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

[Jayjs20]

Jan 21, depends on the strike. But if it grinds lower or they have a few bad quarters theta could eat you up. However it's far enough out to catch a big rebound

And the sooner the better.

Theta has probably already taken a good chunk. Maybe once this is all over, I'll switch to selling puts instead.

 

[KarenRei]

Here's Elon's (purported) email transcribed:

From: Elon Musk
Date: Wed 5/22/2019 10:45 PM
To: Everybody

As of yesterday, we had over 50,000 net new orders for this quarter. Based on current trends, we have a good
chance of exceeding the record 90,700 deliveries of Q1 last year and making this the highest deliveries/sales
quarter in Tesla history!

In order to achieve this, we need sustained output of 1,000 Model 3's per day. Almost all parts of the Model 3
production system have exceeded 1000 units on multiple days (congratulations!!) and we've averaged
about 900/day this week, so we're only about 10% away from 7000/week.

If we rally hard, we can do it!

Thanks for your great work,
Elon​

The tone and content matches Elon - if it's fake it's a good one. China has been a source of internal emails before.

So if this is legit, this is good news. It's still unclear how S/X sales are doing in Q2:

• If they are at 900/day Model 3 production right now, that's a current run-rate of 6,300/week.
• If they manage to further increase it to the target 7,000/week in the final few weeks of June, then they'll maybe have ~6,000/week overall Model 3 production rate for all of Q2, which is a production of ~78,000 Model 3's. (Maybe more.)
  
• The email mentions a goal of higher than 90,700 S+3+X deliveries.
• In Q1 vehicles in transit were ~10k, and if they now increase this to ~15k to unwind the 'wave' delivery method in the next several quarters, then total production would be roughly 5k more than deliveries, i.e. ~96k.
• This means that if Model 3 production is 78k and total production is 96k, then S/X production 18k - better than Q1 but worse than Q2'18.

Another detail in the email: production increase focus is entirely on the Model 3. This could be read in a way to say that Model S/X is at full (or intended) capacity, with no production push there.

Also note the focus on deliveries, i.e. the target for Q2 is record deliveries despite unwinding the wave. (In-transit vehicles are 'sold' vehicles that are not delivered yet, so unwinding the wave would have the effect of reducing deliveries somewhat.)

If this verifies in the delivery report in early July, then this should completely change the current gloom and doom narrative and would paint Q1'19 as the outlier - not Q3-Q4'18 as outliers.

Still 5-6 weeks of heavy FUD until then though - plus in Q1 they originally intended much better deliveries too, so as always there's a real chance of Tesla not meeting these goals.

Not advice.

Just stopping on by (sorry for not being around much). The source of this email is here:

橄榄猫的主人: $特斯拉(TSLA)$ 再补一发，坚持住啊！ - 雪球

Beyond the person who posted it, two commenters with histories on the site claim to have confirmed it with Tesla employees. Email client appears to be Outlook web (hence the "like" button - it's one of their features). The red "EM" and the email addressed to "Everyone" match previously leaked emails.

Still, keep your skeptics hats on until there's media confirmation. Could of course be a well-done fake.

 

[uselesslogin]

Just stopping on by (sorry for not being around much). The source of this email is here:

橄榄猫的主人: $特斯拉(TSLA)$ 再补一发，坚持住啊！ - 雪球

Beyond the person who posted it, two commenters with histories on the site claim to have confirmed it with Tesla employees. Email client appears to be Outlook web (hence the "like" button - it's one of their features). The red "EM" and the email addressed to "Everyone" match previously leaked emails.

Still, keep your skeptics hats on until there's media confirmation. Could of course be a well-done fake.

Well if that does get confirmed I'd like them to do it at 9:45am EDT. I finally decided it was time to buy more last night so I'm liking $185 right now.

 

[Pras]

Net new orders mean...

Net new orders + already delivered > 90k?

I would assume more orders will come. Hope they maintain at least 30k order surplus.

 

[BOBTHEJOCKEY]

Options story, possibly. Plus no real news for a while now... just a grind to deliver cars, waiting for everything to sprout later in the year.

I'm holding only shares, and just the paper loss makes it tough to come here. When I do, people are pretty negative. We see some stories of Good Tesla Service as if feeling sorry for Tesla when 1 month ago this was all about crappy service. Now its all about demand as quick as the wind shifted because thats a better narrative. When half of these post are pure bullshit, ya stop coming here to try and make sence of it all. For now its all noise.

We have all read here a number of ways that Tesla can pull demand levers that aren't being pulled. Tells me right there it's not a demand issue. More like the hulk transforming and looking wierd. Amazing that analysts recommend selling. This is buying season!

When a stock like this is dropping very few people voice a positive sentiment. The smart bull investors are hoping it to go lower to buy more shares and call options at a lower price. Then of course you have the huge amount of Trumpanzee type investors that have made a tidy amount of money on the short side. Why post a positive report that will only temporarily slow a falling knife? Why not wait until the selling is done then start posting the BULL SIDE. At some point there has to be a short squeeze. It's like when to many people are on the same side of the boat.

 

[EVMeister]

Let's assume this email is real and that is what the Twitter was all about. Why not?

 

[KarenRei]

Inside GF3:

Imgur

Installing the ventilation system. Floor looks to be complete. Should be working on installing production lines quite soon.

 

[Todd Burch]

Net new orders mean...

Net new orders + already delivered > 90k?

I would assume more orders will come. Hope they maintain at least 30k order surplus.

I think “Net new orders” means new orders received since April 1 minus order cancellations since Apr 1.

 

[Leo9]

50.000 new orders in 2 months is just 75k per quarter, so not super exciting.

 

[KarenRei]

50.000 new orders in 2 months is just 75k per quarter, so not super exciting.

(Days in Q2) * (Vehicles Per Day) = Vehicles in Q2
(Days in Q2) * (50000 / (Days in Q2 "as of yesterday")) = Vehicles in Q2
(30+31+30)*(50000/(21+30)) ~= 89216.

 

[Pras]

.

50.000 new orders in 2 months is just 75k per quarter, so not super exciting.

There’s only 51 days till 21st. So that is a 90k rate.

But one can also interpret it currently undelivered order for this quarter.

 

[anon]

It says "based on current trends"...which means that order rate now is likely higher than earlier in the quarter, so it doesn't take much to go from 87500 to over 90000. It's easy to believe that orders are at a higher rate now, thanks to Raven and S/X price cuts.

 

[Fact Checking]

Here's Elon's (purported) email transcribed:

From: Elon Musk
Date: Wed 5/22/2019 10:45 PM
To: Everybody

As of yesterday, we had over 50,000 net new orders for this quarter. Based on current trends, we have a good
chance of exceeding the record 90,700 deliveries of Q1 last year and making this the highest deliveries/sales
quarter in Tesla history!

In order to achieve this, we need sustained output of 1,000 Model 3's per day. Almost all parts of the Model 3
production system have exceeded 1000 units on multiple days (congratulations!!) and we've averaged
about 900/day this week, so we're only about 10% away from 7000/week.

If we rally hard, we can do it!

Thanks for your great work,
Elon​

The tone and content matches Elon - if it's fake it's a good one. China has been a source of internal emails before.

So if this is legit, this is good news. It's still unclear how S/X sales are doing in Q2:

• If they are at 900/day Model 3 production right now, that's a current run-rate of 6,300/week.
• If they manage to further increase it to the target 7,000/week in the final few weeks of June, then they'll maybe have ~6,000/week overall Model 3 production rate for all of Q2, which is a production of ~78,000 Model 3's. (Maybe more.)
  
• The email mentions a goal of higher than 90,700 S+3+X deliveries.
• In Q1 vehicles in transit were ~10k, and if they now increase this to ~15k to unwind the 'wave' delivery method in the next several quarters, then total production would be roughly 5k more than deliveries, i.e. ~96k.
• This means that if Model 3 production is 78k and total production is 96k, then S/X production 18k - better than Q1 but worse than Q2'18.

Another detail in the email: production increase focus is entirely on the Model 3. This could be read in a way to say that Model S/X is at full (or intended) capacity, with no production push there.

Also note the focus on deliveries, i.e. the target for Q2 is record deliveries despite unwinding the wave. (In-transit vehicles are 'sold' vehicles that are not delivered yet, so unwinding the wave would have the effect of reducing deliveries somewhat.)

If this verifies in the delivery report in early July, then this should completely change the current gloom and doom narrative and would paint Q1'19 as the outlier - not Q3-Q4'18 as outliers.

Still 5-6 weeks of heavy FUD until then though - plus in Q1 they originally intended much better deliveries too, so as always there's a real chance of Tesla not meeting these goals.

Not advice.

Some additional thoughts:

• I find it super encouraging that Elon has changed his combative, negative messaging that he has used in past rallying emails. While some people like Elon respond better to threats and negative reinforcement ('bad things happen if we don't meet our goals'), the overwhelming majority of employees responds much better to positive reinforcement: 'good things will happen if we meet our goals'. Periodic reminders of worst-case scenarios are not helpful tools to rally employees. While I think Elon should be Elon, and obviously our only planet is at stake, but he's also a grown man who is adaptable and who should listen to feedback and who should improve some of his weaker traits, such as communications. Maybe the new board members pushed back.
  
• As @neroden correctly deduced it weeks ago, Tesla is supply limited:
  • Elon's email mentions Fremont at 6.3k/week and wants it to go to 7k/week. That's not a company that is demand limited.
    
  • By extension Panasonic is probably not a bottleneck at current production levels and presumably not at the 7k/week level either.
  • With the 50%/50% SR+/LR mix Zach mentioned in the conference call, the average cell consumption per unit is around 66 kWh, so with 7k/week rate we get 24,024 MWh/year battery consumption - very close to the ~24 GW net Panasonic cell supply Elon mentioned a couple of weeks ago. This possibly explains why PowerWall (and Solar Roof) is still being under-sold - they probably don't have that many cells left over for energy/storage products.
  • Random thought: I'm so glad Maxwell closed.

Not advice.

 

[emerson06]

"As of yesterday" meaning May 21th, and "over 50,000 new net orders". April has thirty days, so they are averaging 1000 new orders per day. That is good, a bit more than 90,000 orders per quarter.

 

[Cattledog]

Ok, shorts would have a field day with this, it would feed the 'demand problem' narrative in the financial media. However, Elon would recover the moral high ground that has slipped a bit from his grasp and I think it would wipe out any real or perceived demand problem in the next 12-24 months while Model Y, semi and pick up truck come along to set us on our irreversible 1,000,000 cars/year course.

The genesis for this idea is my own experience. At my office, I offered to pay $500/Model 3 deposit as a way to spur the adoption of sustainable transport. I contributed to 12 deposits, so far 3 cars have been purchased, a few orders cancelled, and some are still waiting or in queue. I think it helped, and the side outcome was great goodwill. So.......

"15 years ago, I invested $100M, nearly everything I had, into Tesla because I saw the need to transition the world to the use of sustainable transport. Other key early investors and customers joined at that moment and together we launched the Tesla Motors. To all of them and all of you who are Tesla owners, thank you.

Now, the need to shift the world to sustainable transport and energy is greater than ever. And I am grateful and very fortunate that Tesla has grown tremendously in the last 15 years, as it lets me go all in once again on this idea and this company.

So today I am creating a $1B fund of my own money to help accelerate the adoption of sustainable transport and energy. I am offering to offset the cost of every Tesla purchase worldwide, until the money is exhausted and where I can legally do so, because Tesla's success has afforded me the opportunity.

The details are simple: I will offset $5,000 in cost for any Tesla purchased until $200M of my pledge is exhausted; after that I will pay $4,000 in cost for any Tesla purchased until the next $200M of my pledge is exhausted; after that $3,000/Tesla for the next $200M, then $2,000/Tesla for the next $200M and finally $1,000/Tesla for the final $200M.

I've never been more excited for this company and its future. I invite you to join the Tesla family"

Elon

 

[Todd Burch]

50.000 new orders in 2 months is just 75k per quarter, so not super exciting.

Closer to 90k as others have pointed out.

Now add in Australia and other unopened markets.

Then add in all the China orders that are holding off for GF3.

Then factor in that Q2 is not the strongest auto sales quarter (start of Q2 is slower than end of Q2 and life is not linear).

Then factor in word of mouth sales increasing over time.

Then factor in rising gas prices.

Then factor in a drop in insurance cost once Tesla insurance goes online.

Then factor in peak FUD.

I’d say that number is pretty good.

 

[Cobbler]

(Days in Q2) * (Vehicles Per Day) = Vehicles in Q2
(Days in Q2) * (50000 / (Days in Q2 "as of yesterday")) = Vehicles in Q2
(30+31+30)*(50000/(21+30)) ~= 89216.

 

[Todd Burch]

Ok, shorts would have a field day with this, it would feed the 'demand problem' narrative in the financial media. However, Elon would recover the moral high ground that has slipped a bit from his grasp and I think it would wipe out any real or perceived demand problem in the next 12-24 months while Model Y, semi and pick up truck come along to set us on our irreversible 1,000,000 cars/year course.

The genesis for this idea is my own experience. At my office, I offered to pay $500/Model 3 deposit as a way to spur the adoption of sustainable transport. I contributed to 12 deposits, so far 3 cars have been purchased, a few orders cancelled, and some are still waiting or in queue. I think it helped, and the side outcome was great goodwill. So.......

"15 years ago, I invested $100M, nearly everything I had, into Tesla because I saw the need to transition the world to the use of sustainable transport. Other key early investors and customers joined at that moment and together we launched the Tesla Motors. To all of them and all of you who are Tesla owners, thank you.

Now, the need to shift the world to sustainable transport and energy is greater than ever. And I am grateful and very fortunate that Tesla has grown tremendously in the last 15 years, as it lets me go all in once again on this idea and this company.

So today I am creating a $1B fund of my own money to help accelerate the adoption of sustainable transport and energy. I am offering to offset the cost of every Tesla purchase worldwide, until the money is exhausted and where I can legally do so, because Tesla's success has afforded me the opportunity.

The details are simple: I will offset $5,000 in cost for any Tesla purchased until $200M of my pledge is exhausted; after that I will pay $4,000 in cost for any Tesla purchased until the next $200M of my pledge is exhausted; after that $3,000/Tesla for the next $200M, then $2,000/Tesla for the next $200M and finally $1,000/Tesla for the final $200M.

I've never been more excited for this company and its future. I invite you to join the Tesla family"

Elon

Now THAT looks like a fake email.

Edit: ok, to be clear, I think Cattle is posting a hypothetical offer Elon should make.

 

[TheMrX]

1) I would like to see a second data point showing that Vancouver is seeing 800 orders per week. To trust a single source can lead to folly.

2) I do not believe 2,400 orders per week coming from a single city is realistic. It is certainly possible for an occasional spike, but this would assume Vancouver is accounting for roughly a third of Tesla worldwide production capacity. Amazing if true, but IMO, highly unlikely. To put this into perspective it would mean that Tesla spends at least two days a week making cars for Vancouver alone.

I have to agree here, I took delivery in Montreal on the 11th an they told me that they were delivering at 1 unit per hour rate. That's 64 per week and I will add that I never saw a place selling cars so busy in my life.
Maybe they could have done it for 2 per hour max with a couple more people.

That said, I have no idea of the size of the Vancouver store.

800/week total for Canada looks in the bag tho.

 

[dqd88]

#MeToo - just 1,999,998 to go!

Wonder if we could raise $10B through a go fund me? lol