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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Not saying it is, but just saying it's not definitive that SR will be using a complete new pack design. Reflexfund just extrapolated using the weight reduction for the MR vs the MR to SR. So there's enough evidence to explain either way.
Of course it is definitive. That's what Elon has been telling us for a long while abut the new design. It's well documented.
See here for example: InsideEVs: Deep Dive Into Tesla's Low Cost, Short-Range Model 3 Pack Design
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EVNow
Well-Known Member
I think we need to get some consensus here on "demand" for 3 - by that I mean actual demand at a given price point without getting into economics jargon.
EM said in the Q4 ER that there is a lot of demand - but price is the problem - "they simply don't have enough money" or something like that. So, no, actually the company is being very upfront about demand.
- In US there isn't enough "demand" for just MR & LR for the volume Tesla wants to sell
- So, Tesla wants to sell lower priced SR, so that they can continue to sell high volume (part of the "secret" plan EM has had for a decade)
- One way to make the lower priced $35k car profitable was to cut sales staff. This may lower the demand a little, but the big cut in the price will more than make up for the slight reduction in demand.
Easiest way to solve the "price is the problem" is to introduce leasing. Guess it's kind of hard for appraisers to adjust the deprecation value of a Model 3 if he changes the price every 2 months.
I mean Tesla is famous for having a lease calculator even factoring in fuel savings when I looked into a model S.
do a search in this thread for "leasing" and you will see the discussions and problems with leasing.
EVNow
Well-Known Member
Leasing is not GAAP profit friendly. EM & Deepak discussed this in Q4 ER.
I hope they do introduce leasing at some point - but using 3rd party leasing companies that takes the cars off Tesla's books.
Yeah, and I'm sure @neroden and @Cosmacelf will agree that two parties having secret, private, off the record chat about financials, where both parties are interested in continuing these "clarification" chats in the future as well, are SUPER EASY to monitor and enforce that no material information is shared...
Especially when one of the parties is in a "two party consent" state regarding the recording of phone conversations, such as California.
Seriously, this is an obvious "access is power" hotbed to transfer smaller nuggets of material non-public information illegally, while having no enforcement mechanism and good plausible deniability. I suspect Tesla IR is basically forced to play an existing game with Wall Street analysts, but the SEC is asleep at the wheel, as usual.
Nope. The analysts may want additional info but if they get any they want to get credit and out into a note right away. Large investors specifically don’t want additional material non-public information because they would be barred from using.
This is all fully transparent to the SEC as every company does exactly this.
Price cuts had to happen and they were planned since last year. Introducing SR now while 3750 rebate is still available increases sales and probably ASP since buyers will more likely buy upgrades, paint or AP.
Leasing will come in second half of this year if needed. Leasing has to follow price cuts as it would likely impossible to setup leases before the price cuts.
If the new weights on the Tesla website are correct, I think it is very likely Tesla has not yet ramped up the new module/pack line.
For the 76.4kWh LR pack cells are 70g (4,416 total cells at 309kg), modules (ex cell) are 12g per cell (52kg total) and the pack (ex cell & module) is 117kg.
Implied numbers for SR+ & SR are a 59.8kWh battery with 3,456 cells at 242kg, modules again 12g per cell (these are variable both in weight and cost with cell count) at 41kg. This implies broadly flat pack weight between SR and LR at around 117kg. It makes no sense for an optimised new design to have the same weight for these, and it also makes no sense to software limit the lowest margin car in the long term when you are fighting the "Game of pennies".
Elon tweeted on MR release "It’s a long range battery with fewer cells. Non-cell portion of the pack is disproportionately high, but we can get it done now instead of ~February"
The new pack is supposed to fix this, but the non-cell portion of the SR+ pack is still disproportionately high, and the non useful portion & cost of the SR pack is even higher. So I have to conclude that either the new pack design is not yet ramped for the first batch of SR+/SR cars, or all the weights just added to Tesla's website are completely wrong.
Assuming the Deustche bank current $35k model cash gross margin numbers are correct, then as a long investor you have to be hoping that the new module and pack line is not yet being used for the cars, because this would then be a very easy additional c.$3k cost reduction on the SR car in the coming months.
I think Elon's tweet about the "S-curve" again yesterday is because this new module/pack line is still in very early and unpredictable stages. In the mean time, they can profitably sell SR cars which are software locked SR+ cars in a depopulated LR pack structure.
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So leasing is worst for GAAP profit friendly than lowering margins?
Also I believe leasing is where a good portion of where the demands are. The common folks need to be comfortable with a new tech like Tesla before committing to the idea of buying one and keeping it for 10 years(even though the average Americans don't keep their cars for that long..but it's the idea of it that gets them to finance vs lease). Many still think the battery will need to be swapped out after 3 years just like their MacBook pro.
Yes...…..it definitely is. It also hits cash flow.
Just saw that AWD and the LR RWD carries the same weight so probably take what the website give us with a grain of salt.
I did...it tasted a lot like crow.
Antares Nebula
Active Member
We're in the hole folks. How low can this stay before the MY reveal? I'm gonna being buying next weeks calls if this goes much lower. (I already picked up August and September 400 calls today.)
What will be the close on Friday, the day after the reveal? 300, 310 calls should profit IMO.
Ark and the other hardcore bulls are buying. What about Fidelity, T. Rowe? Without doubt, a very large part is short selling. Screw MS and their BS FUDstrucker notes! Okay rambling over.
What will be the close on Friday, the day after the reveal? 300, 310 calls should profit IMO.
Ark and the other hardcore bulls are buying. What about Fidelity, T. Rowe? Without doubt, a very large part is short selling. Screw MS and their BS FUDstrucker notes! Okay rambling over.
There were some posts about the efforts in New Mexico a few weeks back, maybe from @tinm ? I believe a pro-Tesla bill made it out of committee.
EVNow
Well-Known Member
Yes - instead of booking the profit when sold, you have to spread it over term of the lease - AND - you take a hit if the resale price is lower than the residual.
More over - how long would the lease postpone the need for $35k Model 3 ? I mean the 400k reservations 3 years back was based on this $35k figure. Is 3 years too early to actually introduce that $35k model ?!? Its not like Tesla wants to sell a few thousand cars a year of Model 3 - it wants to sell 500k cars a year. That is how many Accords Honda sold last year ! It will put Model 3 in the top 20 cars/LCVs globally.
The weight is correct for the LR AWD, i guess there is a chance the new LR RWD being offered are actually software locked AWD, but i think more likely it is a copy paste error.
The MR weight hasn't changed since it was released, if the pack design has changed it is possible they just forgot to update it.
For SR+ though, the weight is a completely new number added to the system. It's hard to see how they could easily have got this number wrong, and this number alone validates my whole analysis regarding the fixed battery pack weight.
SR weight was also increased to 3,627lbs from 3,549lbs before Thursday. Again it is possible this was a copy paste error from SR+, but given it was deliberately updated I think that's maybe less likely.
So in summary, I'm pretty confident the SR+ weight is correct and hence the SR+,MR and LR all use exactly the same pack structure. For SR there is some possibility the weight is completely wrong - it could be that it is not actually software locked and does already exclusively use a new pack design.
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