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

[ReflexFunds]

Great post. It makes me more confident that Tesla can hunker down and easily ride out short term demand problems.

The part about Tesla’s break even of 250k vs. big auto’s break even of 5M was especially enlightening.

One question. Wouldn’t the worst case, where deliveries stay flat from q1, be a little uglier because of very likely dropping Model 3 ASP?

Yes Model 3 ASP reduction will have a negative impact vs Q1 (i have reducing from c.$53k in Q1 to $49-50k the rest of the year). But I think this will be offset by 1) a more efficient SR+ pack manufacturing process relative to the LR pack, 2) lower cell count and costs per car, 3) SR+ pack production ramp costs impacting Q1 margin, 4) increased take rate of FSD now AP3 is released and basic AP is bundled, 5) Continued production cost cuts (were still running at double digits QoQ in Q1), 6) Model S/X staff kept on in anticipation of supply ramp post Raven release (these staff will be cut if Tesla stops planning to ramp S/X production back up) and 7) Less end of Q discounting with end of the delivery wave.

 

[tinm]

I think that you mean that the reporters manipulated it in a very big way. Just look at the headlines (which I would argue is what most of the general public read):

View attachment 409217

Every single one of those headlines completely twists his words.

And very likely, the reporters had nothing to do with the creation of those headlines, which is usually handled by editors and their SEO-fanatic minions. Not defending reporters, but trying to clarify who’s responsible for the headlines.

 

[JRP3]

This looks like buying into the most recent dip to me (note the short time frame of about a week)

Yes you're right, I didn't zoom in enough

 

[JRP3]

The editorial side is fully capable of screwing up the truth on its own, without any kibbitzing by the publisher.

Dana Hull was a balanced reporter until she changed employers. Suddenly she started skewing negative and inaccurate.

 

[Zextraterrestrial]

How did the company sell 110% more cars compared to Q1 2018, and yet still lose 700M?

Why is the company forecasting a loss in Q2 despite record quarterly deliveries?

4 months ago, Tesla was going to be "profitable and cash flow positive for all quarters going forward" - so why is Elon insisting on such dramatic cost cutting?

These questions are killing the stock.

Didn’t they pay back a $740M loan in q1, while expanding everything else growth wise?

 

[Zaxxon]

Nope, nothin', it's a wasteland out here. Closest store/service center for me is 427 miles away

I'll be at that location today. Need anything?

 

[JRP3]

And very likely, the reporters had nothing to do with the creation of those headlines, which is usually handled by editors and their SEO-fanatic minions. Not defending reporters, but trying to clarify who’s responsible for the headlines.

It's not just the headlines, read the article snippets as well.

 

[WarpedOne]

In 2008 Elon kicked out Martin Eberhard because Tesla was in financial chaos.

Who is going to kick out Elon now for exactly the same reason?

 

[JRP3]

Email from Tesla about Supercharging in NY:


The New York Public Service Commission (NYPSC) recently blocked Tesla Superchargers from participating in a statewide program meant to encourage additional fast-charging investments across the state.

This decision by the NYPSC would result in Tesla having electricity costs that are more than double what other fast-charging providers will pay. This is counterproductive to the state’s climate and clean air goals, and unfairly impacts Tesla’s ability to expand its Supercharger footprint in New York.

As a result, Tesla has requested a petition for rehearing to allow Tesla Superchargers to participate in the program, and for Tesla owners like you to benefit from additional Supercharger stations. You can read more about this matter here, and read our petition here.

To make your voice heard and prevent the NYPSC from discriminating against Tesla and drivers like you, please take a few minutes to send your comments to the NYPSC using the contact form below.

CONTACT
Or you can reach out to Secretary Kathleen Burgess directly, at [email protected], with your comments in support of Tesla’s rehearing petition in Case No. 18-E-0138.

Your comments will help bring a valuable consumer perspective to their decision. Thank you for your support.

Best Regards,
The Tesla Policy Team

 

[tinm]

In 2008 Elon kicked out Martin Eberhard because Tesla was in financial chaos.

Who is going to kick out Elon now for exactly the same reason?

There's a toooonnnnnnn more to that story than that simplistic version, trust me. (I've spent 2 hrs talking to Martin.)

 

[mongo]

Email from Tesla about Supercharging in NY:


The New York Public Service Commission (NYPSC) recently blocked Tesla Superchargers from participating in a statewide program meant to encourage additional fast-charging investments across the state.

This decision by the NYPSC would result in Tesla having electricity costs that are more than double what other fast-charging providers will pay. This is counterproductive to the state’s climate and clean air goals, and unfairly impacts Tesla’s ability to expand its Supercharger footprint in New York.

As a result, Tesla has requested a petition for rehearing to allow Tesla Superchargers to participate in the program, and for Tesla owners like you to benefit from additional Supercharger stations. You can read more about this matter here, and read our petition here.

To make your voice heard and prevent the NYPSC from discriminating against Tesla and drivers like you, please take a few minutes to send your comments to the NYPSC using the contact form below.

CONTACT
Or you can reach out to Secretary Kathleen Burgess directly, at [email protected], with your comments in support of Tesla’s rehearing petition in Case No. 18-E-0138.

Your comments will help bring a valuable consumer perspective to their decision. Thank you for your support.

Best Regards,
The Tesla Policy Team

Interesting that Tesla is linking to an Electrek article.

 

[WarpedOne]

There's a toooonnnnnnn more to that story than that simplistic version, trust me. (I've spent 2 hrs talking to Martin.)

Please, do share (seriously).

 

[Matias]

Didn’t they pay back a $740M loan in q1, while expanding everything else growth wise?

Paying loans back is not calculated as losses, the same way as taking a loan is not creating profits.

 

[Krugerrand]

Apologies if this article was already shown:
BMW CEO defends record after first automaking loss in decade
BMW CEO defends record after first automaking loss in decade

A couple nice quotes:
"Where is this model offensive?" German shareholder association Vice-President Daniela Bergdolt said in her speech to loud applause from shareholders. "Sure, you've got the iNEXT, but I was expecting something that blows Tesla out of the water."

"Krueger defended his cautious approach on Thursday, saying no one knew how fast electric cars would take over or which technology was set to win out."

That’s a stand up routine right there. It writes itself.

No one knew. Indeed! LOL

 

[Doggydogworld]

What would be your first move as Tesla if it turns out that S/X/3 demand is insufficient to hit profitability for Q2-Q4 (and after that unclear)?

Raise some capital to buy time, maybe by spinning a fantastic Robotaxi tale? Ha.

The die is cast for now. People will either buy enough S/X/3 to create profits or they won't. Solar is (finally) wound down. Energy will grow, but off a tiny base with no margin. Service, Superchargers, Insurance and other efforts to build the ecosystem are not profit centers in their own right. Nothing moves the needle except cars. And the car biz is really tough.

Musk's first attempt to change the narrative from profits to Robodream mostly failed, but he's relentless and bears should not underestimate him. Waymo got right up to the point of deployment and blinked, so the door is open.

 

[JohnDinger]

Didn’t they pay back a $740M loan in q1, while expanding everything else growth wise?

They did. Doesn't impact GAAP profitability or free cash flow.

 

[anon]

I just noticed that Musk's email was reported wrongly not only be much of the media, but also even on the TMC blog, which says "Elon Musk told employees on Thursday that the company will run out of cash in 10 months if it can’t cut costs"! I hope someone can correct it...

See Blog - Report: Musk Orders Company to Cut Costs

 

[dww12]

I do not find evidence for this. It is, imho, a common conspiracy theory that the absence of Tesla advertising is what’s driving what passes for media coverage of Tesla. The reality out in the field suggests other causes. “The media” is a coin the two sides of which are editorial and publishing. In the majority of cases of news-gathering organizations, different people run the two different sides. Publishing owns advertising. What I find repeatedly on the editorial side, when it comes to Tesla, is news gathered with great urgency and as quickly as possible in a neverending race with other news-gathering organizations, and this urgency means reporters have little time for nuance, context, focus on the truly significant meaning, or an appreciation of history, and editors, under pressure from the publisher to generate as many eyeballs as possible, have little patience for the more conscientious of reporters who would very much like to instill more nuance, context, focus on the truly significant meaning, and appreciation of history in their articles.

The lack of those qualities in so many Tesla articles and the sometimes obvious / sometimes subtle trashing of the company and/or Musk stems from incomplete reporting, frequent speculation, and a company that does not care to staff its comms/PR team sufficiently so as to increase the chances that reporters would report with more nuance, context, focus on the truly significant meaning, or appreciation of history. Oftentimes we find reporters following the TSLAQ propaganda foisted upon the Twitter world, and based on my experience talking to Tesla reporters I think they do it because of the dearth of rich information coming from Tesla itself. Reporters, like nature, abhor a vacuum.

Also, many times Tesla reporters are bassd in the SF Bay Area, hundreds or thousands of miles from their media company’s newsroom. There’s little to no interaction between such reporters and their publishers. I do not see an insidious, implied influence of publishers, steaming because Tesla doesn’t pay them ad money, weighing down on the editors or the reporters. The editorial side is fully capable of screwing up the truth on its own, without any kibbitzing by the publisher.

Really? How many people died in an Explorer because of CO poisoning this week, or Boeing autopilot error bacause they were too cheap to include the AOA warning? What about all the MB/Ford/GM fire hazard recals? Because 2 Teslas caught fire and there have been 2 under tractor trailor AP deaths. AP HW 2.5 can’t do 3D mapping. AP 3 can, so this issue will be temporary. Tesla is working as fast as it can to fix what is not possible today to make a better tomorrow. The real story should be ALL of the under tractor trailor deaths and adding side protection to protect ALL motorists, as well as the upcoming 3D mapping that HW 3 will do to prevent this.

 

[Christine69420]

Apologies if this article was already shown:
BMW CEO defends record after first automaking loss in decade
BMW CEO defends record after first automaking loss in decade

Read the article linked. The CEO says

"I do not believe it would be wise, from a business perspective, to put all our eggs in one basket," Krueger said, highlighting plug-in hybrid vehicles and fuel-cell cars as alternatives."


In Norway most of the Hydrogen fuel cell filling stations have closed. And the few Hydrogen powered cars sold have a challenge. Here is a map of hydrogen stations:

Hydrogenstasjoner - Google My Maps

and if you like compare that to EV charging stations:

http://v.imgi.no/ljgmgp4eb6


Then there is the pressure from EU making it very expensive for car manufacturers if they don't lower the mean emission level of the cars produced. Hybrid vehicles won't help much. The cute but weird looking BMW i3 won't tempt many executives over from their BMW 780's.

Sure - the rest of the world may not follow in Norways footsteps. But just like the electric cars hydrogen cars are free of taxes. So it's a level playing field.

Edit: Typos

 

[T@oo]

I just noticed that Musk's email was reported wrongly not only be much of the media, but also even on the TMC blog, which says "Elon Musk told employees on Thursday that the company will run out of cash in 10 months if it can’t cut costs"! I hope someone can correct it...

See Blog - Report: Musk Orders Company to Cut Costs

Was about to post the same. I expect a sharp rebound of the SP on monday.