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Goldman Sachs, Gen III SUV, Model X 2015, from Tesla site

Discussion in 'Tesla Motors' started by Dan43, May 27, 2013.

  1. Dan43

    Dan43 Member

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    Not sure if any of this is new or older news but just popped on the main Tesla site :

    Longer term, Tesla Motors Inc (NASDAQ:TSLA) envisions selling around 500K units through a combination of the Gen 3 sedan (around 200K units), Gen 3 SUV (about 150K units), Model S/X (roughly 90K units) and the next Gen Roadster. From a timing standpoint, the company intends to start deliveries of the Model X in 2015 and hopes to start the Gen 3 production by 2017.
    The main goal of the production team currently is to get production levels of 20K on a single shift across most processes (currently body assembly and finished assembly are still running on a 2 shift basis) and then ramp up to 40K units in 2 shifts.
    Tesla Motors Inc (NASDAQ:TSLA) envisions that the cost per KWhr will decline to less than $100 over the next 10 years which is a roughly 75% reduction from the current levels.
    TSLA has $17.1mn in revenues from GHG credits in Q1 and expects them to continue to remain a source of revenues in the long term.
    http://www.valuewalk.com/2013/05/tesla-motors-inc-tsla-envisions-selling...

    Dan43
    UK












     
  2. gg_got_a_tesla

    gg_got_a_tesla Model S: VIN P65513, Model 3 Res Holder

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    Nice find, Dan. Thanks!
     
  3. DaveT

    DaveT Searcher of green pastures

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    Wow this article has a ton of information. It's a considerable advantage for Goldman Sachs to have this info and the interview with Elon. I wish the whole interview was published. I feel at a disadvantage compared to Goldman Sachs because the interview probably had more info and subtleties that the article didn't describe. It puts Goldman Sachs at an advantage regarding their investment positions regarding Tesla. Feels unfair.
     
  4. MarkH

    MarkH Member

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    #4 MarkH, May 27, 2013
    Last edited: May 27, 2013
    Agreed this is a strangely large info dump, more than you hear on the quarterly calls.

    Takeaways:

    Model X deliveries now 2015 (last I heard late 2014)
    My first hearing of the G3 SUV
    Line shift info particularly detailed
    Powertrain business negligible. Im sure Tesla is fine with that, they need to focus on themselves.
    Amazing battery cost projections - what do they know that we dont!?!
    Tiny amt of capex to double production
    Supercharger deployment based on where the customers are
    i wonder what service metrics they are tracking to achieve their goals in q3
     
  5. Cosmacelf

    Cosmacelf Active Member

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    Elon has said many times that battery technology is improving 6%-8% per year. Compounded over 10 years, that is easily a 75% improvement. No surprise there, but it will take pundits by surprise anyways when we wake up 5-10 years from now with much better/cheaper EVs due to this improvement.
     
  6. AnOutsider

    AnOutsider S532 # XS27

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    Does this mean the announcement is pushed back to June now?

    There may be some nuance lost here, but if this is taken at face value, it more implies that we'll see a huge boost in how fast the SCs deliver charge (though it could also mean swapping AT charging stations). I guess it could also mean some sort of super capacitor or w/e.
     
  7. DaveT

    DaveT Searcher of green pastures

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    Yeah the article is quite discouraging to me as an individual investor because it seems institutions are privy to such interviews like this with Elon.

    Personally I get a lot of info out of his publicly recorded interviews and I watch for subtlety as well.

    However, with this article there are no quotes from Elon directly. It's just summarizing their conversation/interview. So, it's difficult to know the exact context. Also, it seems like there would have been a lot more information transferred because the summary is just summarizing. If this interview was made public as an audio or video recording, then I think we would get a ton more information out of it because we would hear exactly what questions were asked and exactly what Elon's responses were.

    As it stands we have a "summary" version and as an individual investor it makes me feel like an outsider while Goldman Sachs has the insider position.

    Also, the article didn't even say exactly when Goldman Sachs made the visit. Was it yesterday (Sunday) or the day before (Saturday) or even last Friday?

    Lastly, totally agree that this was a huge info dump (and more detailed than a quarterly report in many ways, especially regarding projections). Something this important should be made public as an audio or video recording. Anything less than that is unfair to those who weren't in the room.
     
  8. jeff_adams

    jeff_adams Member

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    I imagine if you loan Elon 100 million to purchase stock in Tesla he would offer you a personal tour and give you some interesting information about Tesla's future plans. Nothing unfair about that
     
  9. Johan

    Johan Took a TSLA bear test. Came back negative.

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    It both is and isn't unfair. If you think the playing field is level with regards to us retail investors vs. the big players yoy're just plain naive. GS seem to be almost Elon's private bankers and they seem pretty intimate. I'm sure their investment branch has quite some holdings in TSLA, however I've never seen them set a price target? Too close of a relationship for that? GS were the main bankers for the TSLA IPO and both offerings as well as the only(?) banker for SCTY IPO.
     
  10. aronth5

    aronth5 Long Time Follower

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    I would add:
    -envisions a technology that would reduce the time spent at a charging station. Doesn't sound like a plug for battery swapping.
     
  11. AudubonB

    AudubonB Mild-mannered Moderator Lord Vetinari*

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    Well, Jeff, that may seem reasonable but it is, in fact, highly illegal. It is why there is SUPPOSED to be a so-called Chinese Wall within any Wall St investment house between its research department and its investment banking department. Now, if the truth is that there rarely are more than 999,999 accusations each day that Goldman violates that - ah well.

    Regardless, the rule of law is that, No. It is utterly illegal to trade on insider information, and if Mr Musk confided something to Goldman or to me or to you that he also did not share in an SEC-approved public manner with the rest of the world, then any trading - and even, non-trading*, on the basis of that information is likewise illegal.

    *non-trading: "I would have bought shares had I not learned such-and-such", or "I would have sold shares...", or "I would have sold naked calls..." and so on. Utterly impossible to prove in court, and inarguably the single most difficult task for a prosecutor to go after. Regardless, a violation of insider trading laws.

    In the interest of full disclosure, I have a career-long...(and past retirement, too...) visceral contempt for Goldman Sachs. Ended up on the wrong side of trades with them...when they were one of my prime brokers. Not that I didn't have my eyes wide open before I played ball with them, nor that I wasn't aware of potential consequences. As a house, they are very, very talented and smart and capable....and I really, Really, REALLY wish they weren't TM's investment bankers.
     
  12. CapitalistOppressor

    CapitalistOppressor Active Member

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    All of you folks who are complaining about Goldman having better data are largely wrong. Most of this information was accurately forecast in these forums, and/or discussed in the conference call or SEC filings.

    Off hand, the only things that I see that are new are the actual allocation of work hours (which shift is doing what), and the revelation that the Model X will start deliveries in 2015.

    Process analysis and anecdotal reports had already shown the reduction in work hours and was widely discussed in these forums pre-conference call, and then was mentioned explicitly in the conference call and letter.

    The North American reservation rates conform with our analysis and with anecdotal reports. That said, the quote supplied is meaningless. "Current" reservation rate means anything that Tesla wants it to mean.

    Exhibit #1: Reservation rates for Europe that are cited in the story are wrong. We measure those directly and they are probably less than half of what was mentioned. But if Tesla had a good day yesterday then the "current" reservation rate can look quite good. But "current' means whatever Tesla wants it to mean.

    The story is also wrong about battery costs, though I am willing to admit that the subject has only been superficially discussed here.

    The future estimates for production in the out years are just happy talk, and conform to ranges that have been widely discussed before.

    The info on credits was probably news to Goldman, but they were widely discussed and projected by us prior to the conference call, to the point that Tesla's omission of GHG data was noted and quantified in the investors threads before Tesla copped to it in their 8k.

    Morgan Stanley got the same tour. Their current report on Tesla is dramatically better than the report they were putting out previously.

    Look, all of this is basically in the investors threads, with most of it more or less accurately estimated before Tesla had their conference call. This story wraps it up in a nice bow, and there are maybe a few new tidbits, but if you want to know whats happening in real time the investors threads here are still probably the best source.

    - - - Updated - - -

    I should also add that we already knew that Tesla was going to speed up production later this year. Simple math requires it.
     
  13. DaveT

    DaveT Searcher of green pastures

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    I got to disagree with you on this one. There was quite a bit of information that was new.

    1. "the company is targeting to exit the year at a 23K-25K annualized run rate".
    This is the first time I heard this and is important because it affects projections for 2014.

    2. "The main goal of the production team currently is to get production levels of 20K on a single shift across most processes (currently body assembly and finished assembly are still running on a 2 shift basis) and then ramp up to 40K units in 2 shifts."
    Didn't know that they're goal after 20k shift was to ramp up to 40k units in 2 shifts. This is important because it affects 2014 forecasts because it's in the best interest of Tesla to hit 40k or close to it next year to take full advantage of two shifts.

    3. "Tesla Motors Inc will require only $25-$50mn of additional capex to take the volumes to 50K units annually."
    This is new news to me as well and is important because it shows they can easily go from 40k units on 2 shifts to 50k units.

    4. "The company expects that global demand for Model S could exceed their initial expectations of 40K-50K units annually."
    I've never heard this directly from Tesla Motors. Sure, we can speculate what demand might be but it's another thing for the company to outright acknowledge the demand they see and are preparing for. In the 1st quarter 2013 shareholder letter (http://files.shareholder.com/downloads/ABEA-4CW8X0/2010772170x0x661989/ee71d11b-3563-489c-9471-9319fd963626/Q1%2013%20Shareholder%20Letter.pdf), Tesla says they estimate "U.S. demand expected to exceed 15,000/year; global demand likely
    above 30,000/year". This is a huge difference in how the company is seeing global demand. Just a few weeks ago it was "likely above 30k/yr" and now they're saying it could be above 50k/year. Which one is it? It's really tough for us who weren't in the room or didn't hear an audio recording to know the nuances and subtleties. Again, the article was a "summary" so it could have left out some details that might be important.

    5. "Longer term, Tesla Motors Inc (NASDAQ:TSLA) envisions selling around 500K units through a combination of the Gen 3 sedan (around 200K units), Gen 3 SUV (about 150K units), Model S/X (roughly 90K units) and the next Gen Roadster."
    This is new and the first time I've heard the company give such specific numbers on the cars and models that it's forecasting. Also, what does "longer term" mean? It's so vague. But I'm thinking maybe there could have been more specific dates or ranges given but it didn't show in the article.

    All of these 5 points are new information to me and are very significant, especially when dealing with financial models.

    Again, I wish an audio recording was made available so we can hear the same info and make our own decisions on the nuances, subtleties and details.
     
  14. vgrinshpun

    vgrinshpun Active Member

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    CapitalistOppressor +11.

    My feelings on complaints are exactly the same.

    There is virtually no new information in this article for those who took time to listen to quarterly calls and read investor threads on this site.

    What is very interesting about this article is that it talks about field visit to the factory hosted by Goldman Sachs. The conjecture seem to be that that this was field trip for the institutional investors that expressed interest in the latest public offering, which had to happen more than a week ago. The question then is why this article appeared now?

    My hunch is that this nicely packaged summary is intended to move stock above the price for the conversion of the notes issued during the latest public offering ($120.00+). The notes can be converted after this price is maintained for some length of time (do not remember details, but seem to recall about 3 months?). It is clearly in the interest of the institutional investors to hold TSLA shares rather than notes paying 1.5% interest.

    I believe that we will see a very active week, perhaps ending with another squirt of short squeeze. The week after next should be also very active due to the SC announcement. All in all we can see substantial rise in price of shares into $120+ territory.
     
  15. MikeL

    MikeL some guy

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    I thought TSLA might gap up again tomorrow morning. Now I REALLY think so (even tho mostly not new info, just more of it)
    btw, what happened to pick-up truck?
     
  16. CapitalistOppressor

    CapitalistOppressor Active Member

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    I agree, its important, but its not new. The production rate for 2013 is substantially less than the 20k units/year that was initially promised. They have previously stated that they were going to speed up in Q4, and we have anecdotal reports of suppliers gearing up for that. With guidance increased to 21k, simple math gets you to the production rates they mentioned. This has all been discussed on this site.

    Its long been known that 20k/shift is their goal. Not sure what is new to you. Running two shifts is a minimum requirement to be able to produce both the Model S and Model X. They aren't going to magic the Model X into existence. Read the article again. The title of that section is "Production at Tesla Motors Inc (TSLA)", not "Model S Production". Producing 40k units/year is a fundamental requirement based on previous guidance for Model S + Model X. 2014 is not mentioned.

    The CapEx requirements to move past that have been previously discussed. Regardless, its always been obvious that moving to three shifts would be inexpensive. Any factory in the world should be able to move to 3 eight hour per day shifts with little additional expense. You can (with difficulty) produce even more with staggered shifts while working 7 days a week instead of 5.

    Their initial expectations of the Model S are 15k units/year in the U.S. With the U.S. being possibly 1/3rd of the global luxury market, that works out to 45k (the quote in the story is 40k-50k). This is simple projection. Nothing new. Demand might be higher than expected because the Model S is currently selling faster than 15k/year in the U.S. Tesla is doing the same simple projections we are.


    Look, I get that it makes you feel better to hear it from Tesla. But this is all just simple math, and whether we do the math here in these forums, or Tesla does the math and puts it in a press release doesn't make it any more credible. The correct answer to "Which one is it?" is that nobody, including Tesla knows for sure. Goodness knows, they hope and pray (as we all do) that the Model S is going to be equally popular in global markets as it is in the U.S. But its all happy talk until it happens.



    Or more probably there weren't specific dates, because Tesla doesn't really have any more of a clue than we do. Those numbers are clearly end of decade numbers, and aren't any more credible than the projections we do here in the sense that if they happen the stock you purchase today is going to be awfully valuable. If they don't happen it wont be. Whether we do the projection or Tesla does the projection, the only question that is relevant is whether you think Tesla will successfully transition to a Gen III product line. If they do, then all of those numbers are extremely conservative.
     
  17. Krugerrand

    Krugerrand Active Member

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    Or not, and the tour happened after they signed paperwork last Wednesday.
     
  18. blakegallagher

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    as always it seems +1 CapitalistOppressor .... and for anyone who has not figured it out .... his numbers are very credible ..... I also agree that the Generation 3 numbers are very conservative ... I also think the 45-50 k number is actually very conservative. It is starting to feel like like those will be the demand numbers in 2014.
     
  19. AudubonB

    AudubonB Mild-mannered Moderator Lord Vetinari*

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    CapOpp - am responding to this primarily because your post immediately followed mine, so I want to ensure that - this time - I did not mean to imply that GS was acting improperly. By a similar token, irrespective of your statement, a prudent investor might consider discounting the information forecast in these forums far more strongly than that forecast by a strong Wall St. presence. For example, which of the forecasts presented in this forum were correct, or close to correct? All of them? 90%? 50%? The truth is that, in an open discussion such as occurs here, we get the gamut of reasonably possible to pie-in-the-sky la-la-land. About the only predictions one doesn't hear much here are bearish ones.

    Back to the linked article, the pertinent eye-opener for me was the line that bringing production to 50K/yr will "take only $25-50mm add'l capex". Using the conservative end - $50mm - I am wonderfully impressed. That pencils out to very significant bulwarking of margins, and is well within the balance sheet now. Very, very nice.
     
  20. Grendal

    Grendal Active Member

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    As for the Model X in 2015, I think that can be explained as "full production" in 2015. I'll bet production happens in 2014 with a slow ramp up to full production in 2015. That would be similar to what we saw with the Model S. To the money men at GS they would interested in when the Model X will be generating revenue and that won't happen until it is at full production.
     

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