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

[KarenRei]

*cough* I actually believe the SEC had a case in September -- not over "funding secured", which was definitely defensible, but rather over Musk's claim that he could let all existing investors stay in Tesla after going private -- that was something where he absolutely should have known better, since anyone can look up the rules, and it's just not possible.

The exact quote was: "My hope is *all* current investors remain with Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment."

He was clearly misled by the current Fidelity arrangement with SpaceX (which basically allows SpaceX investment but heavily dilutes it).

The idea that he released the $35K car now, as soon as he possibly could, *because he wants to keep his promise the reservation holders who have been waiting for it*, is just alien to the profits-uber-alles mentality on Wall Street.

More specifically:

• He previously announced a Model Y unveiling around mid March.
• Who would believe the base price on the Model Y if they hadn't delivered it on the Model 3?
• I believe that they have a serious interest in unveiling it now because it's further along than people like Adam Jonas think - that it's more like Gerber says, a launch around the end of this year with peak rates by the end of next year. So they have to launch it soon, so that people who would have an interest in it avoid making alternative vehicle purchases (said people clearly aren't M3 buyers, or the vast majority already would have bought).
• More on that launch timeline in a second...

Excellent points! Your thoughts on Lathrop?

This question isn't addressed to me, but since I've raised Lathrop several times before, a few notes:

• I don't believe for a second that it's just a "warehouse". The place is freaking huge.
• Tesla keeps hiring manufacturing people to work there - generally engineers, not line workers. It's been said that there's some part manufacturing done there, and I'll believe that, but again, I can't believe that this uses up that whole space, or even a large fraction of it.
• A number of the job ads for Lathrop have included requirements for work at multiple locations. For example, there was a job ad for someone at Lathrop to build an alumium parts foundry for the Model Y, which involved regular travel to Giga.
• All together, this makes me think that they're developing tooling at Lathrop to transfer to Giga. E.g. that Lathrop is doing something similar to what Grohmann does.

 

[zzziii]

https://www.bloomberg.com/news/articles/2019-03-13/vw-brand-to-shrink-workforce-further-in-bigger-savings-push

 

[Dan Detweiler]

The fact that $35k and ~$38k entry prices are in a good place when compared to ICE competitors was already known.

You're starting to sound like Elon vs. the SEC!

Dan

 

[NicoV]

The only thing that is consistent is that what delivery specialists are telling customers in the benelux, is totally inconsistent. We've had reports on the relevant thread about people calling that delivery specialists are not allowed to say on which boat their car is, with the next message being a cheerfull "I just called and they told me my car is on boat such and such". Norway seems to have its *sugar* together but the Benelux is a mess. We're now a full month into it and it's still the same. At this point, I can only assume it's due to sheer incompetence from local management. Either because they are incompetent themselves or because they are not giving the means to do a competent job by Tesla USA.

All that to say that we have a report of a customer that their car is in Zeebruge for a while now but they can't get it shipped to Tilburg. But who knows if that is actually true...

Speculation: Benelux is a special case due to the proximity of Zeebrugge. They will try to deliver the last cars from the last ships to Benelux, and divert anything that arrives earlier to further destinations. I fully expect to get a call to pick up my car the last week of march.

 

[Dan Detweiler]

The exact quote was: "My hope is *all* current investors remain with Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment."

He was clearly misled by the current Fidelity arrangement with SpaceX (which basically allows SpaceX investment but heavily dilutes it).



More specifically:

• He previously announced a Model Y unveiling around mid March.
• Who would believe the base price on the Model Y if they hadn't delivered it on the Model 3?
• I believe that they have a serious interest in unveiling it now because it's further along than people like Adam Jonas think - that it's more like Gerber says, a launch around the end of this year with peak rates by the end of next year. So they have to launch it soon, so that people who would have an interest in it avoid making alternative vehicle purchases (said people clearly aren't M3 buyers, or the vast majority already would have bought).
• More on that launch timeline in a second...

This question isn't addressed to me, but since I've raised Lathrop several times before, a few notes:

• I don't believe for a second that it's just a "warehouse". The place is freaking huge.
• Tesla keeps hiring manufacturing people to work there - generlly engineers, not line workers. It's been said that there's some part manufacturing done there, and I'll believe that, but again, I can't believe that this uses up that whole space, or even a large fraction of it.
• A number of the job ads for Lathrop have included requirements for work at multiple locations. For example, there was a job ad for someone at Lathrop to build an alumium parts foundry for the Model Y, which involved regular travel to Giga.
• All together, this makes me think that they're developing tooling at Lathrop to transfer to Giga. E.g. that Lathrop is doing something similar to what Grohmann does.

Ahhh...

My morning dose of Tesla wisdom from everyone's favorite Icelander. I am starting to need this every morning like I need my 8 cups of coffee. OK, that's an exaggeration. NOTHING is more important than my 8 cups of coffee, but a daily dose of @KarenRei is always a plus. lol!

Dan

 

[KarenRei]

Speculation: Benelux is a special case due to the proximity of Zeebrugge. They will try to deliver the last cars from the last ships to Benelux, and divert anything that arrives earlier to further destinations. I fully expect to get a call to pick up my car the last week of march.

This would fit in with Tesla's general strategy - focus on getting vehicles to the most remote areas first, and then progressively home back in, with the goal of making it so that by the end of the quarter, everyone is delivering, with the hopes of each location exhausting their local inventory by the end of the quarter - taking into account new orders that will occur during that timeperiod.

 

[Dan Detweiler]

Totally off topic but 1) I am really good at being totally off topic and 2) the markets aren't open yet.

Geo-fenced auto folding mirrors are the absolute bomb! (It's the little things in life.)

Not quite so off topic. Little improvements like this on a regular basis are one of the biggest draws to Tesla. How do we get non Tesla owners to understand this? The amount of misinformation is amazing. Case in point...I was talking with a colleague yesterday while I was in my car in the parking lot. We got to talking about the car and she made the comment "Yeah, but electric cars a really slow, right?" I was flabergasted. I told her to get in the car. After a few launches with her squeeling she says, "What does this thing have, a V8?" She just couldn't accept the fact that the car didn't have an engine. This is not a dumb person by the way. She is a 20 year teacher with 3 degrees.

This is the kind of stuff we have to battle.

Dan

 

[Right_Said_Fred]

View attachment 385957
https://www.bloomberg.com/news/articles/2019-03-13/vw-brand-to-shrink-workforce-further-in-bigger-savings-push

7,000 jobs being cut, resulting in $6.7 billion extra profit. So the average VW employee makes almost a $1 million per year...

 

[Fact Checking]

The exact quote was: "My hope is *all* current investors remain with Tesla even if we’re private. Would create special purpose fund enabling anyone to stay with Tesla. Already do this with Fidelity’s SpaceX investment."

For even more context, note the 'hope' qualifier, which definitely marks the statement as forward looking and cannot be mistaken by any reasonable investor as a definite promise. He also said, in another tweet:

"Def. no forced sales. Hope all shareholders remain."​

So I don't agree with @neroden that these were problematic - and in any case if the $420 tweet was OK then all the followup tweets were (probably) fine too.

The SEC's filing/complaint back in September only makes the following argument about those tweets:

Musk [...], had done nothing to investigate whether it would be possible for all current investors to remain with Tesla as a private company via a “special purpose fund,”​

Which is pretty weak in light of the fact that SpaceX has a construct where ex employees can keep their shares in the company as private investors. So the SEC's "Elon had done nothing" claim is particularly baseless: not only had Elon done "something", he has actually already implemented such a mechanism for a private company he owns.

Even if we completely discount the 'hope' forward looking qualifier, Elon's mistake was expecting the SpaceX mechanism which might have worked in the U.S., which would probably not have worked globally, which is a far cry from the SEC's charge of "recklessly misleading investors".

Pretty tellingly the SEC quotes Elon's shareholders statement in their legal arguments, but without the SpaceX context which was very much part of that tweet...

 

[Fact Checking]

7,000 jobs being cut, resulting in $6.7 billion extra profit. So the average VW employee makes almost a $1 million per year...

Maybe VW is laying off the top 7,000 managers?

 

[Carl Raymond]

Totally off topic but 1) I am really good at being totally off topic and 2) the markets aren't open yet.

Geo-fenced auto folding mirrors are the absolute bomb! (It's the little things in life.)

Not quite so off topic. Little improvements like this on a regular basis are one of the biggest draws to Tesla. How do we get non Tesla owners to understand this? The amount of misinformation is amazing. Case in point...I was talking with a colleague yesterday while I was in my car in the parking lot. We got to talking about the car and she made the comment "Yeah, but electric cars a really slow, right?" I was flabergasted. I told her to get in the car. After a few launches with her squeeling she says, "What does this thing have, a V8?" She just couldn't accept the fact that the car didn't have an engine. This is not a dumb person by the way. She is a 20 year teacher with 3 degrees.

This is the kind of stuff we have to battle.

Dan

3 degrees of reality separation. What on earth did she study?

 

[schonelucht]

Speculation: Benelux is a special case due to the proximity of Zeebrugge. They will try to deliver the last cars from the last ships to Benelux, and divert anything that arrives earlier to further destinations. I fully expect to get a call to pick up my car the last week of march.

I think so too since it is obviously maximizes the number of cars delivered before end of quarter. Still doesn't explain why they can't articulate correctly to customers in the Benelux where their cars are and when they will arrive, planning delivery dates only to cancel them a day later etc.

 

[replicant]

What on earth did she study?

The problem is clearly with the media ecosystem – or, more precisely, the ownership and business models of the biggest news organizations. No one should have to go back to school to understand what's going on in the world.

 

[Carl Raymond]

7,000 jobs being cut, resulting in $6.7 billion extra profit. So the average VW employee makes almost a $1 million per year...

Must be shutting whole departments with high on-costs. Anything related to improvement of ICEV design or tech is redundant.

 

[Fact Checking]

This would fit in with Tesla's general strategy - focus on getting vehicles to the most remote areas first, and then progressively home back in, with the goal of making it so that by the end of the quarter, everyone is delivering, with the hopes of each location exhausting their local inventory by the end of the quarter - taking into account new orders that will occur during that timeperiod.

Yes, and this would also explain the sporadic deliveries in Benelux that @schonelucht reported: since there's only very few configurations offered, and a lot of software features which can be freely turned on/off, so Tesla can freely "swap" a Benelux delivery for a far-away delivery in Spain or France.

So when a customer confirms to take delivery in Southern France or Italy and there's two such cars that only differ in software features but otherwise have the exact same hardware configuration, they might bump a Benelux delivery down the queue and serve the farther away customer first. Note that the Benelux delivery is still guaranteed to happen, but a few weeks later.

This would explain the prohibition to talk VINs and ships (as you are not guaranteed them until the last minute), but I suspect not all sales staff understands that, plus:

• there might be cars that are unique hardware at this stage (some rare color and Performance)
• or very common configurations and free delivery capacity in Benelux and not enough orders far away to serve,
• or customers indicating schedule inflexibility, i.e. vacation in the last 2 weeks of March. Tesla would still prefer to deliver the car early than after March 31.

... and in these cases the car might be delivered in Benelux earlier already.

From the outside it would look chaotic, random, with unreliable communications - and this sucks for Benelux customers waiting for delivery - but I'd expect this to be smoothed out once Tesla can expend the capital to maintain a continuous logistics pipeline.

Pro tip: if you want the quickest Model 3 delivery then order the Performance model, 20" wheels, Pearl White color and white seats. Also indicate schedule inflexibility for the final 2 weeks of the quarter, but don't push your luck too much.

Or wait 2-3 more weeks for your dream configuration!

 

[Tslynk67]

But, instead of advertising on TV - just make ads and put it on Tesla youtube channel. Musk can tweet them out and try to make them go viral.

Just web ads would be better than any TV ad.

Does anyone watch broadcast TV any more? Certainly few that matter...

 

[Carl Raymond]

The problem is clearly with the media ecosystem – or, more precisely, the ownership and business models of the biggest news organizations. No one should have to go back to school to understand what's going on in the world.

Ah, sorry I misread. I took 20 year teacher to be a 20 year old teacher, not a teacher of 20 years. Figured she was freshly educated. Second mistake was failing to think that nobody completes 3 degrees by age of 20. (It’s 10pm here. Past my bed time.)

 

[CaliBear1]

Book smart.

Totally off topic but 1) I am really good at being totally off topic and 2) the markets aren't open yet.

Geo-fenced auto folding mirrors are the absolute bomb! (It's the little things in life.)

Not quite so off topic. Little improvements like this on a regular basis are one of the biggest draws to Tesla. How do we get non Tesla owners to understand this? The amount of misinformation is amazing. Case in point...I was talking with a colleague yesterday while I was in my car in the parking lot. We got to talking about the car and she made the comment "Yeah, but electric cars a really slow, right?" I was flabergasted. I told her to get in the car. After a few launches with her squeeling she says, "What does this thing have, a V8?" She just couldn't accept the fact that the car didn't have an engine. This is not a dumb person by the way. She is a 20 year teacher with 3 degrees.

This is the kind of stuff we have to battle.

Dan

 

[Fact Checking]

he problem is clearly with the media ecosystem – or, more precisely, the ownership and business models of the biggest news organizations.

Just to underline this point:

These 6 Corporations Control 90% Of The Media In America​

At least in the U.S. the usual "liberal media vs. conservative media" is a false narrative, the reality is 90% corporate media owned by billionaires (who are overwhelmingly conservative), vs. 10% of fractured 'other' media with a colorful composition.

Disruptors like Tesla, once they are perceived as a threat to these established power structures, will get near unanimously negative treatment by the majority of journalist working for the 90%.

 

[Tslynk67]

Meanwhile in Brussels... (yesterday of all days)