General Discussion: 2018 Investor Roundtable

[neroden]

My thought is that dry/cure time of paint is such a known physics based process along with application speed that the paint line capacity is one of the most predictable operations.

Hope so If the paint line problems are just stupid sensor/processing problems it should speed up quite well.

Do we know if it is seat material versus the other white trim pieces?

No, we don't. Thanks for the correction.

 

[shootformoon]

RE: short burn call.
I'm a lurker, rank investing amateur, but have my fist full of shares that won't be sold any time soon. I've been reading everyones ideas on what might cause the burn and like most cannot see a sure thing (ignoring obvious and impossibles like 10k a week, we only did half that LOL). What about an announcement by a mega player making a buy out offer (fake or not) to take TESLA private, at say $500 a share. Doesn't that basically put the share price at 500 overnight and send the shorts out of business?
Back under the rock for me

I had the same exact idea. The top institutions: T Rowe Price, FMR, Baillie Gifford etc along with EM can have a tender offer of $500 to take it private. This would be a free tactic to instantly push SP to that level which evaporates the shorts because other shareholders could reject that offer, which could push SP higher.

 

[MP3Mike]

4 -- they got GA3 + GA4 up to the target 5000/week (apparently 3000 GA3 and 2000 GA4), so they can shut down GA2

They said that GA4 was 20% of the weeks production, so it only produced 1,000 cars. So GA2/GA3 produced 4,000. They only mentioned GA3 for two things: comparing the quality of cars between GA3 and GA4, and that GA3 was expected to hit 5,000/week on its own soon. (So GA2 could have contributed to the 5,000 cars in the week.)

From the release:

GA4, our new General Assembly line for Model 3, was responsible for roughly 20% of Model 3s produced last week, with quality from that line being as good as our regular GA3 line. We expect that GA3 alone can reach a production rate of 5,000 Model 3s per week soon, but GA4 helped to get us there faster and will also help to exceed that rate.

 

[Rarity]

My assumption is that because GA4 is 100% manual, it can only produce ~1k a week, similar to, say, the original Model S and Model X lines.

But as we saw, it was able to be spun up super quickly, given sufficient available workforce. Who knows, maybe GA5 could be spun up if desirable.

 

[mongo]

My assumption is that because GA4 is 100% manual, it can only produce ~1k a week, similar to, say, the original Model S and Model X lines.

But as we saw, it was able to be spun up super quickly, given sufficient available workforce. Who knows, maybe GA5 could be spun up if desirable.

There is one GA line that does both S&X. It cranks out over 2k per week.

 

[Rarity]

There is one GA line that does both S&X. It cranks out over 2k per week.

I assume the S/X line is not 100% manual. That's why I said the original S & X lines, which I assume were more or less 100% manual (for the X line, at least at first, before it became the S/X line that we know today).

 

[mongo]

I assume the S/X line is not 100% manual. That's why I said the original S & X lines, which I assume were more or less 100% manual (for the X line, at least at first, before it became the S/X line that we know today).

I'm not sure how much (if any) automation the S/X line has, but the X has always been built on the same GA line as the S. (Original S line was replaced with the combined line)

2014: Tesla idles Fremont production line for Model X upgrade – The Mercury News

 

[Rarity]

I recall that the S and X lines were for a long time run in parallel.

Edit: In any event, the good thing about GA4 is that it could be implemented quickly and with low capital costs. The limitation is that it has low throughput and operating costs are high.

If you want to maximize the use of the body line or the paint shop in the short term, then lines like GA4 are great.

 

[neroden]

They said that GA4 was 20% of the weeks production, so it only produced 1,000 cars. So GA2/GA3 produced 4,000. They only mentioned GA3 for two things: comparing the quality of cars between GA3 and GA4, and that GA3 was expected to hit 5,000/week on its own soon. (So GA2 could have contributed to the 5,000 cars in the week.)

From the release:

Thanks for the correction. I just misremembered it.

 

[mongo]

I recall that the S and X lines were for a long time run in parallel.

Are you thinking of the body lines? Those are split.

Factory Upgrade
Seems to indicate there was only ever one GA line...

 

[Rarity]

Are you thinking of the body lines? Those are split.

Factory Upgrade
Seems to indicate there was only ever one GA line...

Hmmm... Maybe my memory isn't so clear.

 

[gora321]

I got the feeling that each piece of equipment sent from Germany works, other equipment had some problems.
I think that Tesla took huge advantage with buying Grohman Automation (cutting supplies to German producers and shifting production for Tesla).

 

[dmckinstry]

I had the same exact idea. The top institutions: T Rowe Price, FMR, Baillie Gifford etc along with EM can have a tender offer of $500 to take it private. This would be a free tactic to instantly push SP to that level which evaporates the shorts because other shareholders could reject that offer, which could push SP higher.

How many shareholders would be required to ensure a rejection. I'm fairly certain that many longs here would not be satisfied with $500.

 

[generalenthu]

Here's some good writing on all the "Tesla skipping brake and roll test" brouhaha.

Tesla changed its testing regimen for the Model 3, and that's OK - Roadshow

 

[EVMeister]

How many shareholders would be required to ensure a rejection. I'm fairly certain that many longs here would not be satisfied with $500.

Indeed. Most (me included) would need a zero added to that, then we can talk. Or at least $3000, might make me think carefully.

 

[mongo]

I got the feeling that each piece of equipment sent from Germany works, other equipment had some problems.
I think that Tesla took huge advantage with buying Grohman Automation (cutting supplies to German producers and shifting production for Tesla).

Plus, since they made Grohman exclusively Tesla, they keep gained knowledge in-house.

 

[shootformoon]

Indeed. Most (me included) would need a zero added to that, then we can talk. Or at least $3000, might make me think carefully.

What I meant is we need a bidding war to start. The final price would be much higher because all the irrational negative sentiments would be replaced by positive ones. Will you take $1000 in three months or wait for a possible $3000 in 5-10 years?

 

[EVMeister]

What I meant is we need a bidding war to start. The final price would be much higher because all the irrational negative sentiments would be replaced by positive ones. Will you take $1000 in three months or wait for a possible $3000 in 5-10 years?

Think I answered that in my post you quoted. $1000 is too low for me to consider. I am a long term investor, I don't have hundreds of shares and I don't have a problem waiting for several years.

If I were offered $1000 for those Tesla shares in 3 months, I'd say no. To equal what a hypothetical $3000 /share would be worth 5 years from now, I'd need to somehow reinvest my shares @$1000 a piece in an investment fund that gave a 22% annual return. I've accounted for daily compounding as well. Not a good deal really nor realistically going to be achieved.

 

[shootformoon]

Think I answered that in my post you quoted. $1000 is too low for me to consider. I am a long term investor, I don't have hundreds of shares and I don't have a problem waiting for several years.

If I were offered $1000 for those Tesla shares in 3 months, I'd say no. To equal what a hypothetical $3000 /share would be worth 5 years from now, I'd need to somehow reinvest my shares @$1000 a piece in an investment fund that gave a 22% annual return. I've accounted for daily compounding as well. Not a good deal really nor realistically going to be achieved.

5 years is unlikely. If we take 10, that is less than 12% yearly return. Add some uncertainty discount like a economic downturn. Then how much expected return do you look at?

 

[EVMeister]

5 years is unlikely. If we take 10, that is less than 12% yearly return. Add some uncertainty discount like a economic downturn. Then how much expected return do you look at?

That would work out with a 11% annual return. Thing is, I and I'm sure many here are expecting that TSLA could easily exceed $3000 per share 10 years from now. In fact some see that as easily possible 5 years from now, I don't think that's completely far-fetched although less likely. If you've read about Elon's compensation package, you'll know that if TSLA isn't exceeding $3000 per share 10 years from now then he/Tesla has fallen well short of the targets laid out there.