TSLA Market Action: 2018 Investor Roundtable

[Yggdrasill]

Well, the last couple of quarters Tesla has been losing money, even disregarding capex. Bu this is related to the initial ramp of the Model 3, which is causing a dip in margins.

I'm not expecting Q1 results to be awesome, but I am hoping to see some signs of recovery on the margin.

 

[Waiting4M3]

....
The "volume" argument. Once we get to 5,000 per week, or 10,000 per week, there'll be lots of cash and profit. No discussion of addressable market, the minimal economies of scale achieved to date, or of valuation.

This is simply false. Most EV supporters, not just Tesla fans, see the future of EV market as an expanding one because EV is superior to ICE. You can argue that you don'g agree with their views on TAM of EVs, but to say there is no discussion of TAM, give me a break, that is being intellectually dishonest.

 

[tander]

The thing you seem to have missed, but what even some of the incumbents are understanding is that EV is better than ICE.
So the addressable market is to move to EV, and that is a big addressable market. Tesla never planned on taking 100% share of EV market.
Even with light volume, Tesla is at least 2 years ahead of competition in the EV space.

I live in a city where you can't drive for five minutes without seeing a Tesla, it's easy for me to forget that some people maybe live some place where they could go months without seeing one, it would be easy not realize Teslas are direct competition to any car not just electrics or hybrid. Total addressable market for Tesla is pretty much any car in a relatively similar class, just look at what has happened to luxury sedans and bmw 3 series.

 

[Yggdrasill]

Once the Model Y is out, you're probably looking at a total addressable market for Tesla of around 10-20 million cars per year. A 10% market share would be fine.

 

[vinvin218]

Tesla Is Taking Apple's Ecosystem Model Up a Notch

Tesla is Taking Apple's Ecosystem Model Up a Notch

 

[jhm]

I am still looking for an intelligent argument as to how a company with $4 billion of equity which loses close to $1 billion per quarter will be around in 2 years, never mind 4.

Where do you get the idea that Tesla is losing $1B per quarter? For all of 2017 loses were $1961M of which depreciation was $1727M. Net cash flow from operations was a mere ($61M) for the whole year. So your point is wildly off mark on an earnings basis and irrelevant on a cash flow basis.

 

[Dwdnjck]

Tesla Is Taking Apple's Ecosystem Model Up a Notch

Tesla is Taking Apple's Ecosystem Model Up a Notch

That is the third article today from The Street that has the same Hot Mess video embedded.

 

[madodel]

One benefit of having a contrarian posting here is the excellent responses. I learn everyday a little more about why I will continue to long TSLA.

 

[anticitizen13.7]

When you read these pages, the bull arguments seem to divide into 4 categories:

Any I've missed?

Yeah.

The “madman” argument. 9 out of 10 times, or maybe even 999 out of 1000 times, a company like Tesla should fail.

I actually believe that Elon Musk has made many bad decisions and mistakes since he seized control of Tesla approximately 10 years ago. However, his problem solving ability, sheer willpower, and a lot of luck have allowed Tesla to survive events that it should not, under ordinary circumstances, have survived.

This is actually quite similar to another situation: Donald J. Trump, President of the United States.

During the 2016 campaign, Mr. Trump constantly tripped on himself and made horrible decisions. He advocated violence at his rallies. He called Mexicans criminals and rapists. Audio tapes revealed that he bragged about committing sexual assault. Still, Donald Trump managed to leave a trail of defeated Republicans in his wake, lose the popular vote, and still deliver an improbable crushing defeat to Hillary Clinton and Liberals.

President Trump should never, under ordinary circumstances, have won the White House. His pugnacious campaigning, unorthodox use of Twitter, shameless use of inflammatory statements, and a bit of luck (the reopening of the Clinton email investigation) cumulatively tipped the balance in his favor.

Where a “madman” like Trump or Musk is concerned, rationality and conventional analysis can fail spectacularly. People who behave unpredictability and who take advantage of fortuitous situations can win.

Finally, I’ll leave everyone with this classic:

 

[Bet TSLA]

When you read these pages, the bull arguments seem to divide into 4 categories:

The "ecce homo" argument - Musk is great, everything he says or does is fine and so long as we have faith, everything's gonna be all right.

The "Netscape" argument. EVs are the future, Tesla is the EV first mover. So Tesla is the future. Forget about competition or alternative battery formats, or anything else.

The "volume" argument. Once we get to 5,000 per week, or 10,000 per week, there'll be lots of cash and profit. No discussion of addressable market, the minimal economies of scale achieved to date, or of valuation.

The "shiny object" argument. Even if the current cars being produced don't make it, there'll be energy or semis, or Roadsters, or tunnels or something.

Any I've missed?

I think you're missing or misstating several important arguments:
- The "no competition" argument. Mainstream competitors are all mired in their inappropriate business models, with inappropriate partners. Tiny competitors have all of Tesla's problems and more. So Tesla will remain production constrained.
- The "machine that builds the machine" argument. Tesla's on a trajectory toward superior manufacturing, which will make their vehicles cheaper and faster to produce, which means way better margins or way cheaper cars.
- The "many income streams" argument. Tesla is not a car company, it's an energy company. Some of its products are energy consumers on wheels. Some are energy storage. Some are energy producers. The car business is at most 1/2 of what their total business will be in three to five years. This is not reflected in the stock price even a little.

 

[defc0n]

The thing you seem to have missed, but what even some of the incumbents are understanding is that EV is better than ICE.
So the addressable market is to move to EV, and that is a big addressable market. Tesla never planned on taking 100% share of EV market.
Even with light volume, Tesla is at least 2 years ahead of competition in the EV space.

I’m not super bullish and I’d be comfortable saying their battery tech is 4 years ahead.

 

[MikeInFL]

On a positive note I picked up some TSLA today

 

[Dennisj00]

I’m not super bullish and I’d be comfortable saying their battery tech is 4 years ahead.

I’d stretch that to 6 or more. After owning 2 leafs (2011/2014) and the current Leaf is not marginally any better.

 

[theschnell]

I know I commit heresy to use analogy rather than first principals reasoning, but the bears love analogies so I will risk it. It's been said many, many times but bears repeating. Tesla M3 and MY = Iphone. Tesla will have the highest profitability on the M3 and MY compared to any other manufacture competing in those segments. Probably double the margin once they get up to scale. How this is so hard to understand after MS has totally dominated is segment and revenue growth exceeds 50% a year is beyond me.

Yes, TSLA valuation is high, but growth rate and addressable market make it reasonable. (Edit: reasonable, if not cheap)

 

[anticitizen13.7]

$250 here we come. By Friday or Monday. Regardless of what the market does, this stock cannot hold any gains.

"Time" is currently 0 for 1.

TSLA closed at 290.24 today.

RemindMe! 3 days “TSLA predictions”

TSLA closed at 283.37 today.

@Time ’s prediction is 0 for 2. Time, don’t quit your day job to be a trader or fortune teller.

 

[CuriousSunbird]

And I’m still looking for an intelligent argument as to why the trolls waste their time here and/or can’t find a better job.

We (or at least I) are looking for evidence or arguments against our thesis. If you only listen to people who agree with you, you don't learn anything.

 

[Jonathan Hewitt]

you don't learn anything.

Well at least we are in agreement on this.

 

[anticitizen13.7]

We (or at least I) are looking for evidence or arguments against our thesis. If you only listen to people who agree with you, you don't learn anything.

Creating a thesis in the first place is a mistake, regardless of what side you are on. It gives the illusion of control.

TSLA is a gamble, and how you win or lose, will likely not be what you expect.

 

[Todd Burch]

We (or at least I) are looking for evidence or arguments against our thesis. If you only listen to people who agree with you, you don't learn anything.

Did you drive the effin' car yet? If you did, you wouldn't need any more evidence.

 

[K_Dizzle]

Is anyone here all in Tesla?