General Discussion: 2018 Investor Roundtable

[EinSV]

Model 3 is on everyone's mind, but this nugget from today's Electrek article on the Tesla Energy reorganization caught my eye.

This is the first explicit confirmation I have seen from Tesla that they expect the energy business to eventually be the same size as the automotive business since the 2016 shareholder meeting:

“Our energy products are critical to our mission to accelerate the world’s transition to sustainable energy, and we continue to expect that Tesla’s solar and battery business will be the same size as automotive over the long term. One of the main reasons we acquired SolarCity was to use our Tesla stores to sell not only cars, but also Powerwall and Solar. Tesla stores have some of the highest foot traffic of any retail space in the country, so this presents a unique benefit that is demonstrated by the growing number of Tesla vehicle customers who are also purchasing energy products through our stores. The reorganization that we announced last week does not impact this.” Tesla’s energy division to be hit hard by restructuring, Tesla still likes long-term prospect
​

Combined with Elon's statement at this year's shareholder meeting that storage margins were expected to be in the same range as automotive margins, this confirmation is very important IMO.

 

[Foghat]

Speaking of Chanos

In the April 2018 he mentions gross margins as a problem... didn’t Tripp point out scrap waste specifically? Wasn’t this one of his reasons for being a “whistleblower”? Wasn’t he saying he didn’t like a CEO lying about this?

I’m wondering if Tripp was leaking back then as well?

If you watch the interview clips of him in December 2017 the stock ticker said $340 and he was asked if he was wrong on the stock price and he said depends on when you start measuring... at this time Tripp had been on the job about a month and a half at tesla. Stock takes a huge dive after March 12 thru beginning of April, right when Chanos does the April interview where he takes about costs and gross margins which scrap and waste is related.

Lastly, this was a great video. I appreciated its detailed look at Chanos. I’ve read that Chanos gets obsessed and doesn’t back down from a position, which makes desperation all that much more a reality if you make a mistake and don’t change. What lengths would he go to be right may lead to his ruin...

 

[Foghat]

In the April 2018 he mentions gross margins as a problem... didn’t Tripp point out scrap waste specifically? Wasn’t this one of his reasons for being a “whistleblower”? Wasn’t he saying he didn’t like a CEO lying about this?

I’m wondering if Tripp was leaking back then as well?

If you watch the interview clips of him in December 2017 the stock ticker said $340 and he was asked if he was wrong on the stock price and he said depends on when you start measuring... at this time Tripp had been on the job about a month and a half at tesla. Stock takes a huge dive after March 12 thru beginning of April, right when Chanos does the April interview where he takes about costs and gross margins which scrap and waste is related.

Lastly, this was a great video. I appreciated its detailed look at Chanos. I’ve read that Chanos gets obsessed and doesn’t back down from a position, which makes desperation all that much more a reality if you make a mistake and don’t change. What lengths would he go to be right may lead to his ruin...

To add, Tesla’s response to the Linette Lopez article for Business Insider on June 4th, states that this scrap was a result of q1 ramping... so this may be more support tripps scrap account was relayed much earlier like April potentially.

 

[Krugerrand]

I mean, can't people be wrong sometimes? heck I might be wrong about Tesla.

It's a weird take to be like "Be careful, this guy has been wrong before" almost implying like you have never made a losing trade in your life.

No. Some professions don’t allow for being wrong.

Money is a unique possession for the vast majority of the population. People kill for money; others and themselves. There’s truth in the saying that money is the root of all evil.

Professional financial advisors et al need to have a much lower tolerance for being wrong particularly when they are trying *this* hard to convince the population that a company and its CEO are fraudulent, liars, scammers, are going bankrupt any day now - for the last 6+ years, btw, etc.

This has gone way beyond some finance guy/s general opinion on the state of affairs, if you’ve got a few extra bucks hanging around then shorting Tesla might net you a small reward.

You’re new here. You’ve missed the people who’ve left because their entire investment has been wiped out. You’ve even missed all the people who’ve left because they’ve made a fortune. Money is serious sugar for a vast portion of the population. It puts food on their table and a roof over their kids’ heads. It makes life easier and more comfortable and less stressful.

So, no. In this regard, in the context of Tesla and what’s been going on and continues to go on...no, it’s not okay for him to be wrong. Or any of the other vocal, chest pounding, pulpit preaching players.

They can be wrong if it just involves themselves, but not now that it involves so many others, not with the vitriol, the FUD, the lies, the fake news, the clickbait, the manipulation...

Some professions don’t allow for people to be wrong. You want your brain surgeon to be wrong when your spouse is having brain surgery? If my cobbler is wrong in redoing the soles of my cowboy boots, the worst that happens is he gets to redo them a second time at no charge to myself.

So, no.

 

[mutle]

Our favourite CNBC Reporter Lora Kolodny wrote an informative article about Tesla today, which is only slightly negative at one point:

Tesla is suing an ex-employee for hacking into its 'MOS' software — here's what that system does

• Tesla is suing a former employee for allegedly hacking into the company's factory software, known as its MOS, or Manufacturing Operating System.
• MOS is one of several disparate reporting systems that Tesla created and uses to track materials, vehicle and battery production in its factories.
• The former employee has disputed Tesla's hacking charges.

Tesla is suing an ex-employee for hacking into its 'MOS' software — here's what that system does

It ends with this quote:

"When Amazon developed AWS that was slated for in-house use. But over a decade, it's become the standard for all cloud services. Elon Musk's vision is paralleling that, I'd guess. He's betting that the factory of tomorrow will be very different than it is today, because cars are becoming more software than hardware. There should be some continuity from manufacturing to the car, where you are updating and bringing new features out over the air. And it all has to be served up by the ERP system."

 

[SlicedBr3ad]

Benzinga - today:

Tesla Motors, Inc. (NASDAQ:TSLA) - UPDATE: Source Familiar Tells Benzinga Tesla's Service Revenues Haven't Grown In Tandem With Service COGS, As Noted By Bernstein In This Morning's Note, Because They Relate Only to 'Out of Warranty' Jobs Which 'Haven't Grown Much'

Tesla Motors, Inc. (NASDAQ:TSLA) - UPDATE: Source Familiar Tells Benzinga Tesla Recording Services Infrastructure Costs As Service COGS Is 'Appropriate', Ensures Comparability Of Auto Margins With Traditional OEMs That Don't Incur Similar Service Capacity Costs

Make sure to actually click the article not just read the link and move on if you support Tesla/bull. Drive traffic to that site.

 

[bhzmark]

Speaking of Chanos

I generally ignore videos and prefer to read arguments and points that people make -- but this guy is good. something about his fast-talking and honest intelligence. conceding a few valid Chanos points, but very logical debunking of Chanos position. Worth watching.

Drive traffic to that site.

Why should I care? Those links are worthless -- they are just a teaser with an an ad to subscribe.

 

[Boomer19]

particularly when they are trying *this* hard to convince the population that a company and its CEO are fraudulent, liars, scammers, are going bankrupt any day now - for the last 6+ years, btw, etc.

This has gone way beyond some finance guy/s general opinion on the state of affairs, if you’ve got a few extra bucks hanging around then shorting Tesla might net you a small reward.

You’re new here. You’ve missed the people who’ve left because their entire investment has been wiped out. You’ve even missed all the people who’ve left because they’ve made a fortune. Money is serious sugar for a vast portion of the population. It puts food on their table and a roof over their kids’ heads. It makes life easier and more comfortable and less stressful.

well said, and prudently brings into focus the seriousness of what’s really going on.
reality is welcome here, and shorts in general have points to be heard. but the cavalier attitude is palpable. you’re not shorting ibm, its not chipotle after some bad romaine. this isn’t tim cooks, lets cling to iPhone revenue and 200bb...while doing the absolute minimum improvements, skating the let’s not cannibalize/let’s not trail-blaze line of thinking. buybacks cant outlast lack of innovation.
this here is actually important.

that said, if elon ends up being a fraud, that will be a sad day. i’m not some fanboy that takes his every word as gospel. but i do think he has an awful lot of answers for an awful lot of challenges facing us. i’m not willing to bet against that with the cards/companies/backings he has on the table right now. if he’s a fraud, he’s f’ed not just once, but like 5x as far as credibility. tsla, solar, open ai, space, neuralink, boring,
nobody is risking what he is in as many places. are you kidding me?
if he’s really full of sh*t he’s the biggest degenerate gambler of all time, ️’s made of meteorite.
if you’re telling me you’re ok looking at yourself in the mirror by taking sides with people like these (https://teslamotorsclub.com/tmc/attachments/fairfax-pdf.310679/) over people who’ve put everything on the line like musk?
sorry i just don’t agree.

 

[22522]

Usually I try to at least think about something a bit before speaking... Maybe read the link.

But, why are folks complaining about service revenue shortfall on a car designed to go 1,000,000 miles?

Did someone mistakenly build service revenue into a financial model?

 

[Foghat]

well said, and prudently brings into focus the seriousness of what’s really going on.
reality is welcome here, and shorts in general have points to be heard. but the cavalier attitude is palpable. you’re not shorting ibm, its not chipotle after some bad romaine. this isn’t tim cooks, lets cling to iPhone revenue and 200bb...while doing the absolute minimum improvements, skating the let’s not cannibalize/let’s not trail-blaze line of thinking. buybacks cant outlast lack of innovation.
this here is actually important.

that said, if elon ends up being a fraud, that will be a sad day. i’m not some fanboy that takes his every word as gospel. but i do think he has an awful lot of answers for an awful lot of challenges facing us. i’m not willing to bet against that with the cards/companies/backings he has on the table right now. if he’s a fraud, he’s f’ed not just once, but like 5x as far as credibility. tsla, solar, open ai, space, neuralink, boring,
nobody is risking what he is in as many places. are you kidding me?
if he’s really full of sh*t he’s the biggest degenerate gambler of all time, ️’s made of meteorite.
if you’re telling me you’re ok looking at yourself in the mirror by taking sides with people like these (https://teslamotorsclub.com/tmc/attachments/fairfax-pdf.310679/) over people who’ve put everything on the line like musk?
sorry i just don’t agree.

Has Elon ever sold a Tesla share? In over a decade as CEO, has Elon’s share count increased or decreased?

Over his time as CEO, has his salary increased or decreased?

Since IPO, has the stock appreciated significantly?

Has he followed through so far on the “master plan” that attracted capital and labor to his organization?

Has he created a product that consumers want?
Is there demand for the product?

Has he allocated capital to increase production to meet demand and vision of future products?

Now compare the answer to these questions to all other growth companies and see where Elon stands.

He may be off on his product timeline projections, but the dude is laser sharp on prediction and vision execution and that’s where the core of value creation comes from.

I think most hedge fund managers and or competition now understand this about Tesla team and Elon. The strategy at play is to slow Tesla down or take ownership over its assets/infrastructure for themselves. There is a real threat to their “company visions” since Tesla is accelerating rapidly on a lot of things, specifically battery cell/pack cost which not only affects the car industry, but the electric utilities, and home construction among other things (like aircraft). Bottomline, this is an entire economic shift and Tesla team are first movers. Talk about vision...

 

[Mich]

I didn't follow the VIN registrations discussions in detail, but I just realized something interesting:
Elon tweeted a picture of a M3 AWD (+maybe P) version rolling off GA4 on June 16. We don't have any AWD VINs registered at all since February.

 

[Henchman]

And still people think Tesla is just a car company.

Oh vey.

 

[Henchman]

Pretty sad to see people WANTING a company that's doing great things, to fail.
That's a level of being a miserable human being that's hard to fathom.

Doesn't matter.
This isn't Delorean, who was al hype, but made an actual pretty shitty car.
And it's not Enron, enron didn't actually make anything tangible.

This is Tesla.
A company with half a million preorders.
It's the Apple of the car industry, and Elon is their Jobs.
But it's more, because Tesla is more than just a car company.
Anyone who thinks they'll go under is fooling themselves.

 

[Vinny809]

I didn't follow the VIN registrations discussions in detail, but I just realized something interesting:
Elon tweeted a picture of a M3 AWD (+maybe P) version rolling off GA4 on June 16. We don't have any AWD VINs registered at all since February.

That’s a very good observation, does anyone have an answer to this?

 

[mrdoubleb]

That’s a very good observation, does anyone have an answer to this?

It appears Tesla has had enough of the VIN tracking and changed their registration schedule recently. They only register the VINs when the customer gets the car.

 

[Mich]

The hightest AWD VIN I found was in the 8k range and just 19 VINs. So either they have ready to ship cars outside the known VIN range or tue car on the picture was one of the 19 early production AWDs.

 

[NicoV]

It's the Apple of the car industry, and Elon is their Jobs.

That is not correct. The right way to state this is:
Apple is the Tesla of the computer industry, and Jobs was their Elon Musk.

I don’t know if this is already the case in the USA, or other parts of Europe, but in the Flemish and Dutch press (despite the seeing the same FUD about Tesla as anywhere else) the expression ‘this XXX is the Tesla of YYY’ is already a very common and well understood expression, meaning ‘Primus inter pares’.

 

[tsunamiofhurt]

I didn't follow the VIN registrations discussions in detail, but I just realized something interesting:
Elon tweeted a picture of a M3 AWD (+maybe P) version rolling off GA4 on June 16. We don't have any AWD VINs registered at all since February.

That’s a very good observation, does anyone have an answer to this?

That's correct -- there haven't been any AWD registrations since the small test batches in February. I think it could be one of two things... 1) The registrations have been small enough to elude detection (as it stands I'm only sampling every ~50th VIN to check for AWD, although I plan to check every VIN soon) or 2) The VINs were registered as RWD but will be modified to AWD VINs closer to delivery (similar to how the 2017 VINs were changed to 2018, after the initial registration)

In terms of the Performance Model 3, it doesn't appear that Tesla has even submitted to NHTSA the VIN decoder for that variant. Per the VIN reporting requirements, they need to do that at least 60 days before offering for sale to the consumer. It's a little puzzling TBH. Additional discussion of this topic here.

 

[1208]

It's pathetic the MSM picking up on slightest thing Tesla does. Proves they have loyalties to Tesla's enemies. Wouldn't be surprised if in the future you get articles like;

Tesla office worker suffers paper cut on finger. Is tesla so poor its buying cheap office paper?

Tesla CEO uses the word Aluminium instead of aluminum, is he going to ditch the USA for another country?

Tesla's brand colour is red, why all Democrats should boycott the GOP colour car company and go with Ford because its logo is blue.

 

[Ulmo]

Papafox did claim yesterday he heard from 2 independent sources that 5K are a done deal which would resonate with the message from Pedro.

How credible is Pedro? Can some who has background info shed some light on it?

This is all moot if Pedro made it up, but if he didn't, then this is what I see:

What's Pedro's point of view? Here's some:

"My source on the line emailed me last night."

That's what I thought: it's from someone working there. The worker only sees the physics and mechanics of the speed of installing a new line and the speed at which it operates. The worker does NOT see the manufacturing of the new line AND the cost to engineer, order, build, and install it. So, the worker looks at the line and calculates in their head extrapolating from a time and space of their own witness, but doesn't take into account the loans and factory equipment manufacturing necessary to bring that about. That worker sees a pathway on the basis of what is presented to them, but not based on the entire corporate system.

What that means to me is that the worker, who is probably slightly optimistic since they have an interest in working on that thing and think of it naturally, and often doesn't naturally consider the amount of time they have off or are not working on it, has viewed what is possible for the equipment systems, as it can be installed over the next few seasons. Since there is a push to actually build a higher rate of cars, we'll see some amount of that possibility, but it has to fit into the realities of getting and installing that factory equipment and calibrating it for production.

The tent thing tells me they are agile enough to do stuff like copy paste without senseless nitty excuses of why they "can't" copy-paste factory lines. That, however, does not mean they'll actually DO that. For instance, I've heard one prediction that the tented line is for experiments; I suspect that's not quite right, but readers here probably know better than I now.

So, 10,000 by February? Only if the lead time for factory installation fits in that window from the time they ordered that equipment and if it's compatible with that outcome (what if the tented line is an older version that works right and the new equipment is a newer version that doesn't work right? Unlikely, but possible), AND if they actually get to 5,000 within the next 2 months. Since that's everything they're trying to do, I suppose it is reasonable to think it is POSSIBLE, but it should be tempered from my point of view because of the factory worker's point of view being too close to it.

Wildcards could be different speeds of different factory engineering.