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

[MartinAustin]

Thoughts on Y cannibalizing sales of 3...

IIRC the Model 3 reveal caused so much public interest in the brand that it drove up sales of the Model S. (instead of reducing them... as bears had predicted)

Of course bears are suggesting that the Y will reduce sales of the other cars. The only thing that will be reduced is the share of production at the factories.

I believe the Model Y reveal event will be a much-needed shot in the arm for brand strength, and may lead to increased orders for the existing three vehicles. (granted... I am a TSLA bull)

TSLA up $3 in pre-market to $292... that's not chump-change

 

[Fact Checking]

What the SEC did not file with their motion, that Elon did with his, is the SEC's follow up email on Feb 24th that strongly implies they intend(ed) the concent decree to require pre approval for all tweets (the very thing that Elon is stated as would not have agreed to and which runs into the 1st ammendment. ).

Note that this followup email on February 24 was written entirely by the SEC, they are effectively "voluntary" interrogation questions colored by the one-sided interpretation of the settlement by the SEC:

1. After December 11, 2018, has Mr. Musk, in accordance with the pre-approval provisions of the mandatory polices implemented by Tesla pursuant to the final judgment entered in SEC v. Tesla, submitted any tweets for pre-approval before publishing them?
2. If so, please identify the tweets Mr. Musk submitted for pre-approval.
3. After December 11, 2018, has Tesla, in accordance with the pre-approval provisions of the mandatory polices implemented by Tesla pursuant to the final judgment entered in SEC v. Tesla, approved any of Mr. Musk’s tweets before he published them?
4. If so, please identify which tweets Tesla approved before Mr. Musk published them and explain how they were pre-approved.​

So yes, these interrogations do foreshadow the contents of their motion on the next day - but this email is not probative of Elon's intent and Tesla's intent, and it doesn't provide proof one way or another what the settlement's negotiators intended when the settlement was hashed out (in private) sometime in late September, early October 2018.

Nor do these interrogation questions in the SEC's Feb 24 email override the plain text of the settlement, which says nothing of such an expansive reading.

I.e. this February 24 email from the SEC doesn't give us much more information than their contempt motion on the next day on February 25, which said pretty much the same thing.

 

[KarenRei]

TSLA up $3 in pre-market to $292... that's not chump-change

Especially when you have some $295 calls expiring tomorrow :Þ

 

[Mars ☰mperor]

One of the best Model Y front view mockups I've seen so far:

Spoiler: Model Y mockup

Source: Reddit.

The lines above are a little too aggressive IMO
I like this one much better.

 

[lklundin]

Further to the recent comments on FUD in the US media, I can point out that here in South Africa where there is very little news about EVs and minimal FUD (although sadly the auto magazines are a bit 'negative'), the average person I speak to about our i3 and EVs in general are VERY positive.

They always end the chat with a cheerful "this is the future for sure"!
Interesting particularly poorer people who may not be able to afford a car but are fascinated by them.

So when the outcome is based on unbiased assessment, intelligence, curiosity and free thinking, EVs seems logical - even beneficial.

Sadly it appears to me that the US is almost self- defeating .

How do other countries respond to FUD? -Europeans are supposed to be more 'sophisticated' in their tastes!!

From news media of a handful of countries I get the impression that the Tesla FUD is concentrated in countries with a significant car manufacturing industry.

 

[Fobble]

The lines above are a little too aggressive IMO
I like this one much better.
View attachment 386243

I personally not a fan of the "dolphin" face of the Model 3

 

[brian45011]

This may be something to keep in mind about potential defamation cases that might be brought against reporters with an anti-Tesla bias. I do wonder if careless Twitter behavior may provide evidence of malice. We have definitely seen cases of journalists casually mocking Musk or Tesla. Any journalist tweets that suggest malice should be preserved as potential evidence.

Casual mocking does not rise to the Supremes' legal definition of "malice":

"it is not enough to show that it is false for the press to be liable for libel. Instead, the target of the statement must show that it was made with knowledge of or reckless disregard for its falsity."
​

New York Times v. Sullivan

 

[KarenRei]

I personally not a fan of the "dolphin" face of the Model 3

The laws of physics are a big fan of the shape.

 

[kelly]

I would be pleasantly surprised if the SEC took a major hit. However I think that is very unlikely. EM will likely prevail but not in a way that calls out the SEC. I think it is a win for EM even if the Court finds a technical issue with the tweet but no damages. The more likely result would be no contempt but a lecture from the Court to both parties on meeting the obligations of the agreement. These are big WINS for me because the government always gets the benefit of interpreting it own authority and gets great deference from the courts. I really hope I am too skeptical but that comes from 45 years of representing and suing the government

One thing I have been thinking about is that judges much prefer litigants to settle cases rather than engage in lengthy litigation. By all accounts it appears the SEC is going after Elon for a very technical violation, as opposed to an obvious flagrant (willful, etc.) violation. I am hoping the judge takes the view that the SEC overreached and to rule in its favor would discourage future defendants from settling cases with the SEC. Why would anyone enter into a settlement with a party who is going to run to court at every opportunity to scream "He violated the order he agreed to!"?

I liked the cases cited in Tesla's Response that noted that contempt is a very powerful tool that has been given to the SEC and they need to use it carefully.

 

[1101011]

Yep, thanks for the info. That fee is a bummer though. I guess Uncle Sam gets his money one way or another.

Nope. Mike Dewine, in this case. New Republican governor with a receptive Senate and House looking for additional revenue.

Apparently that Ohio tax proposal does not consider miles driven... I

That's why discussions I had with my rep centered around use of the highways, and by vehicles of what weight.

 

[EinSV]

Why legendary investor Ron Baron is betting big on Tesla

It's too bad the CNBC hosts kept cutting Baron off when he wanted to talk about his long-term approach to investing in Tesla to ask him questions about the latest background noise.

The short-term drama-du-jour is really meaningless when you believe, as Baron does, that the company will have $150 billion in revenues in 5 years, which is what we'll get if they keep growing at 50%+/year.

 

[Fact Checking]

New Bernstein/Sacconaghi rating out:

"Bernstein analyst Toni Sacconaghi reiterates Market Perform rating and $325.00 price target on Tesla (NASDAQ: TSLA)

• Says Model Y sales target is aggressive.
• Has concerns as Model Y timeline is similar to the Model 3 which experienced many delays.
• Believes for TSLA to reach nearly 750K units/year in Model Y, the model would need to capture similar share to the Model S along with possible upselling of customers from lower-price segments."

Replies and notes to Sacconaghi's report:

• Model Y aggressive sales target is matching the aggressively growing demand for SUVs and crossovers, which demand is growing even in the shrinking ICE market.
  
• The Model 3 ramp-up faced a lot of unknown risks, which caused delays. Those bottlenecks were resolved and there's no basis to believe that Model Y ramp-up includes new, unknown risks:
  • The Model Y is using the exact same battery pack as the Model 3, which is being manufactured at a 6-7k/week rate currently,
  • The Model Y shares 76% of parts with the Model 3, reducing any ramp-up risks significantly,
  • The biggest difference with the Model 3 is expected to be the body line, which had no significant ramp-up problems under the Model 3. Tesla has experience with ramping up three body line platforms before: Model S, Model X and Model 3. There's no basis to expect the Model Y body line to be problematic if Tesla is re-using the Model 3 chassis/body lines with slightly different dimensions.
• Why is Sacconaghi comparing Model Y addressable market to Model S addressable market? Totally different form factors, totally different price segments. Apples to oranges.

 

[mutle]

When the transition is done, only brands like Ferrari or Koenigsegg would survive without fully Electrifying their fleet, I mean all BEV, not hybrids.

Christian von Koenigsegg said that the new Jesko (named after his father who was instrumental in getting the company off the ground), which was introduced last week in Geneva, will be their last ICE model. Production of the 125 cars is planned to last until 2022. After that he expects to build Hybrids like the Regera until they can reach a similar performance at the same weight as their current ICE models (around 1400kg). Maybe the Tesla Roadster 2 will force a change of mind, but Koenigsegg is always very focussed on weight reduction, which is still a problem with current battery tech. Maybe future Koenigsegg BEVs will share battery technology with electric airplanes where weight is also very important.

 

[Singuy]

The second tweet was sent with pre-approval and I don't think there's any grey area there:

The fact that Tesla's team thought that out of abundance of caution they'd further clarify the first tweet is not proof of materialness.

But it is proof of other things:

• It's proof that Elon intended to comply and complied with the settlement both actively and in good faith,
• it's also proof of the "chilling effects" of the SEC's zealous enforcement efforts: Elon was worried about entirely legal communication not covered by the settlement and protected by the First Amendment. Perfect evidence of "chilling effects" and "prior restraint" against Elon's lawful speech.

Furthermore the SEC doesn't even argue that the second tweet somehow makes a legal first tweet illegal retroactively.

Instead their argument is that the first tweet, and in fact all tweets about Tesla listed in the settlement as potential topics that could be material require pre-approval. Even if the tweet is based on already public, immaterial information...

That interpretation of the SEC is a serious overreach and misreading of the settlement, and I hope the judge agrees.

Not saying the SEC is saying the second tweet didn't get pre-approved. I guess how you can look at it as this. The first tweet could be material if Elon didn't clarify with a second tweet. That is what the SEC believe what Elon or his board thought, therefore dinging his first tweet. If Elon made no clarification, the SEC will have a hard time proving the first tweet as a violation.

Remember after the first tweet, we got headlines like "Elon revised guidance to 500k". Even though it didn't move the market, headlines were created from his tweet that made it seem material which caused the clarification of the second tweet.

 

[Zhelko Dimic]

I have to strongly disagree with you here, Zhelko, it's exactly this level of detail (from several well-informed and intelligent members/AI's) that make this thread a must-read for anyone deeply interested in Tesla, not just investments. i'd hasten to add that I don't feel FC makes many frivolous posts either, they're mostly pertinent (unlike mine*)

* I'm working on this, OK?

That's fair. I've noticed it from number of likes on @Fact Checking post, hence my qualifications

 

[Joe F]

Happy Pi day, all!

Loved Mother Goose as a child. With all of the Model 3's hitting the shores overseas, I thought of "Sing a Song of Sixpence." Only slightly modified:

Sing a song of sixpence,
A ship landing was nigh,
4 and 20 Black 3's, baked in a Pi.

When the Pi was opened, the 3's began to sing,
Wasn't that a dainty dish
To land before King Y?
​

Needs some work, but the market is opening.

 

[bhtooefr]

I don't think "rolling coal" incidents were ever reported in Europe? Not the least because such trucks are not legal in most places.

Modifications like that aren't legal anywhere in the US, either, but those laws often don't get enforced in rural areas. (And, I mean, have you seen the Finnish Mercedes diesel fans? I wouldn't be surprised if some of them rolled coal on a Tesla...)

Christian von Koenigsegg said that the new Jesko (named after his father who was instrumental in getting the company off the ground), which was introduced last week in Geneva, will be their last ICE model. Production of the 125 cars is planned to last until 2022. After that he expects to build Hybrids like the Regera until they can reach a similar performance at the same weight as their current ICE models (around 1400kg). Maybe the Tesla Roadster 2 will force a change of mind, but Koenigsegg is always very focussed on weight reduction, which is still a problem with current battery tech. Maybe future Koenigsegg BEVs will share battery technology with electric airplanes where weight is also very important.

And IIRC there's already 400 Wh/kg solid state cells available on the market, for ridiculous money, which isn't something Tesla would take (except in a prototype), but it is something I could see the Koenigseggs and Rimacs of the world taking (especially now that the Roadster 2020 will be almost impossible to beat in a straight line - match, fine, beat, no). And, Koenigsegg has also expressed interest in endurance racing, one of the frontiers that EVs can't easily compete in without such tech.

 

[defc0n]

Today I finally get to see what will more than likely be my next vehicle. Hope everyone bought at this recent bottom. I must admit I will probably unload my position soon after the market opens tomorrow.

 

[SebastianR]

I think we will see this below (and not the other more careful approach):

Obviously that much capacity probably cannot be fit into Fremont - but what Tesla could attempt is to:

• shoehorn a couple of thousand units per week Model Y capacity into Fremont to start offering higher ASP configurations faster, even at the expense of some Model 3 capacity, to tie up Fremont capacity even in worst-case macroeconomic scenarios (similarly to how Model S/X assembly is shared) and to increase Fremont ASPs,
  
• and start building a vehicle factory at GF1 in parallel, that would in principle be capable of producing both Model 3's and Model Y's. This would be the "Dreadnought v2", a first-principles design decoupled from the necessity to get Model Y production up ASAP

Here is why: the way I look at this is, from the perspective of Tesla speaking to a) customers and b) their competition (and not to investors).

So if my theory is right, tonight we will get:
1) An awesome car that many people will want to own.
2) The opportunity to pre-order / register (I think this is pretty much a given now)
3) Lots of (very credible) details on manufacturing/production/assembly: I would love to see some innovation like "no more 12V battery required", or "fully automated wiring harness assembly", or specific other numbers that will shock/annoy/horrify the legacy car makers.
4) Something about how this time production ramp will be different
5) Maybe some videos / live demo of some particularly difficult aspect of the production (robot installing wiring harness? or similar).

Also of course:
6) Advanced summon + AP3 if it is ready
7) Something (could e.g. be AP3) to buy immediately right now for new and existing customers
8) Less likely but still on my list: a (small) interior refresh of Model S/X e.g. GUI, water cooling for AP3, CCS for Europe etc.

What do you think? What could be announced that would really get the legacy car makers blood boiling?

EDIT: Glovis in the Oslo? In Aker Brygge? WOW! That's genius marketing! That's like unloading 1600 Model 3 in the Meat Packing district in NYC. Can't get a port location more fancy, hip and central in Norway. I bet Audi, Mercedes and BMW are not liking that at all. A true show of force!

 

[bdy0627]

Fred going after clicks with a headline again:
"Tesla (TSLA) appoints new CFO and CAO in finance team shakeup"

Showed up on my twitter feed and I thought there was yet another CFO change. Nope. Just confirmation of Zachary Kirkhorn as new CFO plus new CAO Vaibhav Taneja.