Moderators' Choice: Posts of Particular Merit

[st_lopes]

I've had a chance to sift through the ARK model and wanted to share some of my reactions. Many of these things have been called out on Twitter, some of these comments here as well, so may not be groundbreaking new information for many here. That said, hoping that synthesizing these in to a single post may be of use to many in this community. For reference:

• ARK's Price Model: ARK’s Price Target for Tesla in 2025 is $3,000 Per Share
• ARK's GitHub Data Model (includes their old models as well): ARKInvest/ARK-Invest-Tesla-Valuation-Model

TL;DR: Tesla has immense optionality in its business and the permutations of outcomes that justify a $3,000+ valuation by 2025 are equally immense. It may never achieve autonomy nor launch a ride hail network, but it may still hit that price target if it delivers 5M+ units at strong margins and continues growing at 50% CAGR through 2030. Importantly, that growth trajectory will demand a higher enterprise multiple than what ARK has currently ascribed to Tesla in 2025. The ARK model ignores HUGE parts of the business which would just add more support levels for future valuations. TSLA is the next TSLA and this truly still is just the beginning. I look forward to seeing the Machine that Builds the Machine coming to scale and watching the markets realize the level of operating margin and operational execution that Tesla has actually achieved.

---

Below are my observations and comments on some specific assumptions or model details that I personally found interesting:

1. The model assumes MAX 25% market share in any individual segment, which seems entirely reasonable. The one aggressive assumption is the addition of M-2/A and a "Neighborhood EV" ("N-EV") which both have extremely large addressable markets (40M and 100M respectively). In other words, a lot of the extremely high price scenarios have Tesla getting a fair chunk of both of those markets.
   
   
2. Assumes M-3 ASP of $50k, M-Y ASP of $53k, and C-TRUCK of $55k. M-3 seems high, C-TRUCK seems low; modifying any of these doesn't materially change bullish outcomes given the potential distributions skewing to M-2/A or N-EV, but it does increasing some of the bearish outcomes given more of those models skew towards M-3, M-Y, and C-TRUCK.
   
   
3. The highlighted bull case scenario ($4k) assumes 5M units produced/sold in 2025 with an overall ASP of $38k. This begins to show the optionality at Tesla's disposal. Tesla may never need to produce an N-EV or M-2/A, but can keep pushing cost and price of M3/MY lower and achieve a similar margin mix and ultimately valuation.
   
   
4. Ignores Energy; Ignores Solar; Ignores Service; Ignores SaaS (incl. Dojo); Ignores Licensing; Ignores Credits; Ignores SEMI. In other words, this is a very simple model focused solely on Automotive in most of the model outcomes with Ride Hail / Robotaxi pushing the highest model outputs.
   
   
5. Assumes Tesla continues with debt/equity raises to fund factory buildouts. Arguably they may not need to given their operating leverage, the current war chest (enough cash to build another 10 GFs), and BTC. This would impact operating margin calculations, which would also boost valuations.
   
   
6. Assumes a 70% loss ratio on insurance. This is fairly high considering the argument that Tesla's would be orders of magnitude less likely to have accidents and Tesla would be much better equipped to repair their vehicles relative to a third party insurer (i.e., lower cost to settle claims). That said, this is not a material driver to valuation.
   
   
7. The outlier bull cases (e.g., 20k+ / share) have assumptions of 15M+ units sold in 2025; likelihood of achieving that is quite low based on what we know today (e.g., they have a $22k price target scenario where Tesla sells 66M units in 2025). So, take the outliers with grains of salt as they are in fact very extreme outcomes. They do however show Tesla's ultimate potential if world domination was on the roadmap, but these would be major deviations from the 5-10 year Automotive plan we have heard from Tesla today.
   
   
8. Combing through their simulation outputs and you can see that several very conservative outcomes can still reach or surpass their bear case assumptions (e.g., 0% ride hail or autonomous fleet, 40% margins, 6M units sold, $9k/unit capital efficiency, 13 enterprise multiple = $1,300/share) (e.g., 0% ride hail or autonomous, 48% margins, 5.7M units sold, $4k/unit capital efficiency, 13 enterprise multiple = 1,350).
   
   
9. Point made by Meet Kevin in one of his latest videos, but worth reiterating,
   
   ARK is assuming a very low terminal Enterprise Multiple. ARK is using a 13 multiple in all scenarios for Automotive and Robotaxi and 10 for insurance. This multiple is effectively lower than any average Enterprise Multiple as at 12/31/2020 for Large Cap US Companies (telcos and utilities are both ~14; source: EV/EBITDA (Enterprise Multiple) by Sector/Industry 1995 – 2021) and would be roughly the average across all large caps in 2017/2018/2019. Pushing these multiples to more reasonable growth company multiples (20+), which considering Tesla's growth should continue through 2030 - would be reasonable, and you could very quickly more than 2x all the share price outputs. This again confirms how much margin of error Tesla has to still achieve these valuations. For instance, it may never hit 40% margins (say it plateaus at 30%), but still reach the expected ($3k/share) valuations if it hits 6M units in 2025 and is still on track for 50% CAGR through 2030, thus demanding a higher multiple. All while ignoring Ride Hailing and Robotaxi entirely.
   
   
10. Ending with a tangent, I absolutely love the fact that ARK is willing to publish not only their research notes for free, but equally make available their underlying data model. This is completely against the grain in the investment world and truly shows how disruptive they are to their own industry sector. The model is not only simple (arguably oversimplified), but extremely flexible and allows you to play with whichever variables you believe are the most relevant.

Overall, ARK has put out a model that some will scream is unrealistic (because of the emphasis on Robotaxi at higher valuations), but what has actually spelled out a fairly reasonable and conservative view on the Tesla Automotive business. As many here know, Energy and Solar will be major tailwinds to the Tesla business. It comes across, to me anyways, as actually a very subtle way for them to call out that Tesla actually has the potential to 10x in 5 years if they execute across multiple facets of their business, whereas "simply" executing across a single facet (Automotive) will allow them to grow in to a 3-5x in 5 years.

 

[winfield100]

Tesla will have run out of things to do with money....including stock buybacks, approximate completion of superchargers, megachargers, service centers around the globe (Solar System)(FTFY a bit). Plus Elon & Tesla would have to run out of ideas. Then, yes.


it’s Tesla, so always!

somewhat OT
But that should say "around the Solar System)

March 3rd was SN10 launch, and landing (and tiny tiny hop)
March 24 (tomorrow) is SN11 launch
(3 freakin' weeks turnaround!!)

they will need at least 1,000 of these 400ft tall (when 2nd stage attached) over at least 20+ years.
So Elon will need and use a lot of things to do with money
(have watched launches since late 1950's, things have definately improved from rockets spinning like Catherine wheels shooting fire everywhere)

(accumulating a lot slower with DCA and HODL'ing)

 

[jbcarioca]

So outdated, antiquated and not worth a pot.

I get this is where you spent much of your career life and that you’ve done and seen good in the sector. But it’s also full of theives, cheats and inadequate persons and needs a good closet cleaning.

For the record, I’ll talk just as frankly about my industry; also full of unsavory sorts and minimally talented.

Frankly that is slightly overstated. For the record the part of my career spent on this subject was a largely futile process to bring one rating agency ( won't say which one) into the present day. The processes and overall system were designed to meet the needs of nearly a century ago and have been resistant to change. Part for he reason si that the regulatory process for most institutional investors is itself antiquated and resistant to change. In my effort to explain all this and state the relevant implications I do NOT attempt to defend the system as is. Anybody who lived through Penn Central, Enron, LTCM, AIG, the mortgage industry meltdown and subsequent near-failure of hundreds of the world's major banks cannot in good conscience suggest that the risk management systems anywhere in finance are even remotely adequate.

So please do not ever suggest that I have "seen good in the sector". Understanding it and it's market consequences is not in any way analogous to a defense. Please, please understand that.

Two specific statistical concepts explain why nearly all the financial industry is so inadequate in managing risk. Those are 'multi collinearity' and 'boundary conditions'. Those two concepts are commonly ignored in financial industry analytics, including by Nobel Prize winners with disastrous consequences.

Finally, the method of compensation for rating agencies itself guarantees poor results since it is issuer-based. Will prolific issuers have better ratings than do infrequent ones? Is Ford paying more than Tesla?

So once again please do not ever suggest I defend the system. On three separate occasions I worked with regulators to try to establish better control. I was paid, but nothing was done. Why? Just check who has been US Secretary of the Treasury when these various disasters have happened. [self regulation does not work]. Then check which industries make the most political contributions and to whom. After that examine the exact wording of financial services legislation; much of that is nearly identical to lobbyist submissions.

That said, the market reactions to all this are also driven in large part by market-makers. I have made numerous posts about the consequences of that. So has @AudubonB and others. The industry itself is built explicitly to reward market-makers for volatility. Many people here think about FUD. That is futile. Remember that the changes to the SEC and other 'enforcement' entities were largely dismantled during the last few years eliminating nearly all the protections that once existed, specifically including the 'uptick rule', 'naked shorts' and several related rules. There are indeed some rules, but market makers can easily avoid almost all of them, and SEC enforcement has tended to ignore the most influential players (that is my opinion, some might dispute it's accuracy). The SEC budget has slightly risen in the last five years so there is a prima facie suggestion that there are adequate resources, itself disingenuous in my personal opinion.

If I responded too verbosely I apologize. I do not take kindly suggestions that I might have been superficial and biased in favor of those who paid me. No doubt, that is a 'rating agency style defense", so I say it before you can.

 

[Artful Dodger]

4/17/2021 Revised Edition

"Lodger's Ten Rules for Investment Success": (c) 2021 - 3rd Revised Edition

1. Time is your Friend; Emotion is your Enemy (Math is your Ally)
2. Stocks cycle through their Trading Channel in 4-6 wks; Practice Patience
3. Buy Half and Sell Half; There will be more Opportunities
4. Often the Best Action is No Action; Take your Time to get it Right
5. Volatility is not Risk; a Stallion that doesn't buck is called a Gelding
6. Market Makers are NOT your Friends; it's their Game to Rig
7. Don't Overtrade; especially Options
8. Minimize the Croupier's Take; Avoid using Margin
9. Forget the News; They're Paid to Lie (Expect the Lie)
10. Have Realistic Goals; Be Honest with Yourself

 

[LiveLong&Profit]

Get the feeling is all about Panasonic.

As I recall a few things went wrong with the overall Giga Nevada timeline, but yeah, my guess it also mostly Pana.
Major thing, Pana seemed hesitant to really commit the needed resources. To really and truly "ganbarimasu".

Perhaps they didn't really believe that Elon could ramp the 3 as fast as he planned. Pana was burned badly back in the 90's by another partnership that nearly killed them - they still have trauma scars. Foot-dragging can be a survival strategy.
Perhaps getting top-level engineers and line-workers, specialist from Japan to relocate not only in the US, but in the middle of nowhere was also harder than anticipated. I don't think I offend anyone by saying that Asian and Japanese culture puts high value re. face and status: Yes, having a glamorous assignment abroad is great for your status and career. But relocating to work for a then obscure and fledgling auto company, making electric cars - in a place no one heard about? Not so much.
Also practical problems: Where do you send your kids to a good international school in Sparks? Where are the high-school afternoon university preparation classes (juku) and the Saturday Japanese language catch-up course to be found? OK then - bringing the kids is not an option.
And the wife factor? Japanese education has many fine merits, but re. English, it is focused on reading and writing. Spoken English is not a priority. How is the wife going to feel about living in an American city (or village) like Sparks?

So the overall analysis would indicate that you get mostly non-senior engineers, without kids.
Trouble is that the Japanese business and organizational culture highly values both experience and also seniority. How do the more junior employees get the senior leadership back in Japan to really understand Tesla and Elon Musk?
(The engineers that did relocate scoffed about the American labor, who were not really, in their view, up to par.)

It would therefore seem that getting Giga Nevada to run like a well-oiled machine was always destined to be a challenge.

Fast forward to the 3 ramp.
For many months Pana produced steady amounts of 3 batteries only to see them stockpiled unused, while Tesla battled having robots packed too tightly, the infamous flufferbot, and all the other myriad of problems that the ramp entailed. Imagine how the perhaps culturally more risk adverse Japanese engineers and managers must have felt. Were they mentally packing their suitcases and booking planes for Narita Tokyo?

Then suddenly, like a magician pulling not a mere rabbit, but a freaking kangaroo out of his hat, and after much personal and company pain, Elon made the ramp work - and actually ramp faster than many thought possible at the time.
At this point, Pana might have thought:

• "WOW - they made it after all!"
• "Wow, this crazy EV car thing might actually work. Maybe Toyota and our other Keiretsu friends back in Japan are wrong?"
• "This is going to be huge => We better get paid!

Perhaps Pana then compounded their first mistake by trying to pressure Elon into cutting a better deal. Remember the first year after 3 had the initial ramp? Tesla solved their internal bottlenecks, and quickly used their stockpiled battery packs, but now Pana couldn't ramp nearly as fast. After all the pain Tesla and Elon went through, that must have been galling.
Perhaps Elons patience wore thin, and the decided to plaid speed the internal battery production strategy back then.
Because as we have now learned, after Battery Day and acc. to other sources dripping tiny bits of intel, it turns out that Tesla has been pursuing a broad and deep strategy re. a multitude of battery related production technologies as early as ~2012.
Maybe competitors moved more slowly than anticipated, maybe Tesla found more areas where they could optimize processes than thought originally.
The big hedge worked spectacularly: BD was amazing. And now Tesla has the financial resources to do this in a credible way, both re. cash flow and cash on hand.

In conclusion:
Pana always had me worried: So very clear that Pana was the biggest strategic risk.
Had big oil used all their billions to straight up buy Pana instead of playing shorting games, Tesla could have been in real trouble. Fortunately, after BD, that risk is nullified.
And Pana only have themselves to thank for becoming a junior player in the battery field (if above conjectures have any merit)
It also follows, that Panas American branch is not worth so much anymore due to decreased strategic value. It would make sense to sell it. Too bad Tesla needs it way less than 3 years ago. Saving grace for Pana is that a lot of companies are moving into the EV space, so I guess they can get a fair price for it.

TLDR:
Giga Nevada was the right idea for its time: it put Tesla on the map, and forced Pana to become semi-serious. It was a huge bet, that worked.
Then unfortunately Pana dragged their feet and/or tried to strong-arm Elon. With foreseeable consequences.
Now, Giga Nevada is not so important anymore. So Tesla pivoted away from it. I see it being closed down in ~5 years - or sold.

 

[Drumheller]

Off Topic, but I hope the mods will leave this one as I think this is useful for this thread and recent avatar discussion.

Avatars and personal information are something I encourage everyone to think about before sharing in this thread. I have a fair amount of experience in creating, administrating, moderating, and participating in online forums. I've worked with different online communities professionally and as a hobby since 1999. I have seen many of the edge cases, dramatic behaviors, stalking, etc.

This thread is widely known in the internet space, and is not difficult to find. Anyone can read this thread. It doesn't take much time reading in this thread to realize there are many participants that have at least a seven figure investment account. Many have much more. Every piece of personal information you share (your picture, your name, where you live, your age, your occupation, your hobbies, etc) can help someone identify who you are. While I think most people would come to this thread looking for Tesla information and investment information, there may be people that come here looking for new marks to scam out of money, or worse. I'm not suggesting everyone live in fear, as that is no way to live, but I am suggesting people be prudent and thoughtful about sharing too much personally identifying information.

I think a fair amount of this community consists of older people, many of which may not be as savvy regarding the internet. For the younger crowd, it isn't difficult to connect the pieces. Most people won't, but some people have other motivations.

All of that said, I recommend against using your own picture as your avatar and against using your name as your username.

 

[CLK350]

Today is Friday 4/23/2021, one trading day away from Tesla's 2021 Q1 earnings.

The disinformation campaign against Tesla has gotten louder recently, using tortuous deceptive statements, some from no less a well established organization as Consumer Reports, archived here, and continued lying media coverage suggest that the pro oil & gas, coal and ICE lobbies are very determined to slow down as much as possible Tesla's progress EVEN as it is best for the US economy, in the national interest and that of a cleaner planet. This is not new, two years ago Jack Rickard laid out how spending $5B a day losing money shorting the stock is very profitable for the oil and gas industry simply for delaying the inevitable (see notes below).

Something clearly is wrong here. So what can concerned citizens do?

Besides the current Texas car accident, it may be useful to look at the broader picture every once in a while, rather than each instance of disinformation as the bad actors are what we also need to focus on.

Ideally, how to get our tax funded agencies to do their job: the SEC, the FTC's consumer protection branch .. Maybe consider legal action, re damages to retail investors/ shareholders? After all there have been successes in the past, even against large organizations, like Jonathan Emord vs the FDA, another agency captive to the interests of the companies they were supposed to monitor. Despite a few legal victories, the FDA is still relentlessly pursuing its distorted agenda.

The SEC is/ has been captive to the established banking system, as its list of leaders reads like a roster of Goldman Sachs alums - its actions have been more and more despicable/ laughable eg. see the movie "Abacus: Small Enough to Jail" for an entertaining retelling of an illustrative detail. Note: Abacus still remains the only U.S. bank to have been prosecuted in connection to the 2008 financial crisis - none of the banks or persons responsible for the subprime crisis went to jail - only tiny Iceland had the fortitude to do so, and contrary to warnings at the time, they are now doing great economically. Nothing has changed since. See more on the SEC's failure to do its stated mission, to enforce fair, orderly and efficient markets

One way in our system is to vote and support candidates for political office who defend the public interest first. History doesn't leave one too optimistic about this. The one consumer advocate who was/ is the model for the US public interest way is/ was arguably Ralph Nader -didn't work out. Many of us probably forgot we owe many saved lives thanks to his successful crusades against car makers reluctant to make changes out of stubborn status quo ism.

Another way would be a gradual implementation of public direct referendums, with a clear path to implementation as advocated by Matsusaka, see for example https://www.swissinfo.ch/eng/is-the-time-ripe-for-national-referendums-in-the-us-/46116612

Other thoughts:

The best way would be if somehow we could help the people who control the press and the levers of our current government realize that in their own self interest, a genuinely free and enlightened society would be a better place to live and enjoy life than living in gated communities /bubbles. Not sure how likely this is. At least we have some billionaires able to see outside their bubble doing something truly useful with their wealth: Elon of course, but also Mackenzie Scott and a few others

Fortunately, even if we don't do anything, there is no stopping Tesla anymore, just delaying tactics. We don't need to do anything, however lame that sounds (for us), and I for one would like to do something about it.

The Elon way is to just bulldoze progress forward, which barely succeeded against all odds - with the help of a talented group of dedicated engineers and scientists. And investors ; D - As Jack Rickard (RIP) said so well already in 2019, after eloquently describing the forces against Tesla/ progress:

"..I already know how this comes out. The irony is double. It looks like the oil companies and automakers have no possibility of losing this one. In reality, they have no way to win it. One man has them totally surrounded, outnumbered, and outgunned.

Elon Musk.

Bite it bitch. "

For the record, TSLA should have taken off by mid 2019 already when it was clear Tesla had reached profitability status - and as its Giga factories kept increasing it is clear that the SP growth should have been exponential/ parabolic - misinformed retail investors need not have been repeatedly fleeced by the hedge funds - well, let's revisit in a few years - and meantime do what we can to restore our capitalist free markets.

 

[jbcarioca]

Tesla youtube "ads" only reach superfans and antifans.

What Tesla needs to do is reach consumers in neither group that can afford their cars, software, and various other products. To convince these folks to consider buying Tesla products. Not to try to convince the loony toons of TSLAQ.

....

It is not the job of Tesla customers to do their marketing for them. It not the job of customers to do customer service/communications for them.

...

Your perspective is interesting, but...
The Holy Grail of marketing is Word-of-mouth, phraseology that predates cellular phones, not to mention the internet and social media. The most successful brands have almost always had quite small advertising budgets (FWIW 'advertising' is paid promotion. If it is not paid it isn't advertising. Those highly successful brands achieve the most important promotion by their own customers (examples: Airstream, Tesla, Porsche). Then there are those we do not even consider as possibilities that also have that same character (examples: Boeing, SpaceX, Magna (including Magna-Steyr).

Every highly successful brand, repeat EVERY, has a loyal and enthusiastic customer base that promotes the brand, usually without direct compensation, and excuses faults while promoting virtue. In short, they are enthusiasts. Even plumbing fixtures, tools and electrical supplies have that character. Think Snap-On, Moen, even Madison Electric [until they were acquired, perhaps].

I keep posting these things because it is crucial to the prosperity of Tesla that we retail investors understand just how different Tesla is. Tesla DOES NOT follow conventional wisdom. Tesla does not even have dealers, imagine that! Tesla has since inception used very precise and very disciplined cultivation of influencers (early adopters in Marketing context) specifically they have cultivated emerging buyers in a very disciplined way. Young children and young adults all over the world know and admire Tesla. That is where long term loyalty and growth are already being discovered.

Without a doubt I'm influenced by both academic study (My PhD was in Marketing, specifically oriented to women's Islamic banking). That taught me about the role of non-traditional marketing. Please think about how far Tesla has come and is continuing to come just from understanding the modern world.

Frankly there is minimal need to convince the unconvincable. Those people are older and not too likely to buy anyway. The people being convinced are all over the world, including in places Tesla has never been. There is active social media support for Tesla in Brazil, for example, where Tesla is not and probably will not be for some time. less than two years ago I was in Botswana wearing a Tesla T-shirt and was approached by several enthusiastic young people asking me if I had a Tesla. Those stories abound and most of us have them.

Please, please just think about hard core reality. Tesla saves roughly 15% of gross revenues by NOT having dealers and NOT having old-fashioned advertising and promotion. Tesla does NOT pay for product placement, nor even provide test products to press for either TE nor automotive. Tesla does not even have glitzy parties to launch new products. Their releases are, in comparison, boring with not much careful preparation. Geeks loved Battery Day but nobody else understood or cared. Please just think about that. People who mattered, who influence buyers, devoted lots of time and effort to understanding. Everyone else ignored the news or dismissed it as 'vaporware'.

Tesla has such precise and well directed efforts that everyone who does not understand "Word-of-mouth" thinks Tesla is losing sales. That is not true. Tesla is just very, very efficient and rapidly becoming more so.

Even FUD ends out to be not entirely negative since Tesla consistently proves their abilities.

If I seem to be belaboring these points just think of that 15% of Gross sales that Tesla does not spend!

 

[The Accountant]

To the Journalists Doing Lazy Math:
I took the time to breakout Tesla’s Q1 Income Statement by Segment and guess what? Excluding Regulatory Credits and Bitcoin gains, Tesla actually makes money on every car they sell. The Auto segment made $140m in Q1 excluding Reg Credits and the Bitcoin gain. And this is without Model S&X production. Had Tesla sold 15k Model S&X in Q1, the Auto segment GAAP Income would have been well over $400m.

 

[printf42]

With the risk of jinx it, I want to call out the bottom is near, maybe not tomorrow, maybe not next week, but won’t be longer than few months.

Wall Street want to convince us TSLA would be range bound again for the next five years. And try to convince the paper hands that now is the best time to cash out and look for the next meme.

Only problem is, Tesla is very different now than in 2014. Company now has no chance of going BK whatsoever. Model 3/Y had already reached price parity with ICE, let alone the coming 25k car.

With 50% YoY growth for the foreseeable future, Tesla is entering a period of forced profitability, all while they invest as much as responsibly possible.

With that, TSLA would go from now more like AMZN did since 2014, steady clime to stratosphere. Even bean counters won’t be able to find excuses to discount the growth and hold the SP back.

And, this is without considering the wild card called FSD, if Tesla is able to pull it off before 2025, all bets are off now. I am actually wondering who has the guts to sell leap calls now without fully delta hedge them right away.

TL;DR:
If you can afford to set your investment horizon to be 5+ years away, any dip is a gift, actually, just buy whenever you got new funds and don’t wait for a dip, you won’t regret after 5 years.

Not advice.

 

[Artful Dodger]

Today's daily FINRA report is out, which reports on shortselling activity by FINRA members (to comply with SEC Regulation SHO). Let's dig in and do some analysis.

Note that these numbers represent activity only by FINRA-reporting members, and specifically DO NOT include the largest funds (like Pension and Index Funds), or large Hedge Funds who also may have Options Market Maker status. FINRA largely reports the daily activity of Retail Brokers:

In general, the way to interpret this chart is by comparing the daily value to the historical data for that measurement (ie: avg + spread). This is most easily understood when expressed as a Percentile score (think back to the 'normal distribution' in your Stats class).

I've conveniently displayed the percentile score for the latest date in each field (see the row labeled: "Last %tile" in the chart above (grey backgrnd, first row of the stats summary table at bottom). Lol, I should highlight this row since it's v. important.

So the interesting comparisons are in the bottom row of PINK labeled columns:

1. First pink column is FINRA/NASDAQ
   • this is the proportion of all the day's selling done by just FINRA members
   • today's value comes in at the 46th Percentile vs. avg (always the 50th %tile)
   • these are realworld data, based on FINRA daily data back to 2019-01-07
   • Inference: HIGH proportion of selling today from non-FINRA entities
2. Second pink column is SHORT/FINRA
   • this is the proportion of just FINRA trades that were marked as short
   • you could think of this as a measure of the proportion of retail shorting
   • today's value is the 43rd Percentile, which is very low (50th %tile is avg)
   • with Percentiles, 5 points is 1 std deviation, so 43rd %tile is ~1.4 S.D < avg
   • historic data shows today SHORT/FINRA was the lowest since 2020-12-16
   • Inference: extremely low levels of short-selling by Retail today (lowest since before the additjon of TSLA to the S&P 500 Index)
3. Third/Forth pink columns are NAKED SHORT% and Percentile Naked Sht:
   • it's important to really GROK the difference between percent and percentile
   • Percent is just the raw proportion on a single data point
   • Percentile is where that proportion ranks as a score in a normal distribution
     • remember, the mean (avg) in a Percentile ranking is always 50th %tile
     • 1 standard deviation is a 5 Percentile point difference from avg
   • Inference: at a 49th Percentile score, today's Naked Shorting by retail brokers was absolutely typical; nothing to see here at all (hah!)
   • Note further that is almost always the case that the Naked Short Percentile will be very close to the 50th %tile UNLESS the Uptick Rule is in effect.

TL;dr Overall, what does today's FINRA short selling report tell us?

• Higher than avg proportion of trading today by large funds (non-FINRA)
• Very noticibly lower short selling by Retail traders
• No issues with naked shorting by Retail Brokers

Now, here's the part you won't like: we, the Public, and Retail investors, have ABSOLUTELY ZERO visibility into the short trading activities on OVER HALF (53.7%) of all TSLA trading done on NASDAQ today. This is where counterfeit shares can be created in the shadows. Those twice-per-month Short Interest reports only provide the deadline by when large hedge funds and abusive naked short sellers must hide their tracks. It does not prevent, deter, nor even DETECT such financial crime when the cow left the barn 2 weeks ago. Everyone has moved on, the damage is done.

This is an egregious situation, and is routinely IGNORED by the Gov't Agency charged with ensuring a fairing and orderly Market. Pass some disclosure rules for the BOTTOM HALF of the iceburg. Where is the SEC?

Word.

 

[jkirkwood001]

Wow, this forum is depressing reading today! Seems like we need a little good news.

In the slow burn, we're-winning-in-the-long-run category, this one from 3 weeks ago seems to have slipped under the radar (if I'm wrong and this was posted already - sorry!). Sandy Munro posted a video where he interviews 3 senior industry specialists Comparing Tesla, Ford, & VW's Electrical Architectures.

It's not surprising that the Model Y is architecturally more integrated, more advanced, more simple than the Mach-E and the ID.4. What I found interesting was why. These experienced pros suggest that many of the design choices Ford and VW made for their new EVs were likely the result of having to use "parts on the shelf". In other words, because Ford and VW have supplier agreements to use legacy parts in volume for their ICE vehicles, it's too expensive for them to design from first principles around newer, better architectures in their EVs, as we know Tesla always does (Elon's never met a slate he didn't want wiped clean! ) Effectively, all the legacy manufacturers "have" to design their new EVs around obsolete technology.

In the long run, this is more expensive to build and results in lower functionality. There are practical reasons Ford may never be able to economically build and sell the F150 Lightning competitively against the Cybertruck (ignoring the polarizing design). This video provides some good insight about why, long-term, Tesla is still the one to beat. (Not that any of us here needed confirmation! I'm just re-focusing us on some good news that promises upwards SP!

We talk a lot about Tesla's lead in batteries, AI, etc. but even in basic design like electrical systems, Tesla continues to be light years ahead of the competition. FUD-this and FUD-that, eventually all these legacy limitations catch up to them and they will lose money and market share - the money-losing Chevy Bolt is a case in point - from this testimony, nothing's changed. Tesla is well situated for increasing market share and long term profit. The SP will follow.

HODL. Chill.

Screen shots courtesy of 3IS.

The reason the Tesla has no fuses is because it's designed for circuits to be digitally reset, either automatically or remotely by Tesla support - how much $ does this save? How many service visits does it prevent?:

 

[Discoducky]

TL;DR - The Tesla product and manufacturing innovation/efficiency lead continues to grow. My thoughts on why Tesla continues to extend its lead with every new 'competition' product launch.

All other things are a short term distraction for investors.

I've written this for the TMC investor thread community; not for public consumption as there is too much context for n00bs. Yeah, I'm a bull, but I feel I'm a very informed, tech engineer, turned product manager, first principles bull.

The best, most reliable, my 'go-to' sources for information on Tesla continue to be (I'm not associated with them, they are my heroes however):

• Dave Lee @ Dave Lee on Investing - amazing insights abound
• Rob @ Tesla Daily - all things financial
• Jordan @ The Limiting Factor - all things battery
• Sandy @ Munro Associates - *nearly* all things vehicle production (software, ECU, custom chips need some work, luv ya Sandy!)
• Zac and Jesse @ Now you Know - super informative, super funny

Much longer version below...


While most or maybe even all of us know that some EV competition is 'coming' (Rivian, Lucid, NIO...etc), we also know, most at at an arms length, that it is really hard to bring to mass production, taking years to ramp, needing the best engineers, visionary leadership and the capital to keep the gears turning. Any one of these things not fully onboard and or operating efficiently will most likely spell doom at worst or at best cause such a lag as to not be competitive when the product is announced to launched.

We also know, from even the most recent product launches of competition that there are marketing, pent up demand or 'fanboy' purchasing for a quarter or even longer if their are government incentives, then come the dealer incentives and once those run out, the product seemingly goes into life support.

You don't need to look any farther than Tesla's software lead, but when you do you see so much more. Many more insurmountable moats that continue to grow. Underneath software is firmware, then custom ECU's, then custom ASIC's or state of the art chips like the new graphics in the S (not industry standard). These power the entire car and enable to the engineering playground to quickly iterate and enable the most advanced features of any product (not exclusive to autos). Even with my time at Tesla and working on BIOS at Dell and XBOX, I'm absolutely floored that Cyberpunk 2077 at 60fps is playable and appears smooth on the S. It is such an amazing achievement and speaks volumes to their engineering prowess and vision. This is also the tip of the tech iceberg as Sandy continues to discover in his teardowns that Tesla has such a huge lead on HVAC innovations (Octovalve), IDRA gigpress chassis, structural batteries, BMS, motors, inverters, gearboxes...etc (the list is so long). For instance, how many OEM's make their own body controls ECU's? or even know how to swap out a bootloader in the field? (I'd guess none as none have ever demonstrated it or even talked about implementing features which would demonstrate it).

I've been an investor for over 10 years now, been through several valleys, seen some ATH mountaintops and never once thought that competition is at Tesla's doorstep. When the S launched in 2012 I thought OEM's would, out of sheer fear, start reverse engineering and then start production of their own EV optimized chassis and all the other necessary engineering to 'catch up'. This effectively didn't happen and was evident when Porsche released the Taycan. A great effort, but sorely lacking in so many areas that it is a testimonial to how a formerly leading OEM has been put to task and failed to deliver product/marketplace competition. Their product is beautiful, track worthy and that's where it ends as it is also less efficient, much more expensive and has serious issues at the software and firmware side (this is at a glance; so their might be more. I'll wait for the Sandy teardown if one such should happen).

My bias shows as I believe that all other competitors either in production or announced with specifications available are simply a feeble attempt at marketing hype. This includes the Lightning which I wish and hope will be better when launched, but I just don't see how a car with a huge mechanical button on it's beautiful, large LCD screen will have good, industry leading tech underneath it. Huge sigh. Rivian is so darn close, I hope they can find a niche, but that is all they will get is a tiny fraction and it looks like a great product, but lacks many specifications that are key. I'm very cautious to say it will compete.

Let's never forget that traditional OEM's have huge 'boat anchors' holding them back from even keeping up with Tesla's pace of innovation

• Tesla has no appreciable/material marketing, in any country, while selling every car it makes (low # of days of inventory).
• Tesla will effectively double it's manufacturing footprint next year
• Tesla innovates at every level of form, fit and function as well as the creation and production of these innovations
• Tesla attracts the best talent
• Tesla has no ties to dealerships
• Tesla has no ties to gas
• Tesla soon, maybe currently, will take to production, it's own batteries from scratch (4680 Kato outputs)
• Tesla has long term contracts for raw battery materials

To conclude, there have been 2 major events in the timeline of Tesla that have gone so underappreciated, or better to say, way over the heads of investors, that it is astounding.

• Tesla Autonomy day with custom inference and training chips
• Tesla Battery day with structural batteries and so much more that it makes my head spin

and on the horizon will be Tesla AI day. Which I'd bet will also be very hard to understand for the investor community. How many know about GPT3? How many know about BERT? Inception v3? We have yet to see any fruits of the Dojo labor and hopefully are on the cusp of experiencing FSD beta with 3D labeled training data.

It speaks volumes that not only does Tesla make the most performance minded, fastest accelerating cars on the market, but they are also the safest ever made, most tech advanced, consistently getting industry revolutionizing software updates OTA and are the cheapest to maintain/operate making them a seemingly brain-dead value decision when considering 5 year TCO. This has never happened in modern times or ever. Any why would it? No car company has ever had a vision like Tesla.

Would you rather have a Model 3 or Honda Civic or name any other car? Oh and the Civic (other car) is more money over 5 years (TCO). Hmm, lets see. Objectively, Tesla is materially better in all the ways that matter to consumers and they can only find out if they 'search it up' on the intertubes or ask around. This will reign true for years to come. Thanks for reading!

 

[RubberToe]

Fortune 500 issue just came out today:

Fortune 500 list of companies 2021

The name is synonymous with business success. This is the 67th edition of our ranking of America’s largest companies. Together, the 500 corporations on this year’s list generated $13.8 trillion in revenue, or some two-thirds of the U.S. economy. Explore the list to see who prospered, who...

fortune.com

Not showing on the website, but per the Magazine table under: Total Return to Investors 2010-2020 annual rate rank, Tesla is #1 of all companies with a 63.0% annual return. With a 743.4% return for 2020, which is also #1.

Now the 100th largest company by revenue, up from 124th last year. This years estimated $49B in revenue gets us to #63, and 2022 revenue of $65B gets us to the top 50. Still a ways to go.

No U.S. company has produced a better return to investors over the last 10 years than Tesla.

To all my fellow TMC members who held on through the endless BS spewed by the doubters over the last DECADE, Congratulations! Hopefully you had the instinct and vision to have Tesla as your largest single holding.

To the doubters, naysayers, and short sellers, keep doubting, naysaying and shorting. You missed the stock of the century. Oh well

The mission continues...

Tesla’s mission is to accelerate the world’s transition to sustainable energy.​

Tesla was founded in 2003 by a group of engineers who wanted to prove that people didn’t need to compromise to drive electric – that electric vehicles can be better, quicker and more fun to drive than gasoline cars. Today, Tesla builds not only all-electric vehicles but also infinitely scalable clean energy generation and storage products. Tesla believes the faster the world stops relying on fossil fuels and moves towards a zero-emission future, the better.

 

[dgodfrey]

Chevy Bolt is a compliance car still selling in compliance numbers. About 25k units per year in the USA since introduced. Not having $7.5k credit and competing against LEAF/Niro EV/Kona EV with $7.5k credit does more to make GM offer $10k discounts than $40k Model 3 without Fed Credit.

Consultancy Alix Partners recently did a dealership study. It found on average a dealer made $1300 profit on service for every new car sold. Not revenue, profit. You can easily pad $1300 in extra profit on BEVs for dealerships vs ICEv. Dealer resistance is lack of knowledge. Ford dealers seem to be selling Mach-e just fine. Like ICEv compelling EVs get sold crappy ones sit on dealer lots.

Yes the "also rans" will likely sell in those numbers.

Most people want normal interiors. Steering Wheel AND Instrument Cluster. Grab handles, sunglasses holders, volume knobs, leather seats vs superior networks they will rarely if every use. FSD that is perpetually coming soon. Hands free Supercruise and similar will be more than good enough for many.

If driving 600 miles plus daily is regular for you then Tesla is definitely your EV.

The unveiling and introduction of S3XY hasn't collapsed demand for the rest of the auto industry. Neither the unveiling of Cybertruck.

I agree by 2040 Tesla will have the highest automotive market share in the USA and the world. But it won't be anywhere near 100%. Not everyone has the same priorities and taste as Elon Musk. There will be room for others to sell BEVs profitably.

I don't see how anyone can still defend GM. I was hoping they might learn from the Bolt which is the excuse the GM apologist's use to justify the $9k loss before the deep discounts. Love the Corvette and would liked to have seen an EV version. Very disappointed that after 4 years of the Bolt, GM feels the maximum charging speed for the Lyriq at 150kW adequate. It's the lack of forward thinking that I've lost all hope for GM to survive the decade.
I posted this on the Bolt forum as possible reasons why the incumbents can't seem to field a compelling contender and more importantly survive. Until they address/adopt all these Tesla advantages, they will continue to fall further and further behind.

Legacy assumed Tesla was not a threat so without Tesla,

• EV's would prove once again, not ready for prime time, technically, financially, viability, public perception.
• Big oil has a huge influence on Automotive
• The culture of established brands is slow to change
• Fiscal prudence to support profitable product lineups rather than non-profitable
• Corporate boards measure success 1 quarter at a time. Results in myopic planning.

Now you factor in the Tesla effect,

• Innovating faster
• Better technology
• Understands that BEV's are software dependent
• Able to take risks due to size/youth (Cybertruck)
• Vision to see Supercharging was a necessity, not a luxury
• Could go all in on BEV's without risking or cannibalizing existing golden egg
• More efficient manufacturing due to innovations
• Vertical Integration, various advantages from costs to improvement cycles and supply chain
• David vs. Goliath underdog fan club. People are starting see through the FUD
• Fixed pricing, better buying experience
• Elon Musk
• Better understanding of product demographic (e-Silverado should have been before the Bolt)
• Future generations look to Tesla as an aspirational brand. Kids get it.
• Compelling products
• Superior specs
• Safest vehicles available
• More energy dense batteries (300 Wh/Kg)
• More cost effective batteries (cost/KWh ~$60 with 4680's)
• Pulls top talent from all facets of the industry. Legacy's are 3rd, 4th, 5th choices after Tesla/SpaceEx
• Has SpaceEx rocket scientists at their disposal for innovative tech, metallurgy, production, etc.
• Understood that batteries were the single most critical supply line and invested in Giga1 in 2014. Legacy laughed.
• Branding without advertising is envied
• Demand exceeds production, without advertising
• Reputation as the leader in BEV's. Nobody's even close.
• Tesla is synonymous with BEV's like Kleenex is to tissue
• Invented and mastered OTA upgrades (look at China recall, fixed 300k cars over the weekend)
• Most efficient drivetrain, aero, batteries
• Best range and MPGe for similar vehicles
• Global player and expanding market (see Silk Road Supercharger route)
• First and only non-Chinese owned factory in China
• Industry leading revenue to debt ratio
• $20B cash on hand, soon to overtake GM without the debt
• Not burdened with aging, underutilized infrastructure of factories
• Pension/health care/Union obligations either minimal or non-existent
• Light on their feet and can switch directions quickly (Model 3 motor, heat pump)
• Not burdened with dealer franchise network middleman
• Diversified revenue streams from Superchargers, Tesla Energy, Software
• Industry leading autonomy with exponentially more real world miles of data and 5th most powerful supercomputer on Earth
• Lowest depreciation of any BEV
• Best customer satisfaction
• Best long distance BEV based on cost and time charging
• Quickest production car in the world
• Improves cars as better features, processes, specifications become available rather than holding till model year refresh
• Most American made car you can buy

 

[The Accountant]

Let's take a moment to marvel at this:
- Tesla is expanding Fremont's production capacity.
- Building out the Kato Road facility
- Significantly expanding Shanghai
- Building a new facilty in Austin
- Building a new facilty in Berlin

..and
- they are not funding this with a Capital Raise
- they are not funding it with Debt
- they are not drawing down their Cash on the balance sheet.

Tesla is funding all this with cash generated from Operations. Yep, the company that "loses money on every car it sells", generates enough cash each quarter from operations to fund this massive expansion.
Even after funding all these Capital Expenditures, they still have cash left over (Free Cash Flow). In fact, since Q2 2020, they will have generated Free Cash Flow of $4.4B by Q2 2021.

 

[jbcarioca]

There are rare times when I see something as a strong Buy signal. When totally absurd excellent news sends the price down it becomes evident that sometime soon the price will go up. Nearly every post earnings report for Tesla the price declines and 'analysts' dismiss the results.

Be of good cheer. Our company is doing very, very well.
There is no doubt that there are major headwinds right now so the overall markets are skittish, not least due to political disarray (US, UK, Germany and on and on), environmental disasters on every inhabited continent, semiconductor shortages with no short term solution in sight...lots of solid reasons to be pessimistic.

Still, Tesla has weathered all that in quite spectacular fashion. The major impediments are semiconductor shortages, Models S and X, Giga Berlin delays, 4680 issues, cell supply shortages everywhere and FSD. Will Tesla suddenly be unable to navigate multiple major challenges? Of course not.

Then compare this situation to all the past potential problem areas. In nearly all of those Tesla had potential cash weakness. Until now earnings really did have a major and material contribution from regulatory credit sales. Those who argue that these are ephemeral are theoretically correct. Of course we all know that as Tesla grows they keep getting more of these rather than less although the sources vary. This quarter was lower but next quarter will be higher as, among other things, VAG China begins to pay.

Regardless Tesla free cash flow is amazing. Why, because they deliver products very, very quickly. Nine days inventory on hand is quite clearly astonishingly low, but Tesla keeps that low. So, what happens with Berlin and Austin online and Shanghai expansion. Inventory levels net drop due to short delivery cycles. They'll probably find a way to avoiding dropping below seven days ever, but that is a constant reminder of the excellence of Tesla logistics management and, above all, proof of being supply-limited as they grow. Will that continue? Quick answer, proof positive, is this; just check out expected new vehicle delivery for any product, any where. That proves there is no demand constraint, anywhere for anything. That includes Megapack, sold out through 2022 and Powerpack, also very much in demand.

Think about that, then decide if you think Tesla can continue to defy broader markets. If not, sell or short. If so, buy or hold.

For the first time in a year or so, I just made what is for me a substantial addition to TSLA. That isn't advice. However, I stated my basic logic. All the relevant backup was in the earnings report and the webcast. Decide for yourselves.

 

[jbcarioca]

Assumption: Some chip lines have been stopped forever as they were barely profitable & lack of orders forced a decision to close earlier than otherwise

If Ford (or other OEMs) can't EVER get the chips they EXPECT, then Ford or its suppliers will have to rejig things at a very slow speed compared to Tesla.

My question is: have some OEMs left an open goal for competitors & particularly Tesla? Let's take an extreme example, let's say Bosch widely used 1 or more discontinued chips. Bosch would have to do a lot of work (presumably) to validate their changes for all OEMs and get back to normal production rates. Similarly, other sub-systems from other suppliers might be bottlenecks for OEMs and car designs will need to change at least a little. OEMs might really be prevented from making cars in volume (in all models) for a long time. If you want a car, you WILL most likely have to switch brand to whoever has cars (including Tesla).

OEM supply chains are fragile, Tesla (and probably some Chinese & other startups) are anti-fragile, robust & resilient. The last year or so has really accelerated change in work, culture & society in my view, we're running at double speed for a while

Suppliers by revenue (Billions)

1. Robert Bosch. $49.53 (injection plus much more)
2. Denso Corp. $42.79 (ex Toyota, thermal, power, electronics)
3. Magna International Inc. $40.83 (transmissions, ADAS)
4. Continental. -$37.80 (tyre sensors?)
5. ZF Friedrichshafen. $36.93 (transmissions, electronic suspensions)
6. Aisin Seiki Co. $35 (Toyota Group, transmissions, electronics)
7. Hyundai Mobis. $25.62 (Hyundai Group, airbags, lots of electronics sub-systems)
8. Lear Corp. $21.15 (seating, electrics, more - some must have chips in)

It's maybe useful to point out that Magna manufactures the Jaguar iPace and a number of others. Right now they make models from JLR, Toyota , BMW, and Toyota.

https://planttour.magnasteyr.com/index_ENG.php

Among those eight Tier One suppliers all make huge volumes of components including engineering and control/management of whatever they supply. For the prime users of these approaches the supplier independently designs whatever they supply. That is very efficient when no new technologies are needed. In new technologies, not so much. Thus we have VW id. 3 and many others, including Chevrolet Bolt.

Tesla, for the initial Model S was constrained in manufacturing, design and above all, very nearly unable to get supplier cooperation. As Elon said, 'we could not get the A team and sometimes could not get anyone at all'. Mercedes came to the rescue and had their suppliers provide many major Model S parts. As I recall, two air conditioner compressors from MB supplier, one for battery BMS and one for cabin. Suspension parts, switchgear and much else was taken form the Mercedes parts catalog without alteration.

That approach served Tesla well in the beginning, because otherwise they would not have been able to launch the Model S.

Soon, part by part, Tesla discovered better ways to accomplish something. Soon, less quickly, Tesla grew enough so respectable suppliers would actually deal with Tesla. Then, Tesla began, little by little, learning to do better by themselves, even seats (almost no other OEM made their own seats). Following many improvements Tesla borrowed a proprietary Inconel from SpaceX and gave us Ludicrous.

When Model X came along Tesla ended out designing and building many things that suppliers couldn't do. The FWD were to made by a supplier, which could not do it, so Tesla did it themselves and invited ne seniors and other thing to make them work. The vertical integration crept up bit by bit.

When Model 3 arrived Tesla began wholesale reinvention of numerous things, many of which Tesla made themselves. With Model Y and reconsideration of how to approach manufacturing after the initial mess with Model 3 came the realization that there were 'too many parts'. Then came bigger presses, even bigger bigger presses, then Gigapress and coming very soon even bigger Gigapresses. Along with those developments came hundreds of complete redesign elements including the SpaceX creation of Octovalve.

I gave just a few examples to illustrate how Tesla arrived at the highest vertical integration in the auto industry essentially by borrowing from SpaceX, which had itself been forced to vertical integration because they could not buy rockets.

Now teal designs their own FSD chips builds their own Supercomputers to get to FSD, sometime...

Today, watch Sandy Munro do teardown of BEVs. From IPace, VW, GM and Ford we see supplier dominations many dozens of different chips and complete independent major components. We see suppliers dictate complete subsystems, because the OEM does not want to do it themselves. We see dozens of different and incompatible fasteners. We also see no genuine systems integration.

The lesson for us all is that Tesla is reinventing manufacturing just as SpaceX did before it. The result is spectacular when it works. However, the learning curve has mistakes, misjudgments and uncertain timelines.

As we look at Tesla failures to deliver on time and with smoothly perfected whatever the item is we ned to remember that Tesla is redefining the automobile, redefining grid services, redefining energy storage and, in spare time, inventing a solar roof. None fo that is precisely predictable.

Were this to have been a 'normal OEM' Magna-Steyr or Valmet would be doing contract manufacturing. There would be other suppliers from the @UkNorthampton list doing most major systems. They would work. They would be reliable. They would not make anything innovative.

As we criticize Tesla faults we need regularly to remind ourselves what is actually happening.

Nothing about that makes me any less irritated that my Plaid has not been delivered, a month after promised (sort of..).

As we value TSLA shares we really need to remind ourselves that one major part is manufacturing innovation. That single thing keeps Tesla advancing versus all the OEM's who know exactly how do do this because they've done it for 'a hundred years'. Every analyst seems unable to comprehend just how consequential all this is.

 

[Papafox]

Volume today was nearly 40% lower than the average. How does the entire market in a coordinated fashion shrug off an ER this quickly? In theory when you get a huge dump of information, opinions should change. I'm puzzled by the mechanics of it.

In many ways, manipulating TSLA has become easier over time
* S&P 500 inclusion locked up more of the float and thus we see less stock trading every day to support the same amount of options trading. The net result is that the tendency is for the tail to wag the dog. In other words, the stock is priced for maximum advantage of the option sellers by every Friday rather than the stock price running wherever the market would normally take it and the option sellers and buyers just take their lumps or profits.
* Expectations have changed regarding Earnings Reports. Usually we see a run up in stock price leading into the ER and then an average of about a 4.5% pullback during ER week. When TSLA fails to climb after an excellent ER, some investors say, “See, it’s happening again, I should have learned.” In truth, the “It’s happening again” required that the Walll Street pirates do some selling in after-hours trading on ER day to cap the climb and make sure there’s a Mandatory Morning Dip at the start of market trading the following day so that the signal is sent to investors “It’s just another post ER price disappointment, nothing’s happening here this week.
* When the stock price fails to climb, the media pundits jump in with whatever explanation they can latch onto :“Elon is worried about the supply chain. Q3 and Q4 could be disappointing.” I’ve seen a recent ER when the non-GAAP profits exceeded expectations but the stock sank because Tesla doesn’t make a GAAP profit without credits.
* Even the price target increases by analysts are tempered by the artificially low stock prices. Analysts don’t want to get too far ahead of the price and the targets of others.
* In time, investors get conditioned to believe that good news doesn’t matter for TSLA’s price, and the only thing that matters is a big breakaway. You have investors sitting on the sidelines right now, even with this quarter’s good news, waiting for the next rally to begin.
* Fortunately, sooner or later the good news piles up, price targets keep getting raised, and some catalyst sends TSLA spiking upward, volume jumps, shorts jump out, traders jump in, and its off to the races until TSLA actually overshoots its appropriate price.

Right now TSLA is a game of watching to make sure the company is on track for long-term success and patiently waiting for the catalyst that overwhelms the pirates and sends TSLA on another voyage to the stratosphere (and hopefully beyond).

 

[jbcarioca]

Rumors, but Ray seems to be a straight shooter. If this is true I want no part of selling CCs for a while.

View attachment 690011

Tesla said there would be a China designed new model. The design center was announced in January 2020:

Elon Musk Announces Tesla Will Set Up Design Center in China

Tesla CEO expresses fondness for Chinese art and shows a sketch for what could be a future China-market vehicle.

www.caranddriver.com

I have copy of the concept on my office wall.
Whatever 'trial production' might be, the logical conclusions, I think, is that the entire 'underbody' including suspension components may well be made on a single Gigapress. Bizarrely this may not fit the historical notion of 'unibody' but it will make introducing multiple form factors on the same line a relatively easy process, and the China vehicle is being designed to do that from the outset.There are been numerous hints of inclusions of suspension and even a hint or two that wheels might be included somehow. We have no specifics but plenty of hints. There is also the CATL plant being built next door and they're already building battery packs for Tesla plus doing large amounts of battery R&D.

We also know that Zeng Yuqun (AKA: Robin Zeng) and Elon Musk talk frequently and share technical insights. It is quite reasonable to imagine that CATL battery technology will power the China designed vehicle.

Perhaps unusual is that Tesla has not made any formal announcements about all this since January 2020. My personal guess is that this vehicle will enter volume production sometime toward the end of 2022.

The production technologies already working for Model Y will expand to other lines. Just as soon as the Cybertruck enters production there will have been major technical advances that will enable cheap, durable and resistant bodies. As 4680's mature that too enters the mix.

I believe that the China designed vehicle will incorporate Gigapress and CATL battery advances plus a few surprises. That will enable much cheaper production at high volumes. All of that will be being disclosed during the next six months.

Following Cybertruck production with 4680's the soon to be developed German car will appear. There are few clues, but I'll be surprised if it will not be an SUV/hatch in roughly the Peugeot 208/2008, VW Golf class, but slightly larger. That will have major commonalities with the China design, but will be slightly larger, have more capable running gear and will be tuned for higher speed operation. In short, it will have all the classic capabilities of a "hot hatch" but also have a larger SUV version launched together with in (again think Peugeot 208/2008, VW Golf/Taos).

Each of these will end out being the same price as equivalent ICE, but all of them will have higher range than most people think they will.

FWIW, everything we seem to know now suggests that 2023 will probably have major updates for Model 3 and Y with 4680 structural packs across the board. I believe that because Panasonic and LG both say they're working on 4680's and CATL. has disclosed nothing other than the 80GWh plant going pop,beside Tesla, so they may or Amy not do 4680's but they're certainly preparing to supply structural packs.

There will also be multiple factories to build Superchargers and other TE products. Further, energy storage done cooperatively with large scale renewable installations as well as commercial and residential products cannot be neglected. They need massive storage supply, new battery capacity and technology advance will enable that within the next two years.

Global car markets have these types of vehicles as the largest volume vehicles in the vast majority of high volume markets. The highest volume exceptions are India, which trends slightly smaller (excluding tuctuc/auto rickshaw) so an adaptation fo the China model will be an India CKD, assuming the Indian government can allow Tesla the terms it needs). Variants of the China and German models will be built (either CKD or manufacture) in other global markets. Further, some of them will also supply raw materials and/or components to other Tesla factories. Much of this will be developing during 2022/2023.

Doing most of this in one form or another will be essential to maintain a 50% vehicle growth rate.
Even a conservative five year forecast requires all of this even if not in this precise form.
Doing this will allow a 5,000,000 annualized vehicle production rate in 2025.
A quick view of the 25 largest vehicle markets in the world will make it clear that BEV adoption in most of the world is necessary to advance the mission.

That is my personal crystal ball. I do not claim prescience.

I freely admit that this ranks as a close analogue to "the Heart of Gold" but I do not think it requires an "infinite improbability Drive".

IT is well to note, however, that the rough 2020 annual unit sales by familiar OEMs went like this:
Toyota. 9.5 million
VAG. 9.3 million
GM. 6.8 million
Stellantis 6.2 million
Renault-Nissan-Mitsubishi
4.5 million
Hyundai 4.5 million
Ford. 4.2 million

Can Tesla outsell Renault, Hyundai and Ford? If they do, from whom will they take share?
Will the markets be much higher than the non-very-stellar 2020?
What will the displaced auto dealers do?
What will the oil and gas industry do?
From whence commeth all those charging stations?

If that happens what will be the state of Tesla Energy?
Will Elon Musk still be alive then?

It is easy to forecast, but making it actually happen is another thing entirely.