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

[Nocturnal]

My NIO is up over 5% and my TSLA is only up .33%

 

[MP3Mike]

Hey remember a while back when I mentioned Tesla would need to invest some $ into large expansion of the service center network because it hasn't remotely kept up with fleet growth and I got a bunch of disagrees?


Tesla (TSLA) makes massive push for service to catch up with sales - Electrek

People didn't disagree with your prior post because you said service center expansion was needed, but because you said it needed to match the growth rate of sales. And this article says that they are planning to expand service centers by ~11%, while sales grew by ~50% in the last year. So, not expanding at the same rate.

 

[Knightshade]

People didn't disagree with your prior post because you said service center expansion was needed, but because you said it needed to match the growth rate of sales. And this article says that they are planning to expand service centers by ~11%, while sales grew by ~50% in the last year. So, not expanding at the same rate.

Can you cite where I actually said growth rate needed to "match' sales?

Because I' believe I didn't say that, just that it wasn't growing anywhere as much as needed- and cited the fleet growth versus the massively smaller (than even the article cites) growth rate of SCs at the time for context of degree.

The disagrees were generally pretty vocal in telling me I was an idiot to doubt Tesla knew exactly what it was doing and how dare I question them and clearly suggesting they need more SCs was just anti-tesla FUD.

Even after I quoted Elon himself saying Tesla had made a foolish oversight not ramping new SCs as sales spiked I was told I how silly the thing Elon literally said was true was because if it was true the company would've done something about it. (which, of course, they finally are)....

(or for the few who reluctantly admitted what I said was exactly what Elon said- they then informed me it would be "no problem" for Tesla to pay for the new SCs they admit even Elon said they need... which was also weird because I myself had never doubted they could easily pay for em and had already said so several times- the whole point was during a discussion of future financials nobody seemed to INCLUDE paying for them in their math)

But if my memory is incorrect I'm happy to be proven wrong.


In any event, it's good to see Tesla taking significant action on this finally...also worth noting:

The story mentions heavy interest in the northeast US for many new locations.

Same place Elon mentioned was likely for the next US Gigafactory.

 

[StealthP3D]

But 2170 cells are not going away soon:

'Umeda also said the company has decided to launch an additional production line at the Nevada factory next year, increasing the plant's total capacity by some 10% to 38-39 gigawatt hours (GWh) a year by around 2022.

"We are targeting a profit margin of around 5% at our Tesla battery business within two to three years," he added.'

That's an odd comment. Popular cylindrical battery cell formats generally have a lifespan measured in many decades (if not more than a century). Tesla introduced the 2170 cell to the world just three years ago in the Model 3. Since that time it has been adopted by many high-end flashlight makers, power tool makers and others that can benefit from it's high energy and relatively compact form factor.

The 2170 cell has become suddenly popular since Tesla introduced it in 2017 and will not go away in any of our lifetimes without a fundamental battery technology break-through (like solid state batteries). Even then, it probably will be around for decades to come.

 

[Prunesquallor]

Ford has pooled with someone.


Q:
That's very helpful. Thanks. And I think you commented that because of the cruiser recall company, definitely you're going to have a CO2 compliance cost this year. Are you anticipating a similar level of cost in the fourth quarter as was realized in 3Q, and then perhaps more importantly, can you discuss if you think this issue will be resolved, and if there is risk to any of your other hybrid or BEV products?

A:
So, from a cost standpoint, I'll start with that. As I said earlier, it's about $400 million for the quarter. We do expect some costs in the fourth quarter, somewhere between $100 million to $200 million. So that's the impact we see as it is today. And that does also -- that includes the impact of the pooling effort that we're going to have to undertake for our passenger vehicles in Europe.

Q:
Okay. And finally, have you disclosed or can you disclose who the pooling agreement is with? I think it will become a public record at some point in the year?

A:
We're not going to do that today. Thanks.

Who could it be...

Here is ICCT's May estimate for the 2020 EU CO2 compliance. It would appear that PSA-Opel and Nissan would be strong pooling contenders since they are both predicted to exceed their CO2 reduction requirements.

However, a couple of important points:
1) The "Phase-In" compliance credits (PI column) go away after 2020.
2) The “Super-Credits" compliance credits (SC column) get cut by ⅓ in 2021.

If we make those corrections to the totals (assuming all else remains the same) the 2021 PSA-Opel Target Gap would only be -1 and the 2021 Nissan Target Gap would be zero. So neither will be strong contenders for pooling (and of course PSA-Opel will have merged with FCA). None of the other manufacturers/pools will meet their limits next year given those assumptions (Toyota-Mazda may just barely make it).

FYI, the Super-Credits continue to decrease in 2022, are eliminated in 2023 and the targets themselves are substantially reduced in 2024.
It looks like Tesla will get credits for every single car they sell in the EU for a while. Wonder why there's talk of exporting MIC cars to EU?

 

[bkp_duke]

How could that post age poorly in only one weeks time?

Plus or minus 15-20% gives you more than a $160 trading range for the next week ($325-$487). That's a huge range for one week! While it could go outside that range, it's quite unlikely.

It was more that the current "plateau" is related to election jitters than other market conditions. That's how the post would age poorly. My prediction, probably not stated very clearly, was that we are looking at another long-term consolidation period (many months) before we see further share price appreciation. I make this assumption based upon volume, as it appears that everyone that wants to be in TSLA, is in TSLA, and everyone else is just waiting and seeing.

 

[H Mak]

Impossible to know what's going to happen in the markets on a day to day basis at the moment. So every day I set up a buy order for a few more TSLA at 398, just in case. Didn't think we'd see 400 again but if it's available, it would be rude not to accept such a generous offer. I've got it in my head now that <400 = cheap, 400-500 = par, >500 = high.

Also it has been discussed on here what the effect on the share price of a publicised FSD beta crash would be. So I'm keeping some £'s on the sideline for this eventuality. Basically, I love buying Tesla shares on the cheap.

 

[Thumper]

Possible price appreciation wild cards that could cause sudden spike are: 1. general recognition that Tesla FSD is in fact at a breakthrough point 2. S& P inclusion. Don't wait. Get your shares now and hold on for the ride.

 

[Nocturnal]

Possible price appreciation wild cards that could cause sudden spike are: 1. general recognition that Tesla FSD is in fact at a breakthrough point 2. S& P inclusion. Don't wait. Get your shares now and hold on for the ride.

I know we are all sick of talking about the spoon but this might be the best possible time for them to add Tesla because covid/election jitters would blunt the upside.

 

[StealthP3D]

It was more that the current "plateau" is related to election jitters than other market conditions. That's how the post would age poorly. My prediction, probably not stated very clearly, was that we are looking at another long-term consolidation period (many months) before we see further share price appreciation. I make this assumption based upon volume, as it appears that everyone that wants to be in TSLA, is in TSLA, and everyone else is just waiting and seeing.

Given TSLA price action going back to 2019, it's baffling to me how you could believe "everyone that wants to be in TSLA, is in TSLA". As with any high-flyer there are many people who feel like they missed out and are watching the stock for a time they think they can buy it without too much risk of a loss.

That's why a share price plateau like this can be like a calm pot of pasta that is about to boil over. The longer it takes to come back to a boil, the more quickly it will boil over as everyone waiting on the sidelines tries to jump in.

To be clear, at any given moment, everyone who wants in at the current market price is already in. Because all they have to do is place a market order. But it's when the price they are willing to pay changes that the stock takes off. And buying begets more buying. This is why trying to time the market is often a fool's errand.

 

[bkp_duke]

Given TSLA price action going back to 2019, it's baffling to me how you could believe "everyone that wants to be in TSLA, is in TSLA". As with any high-flyer there are many people who feel like they missed out and are watching the stock for a time they think they can buy it without too much risk of a loss.

That's why a share price plateau like this can be like a calm pot of pasta that is about to boil over. The longer it takes to come back to a boil, the more quickly it will boil over as everyone waiting on the sidelines tries to jump in.

To be clear, at any given moment, everyone who wants in at the current market price is already in. Because all they have to do is place a market order. But it's when the price they are willing to pay changes that the stock takes off. And buying begets more buying. This is why trying to time the market is often a fool's errand.

We will know in a week. If I was wrong, then volume will increase drastically after the election uncertainty is behind us.

Again, was my 0.02. Probably been reading too much of Curt's technical analysis book.

 

[AudubonB]

Hey remember a while back when I mentioned Tesla would need to invest some $ into large expansion of the service center network because it hasn't remotely kept up with fleet growth and I got a bunch of disagrees?

I have no recollection of that one way or another, but I do know that the most highly despised poster in all of TMC (s/he doesn’t post in “Investors”) is someone whose sig-line is something along the lines of “Like, how many times do I have to be right?”

 

[JRP3]

That's an odd comment. Popular cylindrical battery cell formats generally have a lifespan measured in many decades (if not more than a century). Tesla introduced the 2170 cell to the world just three years ago in the Model 3. Since that time it has been adopted by many high-end flashlight makers, power tool makers and others that can benefit from it's high energy and relatively compact form factor.

The 2170 cell has become suddenly popular since Tesla introduced it in 2017 and will not go away in any of our lifetimes without a fundamental battery technology break-through (like solid state batteries). Even then, it probably will be around for decades to come.

I wonder if they'll start making 2170's tabless? If you're building a new line why not?

 

[cusetownusa]

https://twitter.com/KelvinYang7/status/1321799576630616064?s=20
View attachment 603456

So does this mean that Tesla is sharing their battery technology? If so, does this mean they will lose their competitive advantage?

 

[Prunesquallor]

It is an admission, that the sale volume of Mach-E will not even meet compliance numbers !

Ford was counting on their crappy little Kuga PHEV to get them out of the emissions penalty box:

Ford relying on hybrid for CO2 targets | Autovista Group

Oops. All recalled. Batteries keep catching fire:

Ford Kuga hybrid battery problems persist - electrive.com

 

[bkp_duke]

So does this mean that Tesla is sharing their battery technology? If so, does this mean they will lose their competitive advantage?

Probably a license/royalty arrangement.

 

[Knightshade]

My NIO is up over 5% and my TSLA is only up .33%

NKLA is still above $0.00.

Markets can stay irrational longer than many can remain solvent.

 

[kbM3]

When Tesla opens up Dojo, they would be forced into being profitable.

History repeats:
AMZN was forced into being profitable when they opened up AWS to the world, even while they invest as much as they could.

Amazon had to figure out how to scale web services, which leads to AWS.
Tesla has to figure out how to scale AI training, which leads to Dojo.

When people start to leverage Dojo(and HW5, 6...10) as the backbone of their own business workflow, Tesla would be forced into being profitable too.

Tesla can also be forced into being profitable when decreasing prices only serves to increase wait times and thus dissatisfaction.

 

[StealthP3D]

We will know in a week. If I was wrong, then volume will increase drastically after the election uncertainty is behind us.

Again, was my 0.02. Probably been reading too much of Curt's technical analysis book.

I totally misread the meaning of your post if the plus or minus 15-20% for "awhile" applied to volume and not price. I think it's likely we will see volume return shortly.

 

[bkp_duke]

I totally misread the meaning of your post if the plus or minus 15-20% for "awhile" applied to volume and not price. I think it's likely we will see volume return shortly.

It was price. Again, just my 0.02 based upon the low volume.

While 15-20% is a large range for most stocks, it's not really for TSLA as the stock has always been more volatile than most.

If we don't see volume return after the election mess is past us, then we could be in for a prolonged period of consoliation.

Again, perhaps me reading too much of Curt's book. When you are studying something, everything jumps out (correctly or incorrectly) as an example of what you are studying.