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

[hobbes]

At a glance, Tesla usually reports delivery numbers on the 2nd day of the month. Unfortunately that's a Saturday this time around so we have to wait for Monday to see what happens.

Someone already looked up recent delivery report timing upthread, searched but couldn´t find it... If the OP reads this, maybe (s)he can repost?

 

[Stretch2727]

Tesla doesn't work that way. The quarter ends world-wide for the entire company at midnight Pacific Time on the last day of the quarter.

It's October 1st on a calendar in Shanghai right now, but it's still Q3 for Tesla China for about 14 more hours... That's about 3 p.m. local time in Shanghai.

Cheers

I would be surprised if it worked this way. Every company I have ever worked at we used the local time to close the quarter/month as it is based on the legal entity in each country. Maybe one of the accounting types can clarify.

 

[Nocturnal]

This video and the points it brings up are pushing me more towards the hyper bull camp. If Tesla can pull off even half of what they might, the sky is the limit.

For reference (2017 numbers, obviously tesla is larger now)

 

[RobStark]

Ford CEO Jim Farley: “I love driving my Mach-E, but I’m not giving up my ‘73 Bronco or my Mustang 5.0-liter coupe but, you know, if I have a third vehicle in the household, it’s probably going to be a Mach-E!”

"Ok consumers. It's a nice car, just not as nice as a gas car."

I think this highlights legacy auto's problem in transitioning. Farley can't tell people to ditch their ICE cars, because they can't (and don't want to) make enough EVs. So they want to keep these as distinct market segments.

https://twitter.com/x/status/1443274037468319744

Elon owns a '67 Jaguar E-Type "Perhaps the most beautiful car ever made" and a Ford Model T.

And he famously purchased a McLaren F1 for $1M and destroyed it. While it was uninsured.

Elon has compared owning a gas car in the future to owning thoroughbred horses today.
You no longer ride them for transport but for pleasure.

 

[Tim S]

Someone already looked up recent delivery report timing upthread, searched but couldn´t find it... If the OP reads this, maybe (s)he can repost?

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

IMHO, a good way to value high growth stocks is not P/E, but the sum of the next 10-15 years of projected profits discounted by their chance of failing. My personal projection puts the sum of the next 10 years of Tesla profit at $650b and the 5 years of Tesla profits at ~$1.4 trillion.

teslamotorsclub.com

Edit: Quoting myself so you don't have to click the link...
"FYI the last time the first day of the quarter was on a Friday was this January, and Tesla released the P&D numbers Saturday morning at about 10 AM ET...

...Of course, you could argue that January 1st was a holiday and October 1st is not, so they could release the numbers sometime tomorrow. However I don't think the numbers have ever been released on the 1st. Last quarter was about 8:30 AM ET on Friday July 2nd."

 

[woodisgood]

This video and the points it brings up are pushing me more towards the hyper bull camp. If Tesla can pull off even half of what they might, the sky is the limit.

For reference (2017 numbers, obviously tesla is larger now)
View attachment 716332

Tesla’s future is in this realm, but investors are going to have to have the vision to see what is not apparent yet. Cars are easy to understand, and you’re going to have plenty of investors that were able to see the EV transition bail because AI/robotics is too abstract at this point in time.

I’d liken it to investing in Apple because you saw the potential of the smartphone vs investing in internet-related tech before it became a thing…one is a compelling product and one is a complete paradigm shift. It’s a lot easier to invest in the tangible than the “pie-in-the-sky” vision of the future.

 

[capster]

This video and the points it brings up are pushing me more towards the hyper bull camp. If Tesla can pull off even half of what they might, the sky is the limit.

For reference (2017 numbers, obviously tesla is larger now)
View attachment 716332

That is a cool chart. I, for one, would like to see a version that is animated across the years. Anyone up to do that please? @Mokuzai?

 

[scaesare]

According to NASA’s Carver, the old boys were actively blocking SpaceX at the time from having a fair chance of just bidding on contracts and such.

I contend that the lawsuits SpaceX brought were of a very different nature than Blue Origin’s. Indeed, Bezos should be thanking Elon for paving the way in the same way Tesla has paved the way for every other OEM and EV startup.

Ungrateful lobster mac ‘n cheese ball.

I tend to agree. As does apparently Elon:

 

[hobbes]

Just saw the anti-EV (trying to sell you a hybrid so you don´t have "worry" about charging) commercial by Toyota on German TV ARD, prime time :/...

EDIT: Toyokia

 

[mongo]

Tesla doesn't work that way. The quarter ends world-wide for the entire company at midnight Pacific Time on the last day of the quarter.

It's October 1st on a calendar in Shanghai right now, but it's still Q3 for Tesla China for about 14 more hours... That's 3 p.m. local time in Shanghai, enough 'work-day' time for lots more local deliveries.

Cheers!

https://twitter.com/x/status/1443620117984780297

Text:


@JayinShanghai
Q3 is officially over for Tesla China, this September has been one of the most busiest month for Tesla China for domestic deliveries. Congratulations to Tesla China Delivery Team. Happy National Holiday!

 

[kbM3]

Someone on Reddit claimed a robo-taxi scenario would produce a 100% ROIC. It sounded too small for me so I tried an example:

Pre-condition: Tesla builds a factory for $5B that can produce 1M robotaxis each costing $30k to manufacture and producing $30k annual profit each. Assume we start tracking after they have produced 0.5M vehicles and are at 1M / year rate for simplicity. That initial 6-12 month ramp would have a loss. So year 1 actually starts with a fleet of 0.5M cars and ends with a fleet of 1.5M cars for an average fleet size of 1M.

Year 1: Fleet = 1M Robotaxis. Profit = (1M cars * $30k / car) = $30B - $30B cost = 0.
Year 2: 2M cars. Profit = (2M cars * $30k / car) = $60B profit - $30B cost. ROIC = $30B / $5B factory cost = 600%.
Year 3: 3M cars. ROIC = 1200%
.
.
Year 10: Fleet 10M cars. ROIC = 5400% (steady state as year 1 cars hit end of life)

At first I thought we’d have to subtract OpEx, but Elon said his profit numbers included all costs. Note that he probably meant for the vehicle itself as well, which if I added back in would raise annual profit to $33k per car.

The idea of a factory that produces widgets with a 10 year life, each generating annual profit enough to pay for the cost of the widget in only 1 year and profits paying off the cost of the factory 6X over in only 18 months is unprecedented I would guess?

Let’s hope Elon’s Autonomy Day numbers are reasonable

 

[woodisgood]

Someone on Reddit claimed a robo-taxi scenario would produce a 100% ROIC. It sounded too small for me so I tried an example:

Pre-condition: Tesla builds a factory for $5B that can produce 1M robotaxis each costing $30k to manufacture and producing $30k annual profit each. Assume we start tracking after they have produced 0.5M vehicles and are at 1M / year rate for simplicity. That initial 6-12 month ramp would have a loss. So year 1 actually starts with a fleet of 0.5M cars and ends with a fleet of 1.5M cars for an average fleet size of 1M.

Year 1: Fleet = 1M Robotaxis. Profit = (1M cars * $30k / car) = $30B - $30B cost = 0.
Year 2: 2M cars. Profit = (2M cars * $30k / car) = $60B profit - $30B cost. ROIC = $30B / $5B factory cost = 600%.
Year 3: 3M cars. ROIC = 1200%
.
.
Year 10: Fleet 10M cars. ROIC = 5400% (steady state as year 1 cars hit end of life)

At first I thought we’d have to subtract OpEx, but Elon said his profit numbers included all costs. Note that he probably meant for the vehicle itself as well, which if I added back in would raise annual profit to $33k per car.

The idea of a factory that produces widgets with a 10 year life, each generating annual profit enough to pay for the cost of the widget in only 1 year and profits paying off the cost of the factory 6X over in only 18 months is unprecedented I would guess?

Let’s hope Elon’s Autonomy Day numbers are reasonable

Yep…the problem becomes being able to build those damn factories fast enough, because there are only so many construction workers and they can only work so fast and they need things like food and sleep and bathroom breaks.

I wish someone could find a solution to the labor problem…

 

[hobbes]

Opel (Stellantis) completely shuts down their Eisenach plant with 1800 employees until the end of the year, citing the chip shortage as a reason:

Wegen Chipmangels: Opel stoppt Produktion in Eisenach

Der weltweite Mangel an Halbleitern macht der Automobilindustrie zu schaffen: Opel stoppt die Produktion in Eisenach bis Ende des Jahres.

www.zdf.de

 

[RobStark]

Farley is clearly a comedian; like his late great brother Chris.

They are cousins. Not brothers.

 

[Lessmog]

They are cousins. Not brothers.

Not as funny then.

 

[CorneliusXX]

BUT if Lordstown sells it's only factory to Foxconn, then what does Lordstown have left?

Rename to Lordsvillage or Lordsshantytown after the sale?

 

[Artful Dodger]

https://twitter.com/x/status/1443620117984780297

Text:
@JayinShanghai
Q3 is officially over for Tesla China, this September has been one of the most busiest month for Tesla China for domestic deliveries. Congratulations to Tesla China Delivery Team. Happy National Holiday!

Yes, I've seen that. "Jay in Shanghai" on Twitter is a good guy, but he's hardly the definative source on how Tesla defines their End-of-Quarter. We need better.

I searched the latest 2020 10-K and Telsa's Amended and Restated Bylaws and the 2021 10-Q for the terms "Pacific", "Time", and "Local" but found no relevant results. It should be written somewhere in corporate documents however. Perhaps @st_lopes has some suggestions?

I'm quite sure this issue has come up before, it's just too infrequent for people to retain an accurate recall (vs. applying 'experience' from other companies). Specifically, and prior to the Giga Shanghai era, people used to wonder if a car delivered on the East Coast at 2:30 a.m. local time counts toward the end-of-quarter total. I recall the answer was 'yes', but again it would be better to locate the source document or policy.

Personally, I'd be surprised if Tesla didn't define a universal time/cut-off for their end-of-quarter: there are no 'Days' on Mars, only 'Sols'. Bot's will be one of Tesla's 1st Martian products, I think.

Local time is meaningless in a moving timeframe. I think time has to be based on the mothership.

Cheers!

 

[brantse]

I'll have to dig around, but I thought there were a couple SPAC's he was involved in that he couldn't sell out in time before they crumbled. It's not the fact that he didn't lose money on the SPAC's, it's that my assumption is that he was counting on making a killing on the SPAC's that would then cover his leverage he was using for his other investments.

So for example, he's on margin and using options to leverage himself back in Q1 and he's doing it with speculative stocks, stock's with high P/E's, etc......which would mean he lost a ton of money. If he was counting on making huge returns on his SPAC's but they crumbled before he could sell out, then his only option to cover those losses in his other positions is to liquidate his biggest positions, which odds are was TSLA. This is just speculation by me though based on the dynamics of the market back in Q1/Q2.

Say what you want about Chamath selling out of TSLA, but he has publicly warned firms and investors for using leverage and stated that he doesn't use leverage.

 

[RobStark]

OT

Foxconn strikes deal to acquire former Lordstown Ohio plant

WASHINGTON/DETROIT (Reuters) -Global technology firm Foxconn will buy an assembly plant owned by U.S. electric vehicle startup Lordstown Motors Corp for $230 million and take over production of a new pickup truck, the companies said on Thursday. Under the in-principle agreement, the Taiwanese...

finance.yahoo.com

"Even if the Endurance is well-received by customers, Lordstown Motors won’t fully utilize its Ohio factory anytime soon. Selling the facility and operating in parallel with Foxconn could help the company better leverage the facility where GM employed 10,000 people at its peak."

Lordstown makes deal to sell ex-GM Ohio plant to Taiwan’s Foxconn

The sale will bring in much-needed funds and potentially help Lordstown Motors build multiple models in the same facility along with Foxconn.

www.detroitnews.com

Looks like Lordstown Motors wants to sell the factory to Foxconn then lease a small portion back to manufacture the Endurance.

 

[thx1139]

Yes, I've seen that. "Jay in Shanghai" on Twitter is a good guy, but he's hardly the definative source on how Tesla defines their End-of-Quarter. We need better.

I searched the latest 2020 10-K and Telsa's Amended and Restated Bylaws and the 2021 10-Q for the terms "Pacific", "Time", and "Local" but found no relevant results. It should be written somewhere in corporate documents however. Perhaps @st_lopes has some suggestions?

I'm quite sure this issue has come up before, it's just too infrequent for people to retain an accurate recall (vs. applying 'experience' from other companies). Specifically, and prior to the Giga Shanghai era, people used to wonder if a car delivered on the East Coast at 2:30 a.m. local time counts toward the end-of-quarter total. I recall the answer was 'yes', but again it would be better to locate the source document or policy.

Personally, I'd be surprised if Tesla didn't define a universal time/cut-off for their end-of-quarter: there are no 'Days' on Mars, only 'Sols'. Bot's will be one of Tesla's 1st Martian products, I think.

Local time is meaningless in a moving timeframe. I think time has to be based on the mothership.

Cheers!

Delivery time ends when the stores/delivery centers close. Then the people in charge of counting deliveries can finalize the numbers.
Production time ends when the factory closes or it hits midnight. Then the people in charge of counting cars manufactured can finalize the numbers.