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

[Singer3000]

The recent share price drop was at least in part accomplished via an unsustainable bear raid and increased shorting:

There was no way for Elon to announce the (clearly long planned) changes for them to be presented fairly and not spun negatively.

My not advice: patience, it will self-correct and will probably do so via a sudden phase change when we least expect it. Whether it's going to happen in one week, one month or one year - no idea.

Both Apple and Amazon were facing stiff opposition as well - and that self-corrected too, rather spectacularly.

I think this is a pretty correct assessment. The only thing I’d say is that because of the changeable guidance, I’m still pretty clueless about how many M3 Tesla will have been produced in Q1, yet alone the rest of the year. Are we burst producing at 7,000 per week including SR/SR+? Are those on top? How does this marry with the Q4 letter saying 7,000/week at Fremont was the aspiration for year end? No wonder the price has been skittish. Delivery report first week of April may help to settle things.

 

[lascavarian]

Is it worth a minute to try to understand how the incorrect data on the V3 Superchargers got it wrong? The 200kW number vs the announced 250kW spec.

Was it malicious or just some honest mistake? Has it been explained?

 

[ReflexFunds]

Is it worth a minute to try to understand how the incorrect data on the V3 Superchargers got it wrong? The 200kW number vs the announced 250kW spec.

Was it malicious or just some honest mistake? Has it been explained?

The technical information they posted on reddit all looks largely correct. They said the cabinets can support 250kW but they thought individual chargers would initially be limited to 200 kW. Likely just slightly out of date information and Tesla decided to push V3 further from the start.

 

[Fact Checking]

The only thing I’d say is that because of the changeable guidance, I’m still pretty clueless about how many M3 Tesla will have been produced in Q1, yet alone the rest of the year. Are we burst producing at 7,000 per week including SR/SR+? Are those on top? How does this marry with the Q4 letter saying 7,000/week at Fremont was the aspiration for year end? No wonder the price has been skittish. Delivery report first week of April may help to settle things.

I'm pretty sure 4 weeks ago Elon wasn't entirely sure either.

They are very clearly playing it by ear: they are waiting for how well the European and Chinese delivery ramp-up is going, they are waiting for how the China tariff negotiations are going. Then depending on actual numbers they decided, I guess 3-4 weeks ago, to switch gears and do the SR release.

How fast the new SR line is going to ramp up they don't know yet, either. It's a complex, large, football field sized assembly line at the Gigafactory with an unknown S-curve, but that they already made a batch of ~550 units is pretty promising IMHO, it means they already skipped the first 6 months of the Model 3 ramp-up.

But meanwhile they are not over-promising to investors, so Q4 guidance was mostly conservative and the January 30 Cc was a bit upbeat already. And until they didn't know they didn't want to ramp up supply chains, tie up capital, have a higher headcount than necessary, etc.

That's the right approach IMO, Elon promised to not risk the company ever again, so they were ready for a slower ramp-up in 2019. Had there been a Trump Slump and a Trump Recession worst-case in 2019 Tesla would have been ready for it. These were all external factors outside the control of Tesla.

And wherever there is 'change', there is 'fear from change', and where there's seeds of fear there FUD festers.

 

[Tslynk67]

Went and picked up my Model 3 Performance today. Went quick, no issues with the car and the acceleration is unbelievable. Only took 2 years, 11 months and 1 week of waiting.

Photo, or it didn't happen!

 

[lascavarian]

Likely just slightly out of date information and Tesla decided to push V3 further from the start.

It had the feel of such immediate info. I guess it was misinterpreted.

 

[humbaba]

I purposely pick hotels with destination chargers. I’m surprised all hotels haven’t caught on yet.

Planning a trip later this year and will need to stop around Indianapolis. While there are destination chargers, all seem to be located at restaurants or parking garages. Maybe the casino has a hotel, but that isn't really a destination of choice.

It seems to vary a lot based on route -- some routes have numerous hotel destination chargers, others not so much.

 

[ReflexFunds]

I'm pretty sure 4 weeks ago Elon wasn't entirely sure either.

They are very clearly playing it by ear: they are waiting for how well the European and Chinese delivery ramp-up is going, they are waiting for how the China tariff negotiations are going. Then depending on actual numbers they decided, I guess 3-4 weeks ago, to switch gears and do the SR release.

How fast the new SR line is going to ramp up they don't know yet, either. It's a complex, large, football field sized assembly line at the Gigafactory with an unknown S-curve, but that they already made a batch of ~550 units is pretty promising IMHO, it means they already skipped the first 6 months of the Model 3 ramp-up.

But meanwhile they are not over-promising to investors, so Q4 guidance was mostly conservative and the January 30 Cc was a bit upbeat already. And until they didn't know they didn't want to ramp up supply chains, tie up capital, have a higher headcount than necessary, etc.

That's the right approach IMO, Elon promised to not risk the company ever again, so they were ready for a slower ramp-up in 2019. Had there been a Trump Slump and a Trump Recession worst-case in 2019 Tesla would have been ready for it. These were all external factors outside the control of Tesla.

And wherever there is 'change', there is 'fear from change', and where there's seeds of fear there FUD festers.

One thought on production plans. It looks like Tesla will export battery packs, motors, inverters and other powertrain components from GF1 to GF3 between September-19 and March-20. This is when they plan to ramp up in-house production at GF3.
This means Tesla will have an excess 3k per week battery packs and powertrains in GF1 in March 2020. These components are all likely shared with Model Y, so these components could be diverted to Model Y in GF1 in March 2020 - so for these components the S curve production ramp for Y could already be done by March 2020.
We know Tesla managed to ramp general assembly in a tent over just a few weeks in Fremont, we also know Tesla plan to advance from construction complete at GF3 in May to body, paint and assembly production by September - suggesting just c.4 months to install these production lines. So it is possible Tesla could start installing equivalent lines at GF1 in December 2019 and already be at 3k per week Y production by March 2020. Of course, suppliers are likely to be much slower moving and these will be the real bottleneck. So it all comes down to how soon suppliers get moving.

In summary, I think Tesla's internal (best case & unlikely) target could well be 3k Ys produced per week at GF1 or Fremont by March 2020. But they may not have to decide exactly where until November 2019.

 

[jerry33]

Planning a trip later this year and will need to stop around Indianapolis. While there are destination chargers, all seem to be located at restaurants or parking garages. Maybe the casino has a hotel, but that isn't really a destination of choice.

It seems to vary a lot based on route -- some routes have numerous hotel destination chargers, others not so much.

Be sure to check PlugShare.com as well. They list a lot of hotels with EVSEs. Even though those EVSEs are slower, because you're staying overnight the speed doesn't matter, you will still have a full charge in the morning. Also many, but not all, of the hotels shown at tesla.com are priced for royalty.

 

[Artful Dodger]

At a 3,000/week rate that would be 3,000*0.20*$35,000 = ~$21m/week of income generated by GF3 (after GAAP depreciation and other non-cash costs), which will generate $500m of income in about 23 weeks or about 6 months.

Good analysis, thanks! You're right, capital payback + new requirements will be a revolving wheel as production expands. GF3/Shanghail likely will add production continuously. Here's one 'best-case' scenario: (note there are no capital constraints mentioned)

After the 1st Model 3 production line is running at GF3 (Q32019 with parts imported from Fremont and GF1/Sparks) then they'll use those construction resources to add Lines 2 thru 4 repectively at GF3. Being China, they might be able to do each line in about 3 months.

This continues until 4 lines are built, roughly 1 year elapsed time. With each line at ~3K/wk that's 12K/wk Model 3 SRs for China+Asia/Pacific. Of course during this period, GF3 steadily adds support facitlies (ie: bty pack assembly) and reduces the support required from N. America.

When the dry electrode 'Maxcell' is ready for production, I expect Tesla will begin producing them in Shanghai as well, near GF3. Indeed, Tesla Grohmann would do well to expand their existing Shanghai operations.

By 2020H2, they're ready to start building the Model Y. They'll need at least as many lines for Model Y production, eventually perhaps 2x the no. of lines in the steady state.

Overall demand seems nearly inexhaustible, so long as reduction in Tesla build-cost can continue to move down incrementally. I think the $25K car will be the next major project for China. Demand could be 50K per week? That's only 2.5M cars per year. I think that might be low for all of China plus the Asia/Pacific region.

Of course by that time (+3 years?), Tesla will need a new Gigafacory to build that $25K car. Other cities in China also offered free capital to host Tesla production, and I doubt that appetite will wane.

Personally, I'm glad tha Elon is testing the 'Star hopper', because those old Gulfstream G-650ERs take so long to cross the Pacific.. He's gonna need a faster ship (and a bigger boat).

Cheers!

 

[Singer3000]

I'm pretty sure 4 weeks ago Elon wasn't entirely sure either.

They are very clearly playing it by ear: they are waiting for how well the European and Chinese delivery ramp-up is going, they are waiting for how the China tariff negotiations are going. Then depending on actual numbers they decided, I guess 3-4 weeks ago, to switch gears and do the SR release.

How fast the new SR line is going to ramp up they don't know yet, either. It's a complex, large, football field sized assembly line at the Gigafactory with an unknown S-curve, but that they already made a batch of ~550 units is pretty promising IMHO, it means they already skipped the first 6 months of the Model 3 ramp-up.

But meanwhile they are not over-promising to investors, so Q4 guidance was mostly conservative and the January 30 Cc was a bit upbeat already. And until they didn't know they didn't want to ramp up supply chains, tie up capital, have a higher headcount than necessary, etc.

That's the right approach IMO, Elon promised to not risk the company ever again, so they were ready for a slower ramp-up in 2019. Had there been a Trump Slump and a Trump Recession worst-case in 2019 Tesla would have been ready for it. These were all external factors outside the control of Tesla.

And wherever there is 'change', there is 'fear from change', and where there's seeds of fear there FUD festers.

What in your view should we make of the delivery estimates of March for the high spec Model 3s in every left hand drive European country? Shoddy website maintenance or the speculative shipping of high volumes of units that don’t yet have a buyer? One positive inference I draw is that they still haven’t opened up the LEMUR for Europe, which they would surely have done if there was a major demand issue.

 

[zzziii]

Christophe Barraud on Twitter

 

[Fact Checking]

One thought on production plans. It looks like Tesla will export battery packs, motors, inverters and other powertrain components from GF1 to GF3 between September-19 and March-20. This is when they plan to ramp up in-house production at GF3.
This means Tesla will have an excess 3k per week battery packs and powertrains in GF1 in March 2020. These components are all likely shared with Model Y, so these components could be diverted to Model Y in GF1 in March 2020 - so for these components the S curve production ramp for Y could already be done by March 2020.

Agreed, two notes:

• Firstly, I'm not certain they will be able to ramp up to 3k/week cell production at GF3 in March/2020: it's about 8 GWh/year capacity, which is the result of an entire 5-year ramp-up of the 18,650 production of Panasonic ... So I think it depends on the cell production partner, or whether Tesla starts doing cell production alone.
• Secondly, it still appears to be unclear (to me) whether the Model Y is going to be made at GF1, or in Fremont. Doing it in Fremont would be safer, faster, and it would allow GF1 vehicle production to be the grounds-up design they always planned - and not a fast copy of the Fremont Model 3 lines. It would also allow GF1 to attract a larger labor force.

 

[Sudre]

Smart shorts initiate the short on strength and cover on weakness leaving dumb shorts holding the bag.

How do explain that one guy who is a big TSLA short and lost so much in his fund that even he fell off the billionaires list?

Oh wait. That’s right you said smart shorts. I imagine after 7 years of shorting a company you would figure out that maybe it was the wrong choice... ANY DAY NOW! Lol.

I actually understand the smart shorts who short at the top. They are just swing traders probably playing it in both direction.

 

[Dan Detweiler]

Planning a trip later this year and will need to stop around Indianapolis. While there are destination chargers, all seem to be located at restaurants or parking garages. Maybe the casino has a hotel, but that isn't really a destination of choice.

It seems to vary a lot based on route -- some routes have numerous hotel destination chargers, others not so much.

Hotels with a destination charger are a nice plus, but seldom if ever a necessity. Unless you are in a very remote location there is always a Supercharger within about 100 miles or so. Also, the destination chargers tend to be at more exclusive hotels and tend to be pretty pricey. I have found that the money spent to stay there is rarely worth the convenience. Just my opinion though of course.

Dan

 

[jerry33]

Hotels with a destination charger are a nice plus, but seldom if ever a necessity. Unless you are in a very remote location there is always a Supercharger within about 100 miles or so. Also, the destination chargers tend to be at more exclusive hotels and tend to be pretty pricey. I have found that the money spent to stay there is rarely worth the convenience. Just my opinion though of course.

Mostly that's true. There are some reasonably priced hotels with destination chargers or superchargers, such as Holiday Inn Express. And for an overnight stay you don't really need more than just an L2 EVSE. (This conversation should probably be moved to one of the charging threads.)

 

[Pras]

How do explain that one guy who is a big TSLA short and lost so much in his fund that even he fell off the billionaires list?

Oh wait. That’s right you said smart shorts. I imagine after 7 years of shorting a company you would figure out that maybe it was the wrong choice... ANY DAY NOW! Lol.

I actually understand the smart shorts who short at the top. They are just swing traders probably playing it in both direction.

People focus on short seller but the real push is from industry lobby. A few short sellers cannot create this big a mass campaign against Tesla. This is more coordinated attack and short sellers are like vultures waiting to jump on the kill after the lobby has done its job.

 

[scaesare]

Apparently the Tesla Semi and Tesla Truck will share the same drive system.

https://www.linkedin.com/in/dr-michael-schwekutsch-a75b0310?trk=public-post_share-update_actor-text

"The former results in 100+ patents, the latter in the leading edge Drive Systems like the one of the Tesla Roadster II and Tesla Semi / Tesla Truck."

It doesn't surprise me they are in essence leveraging the Model 3 motors in both...

 

[Dan Detweiler]

Hotels with a destination charger are a nice plus, but seldom if ever a necessity. Unless you are in a very remote location there is always a Supercharger within about 100 miles or so. Also, the destination chargers tend to be at more exclusive hotels and tend to be pretty pricey. I have found that the money spent to stay there is rarely worth the convenience. Just my opinion though of course.

Dan

Agreed

Dan

 

[AcesDealt]

There's no more boats scheduled to arrive in SFO according to this spreadsheet I believe: Tesla Carriers

I'd prefer a steady state pace rather than window dressing all the time but that's just me.

edit: unless those delivery times for new orders being March is literally true in which case it is fine to taper off of course.