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

[MikeC]

Apologies for the SeekingAlpha link:

Tesla 5.3% Bonds Being Redeemed Early (NASDAQ:TSLA)

Tesla (TSLA) issued $1.8 billion of 5.3% bonds in August 2017, which are due in August 2025. Read more on Tesla's plans to redeem these bonds.

seekingalpha.com

 

[Beltsbear]

FWIW many folks interact with sales advisors, even at Tesla, pre-sale.

Test drives for example.

100% of my experiences with them have included them providing factually inaccurate info.... (in some cases the only reason I knew it was inaccurate was having read the correct info at TMC too.... like at the time they told me Model 3 didn't come with heated rear seats at all and would come on a later model... when I knew from here they all had it and it just wasn't enabled in SW yet).


Just like 100% of my experiences with sales associates at every other brand of car I've dealt with including other "luxury" brands like Lexus, Mercedes, etc. where they generally knew less about the features and optioning of the things they were trying to sell than I did.

front-line car sales persons are notoriously ill informed on their own products- across all brands.

There are MANY things Tesla does far better than other car companies... training random sales staff isn't among them.

The experience you just relayed, is certainly not a clear cut case of being inaccurate. At the time, the Model 3 did not have heated rear seats turned on. That is the kind of detail level that not every salesperson is going to know, at least at that point when things were in transition. The salesperson was not lying to you. And yes, people like us who are in TMC know more about the details of Tesla products then some of the front line salespeople. That is to be expected. Compared to my dealings with ICE car sales, where information presented was often wrong for the salespersons gain.

 

[colettimj]

Tesla (TSLA): New Buy Recommendation for This Technology Giant - TipRanks.com

www.tipranks.com

His prior target (from Jan) was $950 with a $1,250 “Bull”.

 

[copyhacker]

Tesla SuperCharger and Tesla SuperCharger app will the first real advertising Tesla does and they will get paid for it.

Big “iTunes for Windows” vibes. That was the gateway into the Apple universe for millions of unwashed Windows plebes and it was huge for Apple. Although Apple purists hated the idea at the time.

 

[insaneoctane]

IIRC both the oil industry and auto manufacturing are about $2-3t each.

Electricity is alot cheaper than gas, so this wont be the case with EVs. 200,000 miles of gas costs ~$20,000 for the average 28mpg car. 200,000 miles of electricity is about $6,500 for a 4mi/Kwh EV.

Also WHO makes money on “fuel” is very different between gasoline and EV….

The “gas station” model lives off 3% somehow (which is why many add a mini mart)

With the supercharger, Tesla can install solar and battery storage to possibly claim all the margin. It would be capital intensive for sure, but gives SC access to WAY more margin than the gas station ever had. As long as SC relies on grid for significant power, they will likely lose money IMO. Again, due to competition from people’s home charger, the EV “gas station” model likely NEVER have the equivalent “miles of fuel” sold vs the gasoline stations of today. If Tesla combines SC battery storage and mini grid stabilization ie autobidder, it seems interesting.

 

[Krugerrand]

Oh, DO pay attention!
Actually, I fear we all need a good ocular scrub of Meguiar’s from all the glazed eyes….

(try unseeing THAT)

The real problem was that my choice of beverage was tequila. Then I ran into tax accountant language, which caused me to have to start over and reread from the start. Then I’d get to the beverage suggestion part again and grab another tequila. Rinse and repeat. I was on my eighth tequila before 7am (and on an empty stomach) when I finally gave up and asked for pictures and hints.

 

[elasalle]

Also WHO makes money on “fuel” is very different between gasoline and EV….

The “gas station” model lives off 3% somehow (which is why many add a mini mart)

View attachment 686694


With the supercharger, Tesla can install solar and battery storage to possibly claim all the margin. It would be capital intensive for sure, but gives SC access to WAY more margin than the gas station ever had. As long as SC relies on grid for significant power, they will likely lose money IMO. Again, due to competition from people’s home charger, the EV “gas station” model likely NEVER have the equivalent “miles of fuel” sold, if Tesla combines SC battery storage and mini grid stabilization ie autobidder, it seems interesting.

The recent supercharger in remote Lhasa in China had V3 and powerwall all in one. Also, I think it's like one year since China started manufacturing superchargers.
Tesla recently asked CA residents with powerwall to participate in a virtual grid.

breadcrumbs pointing so some massive possibilities .... it's not just a super charger ..... cheers!!

 

[Skryll]

However, sniffing the data exchange during the Supercharger-to-car handshake, it has been noted that the car VIN is passed to the supercharger... it just didn't initially make use of it. That could be made use of as part of this plan...

and Tesla has enough data for their own cars to triangulate authentication but for third party?

 

[Chunky Jr.]

Apologies for the SeekingAlpha link:

In case there are others like me who don't really understand what impact redeeming the bonds early has...

This means Tesla will pay $1.8477 billion, or almost $48 million over the face amount to redeem these bonds. Of course, it is saving $95.4 million in interest per year over the next four years, so this redemption makes economic sense, particularly considering Tesla currently has significant cash on its balance sheet.

 

[Criscmt]

Yes. If Tesla recognizes any portion of their deferred tax asset benefit this quarter it would partially or fully offset the bitcoin impairment.


Copying @st_lopes on this response as he has much more tax expertise than I do.
We have seen other companies in this situation take most of the benefit at one time and not spread over several quarters. But it can be taken over several quarters/years.
However, there is one factor that may be different for Telsa now than with the other companies in the past.
In 2018, the US tax law changed so that there is no expiration on using past losses to offset future tax income starting with the 2018 tax filing..

The table below is not 100% accurate but directionally Tesla's $2B deferred tax benefit can be outlined as follows:
View attachment 686561

Of the $2B in Deferred Tax Benefit, about $200m from 2018 and $133m in 2019 have no expiration.
So perhaps Tesla can take the position that $333m ($200m+$133m) will more likely than not be used in the future and book $333m to income in Q2.
Contrary to what TSLAQ claims, Tesla takes a conservative approach with their accounting so I am not counting on this. But it's possible.

Thank you.
Shouldn’t the company first use up the the tax benefit from years prior to 2018 which expire soon(when?) unlike 2018 and later losses which will be available much longer into the future?

 

[Knightshade]

The experience you just relayed, is certainly not a clear cut case of being inaccurate. At the time, the Model 3 did not have heated rear seats turned on.

I actually asked to try and give him the benefit of the doubt.

I said "Are you sure it's just not turned on yet?" and he said "No, they physically don't have heaters- if you want heaters you should wait before you order one"

I'm not suggesting he was intentionally trying to deceive me- I'm suggesting car salespeople providing misinformation is incredibly common across all brands, Tesla included.

When the Lexus guy gave me misinformation about how you could order various infotainment options he wasn't trying to deceive me- he legit was ignorant of how his own custom order book worked. In that case he actually thanked me for educating him since I was doing a special order and now he could offer customers more flexibility in the future to do so.

 

[CorneliusXX]

In case there are others like me who don't really understand what impact redeeming the bonds early has...

This means Tesla will pay $1.8477 billion, or almost $48 million over the face amount to redeem these bonds. Of course, it is saving $95.4 million in interest per year over the next four years, so this redemption makes economic sense, particularly considering Tesla currently has significant cash on its balance sheet.

This is also the same reason why a credit upgrade by Moody's is not particularly relevant anymore. Tesla doesn't need to issue significant amounts of debt like they were prior to and during the M3 ramp.

 

[SOULPEDL]

However, sniffing the data exchange during the Supercharger-to-car handshake, it has been noted that the car VIN is passed to the supercharger... it just didn't initially make use of it. That could be made use of as part of this plan...

Or was part of the plan from the start.

 

[willow_hiller]

@transpondster posted this news earlier this week, but it slipped under my radar completely.

Tesla has sold the Maxwell Technologies brand and assets to an ultra-capacitor company called UCAP Power. Here's the press release: https://ucappower.com/wp-content/up...quires-Assets-from-Maxwell-Technologies-1.pdf

Weirdly enough, almost none of the news on this sale mentions Tesla, so I'm guessing that's why it's not being picked up by the traditional Tesla news sources.

I'm guessing this means Tesla bought Maxwell just for the dry-battery electrode processes IP and had no use for the supercapacitor IP. Tesla paid $218 million for Maxwell back in 2019. No word on how much UCAP paid for Maxwell, but it could represent a nice little bump to Q3.

 

[st_lopes]

Thank you.
Shouldn’t the company first use up the the tax benefit from years prior to 2018 which expire soon(when?) unlike 2018 and later losses which will be available much longer into the future?

They would have to use the current year benefit before they consume old years.

Then if you have fully consumed the current year's loss (which in Tesla's case, their US operations will run at significant losses again due to SBC), you start to use your accumulated balances, which yes you would prioritize oldest years first.

That's an important timing element as well, as the "more likely than not" test does consider if the loss will still be available (have not expired) by the time you've generated sufficient income to apply that loss.

 

[M|S|M MYP]

About to pull the trigger on a Model Y for the wifey....DM me your referral code if you like

 

[adiggs]

They may not use the superchargers that much - Is there anyone daft enough to go on a road trip in something other than a Tesla anyway?

I resemble that remark!

I went really old school, driving my Roadster from US/Canada border down to the US/Mexico border back in 2014. I only needed like 10 days!! (And no - I won't be repeating that particular road trip again - glad I did it once, not daft enough to do it again )

 

[ammulder]

With the supercharger, Tesla can install solar and battery storage to possibly claim all the margin. It would be capital intensive for sure, but gives SC access to WAY more margin than the gas station ever had. As long as SC relies on grid for significant power, they will likely lose money IMO. Again, due to competition from people’s home charger, the EV “gas station” model likely NEVER have the equivalent “miles of fuel” sold vs the gasoline stations of today. If Tesla combines SC battery storage and mini grid stabilization ie autobidder, it seems interesting.

Do we have any figures on what area needs to be covered by solar panels per 100 kWh dispensed by a supercharger?

I'm assuming that whatever panels they can cram into a parking lot (on roofs over stalls or whatever) are going to be pretty insignificant compared to the energy dispensed on a daily basis. I feel like I heard a car or CyberTruck covered in solar could get like 30 miles a day (8-10 kWh?), so even if there's 10x that many panels on-site, it covers maybe 2 charges daily. Not nothing, but not free charging either.

As such, I'm assuming that if Tesla wanted to supply superchargers with "free" energy to dispense, they'd need to be building solar farms. And I haven't seen them doing that.

I'm not exactly sure why -- with billions in the bank you'd think it would be a sensible investment to power the supercharger network.

Maybe batteries are the start so at least they can time-shift off-peak energy rates, and once the batteries are in place then solar makes more sense? And then cell constraints would be stalling this whole idea?

 

[Huskyf]

Great article from thestreet

Tesla Software Defies Critics

Shares ready to roll as full self-driving capability shocks pessimists

www.thestreet.com

 

[jbcarioca]

I actually asked to try and give him the benefit of the doubt.
...

My experience includes buying more than 50 new vehicles in a dozen countries. I have never yet seen a car salesperson who knew as much about their vehicle as I did. Of course, those of us who post here are more obsessive than are typical car buyers. Still it surprised me to find a number of fairly exotic cars without basic knowledge. I have grown to expect ignorance so I am never disappointed.

With Tesla I admit being a bit shocked when one day I was at my local Tesla Store when a salesperson I knew referred his own customer to me to answer a question about how to use the navigation system in his new Tesla. I gave him the primer. the shock was on three counts: 1. the salesperson was clueless about nav; 2) the new owner and not even read his own manual and ddi not even know how to find it on his car; 3) the salesperson actually chose to ask a long term customer rather than speculating.

That was just like all the others, so why be shocked? I guess I always imagine there might be competent lurking somewhere in a car salespersons brain.