Yesterday as well as today: NASDAQ | SEC Filing
307,152 shares - average cost basis $25.35. About 0.5% of the entire float.
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Yesterday as well as today: NASDAQ | SEC Filing
307,152 shares - average cost basis $25.35. About 0.5% of the entire float.
gigglehertz
Member
83,955 shares yesterday
223,197 shares today
per filing at link further down on twitter feed
dang too slow. why do I bother posting anything?
223,197 shares today
per filing at link further down on twitter feed
dang too slow. why do I bother posting anything?
no, baron was trying to get Elon announce $100 cost target. But as jb Straubel has also done, they do not disclose their internal cost number for competitive reasons. Not for lack of knowing.
Gigafactory production is already sold out through 2016. If you believe reservation numbers and interest, they have nearly 100k order requests already and that was within the first week of the May announcement. Demand is through the roof, so tesla has some good visibility for what they can sell at this scale. You can't put in a product order in China for 35Gwhs of storage and actually think you can have it done. It would never happen. At least not by 2018. Secondly, control over production at this scale is an advantage. Engineering and production can work closely together to implement changes in a much more efficient manner. Remember, they are going to produce more batteries the all the batteries produced on earth(2013). You can't just put in an order request for that and actually succeed at getting any of it at quality and precision and price for tesla branded product.
The amazing thing about this entire conversation around the Elon effect is that he has had high fidelity in his mission and execution from his pay pal days through today with tesla,spacex, and Solarcity as chairman. That is an earned accomplishment. He also has the most current data in areas where no one has nearly amount of access. Tell me whose commercialized lithium ion batteries for 200+ mile range as well as commercialized li batteries for storage application at these scales already? In addition who has executed on space transport as spacex has thus far?
It all connects and adds unto each other, and that is critical here. Paying attention to what Elon says is just as valid as paying attention to academic/think tank studies that you might hold in higher esteem. I look at elon's access to real world data on commercialized li batteries and see the most "in the know" person on this part of the industry.
To be sceptical is absolutely necessary, to poo poo what Elon says is reckless. As a critical thinker you must validate a reason why he would be wrong about his approach and strategy just as much as he would be right. Given the track record and evidence at hand, Elon is a good prognostication as to what is really happening/going to happen in terms of energy storage at scale in the global market place. At this scale, there is no one else offering a solution. So Elon appears to have knowledge gap advantage.
If you look at what he did with spacex, then you'll understand why he's doing it with batteries. Spacex rocket costs $60million. Outsource contracted ULA rockets around $400mln. Elon has demonstrated his methods have validity. Show me a comparison and I will listen.
Foghat - Thanks for the response. Please don't take my response as poo-pooing Elon, just saying that as an investor, he provided nothing that would be the basis for investing money in response to Baron's question. I realize that Baron has already invested a lot of money in these ventures, so I'm sure he has received more substantial answers, and probably been able to actually look over hard numbers. I don't have 100s of millions to hand over, so I can't demand that kind of access.
Either way, your responses don't really address the root of my question. You explain that there is no way for the market to supply such a huge quantity, and without a doubt, you are correct. It very well might be possible that building their own plant may be the lowest cost option to procure such a huge quantity. However, that doesn't make it the lowest cost in absolute terms. Let's say I decided I needed sixteen quadrillion #2 pencils at my house because I figured out a way to use them to achieve cold fusion. It very well might be cheapest to just build my own factory to turn trees and graphite from this area because of the lack of availability of such a huge quantity. Chinese labor will still be able to produce pencils at a lower cost than me, but because my purchase volume is so high, my entry into the market would completely distort all existing pencil markets and cause my cost to be lower by making my own.
The fact that their production is sold out through 2016 I think it somewhat meaningless as well, since they aren't really planning any significant production until 2017.
To cut to the chase, to critically analyze Elon, this is what I see:
Paypal - great accomplishment, although what role he really had I don't know. I also know that Paypal's success was built on Ebay's early success, so was it Elon's genius or just being the right guy with money at the right time? I don't know, and I certainly am not taking anything away from him. I'm just putting myself in the role of a rational investor trying to evaluate the situation.
Tesla - Seems like a great company, and they certainly have produced one really awesome car (S). However, although the future looks bright, it is certainly far from a fait accompli that it will ever make money. Again, I'm not saying it won't, but it hasn't turned a profit yet, so as an investor, I can't really extrapolate a "success" on this one.
SpaceX - Again, truly amazing to start a company from basically nothing and launch rockets into space. However, as a privately held company, there's not much that can be extracted, other than that they are still in business. They raised another 1 billion USD early this year, so apparently it isn't returning money hugely, but I don't know the details, so I don't know whether it is good or bad. Like Tesla, it's not a strike against, and it is certainly doing some good things, but as an investor, I can't draw any conclusions.
SCTY - The investment this thread is based on. Hasn't made any money yet, seems to have some good ideas, but I'm still looking for the hard evidence of what they have that nobody else does, other than Elon. I'm not poo pooing Elon, but he can't do everything, and even if he could, although he is clearly capable of some amazing feats, the only thing he has publicly made money on is PayPal.
You ask who else has commercialized these batteries for this range, etc. etc., and those are good questions. However, I'm not putting Elon on trial to decide who is the most visionary person in the alternative energy space. He wins that by a landslide. I'm just evaluating a company's potential to make money, and having Elon involved in no way guarantees that, at least based on performance so far. I'm not showing any comparisons, because there aren't any, and they would be irrelevant anyway. The more important question is not, "who else has offered a solution to provide batteries on this scale," but, "why has noone else even tried to do this?" Maybe others have looked at it and decided it won't work, so they didn't try.
I'm just pushing to understand deeper, not to tear anyone down or poo poo. This is a thread for discussing investment in SCTY, and that's what I'm trying to evaluate without getting caught up into any hype.
thanks for your reply. The numbers are big. We're taking about a trillion dollar industry here. Each cent Solarcity cuts from retail cost/kWh literally opens up 10's of billion market share for them. if Solarcity can develop a product such as solar+storage that can do this absent any ITC or other incentives, then tesla energy storage is a significant development to track. Elon is the center of low cost energy storage. Tesla's developments here are critical to Solarcity unlocking this near infinite market. It's really not a Elon vision, but an execution on cost reduction that's at hand here. Cost/kWh is the target, not Elon worship. If you think this will be achieved at scale, then Solarcity is worth multiples of current market cap. If not, then don't invest in them because this is what they are attempting.
Solarcity has already hit its 2017 install cost targets. Reducing sales and marketing by .30 cents and they are at the target cost to thrive post ITC. Residential Energy storage is coming on line in 2016 in scaling numbers. Solarcity is already proving out the aggregation model as I write this. Tesla is expanding pack production to Nevada as I write this. The Gigafactory starts production in 2016. The combination of commercially viable solar+storage package is coming together in scaling numbers in 2016. As far as I know Solarcity is the furthest along in reaching this market eventuality. The pieces are in place.
now is the policy transition to get there. Business modeling/projecting is difficult. So this is about what you believe is going to be the way things shake out. I think this shakes out in favor of Solarcity and tesla energy.
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TheTalkingMule
Distributed Energy Enthusiast
Musk is a private citizen taking cargo deliveries and soon people into space. And now we're poo pooing even this?
He's trying to take us to Mars for god's sake. What will impress you?
He's trying to take us to Mars for god's sake. What will impress you?
jhm
Well-Known Member
Sunrun Mixed Q3 Shines Light On Shadowed SunEdison SUNE RUN - Investors.com
This is good on SunRun. Q3 results have revenue up 47% y/y and getting quite close to operating in the black. The are on track for 2015 MW installed to hit 205 MW up 79% from 2014.
So it looks like they are keeping pace with SolarCity's growth and taking marketshare from the rest of the pack. But more significantly they are doing this while moving closer to profitability. Their business model is much less vertically integrated than SolarCity. They mostly focus on marketing, sales and finance. A portion of their installs, they do themselves, the rest is done by afflicted installers. This makes for a much less capital intensive business.
It's good to see SunRun do well. It does add some confidence to the market, especially for distributed solar installers who offer lease financing. It may well be part of the reason SCTY went up a bit yesterday.
This is good on SunRun. Q3 results have revenue up 47% y/y and getting quite close to operating in the black. The are on track for 2015 MW installed to hit 205 MW up 79% from 2014.
So it looks like they are keeping pace with SolarCity's growth and taking marketshare from the rest of the pack. But more significantly they are doing this while moving closer to profitability. Their business model is much less vertically integrated than SolarCity. They mostly focus on marketing, sales and finance. A portion of their installs, they do themselves, the rest is done by afflicted installers. This makes for a much less capital intensive business.
It's good to see SunRun do well. It does add some confidence to the market, especially for distributed solar installers who offer lease financing. It may well be part of the reason SCTY went up a bit yesterday.
i like sunrun. Their legal team is really contributing to the fight against hostile utilities. My only concern is their cost structure going into 2016. They are, in my opinion, well behind Solarcity in total cost per watt right now. That profit margin is going to get cut significantly come 6-9 months. They are going to have to cut something significant in order to stay afloat. is it sales team? Or every department in some way? Something will get cut, cause it's just too much of a cost cut to do in 6-9 months and continue growth. I also don't think a stock offering is in the cards either so tight sledding soon.
Im speculating Solarcity will have an opportunity to hire their trained employees which would also help cut acquisition costs at continued compounding growth.
Tax Equity Partners
Someone brought this up earlier but I couldn't find an answer.
At the end of the Q3 the "Estimated Nominal Contracted Payments Remaining" is $8.9 billion as per the shareholder letter.
While the "Gross Retained Value" is only $4.4 billion.
Looking into the definitions, the first metric only includes 20 years of contracted payments, while the second one is for 30 years.
Normalizing both to 20 years for better comparison we have:
> Estimated Nominal Contracted Payments Remaining: $8.9 billion
> Contracted Gross Retained Value: $3.3 billion
Looking into the definitions again, the only difference between these two is the distributions to Tax Equity "Partners", as far as I can find.
We also need to remove MyPower cashflows, of 546 mln, on both sides because Tax Equity Partners are not involved in those cashflows. Thus we have:
> Estimated Nominal Contracted Payments Remaining: $8.4 billion
> Contracted Gross Retained Value: $2.8 billion
While these partners contribute only 30% of equity and expect all returns to comeback within 5 to 8 years, why is it that they are getting a whopping 67% of the cash flows, while the company only gets 33% of cashflows?
I find this shocking. Am I missing something?
Someone brought this up earlier but I couldn't find an answer.
At the end of the Q3 the "Estimated Nominal Contracted Payments Remaining" is $8.9 billion as per the shareholder letter.
While the "Gross Retained Value" is only $4.4 billion.
Looking into the definitions, the first metric only includes 20 years of contracted payments, while the second one is for 30 years.
Normalizing both to 20 years for better comparison we have:
> Estimated Nominal Contracted Payments Remaining: $8.9 billion
> Contracted Gross Retained Value: $3.3 billion
Looking into the definitions again, the only difference between these two is the distributions to Tax Equity "Partners", as far as I can find.
We also need to remove MyPower cashflows, of 546 mln, on both sides because Tax Equity Partners are not involved in those cashflows. Thus we have:
> Estimated Nominal Contracted Payments Remaining: $8.4 billion
> Contracted Gross Retained Value: $2.8 billion
While these partners contribute only 30% of equity and expect all returns to comeback within 5 to 8 years, why is it that they are getting a whopping 67% of the cash flows, while the company only gets 33% of cashflows?
I find this shocking. Am I missing something?
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I don't think you are necessarily missing anything, but you are making some assumptions as far as how they account for things.
Somewhat based on your work and looking at things on my own, I have determined that you can't really make a truly informed decision about the valuation of this company based on hard numbers. There are too many poorly defined terms. One can invest in this company based on trust in the people running the show, or not. They say their costs are coming down and are on track to be profitable even with the ITC expiration. At one year out from a reduction from 30% to 10% to not be profitable now looks scary to me. If you take their word for it, they'll be there. You seem skeptical, but there are a lot of very intelligent people on here who are taking them at their word.
Maybe I'm not getting your drift, but yes, that was their whole point of curtailing growth next year, to be profitable more quickly. I didn't gather any details in really how that was going to happen, but as earlier, it just comes down to deciding if they are giant BSers or really do have a viable plan to get there.
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I know they didn't claim actual "profit" next year, but they did claim "cash flow positive", which is obviously a requirement for eventual profitability.
1) Solar City is focusing on reducing acquisition, installation, and panel costs.
2) Solar City's factory will be fully operational by the end of 2016.
3) Solar City is focusing on utility and large scale installations, and is not forgetting about its 1 million customer goal. Solar City is intentionally being conservative with its expectations for a period of time when there are likely to be a lot of changes to state and federal incentives.
4) Solar City is not leveraging its Tesla relationship, YET. This is a positive sign. Tesla customers receive a nominal discount if they sign with Solar City. I don't think Solar City customers receive a discount if they buy a Tesla. YET.
5) Solar City is one of the main players fighting to ensure that Solar Power is treated FAIRLY.
6) Especially with the energy mandates being put in place, at the state and federal level, why would any sane non financially motivated politician vote against legislation that supports Solar? Any "politically" or "financially" motivated opposition to clean energy will be met with many very angry constituents, many of whom are very politically involved.
7) If Solar City has a problem, the entire Solar industry has a problem, especially since there are laws in place that prevent the utilities from owning more than a certain percent of Solar assets. What sane politician would want to kill the tens of thousands of middle and upper class jobs the Solar industry is creating? There are currently around 200,000 people employed by the Solar Industry. This is almost twice the number of people currently employed by the coal industry.
In U.S., there are twice as many solar workers as coal miners - Fortune
I'll continue this post at a later time. This post is for those who choose to actually listen to facts, and is not for those who have made up their mind about Solar City, and ignore what is really going on. In my view, Solar City will either go bankrupt or will be extremely successful, will be a major player in the Solar industry, and is worth $50 billion.
On top of all of this, the events in Paris now have the world focused on Paris and on dealing with ISIS. Bombing oil fields controlled by ISIS will reduce supply, and will cause more people to demand a shift away from "big oil". Also the attack in Paris should make more people aware of the very important conference that is in a few weeks.
2) Solar City's factory will be fully operational by the end of 2016.
3) Solar City is focusing on utility and large scale installations, and is not forgetting about its 1 million customer goal. Solar City is intentionally being conservative with its expectations for a period of time when there are likely to be a lot of changes to state and federal incentives.
4) Solar City is not leveraging its Tesla relationship, YET. This is a positive sign. Tesla customers receive a nominal discount if they sign with Solar City. I don't think Solar City customers receive a discount if they buy a Tesla. YET.
5) Solar City is one of the main players fighting to ensure that Solar Power is treated FAIRLY.
6) Especially with the energy mandates being put in place, at the state and federal level, why would any sane non financially motivated politician vote against legislation that supports Solar? Any "politically" or "financially" motivated opposition to clean energy will be met with many very angry constituents, many of whom are very politically involved.
7) If Solar City has a problem, the entire Solar industry has a problem, especially since there are laws in place that prevent the utilities from owning more than a certain percent of Solar assets. What sane politician would want to kill the tens of thousands of middle and upper class jobs the Solar industry is creating? There are currently around 200,000 people employed by the Solar Industry. This is almost twice the number of people currently employed by the coal industry.
In U.S., there are twice as many solar workers as coal miners - Fortune
I'll continue this post at a later time. This post is for those who choose to actually listen to facts, and is not for those who have made up their mind about Solar City, and ignore what is really going on. In my view, Solar City will either go bankrupt or will be extremely successful, will be a major player in the Solar industry, and is worth $50 billion.
On top of all of this, the events in Paris now have the world focused on Paris and on dealing with ISIS. Bombing oil fields controlled by ISIS will reduce supply, and will cause more people to demand a shift away from "big oil". Also the attack in Paris should make more people aware of the very important conference that is in a few weeks.
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Koolaid guy,
I appreciate your optimism, but the reason SBenson and a very few others are skeptical is that too much is uncertain. Responses to your points above:
1)OK, good. Did they not care about these costs before? "Focus" doesn't necessarily accomplish anything if there is no actual plan for how to reduce those costs. I can focus on losing weight all I want, but if I don't know what about my lifestyle is going to change, nothing will happen.
2)Good. Related to 1), how does that benefit them? Are they the best solar component factory operators in the world, so it will lower their costs? Some other companies have been running factories like this for a decade or more, and they probably have gained some institutional knowledge about how the optimize it. I'm not saying that SCTY factory won't be low cost, but there is no guarantee.
3)Again, "focus" and "not forgetting" don't increase revenues or lower costs. They are wise to scale back optimism given the impending regulatory/incentive changes, but that again doesn't make them or investors more money.
4)Interesting, but given that both are at the very early stages of market penetration of "new" products, there isn't that much to gain from leveraging the two customer bases.
5)Like all in their space, they are lobbying actively to retain the favorable treatment they have been receiving. At this point, it's all political, so we'll see.
6)Politics - that could be its own thread. In some jurisdictions, you might be right. As a national issue, it might be different. It's politics, and in my opinion, nowhere near a slam dunk to go any particular direction.
7)Again, politics. Your job destruction in solar is another man's job creation. I'm not taking sides on that one, just saying it's no slam dunk, although you are right, if it's SCTY's problem, it's everyone's problem, at least to some extent.
TheTalkingMule
Distributed Energy Enthusiast
Up until 2 or 3 years ago solar wasn't really considered an existential threat to the legacy power industry, but that's all changed. Solar is no longer projected to be the cheaper form of energy production, it actually is.
The days of methane and coal interests playing nice are behind us and the real discussion is just beginning. They've seen what happened in Germany when wind hit 8% and solar hit 5%, their entire profit structure broke down and they have no way out.
I would expect even more oil & gas stooges at the state legislature level nationwide and even more obstructionism as we move forward. These people have absolutely zero interest in jobs and will ratchet up the rhetoric to drown out the rational conversation.
Even if we pretend Climate Change is a lie invented by Al Gore, (as some crazy republicans believe), every sane person should understand why it is essential to support clean energy until 100% of our Electricity is from clean energy sources, and to stop subsidizing dirty energy. Technically, the incentives for using Solar power barely qualify as subsidies. Any politician who doesn't support reducing dependency on dirty energy, or who thinks climate change is a hoax, should be given a 5 week mandatory vacation to one of the most polluted cities on Earth and should be prohibited from staying in a hotel with an air filter. There is only one CORRECT side to this "debate".
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