup.

Maybe 10K manufactured in Q1 with 7-8K delivered would be my guess. Could be on the higher end of that range if they can really pull of a huge west coast push. If they really have removed the bottlenecks, then that 10k could be 11k with a nice burst next week. Of course none of those would be delivered, but we could see VINs assigned in the 14k range and could see more VINs registered next week around Tues or Wed if that is the case.

 

[Waiting4M3]

Seeing more VIN assignments and they seem to be mostly west coast, which leads me to think they are going to try to delivery at least some portion of these vehicles or they would be assigning VINs to east coasters for delivery next quarter. Very similar to the way they do orders and deliveries for S/X with Europe, Asia and please farther way early in the quarter and then east coast US and finally the west coast of the US by the end of the quarter.

Just anecdotally, I am seeing a lot of 10k VINs but also seeing a ton of 6-7-8's still. I just dont get how they are doing this. Its clear they are building in batches based color, but not wheels. The batches seem to be sized different based on demand, this seems all logical. But I still dont get the wide variance of VINs unless the CNBC article was at least somewhat true that parts needed to be re-worked before the cars could be assigned to someone and delivery setup.

Maybe 10K manufactured in Q1 with 7-8K delivered would be my guess. Could be on the higher end of that range if they can really pull of a huge west coast push. If they really have removed the bottlenecks, then that 10k could be 11k with a nice burst next week. Of course none of those would be delivered, but we could see VINs assigned in the 14k range and could see more VINs registered next week around Tues or Wed if that is the case.

The VIN distribution coming out of the line, assuming that VIN sequence in the line is random, should reflect the VIN distribution in the line. If Tesla is producing 1500/wk, and it takes 2 weeks to go through the line, then there should be at least a 3k spread in the VINs coming out of the line. That variation could likely be larger since some VINs are skipped. Or Tesla could be ramping to 2k/wk rate, so there are now 4k cars in the line.

Edit: I think this explains the VIN spread we see between 8xxx and 11xxx, but recently we saw a bunch of 6xxx-7xxx VINs out. I'm confused about those also.

 

[elasalle]

The VIN distribution coming out of the line, assuming that VIN sequence in the line is random, should reflect the VIN distribution in the line. If Tesla is producing 1500/wk, and it takes 2 weeks to go through the line, then there should be at least a 3k spread in the VINs coming out of the line. That variation could likely be larger since some VINs are skipped. Or Tesla could be ramping to 2k/wk rate, so there are now 4k cars in the line.

Are the number of entries(users) in Model 3 invites increasing at similar pace as to M3 production? If not, the sample population of folks in M3 invite spreadsheet might be decreasing? I think we can assume folks posting in TMC to be fans and the further out we go, we will have folks who just want their car and will not care about updating, participating in TMC forum?
if the above is the case, at some point the frequency and size of VINs registered at NHTSA might be the most accurate thing ??
thoughts??

 

[Starno]

Well even if they have the line arrived, they still have to mount it, and even with plans it takes time.
I mean look at houses, even experienced construction companies, with plans,... they still need some time ...

 

[Waiting4M3]

Are the number of entries(users) in Model 3 invites increasing at similar pace as to M3 production? If not, the sample population of folks in M3 invite spreadsheet might be decreasing? I think we can assume folks posting in TMC to be fans and the further out we go, we will have folks who just want their car and will not care about updating, participating in TMC forum?
if the above is the case, at some point the frequency and size of VINs registered at NHTSA might be the most accurate thing ??
thoughts??

As of last night, the sheet has ~2500 entries, and ~600 with assignment or already delivered, ~600 invited but no VIN assignment, and ~1300 not showing invitation date yet. It's possible at some point the user pool at TMC will saturate, but I don't think we're at that point yet.

 

[EinSV]

The original discussion was why didn't TSLA shoot up after April 2016 when M3 reservation #s came out. The $20B future revenue is very impressive, but my take is that the market saw that $20B as being 3+ years away, and wanted to wait to get into TSLA at a less risky time, closer to M3 production start. In the mean time, shorts and traders saw it as opportunity to bash TSLA down because short term cash flow would look bad due to Tesla spending to gear up M3 production in 2016 and 2017.

I essentially agree with all that (or least don't have a better explanation).

But IMO nothing materially new or unexpected happened 1 year later in 1H 2017 when the SP went from $200 to the $300s except the Model 3 launch got closer and what seemed far off (but really wasn't) was close enough to feel "real" and the fear/FOMO balance changed.

The long-term prospects changed at the reveal with demand for the Model 3 proven to be dramatically higher than the market expected yet the market stood there like a deer caught in the headlights and collectively did nothing. I thought at the time and still think it was nutty for the market not to reset the SP much higher after the reveal.

Irrationality like this makes me personally wary of my ability to predict short-term SP movements. Better to just load up when the market seems to be irrationally pessimistic, as it was for essentially all of 2016 IMO (and IMO still is).

 

[geneclean55]

Most of the recent spreadsheet users are non-owner 3/31 line waiters. These are probably a pretty enthusiastic bunch. In fact, some folk have suggested that the VIN assignment increase is due to a recent change in spreadsheet reporting behavior. Not sure if that can explain all of it though.

 

[Reciprocity]

The VIN distribution coming out of the line, assuming that VIN sequence in the line is random, should reflect the VIN distribution in the line. If Tesla is producing 1500/wk, and it takes 2 weeks to go through the line, then there should be at least a 3k spread in the VINs coming out of the line. That variation could likely be larger since some VINs are skipped. Or Tesla could be ramping to 2k/wk rate, so there are now 4k cars in the line.

Edit: I think this explains the VIN spread we see between 8xxx and 11xxx, but recently we saw a bunch of 6xxx-7xxx VINs out. I'm confused about those also.

That is an explanation, but assumes a lot. One thing it assumes is that the VIN assignment in the line is random based on a pool of registered VINs? Is that normal? It certainly would be a way to keep people from guessing the rate as we have all found out. I guess the other major assumption is that the line itself can hold so many vehicles and that they take 2 weeks to go through the entire line. I have no reason to doubt any of what you stated because I am just not that well read on auto manufacturing. I never really thought about just how many vehicles would be moving through the line at any given time. It makes sense based on how slow an auto line would go. I think Elon said it was as fast as a an old lady using a walker and that they where looking to speed it up to someone walking fast. I guess I never thought about it taking 2 weeks to talk the line.

 

[mongo]

9 minutes till the compensation vote meeting.

 

[Waiting4M3]

I essentially agree with all that (or least don't have a better explanation).

But IMO nothing materially new or unexpected happened 1 year later in 1H 2017 when the SP went from $200 to the $300s except the Model 3 launch got closer and what seemed far off (but really wasn't) was close enough to feel "real" and the fear/FOMO balance changed.

The long-term prospects changed at the reveal with demand for the Model 3 proven to be dramatically higher than the market expected yet the market stood there like a deer caught in the headlights and collectively did nothing. I thought at the time and still think it was nutty for the market not to reset the SP much higher after the reveal.

Irrationality like this makes me personally wary of my ability to predict short-term SP movements. Better to just load up when the market seems to be irrationally pessimistic, as it was for essentially all of 2016 IMO (and IMO still is).

I think there were a couple of different pushes. One is the Tencent accumulation from Dec'16 to March'17, I think they are in it for the long haul, so they got in a little before any outward signs of M3 production appears close. Two, the general market perceived lower risk when M3 RC cars sighting starting in March. Then in June, as the July delivery event loomed near and looked like Tesla may actually deliver, I think FOMO kicked in and the PPS spiked to ATH.

 

[Waiting4M3]

That is an explanation, but assumes a lot. One thing it assumes is that the VIN assignment in the line is random based on a pool of registered VINs? Is that normal? It certainly would be a way to keep people from guessing the rate as we have all found out. I guess the other major assumption is that the line itself can hold so many vehicles and that they take 2 weeks to go through the entire line. I have no reason to doubt any of what you stated because I am just not that well read on auto manufacturing. I never really thought about just how many vehicles would be moving through the line at any given time. It makes sense based on how slow an auto line would go. I think Elon said it was as fast as a an old lady using a walker and that they where looking to speed it up to someone walking fast. I guess I never thought about it taking 2 weeks to talk the line.

I agree with the points that you raised, and we just don't have any way of testing these assumptions. I guess my point is that we don't get too attached to the VINs that are assigned, not go over the moon when a high VIN comes out thinking that Tesla had just magically got to 5k/wk, and not go hide under our blanket when low VINs come out thinking there must be a big problem that Tesla is hiding from us. Production is hard and there are lots of problems, but Tesla has lots of smart people fixing them. From day to day there won't be dramatic changes but over time we'll be OK.

 

[ValueAnalyst]

China Green Licence Plate Scheme Going National | CleanTechnica

December article, but: "The third stage, set for the first half of 2018, will have the scheme online for the whole country."

 

[sdtslafan]

OK Elon, we delivered for you, now your turn!

 

[Mike Smith]

101 registrations in Norway today, 129 yesterday

 

[Waiting4M3]

OK Elon, we delivered for you, now your turn!

Elon: "Hold my flaming absinthe."

 

[bdy0627]

The long-term prospects changed at the reveal with demand for the Model 3 proven to be dramatically higher than the market expected yet the market stood there like a deer caught in the headlights and collectively did nothing. I thought at the time and still think it was nutty for the market not to reset the SP much higher after the reveal.

Irrationality like this makes me personally wary of my ability to predict short-term SP movements. Better to just load up when the market seems to be irrationally pessimistic, as it was for essentially all of 2016 IMO (and IMO still is).

I couldn't agree more. Dips very predictably reverse pretty quickly. You aren't making a WAG to buy a dip or sell a climb. You are playing the odds. At all other times, it's much more difficult to be right when guessing which way the market will price TSLA in the near future.

 

[EinSV]

I think there were a couple of different pushes.

One is the Tencent accumulation from Dec'16 to March'17, I think they are in it for the long haul, so they got in a little before any outward signs of M3 production appears close.

Two, the general market perceived lower risk when M3 RC cars sighting starting in March.

Then in June, as the July delivery event loomed near and looked like Tesla may actually deliver, I think FOMO kicked in and the PPS spiked to ATH.

Again, I agree with you but it raises a bigger issue that I find fascinating. Basically each of the three factors you mention are driven by only one thing -- production of Model 3, announced the previous year, getting close. Nothing material happened on the Model 3 program except the passage of time, and eventually investors piled in.

It is as if the market could not believe the Model 3 was actually going to happen until investors saw evidence of it with their own eyes -- RC cars, equipment being installed, etc. -- which is a little bizarre IMO.

IMO, we see the same thing now with the Model Y and Semi (for example). Elon has estimated demand for the Model Y at ~1M/year. Given the pre-orders for the Model 3 and the fact that CUVs are much more popular than sedans this seems reasonable (leaving aside whatever tricks Tesla has in store for the Model Y). It probably seems far out in the future to many investors but a year and a half or two years is nothing in the grand scheme of things. The same with the Semi.

It is like they are hiding in plain sight, just as the Model 3 was throughout 2016 and to some extent still is today with overreaction to short-term production issues. I think that creates great opportunities for long-term investors who believe Tesla will turn these into successful programs, and can be patient while Tesla works through the teething issues and all the inevitable drama around them.

 

[RationalOptimist]

To me, the most significant development this past week is nothing to do with model 3 production rates. It's that we finally have clear evidence that Tesla's deep-learning approach to autonomous driving is working. There are unimaginably large benefits to being the first to market with level 4 AD, especially when it can be auto uploaded to hundreds of thousands of vehicles, and the deep learning process thereby accelerated. That would be the moment when Tesla ride-sharing network takes off, and when suddenly owning a Tesla Model 3 becomes economically affordable to anyone. It could create a true moat for Tesla. I've been sad about slow progress for a year, but still believing the argument that it's all about setting up the right architecture. THEN change happens fast. For the first time, there's real evidence that Karpathy has done that, and that Elon's strategy of going the harder, but theoretically much-better-for-the-long-term route of vision based AI, is going to pay off. That alone is worth at least a 20% pop in share price, I would think.

 

[EinSV]

To me, the most significant development this past week is nothing to do with model 3 production rates. It's that we finally have clear evidence that Tesla's deep-learning approach to autonomous driving is working. There are unimaginably large benefits to being the first to market with level 4 AD, especially when it can be auto uploaded to hundreds of thousands of vehicles, and the deep learning process thereby accelerated. That would be the moment when Tesla ride-sharing network takes off, and when suddenly owning a Tesla Model 3 becomes economically affordable to anyone. It could create a true moat for Tesla. I've been sad about slow progress for a year, but still believing the argument that it's all about setting up the right architecture. THEN change happens fast. For the first time, there's real evidence that Karpathy has done that, and that Elon's strategy of going the harder, but theoretically much-better-for-the-long-term route of vision based AI, is going to pay off. That alone is worth at least a 20% pop in share price, I would think.

I agree that this is a very important development.

But despite videos all over social media not a single article has been written in the mainstream financial or general press (at least none that show up on the first 50 entries of a Google search in the past week). The closest is an article in BGR and of course Electrek, Teslarati etc. ran stories.