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

[lazybot]

This is an entirely different situation. I am discussing paying for software and the promises made. I have not said a word about the M3 price drop, or the value I paid for my Model S vs what you get today. But if that is how you choose to move forward with this conversation I can't say or do much about it.

I am one of those that bought a model 3 in 2018 but did not buy EAP and FSD. EAP+FSD for $5k was very tempting but I decided to pass as I did not consider it to be useful for my particular situation. I like driving the car and I do not take long trips or get stuck in traffic during commute. I plan to keep the car for a long time so resale was not a factor either. So the option was not worth it to me personally. I would probably use the money to put down an order for a Y instead.
If you look at this from Tesla perspective they offered this deal as a way to get some revenue from buyers like me or buyers who did not get FSD. A different way to look at this would be through an analogy of buying an airline ticket. If you buy it early you are guaranteed a decent price and a confirmed seat. If you wait until the last minute the price will go up in most cases when there is enough demand and you will pay more. If there isn't enough demand the airline will drop the price to fill the empty seats rather than keep the ticket price the same and fly a partially filled plane at a loss. So people who buy in at the reduced price may be lucky but they were never guaranteed a lower price or a seat compared to some body who bought a ticket early. In this case Tesla had unlimited capacity in that they could sell to as many buyers as they could find to realize some revenue with out an additional cost to them. That is until people who paid more for this started complaining and Tesla had to revert the prices.

 

[tinm]

So here’s a wild question: why not a class-action lawsuit against the SEC?

 

[Papafox]

In all seriousness (after my recent short-seller laird post), TSLA approached the lower bollinger band (shown in green) then bounced. The bounce was seen as a signal that TSLA may well have bottomed out, and so investors sitting on the sidelines jumped in. Notice in the tech chart the previous "bounce" off the lower bollinger band at the 275 mark. The shorts are seldom willing to let the first day of an attempted bounce go unchecked, and so we've transitioned into a long period of "whack the mole" where shorts do whatever selling is necessary to get TSLA back into the red. The story they wish to tell today is "Tesla had yet another day of closing in the red as it continues its descent." More astute investors will recognize today as the now rather mandatory "whack the mole" day before a real recovery can begin. Shorts have to use up lots of ammo today, and if macros and news (FUD) permit, the recovery can start tomorrow. I've been advising in the daily trading charts thread to look for the "whack the mole" day before a true bounce happens in this time of extreme manipulation. The wild card is the final half hour of the day. A brave climb could escalate if it happens, and of course the shorts will try for a push-down during that same time period.

Make no mistake about it, the manipulations that you are seeing are illegal, but the shorts feel very comfortable the SEC is not going to come after them.

 

[kbM3]

Given Elon's guidance on the Q4 call is equivalent to 400-600k total production, I'd guess that's what Elon meant. If he'd said "around half a million" rather than than "around 500k" i'm sure what he meant would have been a lot more obvious to the SEC. There is a heavy tendency towards character efficient language on Twitter though unfortunately, often at the expense of clarity. A similar cause of the "funding secured" tweet problems.

However, Elon almost always talks production rate not production totals. I’m fact, the later clarification to his initial tweet specifically states that he meant rate.

 

[Tenable]

I am one of those that bought a model 3 in 2018 but did not buy EAP and FSD. EAP+FSD for $5k was very tempting but I decided to pass as I did not consider it to be useful for my particular situation. I like driving the car and I do not take long trips or get stuck in traffic during commute. I plan to keep the car for a long time so resale was not a factor either. So the option was not worth it to me personally. I would probably use the money to put down an order for a Y instead.
If you look at this from Tesla perspective they offered this deal as a way to get some revenue from buyers like me or buyers who did not get FSD. A different way to look at this would be through an analogy of buying an airline ticket. If you buy it early you are guaranteed a decent price and a confirmed seat. If you wait until the last minute the price will go up in most cases when there is enough demand and you will pay more. If there isn't enough demand the airline will drop the price to fill the empty seats rather than keep the ticket price the same and fly a partially filled plane at a loss. So people who buy in at the reduced price may be lucky but they were never guaranteed a lower price or a seat compared to some body who bought a ticket early. In this case Tesla had unlimited capacity in that they could sell to as many buyers as they could find to realize some revenue with out an additional cost to them. That is until people who paid more for this started complaining and Tesla had to revert the prices.

The airline never promised to charge me more later. Also, though not entirely relevant, many airlines leave planes empty and raise prices in spite of the lack of demand to charge a premium to those that must travel last minute.

 

[MarcusMaximus]

I think we will get into the weeds here. I would say I don't perceive much value in my car showing a straight line vs two lines on the side and suggesting I move out of the fast lane. You may argue that it exits the freeway before disengaging, but these are perceptions of value and I don't want to argue. I doubt anyone here has the power to change the situation in a meaningful way. But as an owner and an investor I find this frustrating. I love the idea of additional cash trickling onto Tesla's balance sheet. But I don't like it being done at the expense of owners. Others may disagree, that is their right.

Ya, I think there’s definitely a reasonable question about whether the time with the features received(and the early access program invitation) are sufficient value. I’d agree that they aren’t sufficient and Elon did say it was a mistake.

Was just noting that, at every level, we did get *something* for the extra money, regardless of how much we might think it was worth.

 

[Tslynk67]

No, still not yet. Getting so close now that they need only average 5/day from here on out, though. So it's going to happen.

Indeed, I jumped the gun. Still, figures for today are up once again, now just 26 short for the quarter record. Would be very cool to hit it today.

5000 for the quarter is definitely possible.

 

[Tslynk67]

I may be biased, but I don’t think you will lose money or be forced out. I know I sound like a cylon prophecy, but all of this has happened before and will happen again. It may take several months, but eventually the stock will bounce back to its previous high

I don't think we'll go private, at least not without a solution for small/overseas investors. Elon personally told me that this one one of his major reasons for not going private at 420.

 

[Tslynk67]

it crashed 3 times in a row for me, and that is just now, trying to get to an order page...

Incredible demand, or time to reboot the 486 under Elon's desk?

 

[Tenable]

So here’s a wild question: why not a class-action lawsuit against the SEC?

My (very uneducated) guess. Attorneys love class actions against entities that are likely to settle quickly to avoid the expense, or for some publicly traded companies the averse market reactions. Governmental agencies have no such onus. They have a deep roster of salaried employees that are simply reallocated to fight you to the bloody conclusion. Attorneys working contingently hoping for a piece of a fast settlement have no stomach for it.

 

[SOULPEDL]

I don't think we'll go private, at least not without a solution for small/overseas investors. Elon personally told me that this one one of his major reasons for not going private at 420.

Interesting... It was my question on SAY.

 

[Silent Ludicrosy]

The mind bobbles at what might have eventuated had you been fully educated there.

 

[Antares Nebula]

I believe the actual ordering system is different from, and less robust than, the "reservation" system. There are indications that they were literally two separate computer systems, which is why they were not even remotely able to deliver orders in even close to reservation order even when they were *trying*. I also suspect there is a manual processing element -- some sort of validation. I can't prove this, but there have been hints.

TLDR: Tesla's software systems are not state of the art.

Now I really have to stop posting.

This makes sense because their ordering system would not have changed really by simply adding new products (the Y). Whereas the reservation system they set up for the 3 years ago would have been a separate system. So not really comparable. Companies don't plan or pay for more bandwidth/processing than they need. Very possible that they likely underestimated the surge in demand. But it's also possible that they are extending the "sale" for a few days. Nothing wrong with that. It's a very minor sale, but Americans love their sales.

 

[Tslynk67]

Early adopters of technology are always "punished" by paying more. They are also "rewarded" by getting access to the tech sooner. It's always a trade off.

Yep. Like many here, have been a Tesla owner for five years now and even thought those earlier cars are crummy by today's standards, I felt (and still do) like a king every time I was in the car.

Sounds kinds cheesy to say it, but owning a Tesla completely changed my life for the better.

Plus we all helped Tesla get to where it is today.

 

[Artful Dodger]

This should be useful for some good data mining on VIN assignment to Production date:

Model 3 VINs‏ Mar 6
#Tesla registered 6,747 new #Model3 VINs. ~32% estimated to be dual motor. ~56% estimated to be International. Highest VIN is 323380.

Ship watchers, please remind me when the last shipload of Tesla vehicles departed San Francisco? Seems they must have built about 3,478 Model 3's between those two dates. So this might tell us something about production rates as well.

Great, the last EU bound ship Viking Adventure (EU ship #8 ) is scheduled to reach ZEE BE on 24th -- looks like last batch has possibility to be fully delivered with such high Belgium numbers ..

Here's Marine Traffic data for Viking Adventure (Call Sign: 9V3165)

SAN FRANCISCO [US] - USSFO
"Actual Time of Departure"
ATD : 2019-03-03 04:38 LT (UTC -8)

ZEEBRUGGE [BE] - BEZEE
"Estimated Time of Arrival"
ETA : 2019-03-24 12:00 LT (UTC +1)ETA
​

From the info gathered above, the latest International VIN assignments were posted about 3 days AFTER the last car carrrier sailed for Zeebrugge (Mar 6th tweet vs Mar 3rd sailing).

There have NOT been any additional International VINs assigned since then, so its quite likely Model 3 production shifted focus back to N. American spec cars around that time. What can we deduce from this?

***REMINDER: the following is pure speculation***

• 1st, we should confirm when the last ship departed for China (since those too are classified as Int'l VINs)
• it now seems possible VINs are being registered upon shipment, rather than part of production planning (as previously assumed)
• this change would distort already unreliable Bloomberg estimates
• a Mar 3rd date for switchover implies 4 weeks of production @ 7K/wk for N.America (approx. +28K Model 3s) by end of March
• high rate enabled by SR with high demand + lower bty cells req'd
  
• NB. weekly production rate split of 4,000 LR + 3,000 SR (see Bonus Calculation in my next)
  
• compare this to Elon's internal email setting a goal of 30K deliveries in 30 days in March, a reasonable stretch goal for the end of Q1
• N.Am Jan+Feb delivery estimate 18.6K US + 4.7K Cda ~23K
• allow 10% (3K) undelivered, that's still 23+27 = 50K for Q1 in N.Am
  
• Int'l 16 ships * 2.5K/ship is 40K shipped, allow for 10% not delivered by end of Q1, that's est'd 36K Int'l deliveries
• that's 86K Model 3s delivered in 2019Q1, plus 7K in transit
• that's a potential increase in deliveries of 36% vs 63K in 2018Q4

That's gonna be a surprise, if it happens.

Cheers!

 

[EVNow]

Not quite as fast as yours. I took delivery of my shiny new 85D, a blink of an eye later they started rolling out the new body style. Was I a little miffed, maybe 1% but as you say, thats life. Loved my car, did it make me complain? No, it made me invest and continue investing. I received the value I expected for my dollar and Tesla never broke any promises. This is different.

For the price I paid for 3 LR - we can get 3 P.

Tesla can and should create a clear differentiation between people who got the EAP+FSD earlier compared to those of us who got it when it was on sale.

BTW, if Tesla sells an extended warranty for 5k - and briefly after a few months makes that 3k - should they be asked to reduce the extended warranty by 2k for everyone ? I don't think so. Note that the extended warranty hasn't been used, since the car is on orginal warranty still.

 

[Artful Dodger]

BONUS Calculation: (assumptions listed first)

• Tesla Model 3 Production is currently limited by the number of bty cells they can get from Panasonic (not by Fremont)
• Panasonic current cell production allows 6,000 LR packs/wk
• LR pack is 75 KWh and SR pack is 50 KWh
• that's 450,000 KWh/wk cell production from Panasonic

Then we can do production planning for the following split:

• LR 4,000/wk => 300,000 KWh/wk
• SR 3,000/wk => 150,000 KWh/wk
• That's 7K/wk Model 3 production while still using same # cells

Further we know the gross margin on the LR is at least 20.4% (from 2018Q4 financials), and likely to be higher due to low labor cost.

Even if we assume GM on SR during 2019Q1 is neutral, then (with 57% LR vs 43% SR) net GM for N.Am in March would be at least 11.6%

However, March 2019 Model 3 production rate is 44% higher than the avg during 2018Q4, therefore gross profits in Q1 would be the same total amount as if Tesla produced its total Model 3 mix with a gross margin of 16.7%

That's getting close, wot?! So what the GM would actually need to make on the SR variant in order for total Model 3 gross profit in N.America for March 2019 to equal the average monthly gross profit achieved in all of 2018Q4: (Guesses anyone before you look?)

Spoiler

3.6%

P.S. Telsa may have one further advantage for the end of 2019Q1: Since China is on the other side of the Int'l date line, it will already be Monday morning in China when Q1 ends for Tesla in California. If the banks are open, Tesla may be able to claim the revenue for vehicles delivered over the last 2 weekend days, which won't happen in Europe and N. America.

 

[Antares Nebula]

Most people you spoke to and most people interviewed on the media just read the misleading clickbait media narrative and didn't realise the head of Saudi's PIF actually told Elon he would take Tesla private and that he had sole authority to do so.

Just like most people think that Musk called the diver a pedo unprovoked, and wouldn't read about or know that the diver first told Musk to stick his submarine up his ass. I don't know about you, but if someone tells me to stick something that I worked on very hard up my ass, I'll call them a pedo, a Nazi, a racist or whatever the hell I please. There are no rules in war... People please!

 

[oneday]

The Judge granted the SEC motion to file a reply the same day it was requested. Late last night Elon’s Attorneys filed a request for a sur-reply, I find it interesting that the Judge has yet to accept that request. Perhaps, she is currently judging the case on its merits, and may issue a summary dismissal to not waste any more of the courts time. Probably a very low likelihood, and I am not a lawyer so have no idea if such a thing would be possible. The optimist in me wants to think that is what is happening though.

 

[Silent Ludicrosy]

I don't think we'll go private, at least not without a solution for small/overseas investors. Elon personally told me that this one one of his major reasons for not going private at 420.

Is it possible to do a massive stock buyback and simultaneous private capital raise? In other words take Tesla mostly private and let the longs keep a few public shares. I have no idea how these things work...