General Discussion: 2018 Investor Roundtable

[skitown]

I don't know that they pushed out the Semi target. From my re-reading, they only said they were not focused on Semi sales/ reservation numbers. Open to correction.

Well, they certainly pushed out the "Semi Range" target. Paraphrasing: "Targeting closer to 600 mile range now...."

 

[MattEnth]

While I agree with most of what you said, @MattEnth did miss pretty bigly on his Q1 call.

He missed on the biggest ticket items, M3 ramp, cash, and profitability.

Erm, I'll defend and say the only "big ticket item" I missed on was Elon's backing down from Q3/Q4 profitability. And I'm still stunned that happened. I also missed on cash, though I still need to go through and figure out the relationships between cash and customer deposits (is Tesla using customer deposits for liquidity? or can we find enough evidence that they're specifically not doing that? Either would be interesting)

On the M3 ramp, I would argue that I was right. It seems to me like they certainly softened their commitment.

• Q4 Letter: "5,000/week by the end of Q2"
• Q1 Letter: "approximately 5000/week in about 2 months."

The first is a hard number with a fixed date. The latter is not.

The WSJ also reported that Tesla was making 325 cars per day just after the Q1 call, which comes out to 2275 per week. As far as I know, Tesla is yet to make 2500 Model 3s in a single week. The Q1 letter has 2270 as their record production.

They are more than a month behind February's production targets.

I don't know that they pushed out the Semi target. From my re-reading, they only said they were not focused on Semi sales/ reservation numbers. Open to correction.

The Semi wasn't even mentioned in the Q1 letter (seriously, do ctrl+f). The 10-Q now lists it as a pipeline project and does not give a firm date (quote below).

The Model Y and Roadster also weren't mentioned in the Q1 letter.

In addition, we have several future electric vehicles in our product pipeline, including those we unveiled in 2017 – an electric semi-truck and a new version of the Tesla Roadster.

 

[Waiting4M3]

I don't know that they pushed out the Semi target. From my re-reading, they only said they were not focused on Semi sales/ reservation numbers. Open to correction.

You're correct. I only highlighted items that were known to be directly contradicted by what Tesla announced. Other items that Tesla's comment didn't directly contradict, I'm going to give Matt a pass.

 

[mongo]

You're correct. I only highlighted items that were known to be directly contradicted by what Tesla announced. Other items that Tesla's comment didn't directly contradict, I'm going to give Matt a pass.

Cool, I only asked because I had heard the delayed semi narrative elsewhere and wanted confirmation that it hadn't been stated directly.
Thanks!

 

[TradingInvest]

Buffett: I've never said anything negative about Elon Musk

I used to have high regard toward Warren Buffett. In the past I went to his shareholder meetings many times, I don't remember he ever said anything wrong. After watching this video, I realized maybe he is getting old? Everything he said in this video is kind of wrong.

Elon is just trying to improve a product? What about Tesla's mission?

Some candy brands has so much moat that Elon can't do well? - let's see what happens. From now on my family will only buy Elon's candy.

iPhone has strong moat? iPhone is already losing out in China. I never thought this could be possible, apparently the pace of innovation is a big deal. Let the Huawei phone come to the US to freely compete, let's see what happens. Ever after Steve Jobs was gone, Apple stopped innovation.

"A few days ago Tesla said they don't need financing, now they are talking about needing it." Warren, you know you are reading FUD.

Costco has strong moat? I'm in the middle of switching to Whole Foods.

Amazon has strong moat? Wait until someone like Elon compete with them. Jeff Bezos was lucky that no competent people really competed with him in the last 20 years.

 

[aubreymcfato]

Well, today was quite the day for Norway, they surpassed the 25000 milestone.
And if tomorrow goes as today, May 2018 will achieve May 2017 results: in just 5 days.

 

[TradingInvest]

I don’t know why people on dumping on MattEnth for posting this. It is useful information. It clearly shows why the bond markets are closed for Tesla right now, and why shorters are shorting. It also shows why the analysts on the call were so incredulous that Elon wasn’t going to raise money.

Ironically, I’ve been in Elon’s position before, just on a much, much smaller scale. I had raised $6m in our first VC round and deployed the cash rather rapidly. Thing is, I could easily see that we were going to bottom out with about $1m in the bank but the VCs, being financial money men (read: couldn’t run a company if their life depended on it), argued for a quick $10m second round. We never touched that money. We went public and raised $72m. Never touched that money either. I wasn’t the CEO anymore by that point for that bit of essentially financial malpractice. The point is that the CEO has the best view of what the company is going to need.

Elon is not an idiot, nor is Deepak. I have very little doubt they will manage their way around what looks like a liquidity problem. It isn’t as if they don’t know about it...

Most people on this board know Tesla's real financial situation, that's why everyone is watching the production ramp closely. However, many people on this board also understand if Tesla's account runs out, it's not the end of the world, the company can easily get billions through several means. This last part is the thing that shorts don't understand, or maybe they do understand, but they just try to spread fear (FUD). They want to spread fear to create a bank-run situation. One short even admitted this to me privately that they want to see it happen.

 

[Waiting4M3]

Erm, I'll defend and say the only "big ticket item" I missed on was Elon's backing down from Q3/Q4 profitability. And I'm still stunned that happened. I also missed on cash, though I still need to go through and figure out the relationships between cash and customer deposits (is Tesla using customer deposits for liquidity? or can we find enough evidence that they're specifically not doing that? Either would be interesting)

On the M3 ramp, I would argue that I was right. It seems to me like they certainly softened their commitment.

• Q4 Letter: "5,000/week by the end of Q2"
• Q1 Letter: "approximately 5000/week in about 2 months."

The first is a hard number with a fixed date. The latter is not.

The WSJ also reported that Tesla was making 325 cars per day just after the Q1 call, which comes out to 2275 per week. As far as I know, Tesla is yet to make 2500 Model 3s in a single week. The Q1 letter has 2270 as their record production.

They are more than a month behind February's production targets.


The Semi wasn't even mentioned in the Q1 letter (seriously, do ctrl+f). The 10-Q now lists it as a pipeline project and does not give a firm date (quote below).

The Model Y and Roadster also weren't mentioned in the Q1 letter.

Matt, I won't argue with you. Just like your Q1 call, I will wait and see if your argument stand up in time.

 

[anon]

On the M3 ramp, I would argue that I was right. It seems to me like they certainly softened their commitment.

• Q4 Letter: "5,000/week by the end of Q2"
• Q1 Letter: "approximately 5000/week in about 2 months."

The first is a hard number with a fixed date. The latter is not.

The "about 2 months" thing is the same language that was used in the delivery report in early April. Of course it's a slight softening of the timeline in the Q4 letter, but it wasn't new for earnings.

 

[dirtyofries]

Rumblings in Chinese media of a large investment bank to build factories.

重磅：中国一家大型综合性集团，考虑深度入股美国特斯拉汽车_中原网

 

[TradingInvest]

I agree. Last night I drove my friend's new Model 3 (he ordered online, not previous owner). It's a great car. No identifiable manufacturing problems. He used to drive a Prius, and follows Tesla closely, but still was surprised at how wonderful the Model 3 is.

My model 3 is also perfect in EVERY regard, much better than I thought. This car will be a run-away success. Every time I let someone test drive, they say they want to buy the car. A friend of mine who is a loyal Mercedes fan, who owns two Mercedes, one sedan, one large SUV. He used to be proud of his cars' acceleration, handling, braking and how quiet they are. Yesterday he tested mine, you know how that goes ... On top of that, he sadly admitted his SUV alone burns $4000 of gasoline each year. While we were back to the parking lot after test drive, a stranger approached us and said this is his dream car. We gave him a test ride too. This is the second time this happened to me in one weekend.

How often do you walk to people on the parking lot and tell them their car is your dream car? People don't do that. Unless it's a Tesla.

I have a large group of friends, about 30 families. Right now we have 2 Model Ss, one model 3, another model 3 is coming, another one is ordering a Model X. Imagine next time we meet, people will talk about them, test drive, then suddenly half of the group will switch to Tesla. I see no reason why they won't switch. Then the rest half will consider Tesla when they buy their next car. We have seen this with smart phone switch. This is the beginning.

 

[TradingInvest]

Rumblings in Chinese media of a large investment bank to build factories.

重磅：中国一家大型综合性集团，考虑深度入股美国特斯拉汽车_中原网

Sometimes it's just rumor. But this does make a lot of sense. Long time ago, I thought the best thing China should do is to buy 20% of Tesla from the open market, then fully support Tesla in China. This would be a huge win for China. India should do the same.

If this Chinese firm wants Tesla to issue shares in exchange of funding to build the factory, I don't think Elon will do that.

 

[RobStark]

Battery shortage interrupts Hyundai Ioniq Electric sales

In a memo entitled "18My Ioniq EV Short-Term Production Shortage," which the reader provided to GCR, Hyundai Canada informed dealers that:

"Due to a temporary global battery supply shortage, the sold order entry system for 18MY Ioniq EV will be closed effective immediately. The 19MY Ioniq EV will be opened at the same time to allow for pre-sale of 19My Ioniq EV, with deliveries beginning in July."

 

[sub]

View attachment 299495

Stole that for my avatar until Tesla hits 5k/wk or goes bankwupt.

 

[sundaymorning]

Tried posting it in the other thread (still needs moderator approval), but reposting here...

• They delayed an 82.5M debt payment from February to August
• They have 30% of all cash overseas.
• They have -2.2B net working capital
• Their accounts payable (2.6B) is almost larger than their cash position (2.67B)
• They moved >50% of cash out of money market funds and into cash balance (around 930M still in money market, which is pretty close to customer deposits).
• They're planning 2.35B more in CapEx this year
• They amended their credit agreement to be able to lever Freemont
• Elon is personally approving every 1M+ expense
• They're cracking down on contractors
• They're being adversarial to their suppliers
• They have an upcoming company reorganization/restructure
• They've had significant turnover in their finance department in the months prior

This is a company in financial distress. It makes Elon's statement that they won't raise capital all the more stunning.

My opinion here is that you are trying to suck us into a discussion that has no merit. Your post indicates that you are missing the point completely, and any 18 with a credit card and a minimum wage job can pick you apart on the FUD. I especially highlighted your points in BOLD, here’s how accounts payable, working capital and cash flow works:

The accounts payable has a contingent period of 60 days before they need to be paid. Tesla uses their credit (which is outstanding in the automotive industry as they were able to extend this period from 30 days to 60 days currently). That balance/debt was used to stock up inventory/parts in order to build the Model 3/S/X. In a 60 day period Tesla on average DELIVERS 16,000 model S&X, which means there is incoming cash flow of $1,600,000,000. The Model 3 (this quarter estimate of 2,000 per week) brings in another $1,000,0000,000. Which totals to $2.6 billion in revenues that could easily be use to fund operations and draw themselves another line of credit that could be extended further to another 60 days. The accounts payable only becomes a liability when the SX3 lines stop completely, in which case, won’t ever happen unless there is a black swan event like a huge earthquake.

This example can be compared to a teenager who owns a credit card and has an outstanding balance of $1,000. If the teenager was employed and was able to pay this balance, the bank would be happy to extend another $1k loan as long as the teenager makes good on his/her payment.

Aside from the 60 day credit, Tesla also has another $2.6 billion in cash, giving them $5.2 billion in wiggle room. Hence, the picture is much rosier than what you are painting. Now go back to your corner and phantom more ideas for FUD.

 

[Reciprocity]

God, could those Bloomberg interviewers have been any more condescending? They were almost laughing at him. The joke's on Bloomberg though. This may indeed be the start of a sea change in quarterly conference calls. We can only hope.

Yeah, Galli is a class act. I wish I was as on top of things when I was 25. Instead I was chasing coeds.. wait NM i was working at 25, but still pretty clueless and chasing girls that where not in school anymore. But anyway, I hope my kids are more like Galli then like I was when I was 25. I had a good work ethic but was still just a wild child.

 

[Lbkmxp100d]

Yeah, Galli is a class act. I wish I was as on top of things when I was 25. Instead I was chasing coeds.. wait NM i was working at 25, but still pretty clueless and chasing girls that where not in school anymore. But anyway, I hope my kids are more like Galli then like I was when I was 25. I had a good work ethic but was still just a wild child.

I saw that too! Pretty sad to treat a young man like that. Also was a title of article callin him a “nerd”. I wish I was half as mature as him at 25. My mane concern at 25 was where to go on date. He was the most prepared of any of the “Wall Street” experts. I give the young man great props and wish him nothing but the best. Hope this may help him propel whatever future endeavors he wants to pursue.

 

[skitown]

Battery shortage interrupts Hyundai Ioniq Electric sales

In a memo entitled "18My Ioniq EV Short-Term Production Shortage," which the reader provided to GCR, Hyundai Canada informed dealers that:

"Due to a temporary global battery supply shortage, the sold order entry system for 18MY Ioniq EV will be closed effective immediately. The 19MY Ioniq EV will be opened at the same time to allow for pre-sale of 19My Ioniq EV, with deliveries beginning in July."

Wow. I believed this was coming. But to see it it here in a photo is pretty amazing.

 

[Reciprocity]

I saw that too! Pretty sad to treat a young man like that. Also was a title of article callin him a “nerd”. I wish I was half as mature as him at 25. My mane concern at 25 was where to go on date. He was the most prepared of any of the “Wall Street” experts. I give the young man great props and wish him nothing but the best. Hope this may help him propel whatever future endeavors he wants to pursue.

I'm pretty sure he is proud to be a nerd. Elon is the king of the nerds. I only knowkbecause I am one as well.

 

[Zaxxon]

For some definition of 'temporary' that differs from mine...