Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable

[Prunesquallor]

99% of cabbies: wtf is this doors, how do I get in and out ? 98%: Love it anyways, gliding ride, glass roof, clean dash, acceleration, vents, navigation voice, play anything via slacker/spotify, karaoke, ...

I can envision a big “PUSH” decal next to the handle.

 

[Tslynk67]

Note that for Tesla's ZEV revenue purposes what matters most is not the average pollution and how it relates to the industry average, but the "absolute excess emissions" of FCA-PSA-Opel combined firm - and this indeed would increase at least 3.6x-fold after the merger (!).

PSA has a number of ZEV vehicles, but they are already included in their 114g/km average, and they are a long way from 90g/km.

The fact that FCA's emissions got worse by +5 g/km is proof that reducing emissions in the ICE industry is hard: they'd have to cut some of their most profitable lines of business, and the rest would still be polluting.

A 3x increase in the pool size means that Tesla's potential revenue maximum from EU ZEV credits increases 2x-3x (not exactly 3.6x due to 'super-credits' which are somewhat diluted by the merger).

Since the pooling agreements are exclusive, i.e. Tesla is not allowed to pool with other ICE carmakers anymore and they require FCA's permission to expand the pool and FCA might not have allowed some other ICE manufacturer into the pool even if Tesla reduces the average emissions to below 90 g/km, an expansion of the pool is a Big Deal IMHO and big positive for Tesla.

If FCA ZEV pooling revenue of Tesla was estimated to be $1b/year in Europe, this proposed merger increases that to $2b-$3b/year (to the extent Tesla can ramp up in Europe) - as it's unlikely that FCA-PSA-Opel would be able to ramp up to Tesla's scale of ZEV vehicle production and sales anytime soon.

I would posit that FCA's Tesla arrangement may have been perceived as a sweetener in the revamped negotiations...?

 

[bhtooefr]

Not a recall nor a retrofit. Perhaps an upfit?

As in

Tesla just upfitted my TMX with a better FSD computer.

"Upfitting" already exists in the automotive industry, to refer to aftermarket (but manufacturer-approved) modifications for commercial vehicles. Think things like Class B motorhome conversions, custom shelving installed in work vans, service bodies on pickup trucks, that kind of thing. (Or even things like XL Hybrids and their aftermarket hybrid systems, and Lighting Systems and their aftermarket EV conversions, both of which are manufacturer-approved.)

It is a retrofit of the new FSD computer, I'd just use that.

 

[AlexS]

Been widely discussed elsewhere. A 11,08s quarter mile is nonsense for a Model S Raven Ludicrous; they normally get in the 10,5x seconds range. 0-60 time is nearly 0,3s slower than spec.

They also claim that the top speed is 155mph. The *old* Model S had a new 155mph, but the new ones have a 163mph top speed. Which makes me suspect that they had an old one. Not that that alone would explain their terrible performance.

Also, re: handling: if they're in an old S, then they don't have the new active suspension.

I wish there was an easy way to tell Raven from non-Raven apart from the badging. You never get a good look at the rear badging in their video, unfortunately.

Also might be that Model S is no set to very low setting. In this case car is slower.

 

[canoemore]

Washington Post -- Ford to offer over-the-air software updates across lineup

Ford seeing the light, I guess

 

[elasalle]

Washington Post -- Ford to offer over-the-air software updates across lineup

Ford seeing the light, I guess

Unless you are EV, how much issues can actually be fixed by software updates. ....

 

[KarenRei]

Washington Post -- Ford to offer over-the-air software updates across lineup

Ford seeing the light, I guess

Note that "having OTA updates" is not the same thing as "having OTA updates on a unified vehicle control software stack".

Remember, I-Pace also "has OTA updates", but that didn't let them fix their braking issue OTA; people still had to bring their vehicles in to the dealership to get a software patch. One of Tesla's unique advantages is a unified software stack, rather than having a bunch of independent "boxes" from OEMs that have varying degrees of integration with each other.

 

[Carl Raymond]

Washington Post -- Ford to offer over-the-air software updates across lineup

Ford seeing the light, I guess

I wonder what the dealers think of this. Should create a nice little triangle (Ford, Dealer, User) of finger pointing the first time there’s an issue.

 

[elasalle]

The Pickup reveal had 2 Trucks - with Cyberpunk Bladerunner In front, and another one in the back.

has there been any discussion of why 2 trucks were shown ?

So what if both trucks are gonna be released at the same time. ....
( ... EM has said that they would do multi product lines at the same time in future ...)

~ Cheers

 

[ElectricOrgan]

From my perspective, any EV purchased means one less ICE purchased. As a TSLA investor would I like them to be all Teslas...sure...but it is impossible and the mission statement is to transition us to renewable energy transportation. It does not say by Tesla alone.

Not only is it one less ICE purchased, it is one less ICE customer, forever. I don't know the number, but I'm willing to bet at least 9 out of 10 EV buyers never buy another ICE again. For the most part it will be a one way street.

That said, I do know one person who bought a Tesla and was unhappy enough to sell it and buy a Mercedes. In fact, I think she traded it in and had to pay nothing. lol

What I don't agree with is that buying a Tesla is a one way street. I think the Tesla is enough outside the norm that while most people who buy them will be happy, there will be a number that will get tired of the many "issues" and buy some other EV down the road. Right not there aren't really many other options, but I'm interested in learning how GM's charging network is going to work.

 

[ElectricOrgan]

I agree. Merc is unlikely to sell a car where even 1 of the features is 'beta'.

That, by the way, to be clear is a shortcoming (IMO) of Merc's. But hey - the inability for their cars to change over the months and learn new tricks also ensures that they generate maximum revenue from each sale. From my point of view, it pretty well ensures that Merc is either late to the party, or arrives after the party is over and everybody's left. Some of these new features are hard and will need a LOT of input, input that is only economically feasible when your customers provide it for free.


I also agree that the perception of Tesla's service will be an impediment someday when the cars are approximately competitive. My personal experience has been overwhelmingly good, but it also started 6 years ago (I met employee 1 and 2 that started the Portland SC, when they started it up). More recently are some worrying signs - harder to talk to somebody, parts take 2-6 weeks and that's just considered normal (customer car being laid up for an extra month or 2 isn't a good look; even if it's shared by everybody in the industry).

I get what you are saying about the upgrades, but that's not at all the same thing as having so much of the car being Beta. I can't tell you how many people complain every time they redo the console layout. That's update, but not at all Beta. The console actually works... if you don't mind the brown ring.

I'm involved with service every week trying to get various problems fixed. I read some stock analyst saying so many millions of dollars of profit came from how they report warranty work. So you can believe they are squeezing the service centers on warranty work. I'm trying to get into a new center and they acknowledged each center is operated differently. To me that means some focus on repair, others focus on profit. I was asked for the time and date of the issue I was reporting and I got the time stamp from when I called the 800 number and the time stamp for when the problem was diagnosed which was when the call was answered 50 minutes later.

 

[Tim S]

Anybody remembers if long distance power transmission makes sense financially?
Like from TX to NY?
There are places with less sun or more seasonal or blackouts due to storm etc., when local solar production won't work...This will surely come up with people being afraid if they freeze to death during those periods if they depend on solar.

I don't think that makes sense. We have lots of hydro from Quebec here in NY, and lots of potential for more solar and wind. Our solar panels on our roof cover most of our electricity use.

 

[Jo-]

The Pickup reveal had 2 Trucks - with Cyberpunk Bladerunner In front, and another one in the back.

View attachment 471659

has there been any discussion of why 2 trucks were shown ?

So what if both trucks are gonna be released at the same time. ....
( ... EM has said that they would do multi product lines at the same time in future ...)

~ Cheers

He said you could put an F-150 in the back of a Tesla Truck on the Semi platform. That truck is not the cybertruck, and the one in the back is a generic F-150 lookalike. No indication they would release two trucks at the same time. In fact, he said if the cybertruck isn’t that popular due to its look, then they would later make a more traditional looking truck.
And OT: this isn’t investment thread material (yet)

 

[The Accountant]

The Pickup reveal had 2 Trucks - with Cyberpunk Bladerunner In front, and another one in the back.

View attachment 471659

has there been any discussion of why 2 trucks were shown ?

So what if both trucks are gonna be released at the same time. ....
( ... EM has said that they would do multi product lines at the same time in future ...)

~ Cheers

The Pickup has not yet been revealed, the reveal will happen in November. Those two drawings you show were done by artists not associated with Tesla.

 

[EVNow]

Tesla just upfitted my TMX with a better FSD computer.

Upgrade.

 

[ElectricOrgan]

Is there a way to put "new" posters in a forum purgatory where they have to read every general investment thread from 2012 onward before posting? That's basically what it's like for folks that have been here for over a year. Having to read the same tired argument over and over again. Yeah, Tesla is screwed when the legacy auto makers catch up. When will it happen? Never.

Look at what Tesla has done in 7 years versus everyone else.

Do you not understand that until Tesla got close to pushing out the model 3 none of the major auto makers took them very seriously? They've all had projects running in the background, but the inertia and focus on the same old, same old was operating. Once Tesla made it clear they would actually be selling that $35,000 car and not losing money on every car they sell, the rest of the industry sat up and took notice. I can't recall which company, maybe Ford, fired their CEO because he wasn't doing enough, fast enough.

Another major US auto exec actually publicly proclaimed Tesla would never make it. Well, that may or may not be true, but they will pretty clearly ship at least a couple million EVs in the process.

Just for grins I dropped by a Chevy dealer the other day and asked about the Bolt. They still can't answer basic questions about charging that an educated buyer might ask, like speed of charging at a DC fast charger for example. She did know the fastest it would level 2 charge was 32 amps and the battery was 60 kWh, which I just read has been bumped to 66 kWh in 2020 cars which I would expect are out now. So why didn't she know this???

Clearly they aren't there YET.

 

[EVNow]

Limit to EU sales will be about ~50% of Fremont output IMO - which should be 60k/quarter. Still a long way to scale up to that magnitude.

Fortunately GF3 is here - which means Tesla can redirect US manufactured cars to EU.

EU sales are probably incentive driven to an extent. They can always do some judicious deals to increase sales if needed.

Without knowing how much they get per car and how easy it is to sell the car in US instead, it's difficult to figure out what the strategy should be.

BTW, I expect $1B gaap profit by Q4 '20. Tesla may not be that interested in increasing sales in EU by reducing ASP. Esp if FSD has made good progress.

 

[ElectricOrgan]

Basically the advantage Tesla has is 10 years of relevant experience, very capable in house engineering and an eco-system of parts of the right type at the right price.

Not sure what that means.

Raw materials for batteries might be a problem, but Tesla is already working on it...

I think the Chinese, VW Group and Daimler will all do well...

A "Tesla Killer" is a myth, but a "Tesla Growth Inhibitor", or 2 are a possibility limiting Tesla to 10-12M rather than 20M... the most likely player in that space is VW Group...

I agree with all that, except for the fact that Tesla is still be run as a startup. As long as Musk is in control that is likely to continue since he clearly is not interested in anything else. That's not saying Musk has to remain in charge indefinitely. So if Tesla grows to be a fourth place US automaker and changes their mode of operating, they can continue for some time. But eventually they either have to change their mode of operating or they won't be able to sustain continued growth. Running a company that just produces the same number of cars each year is very different from running an exponentially growing startup.

Personally I think the Tesla killer will be their lack of good service and support.

 

[wipster]

OK, I am gonna post it here (Top Gear: Taycan versus model S - not plaid though)...

Boy that's what I want, whooshy sci-fi whistling noise when I hit the throttle... and adjustable even! Makes you feel like you're not even in a electric car...

I'll pass thanks

 

[hacer]

May I ask for the source of that information, and can you or anyone else (shout-out to @Hock1, @Doggydogworld, @brian45011, @luvb2b) link to some sort of public document or article that shows or strongly implies that "Nasdaq Market Makers" (Nasdaq member firms - of which there are hundreds I believe), are allowed unlimited short positions within the ~5 business days stock borrowing window?

I haven't found the U.S. rules (which is weird ...), but here are the European commodities market "Nasdaq Clearing" rules for margin requirements and collateral management:

Nasdaq Clearing - Collateral Management

"Intraday Risk Monitoring
Intraday risk reports are generated every hour (starting at CET 10:00 and ending at CET 18:00) or more often if deemed necessary. Each intraday margin calculation reflects any clearing participant’s change in exposure, with updated positions and real time prices, during the clearing day. In case of a breach by a participant of the intraday risk limit, the Clearing Risk Management will issue a margin call."

"Intraday Margin Calls
Nasdaq Clearing has both the authority and the capacity to calculate and require intraday margin as a means of maintaining a desired level of margin coverage. The Rules and Regulations of Nasdaq stipulate that the new margin requirement shall enter into force immediately and be met by the member no later than 90 minutes after the clearing house notified the clearing member that a new margin requirement has been calculated."​

Pretty clear position size dependent Value-at-Risk rules for long and short sales, and margin is maintained electronically and goes up and down based on positions.

Are you suggesting that no such rules exist on the U.S. Nasdaq exchange, that any market maker or hedge fund that is member of the exchange (there's hundreds of them) is allowed a full business week of unlimited short positions, with no margin rules and no risk management whatsoever?

If true then that's incredible - and might be worth for journalists (shout-out to @ZachShahan) to follow up on.

I didn't mean to imply that there are never any limits to trading. Member firms are always supposed to remain within capital limits on their trading. I believe that in the U.S. member institutions are supposed to follow FINRA's rule SEA 15c3-1 which establish risk limits on positions relative to the capital of the member institution. They're supposed to have their own risk desks that track their exposure and keep their trading within the prescribed bounds. I believe that it is self policing in the U.S. except for the occasion audit or an actual failure. I think that it's different in Europe because the failure of Baring's Bank with resulting counter-party losses caused the EU to pass laws requiring actual supervision by a third party.

Member's capital is more or less a measure of their net worth (which is typically self-computed and audited annually) and they simply have to keep total risk exposure within the limits allowed by their capital. Mostly the risk exposure rules are there for control of risk on derivatives which are always created from thin air, but also for securities that are bought with loan proceeds. Regardless that capital is theirs and remains under their control. It is not transferred to any third parties. This is totally unlike a retail investor who's money or securities remain on deposit with the broker and their is no way for them to do anything with it while it is supporting a trade.

So in my example of shorting 30,000 shares it would go like this: say it was done at a price of $300. During settlement the short seller would receive $9 million, and fail to deliver anything. If they are obeying the FINRA rules, they will need to verify that their working capital has about 20% (a made up number I'm not going to lookup the risk requirements) of that, or $180k. The check and they have $200 million capital so it's all good. They are of course free to reinvest that $9 million in other securities, repos, swaps etc.