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

[Nolimits]

Hi all, newbie poster here, TSLA owner since 2012, Tesla owner since 2013, TMC lurker since 2015. Thank you all, and especially moderators, for this valuable and entertaining asset.

I see that the Los Angeles Motor Show has introduced the ZEVAS - Zero Emission Vehicle Awards. To my delightful surprise, the full Tesla lineup is represented through it's categories. I trust the members of this forum give the ZEVAS their unbiased vote - even if the categories and Tesla's absence in some of them could be subject for debate. I guess it wouldn't hurt $TSLA to share the link

The Zevas – Zero emission vehicle awards

zevas.laautoshow.com

All the best!

Voted! Easy way to advertise and further brand awareness

 

[SPadival]

This Needham guy, the Roth fellow & the Barclays Brit have been bears since ages. We just have to wait until they go the way of the Tambourine man from Goldman Sachs. In any case, the “market” pays no attention to these people anymore.

 

[jbcarioca]

You are of course right. Considering I’ve been to Kotor in Montenegro on vacation 2 years ago, this is pretty embarrassing for me

For simplicity, I think we should all agree that Koper is it, regardless.

It is bizarre that those of us who are familiar with both places seem to be doomed to occasionally mistyping them. I'm tempted to delve into etymology, since bother quite ancient places. Kotor's name derives from old Greek, while Koper is a Slovene name in that spelling, but in Italian it is still called Capodistria, a quite perfect description of where it is. Both are Tesla-friendly.

At the rate logistics are evolving it's safe to assume that Koper will continue as a Tesla shipping destination for some time, perhaps even after Grüneheide reaches full production.

—

Mod: last post on Koper vs. Kotor.

 

[Artful Dodger]

Does Moody’s rating even matter now that Tesla is paying back it’s debts, rather than taking on more debt?

It does for certain large investment funds. Their charters state that they can not even purchase equity in a company which does not possess an investment grade credit rating. Adding their stock purchases would certainly affect the SP.

 

[The Accountant]

James Stephenson has started his quarterly 69-tweet earnings forecast:

https://twitter.com/x/status/1448473911184740358

Stephenson has $1.55 EPS vs my $2.00.
The entire difference is attributable to margins.

Stephenson assumes a huge drop in gross profit margin from Q2 ( 24.1% in Q2 down to 21.3% in Q3)
I assume an increase in gross profit margin (Q2 of 24.1% and Q3 of 25.1%)
He drops margins 280 basis points.
I increase margins 100 basis points.

Although there were some price decreases in China and also the introduction of the lower priced Model Y SR in China, I have margins improving mainly for 3 reasons:

1. Model S had negative margins in Q2 and now have good margins in Q3 and with more unit sales in Q3.
2. All of the incremental Model 3/Y production was from Shanghai - a lower cost facility compared to Fremont (i.e. Factory Mix is better)
3. Higher volumes in Shanghai decreases the fixed cost per unit manufactured vs Q2.

Perhaps Stephenson is assuming higher cost of materials for chips, etc.

Fingers crossed that I am right

 

[ZachF]

Wow
From Needham's website:
"Needham & Company’s primary goal in equity research is to provide in-depth, domain knowledge and deliver our analysis to a discerning and specialized institutional client base"

This is what they do for a living and they actually think that the Gigafactories max out at 500k vehicles? Even the land-constrained Fremont will get to 750k.
I never realized how weak the Wall Street analysts were until I started investing in and researching Tesla myself.

More knowledge of Tesla here on TMC than any Investment Bank's Equity Research department.

Most analysts are completely worthless. I'd bet most of their projections just involve looking at the street average estimate and adjusting it based on how bullish/bearish they feel.

Remember, ~80% of these bums can't even beat the S&P500 and are screaming for bailouts every decade or two. Then you have the complete losers like Mark Spiegel, who has trouble matching T-bills or even the mattress fund.

 

[jbcarioca]

....

I started reading the actual Safety Act, but I'm not an attorney and my eyes are glazing over - so I will defer to others on this forum who have more expertise in the law for their views.

Skipping the denotation of NHTSA authorities and practices, which really are not the point. The point is that driver automation was not conceived when the rules were established, either legislatively or administratively.

FSD and other such systems are analogous to the FAA problems coping with 'glass cockpits', advanced autopilots and electric aircraft. Each of those faced rules that were explicit. One odd example. The FAA defined airplanes and helicopters as 'piston' and 'turbine' with quite different rules. BY definition, then, if powered by electricity it was not an aircraft at all. They slowly came to adopt rules that allowed electric aircraft to actually exist.

The NHTSA is certainly not perfect. However the investigation of Tesla and FSD can serve as a very useful happening if it spawns real improvements.

The fundamental issue is genuine; vehicles have always been complete and final products once delivered. The regulatory process is built on that premise. Now we have a product that is upgraded and altered in numerous safety-related ways on a regular basis. Do the upgrades change safety? Remember the Model 3 brake criticism, cured via a software update. Should that have been termed a 'recall'? How about this China OTA update?:

Tesla issues recall for 250,000 cars in China over assisted driving acceleration

The Model 3 and Y "recalls" will take place entirely remotely, via a software update.

www.cnet.com

Governments around the world now are coping with that definitional problem. It is not trivial. While most of us trust Tesla to do this well, others OEMs may not be so good. Then there are legitimate FSD complaints even among us.

To be clear, I am not arguing that government actions anywhere will be wise and impartial. I do argue that they are inevitable.

 

[Artful Dodger]

Perhaps Stephenson is assuming higher cost of materials for chips, etc.

Fingers crossed that I am right

Yah, you got this Gee.

Hint: whenever Elon says a thing was 'incredibly hard', he means they kicked its ass...

Cheers!

 

[Artful Dodger]

Tesla Plaid Rear Drive Unit - Quick Look by TMC'r @Ingineer

BTW, I think the video thumbnail is exaggerating with "Dual motors 1,050 hp". I think that power rating includes the front motor too.

Cheers!

 

[Tes La Ferrari]

Hi all, newbie poster here, TSLA owner since 2012, Tesla owner since 2013, TMC lurker since 2015. Thank you all, and especially moderators, for this valuable and entertaining asset.

I see that the Los Angeles Motor Show has introduced the ZEVAS - Zero Emission Vehicle Awards. To my delightful surprise, the full Tesla lineup is represented through it's categories. I trust the members of this forum give the ZEVAS their unbiased vote - even if the categories and Tesla's absence in some of them could be subject for debate. I guess it wouldn't hurt $TSLA to share the link

The Zevas – Zero emission vehicle awards

zevas.laautoshow.com

All the best!

It is curious to me that the “top 5 ZEV SUV” category doesn’t contain the X, but does contain the ix3.

But both the X and Y are lumped into 1 category which would require them to cannabalize one another’s votes.

I wonder why the categories appear this way ?

 

[hobbes]

Does Moody’s rating even matter now that Tesla is paying back it’s debts, rather than taking on more debt?

IIRC Gary Black wrote somewhere that for some funds the buying decision is in part based on the rating, can´t find the exact tweet right now. Maybe someone more knowledgeable can chime in (@Curt Renz ...)?

https://twitter.com/x/status/1421479836204285953

 

[ZachF]

IIRC Gary Black wrote somewhere that for some funds the buying decision is in part based on the rating, can´t find the exact tweet right now. Maybe someone more knowledgeable can chime in (@Curt Renz ...)?

https://twitter.com/x/status/1421479836204285953

By the time Moody's changes Tesla's debt rating, Tesla probably won't have any more debt to rate...

 

[H Mak]

Is it the company that is rated or the individual debt instruments?

 

[st_lopes]

You both make it sound so easy to borrow $8 Billion cash. This isn’t a line of credit, this is cash that must be then transferred to the IRS and the California Dept of Revenue. EM has borrowed a few hundred million dollars against his shares so far from banks like Goldman, but $8 Billion is something else. I predict he sells shares to pay the tax bill.

While I agree that borrowing $8B is unlikely to follow the typical asset backed loan processes, I don’t agree that Elon will sell shares to fund the tax. It would be way more efficient to take out debt to fund it, even if that debt comes with more restrictions that he has enjoyed on his other loans.

Your Stock Award

Know what tax rules apply to you and learn some strategies that can help to reduce your tax burden.

www.schwab.com

• Restricted stock awards let you take advantage of a so-called "83(b) election," which allows you to report the stock award as ordinary income in the year it's granted and then start the capital gain holding period at that time
• Caution: if the stock fails to appreciate, you don’t get a refund of the tax you paid when you made your election
• Your alternative is to defer paying any tax until the stock is fully vested

"Determine if an 83(b) election is an option for you. If you're granted a restricted stock award, you have two choices":​

1. you can pay ordinary income tax on the award when it's granted and pay long-term capital gains taxes on the gain when you sell, or
2. you can pay ordinary income tax on the whole amount when it vests."

Further, Elon already has share equity loan facilities with 2 large investment banks. He could easily borrow against any new shares to cover a 20% long-term capital gains tax just on the equity in those shares alone.

That is, WITHOUT needing to provide any other collateral. I think that the Barron's article was sensationalizing the situation for clicks.

Paging @st_lopes

Cheers!

Personal US Tax is outside of my wheelhouse. Though I would suspect there are some kind of limitations on that preferential treatment under 83(b) when dealing with options of this scale.

I do think people are misunderstanding Elon’s comments at code conf. He has to pay tax as these options will expire and he obviously wants to exercise them (which has tax consequences). He doesn’t HAVE to sell his shares (if he takes out debt) until he settles his debts with the bank (that is if he doesn’t liquidate other assets- which he doesn’t have any worth anywhere these values).

Paging @CreativeName

 

[Singuy]

IIRC Gary Black wrote somewhere that for some funds the buying decision is in part based on the rating, can´t find the exact tweet right now. Maybe someone more knowledgeable can chime in (@Curt Renz ...)?

https://twitter.com/x/status/1421479836204285953

I believe some investment funds, those that lean conservative, only buy companies that are investment grade as it's one of the key metrics they look at to assest risk

 

[traxila]

Wow
From Needham's website:
"Needham & Company’s primary goal in equity research is to provide in-depth, domain knowledge and deliver our analysis to a discerning and specialized institutional client base"

This is what they do for a living and they actually think that the Gigafactories max out at 500k vehicles? Even the land-constrained Fremont will get to 750k.
I never realized how weak the Wall Street analysts were until I started investing in and researching Tesla myself.

More knowledge of Tesla here on TMC than any Investment Bank's Equity Research department.

In defense of their intelligence and knowledge, they have ulterior motives. Most of them anyway.

In defense of their actions, I got nothing.

In the final analysis, they are liars hoping to influence the present and future with their statements. But Elon figured out a long time ago that actions speak louder than words.

 

[HG Wells]

I'm sorry Mr. Musk we are going to decline the loan. While you have some impressive assets they are all speculative.
Even if your income was a thousand times what you entered on the form, we would reject the loan.

Tesla CEO Elon Musk didn't receive a paycheck from the electric-vehicle maker in 2020. Musk's 2020 salary dropped to zero, according to an update filed with the SEC on Friday. His salary in 2019 had been $23,760. In 2018, it was $56,380

 

[Huskerfl]

While I agree that borrowing $8B is unlikely to follow the typical asset backed loan processes, I don’t agree that Elon will sell shares to fund the tax. It would be way more efficient to take out debt to fund it, even if that debt comes with more restrictions that he has enjoyed on his other loans.


Personal US Tax is outside of my wheelhouse. Though I would suspect there are some kind of limitations on that preferential treatment under 83(b) when dealing with options of this scale.

I do think people are misunderstanding Elon’s comments at code conf. He has to pay tax as these options will expire and he obviously wants to exercise them (which has tax consequences). He doesn’t HAVE to sell his shares (if he takes out debt) until he settles his debts with the bank (that is if he doesn’t liquidate other assets- which he doesn’t have any worth anywhere these values).

Paging @CreativeName[/USER
[/QUOTE]

What would be the estimated split that California would be entitled to? It seems by this article that they would look at the days between the options being granted and exercised and use the that to establish a percentage based on the number of days Elon was in CA?Elon Musk won't pay income tax in his new home state of Texas, but he's not off the hook in California

 

[traxila]

I believe some investment funds, those that lean conservative, only buy companies that are investment grade as it's one of the key metrics they look at to assest risk

This is true. So it matters to the SP, but marginally if not at all to Tesla.

 

[Lessmog]

I told someone I would provide him a link to a good walkthrough of the Grünheide plant. Is there a consensus as to what might have been the best of the bunch?

It's hard to say what is the best walkthrough. There are several in German, a couple in English and some that are deep dives into aspects. Probably the most accessible starting point in English is Gali's walkthrough:

If they don't suit Gali's style, there are some others are linked below:
Darren Yoong (English):

GF4 (Mostly German):

WolfPack Berlin (German): Pt1

Pt2

@avoigt also has a couple but focussed on specific sections: Giga Berlin County Fair Part 1 Entrance

This is not in the same category as it is a short written article (in Swedish to boot; but Google might give an acceptable translation). From Tesla Club Sweden today:

Så är det att jobba på Tesla Giga Berlin – Tesla Club Sweden

teslaclubsweden.se