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

[The Accountant]

Two Insights from Tesla's Inventory Details:
I just started looking at the 10K. I went straight to the Inventory details because I had seen a pattern developing in Q2 & Q3.

Raw Materials
While Cost of Goods Sold (COGS) grew 49%, Raw Materials grew by 87% and now sits at a whopping $2.8B. Raw Materials should increase as your production grows but the $2.8B in raw materials is high even taking into account the 49% growth and the Austin/Berlin launch inventory. I suspect, Tesla increased its safety stock on key components by at least $600m.
Key Take Away: Tesla enters 2022 with a better stock position to deal with shortages than 2021 (edited to correct years mentioned).

Work In Progress (WIP)
WIP grew 121% vs PY and this cannot be the automotive division as Tesla did not double it's manufacturing lines and we don't see thousand of unfinished cars anywhere. My guess is that this increase is related to Energy and its Megapacks. We have seen many megapacks sitting around at the Sparks GF. I suspect, these Megapacks are waiting for a part. This is the reason why Energy sales and margins were so disappointing in Q4.
Key Take Away: Once the missing parts arrive and megapacks delivered, we could see a nice bump in sales possibly adding $0.25 to EPS for the Qtr.

 

[Krugerrand]

Peterson brought up an issue with supply backlogs that I don't think everyone is aware of (at least not me.) The example he mentions is a company may have been used to shipping times of say 60 days, but with shipping times being pushed back they could be faced with 6-12 month shipping delays.

The issue is that the company now has to forecast how much they need to order and as we all know the further out you forecast the worse your estimate is. What could happen is the company over estimates how much they need to ship which further clogs the shipping pipeline, but more importantly if demand isn't as high and/or the order is too great then the company is now facing oversupply.

Another issue he brings up is that the shipping infrastructure just cannot quickly adapt to a spike in demand like we've seen since covid. They can't suddenly have cargo ships appear and the dynamics of union labor also don't allow for available labor personnel to suddenly appear.

To bring it back to Tesla they've addressed this in the last earnings call and stated supply constraints will continue to be a limiting factor this year, but they believe it will ease as we end the year going into q1 of 2023. Elon and the rest of the team did not seem too concerned and it should help calm your nerves that they still reiterated 50%+ growth this year. Apples earnings call, from what I've gathered, reiterates this belief that supply constraints are an issue, but they see it easing over time.

Tl;dr: supply constraints are transitory and Tesla will do just fine this year and every year from here on out.

Yeah, except they aren’t telling what’s really going on; they’re at the bottom of their suppliers’ lists because their orders are minuscule. They don’t get priority anymore than Tesla did in the beginning.

 

[wtlloyd]

10-K: "Model Y gross margin has benefitted from shared manufacturing of Model 3 and learnings from the scaling of past products."

Bingo! It is frustrating to hang on the edge of start of production at Berlin and Austin. But when they do start, they will ramp much faster than anticipated because Tesla learns and does not repeat mistakes. Their contribution at year's end will be substantially greater than forecast.

Notice I am not projecting any actual numbers

 

[TheTalkingMule]

When SP already approaches Friday's max pain 15 minutes into Monday trading.......the algo calls for a nice fat MMD effort.

Have we seen today's high yet? I doubt it.

Edit: Pardon me, we passed max pain($940) at 9:39.

 

[mongo]

Two Insights from Tesla's Inventory Details:
I just started looking at the 10K. I went straight to the Inventory details because I had seen a pattern developing in Q2 & Q3.

View attachment 765947

Raw Materials
While Cost of Goods Sold (COGS) grew 49%, Raw Materials grew by 87% and now sits at a whopping $2.8B. Raw Materials should increase as your production grows but the $2.8B in raw materials is high even taking into account the 49% growth and the Austin/Berlin launch inventory. I suspect, Tesla increased its safety stock on key components by at least $600m.
Key Take Away: Tesla enters 2021 with a better stock position to deal with shortages than 2020.

Work In Progress (WIP)
WIP grew 121% vs PY and this cannot be the automotive division as Tesla did not double it's manufacturing lines and we don't see thousand of unfinished cars anywhere. My guess is that this increase is related to Energy and its Megapacks. We have seen many megapacks sitting around at the Sparks GF. I suspect, these Megapacks are waiting for a part. This is the reason why Energy sales and margins were so disappointing in Q4.
Key Take Away: Once the missing parts arrive and megapacks delivered, we could see a nice bump in sales possibly adding $0.25 to EPS for the Qtr.

View attachment 765959

One factor toward WIP besides 4680 cells not yet in packs and unapproved salable Austin and Berlin vehicles is that the S and X lines were drained at the end of last year. So all their WIP should show as incremental increase.

 

[StarFoxisDown!]

Quite the BS to start the trading week. I hope we get a combo of stellar Jan China numbers + Giga Berlin this week.

 

[-=buzz=-]

Very disappointed to hear Chamath repeatedly say that Elon Musk has been "selling", for like the last 5-6 episodes. The first time he said it was in the context of a potential market downturn when he said some of the smartest people he knows are selling, including Elon. Of course we all know Elon was only selling to pay taxes so he could buy MORE shares. Elon was not selling Chamath, he was BUYING! Why have Jason, Sacks, and Friedberg not called out Chamath on this error by now ? Surely they all know the facts.

Well, Elon sold $5B (?) in long term holdings besides the option execution tax sales.
Don't know how much of that went to the option taxes as well and what he's done with the rest.

So he's technically correct although Elon ended up with more shares than he started with.

 

[TheTalkingMule]

Quite the BS to start the trading week. I hope we get a combo of stellar Jan China numbers + Giga Berlin this week.

What? We blasted past max pain in like 9 minutes and forced MM's to short/sell. This is the goal for a stead rise!

(and it's quite helpful for those holding $950 CC's )

 

[The Accountant]

Bingo! It is frustrating to hang on the edge of start of production at Berlin and Austin. But when they do start, they will ramp much faster than anticipated because Tesla learns and does not repeat mistakes. Their contribution at year's end will be substantially greater than forecast.

Notice I am not projecting any actual numbers

Here was Lars Moravy's (Vice President, Vehicle Engineering) during the Q1 2021 earnings call giving a response to an Analyst on how Tesla could get vehicle costs down:

". . . when you look at some of the other advancements that we're including in the Model Y, factories into Austin and Berlin, we've reduced the body part count by as much as 60%, and the parts cost money. So we continue to find optimizations there as well as we get the economies of scale when we start to talk about the volumes we're considering worldwide with four factories building the same vehicle. So both of those things on the vehicle side will improve our COGS as well, and powertrain continues to be integrated into that".

I keep thinking that I am underestimating how quickly Tesla will get to strong margins at Austin and Berlin. This could be a positive surprise.

 

[Tes La Ferrari]

Tesla Model Y Shines In This Top Gear Review

The Tesla Model Y may not be perfect, and for some people a Model 3 would be a better choice, but this review really puts it in a good light.

insideevs.com

TLDR: "This review is packed with praise for what is one of the very best electric crossovers on the market."

The reviewer has some dislikes, but "they do little to dilute the very positive overall impression left by this review." He calls this "Tesla's best all-arounder yet"

 

[StarFoxisDown!]

What? We blasted past max pain in like 9 minutes and forced MM's to short/sell. This is the goal for a stead rise!

(and it's quite helpful for those holding $950 CC's )

I couldn't imagine holding any CC's over the next 2 months. Berlin and Austin are potential catalysts that can cause a rally at any moment. China sales numbers could cause moves up. Plus ya know, TSLA has a habit of rallying out of nowhere. Those elements plus the fact that the stock is still down 25% after beating earnings would make me nervous as hell to hold any CC's.

 

[Dangerous Fish]

Tesla Model Y Shines In This Top Gear Review

The Tesla Model Y may not be perfect, and for some people a Model 3 would be a better choice, but this review really puts it in a good light.

insideevs.com

TLDR: "This review is packed with praise for what is one of the very best electric crossovers on the market."

The reviewer's dislikes has some dislikes, but "they do little to dilute the very positive overall impression left by this review." He calls this "Tesla's best all-arounder yet"

It should be noted that only a few RHD MY demonstrators are in the UK so far. The first boat load of customer cars arrives on February 19th. I was going to be collecting mine on that day but have had to postpone to March. It's going to be a big seller in the UK.

 

[Nocturnal]

I couldn't imagine holding any CC's over the next 2 months. Berlin and Austin are potential catalysts that can cause a rally at any moment. China sales numbers could cause moves up. Plus ya know, TSLA has a habit of rallying out of nowhere. Those elements plus the fact that the stock is still down 25% after beating earnings would make me nervous as hell to hold any CC's.

I've been trading a little (man is it a lot of work for not much squeeze) but that's why I'm afraid to be in too much cash as well. We all know that TSLA randomly spikes, and with two factories waiting to open while WS is distracted means any day could be heavy green.

 

[Tes La Ferrari]

Is The Chevy Bolt About To Join EV 1 & Volt In GM's Electric Car Graveyard? - CleanTechnica

As Chevrolet prepares to introduce a lower priced electric car and more electric pickup trucks, the days of the Chevy Bolt may be over.

cleantechnica.com

TLDR: "You Lead, Mary. You Lead. And it mattered"

 

[petit_bateau]

Two Insights from Tesla's Inventory Details:
I just started looking at the 10K. I went straight to the Inventory details because I had seen a pattern developing in Q2 & Q3.

View attachment 765947

Raw Materials
While Cost of Goods Sold (COGS) grew 49%, Raw Materials grew by 87% and now sits at a whopping $2.8B. Raw Materials should increase as your production grows but the $2.8B in raw materials is high even taking into account the 49% growth and the Austin/Berlin launch inventory. I suspect, Tesla increased its safety stock on key components by at least $600m.
Key Take Away: Tesla enters 2022 with a better stock position to deal with shortages than 2021 (edited to correct years mentioned).

Work In Progress (WIP)
WIP grew 121% vs PY and this cannot be the automotive division as Tesla did not double it's manufacturing lines and we don't see thousand of unfinished cars anywhere. My guess is that this increase is related to Energy and its Megapacks. We have seen many megapacks sitting around at the Sparks GF. I suspect, these Megapacks are waiting for a part. This is the reason why Energy sales and margins were so disappointing in Q4.
Key Take Away: Once the missing parts arrive and megapacks delivered, we could see a nice bump in sales possibly adding $0.25 to EPS for the Qtr.

View attachment 765959

That CATL Shanghai factory was at 60% capacity at the end of 2021 (allowing for the story being filed 6-Jan-22) and I don't think the Tesla Shangai plant and/or the Fremont one can together process that volume of cells, yet. We think it is 80GWh which would be approx 1.3m cars/yr.

So those cells are likely going into a stockpile somewhere. If that were Tesla ("we'll buy every battery you can ship") then that would be sitting in raw materials. Maybe about $1bn of stock in LFP cells ....

CATL delivers first LFP cells to Tesla Giga Shanghai | electrive.com

www.electrive.com

 

[UltradoomY]

That CATL Shanghai factory was at 60% capacity at the end of 2021 (allowing for the story being filed 6-Jan-22) and I don't think the Tesla Shangai plant and/or the Fremont one can together process that volume of cells, yet. We think it is 80GWh which would be approx 1.3m cars/yr.

So those cells are likely going into a stockpile somewhere. If that were Tesla ("we'll buy every battery you can ship") then that would be sitting in raw materials. Maybe about $1bn of stock in LFP cells ....

CATL delivers first LFP cells to Tesla Giga Shanghai | electrive.com

www.electrive.com

My brain is putting this information together along with the Q4 conference call remarks about batteries not being a limiting factor in 2021...
I will be looking closely at the Q1 2022 P&D report coming in about 55 days.
If Tesla can overcome some of the supply chain issues impacting assembly of both Mega packs and Auto - this could definitely be the first of many blow out quarters.
Sandbagging the capacity of "comfortably more than 50%" seems to be pointing to an accelerated curve up if these challenges are met, and from other sources during Q4 calls (Tim Apple being one) that they see March/April to be the inflection point where it starts getting better.

Great things ahead!

 

[StarFoxisDown!]

My brain is putting this information together along with the Q4 conference call remarks about batteries not being a limiting factor in 2021...
I will be looking closely at the Q1 2022 P&D report coming in about 55 days.
If Tesla can overcome some of the supply chain issues impacting assembly of both Mega packs and Auto - this could definitely be the first of many blow out quarters.
Sandbagging the capacity of "comfortably more than 50%" seems to be pointing to an accelerated curve up if these challenges are met, and from other sources during Q4 calls (Tim Apple being one) that they see March/April to be the inflection point where it starts getting better.

Great things ahead!

You won't really have to wait that long. Jan China numbers will give a lot of insight into what the potential is for Q1. Those numbers will most likely come out in the evening of tomorrow or Wednesday

 

[TheTalkingMule]

I couldn't imagine holding any CC's over the next 2 months. Berlin and Austin are potential catalysts that can cause a rally at any moment. China sales numbers could cause moves up. Plus ya know, TSLA has a habit of rallying out of nowhere. Those elements plus the fact that the stock is still down 25% after beating earnings would make me nervous as hell to hold any CC's.

I need to sell a bit in the next couple weeks/months, so I don't mind one or two CC's executing. Agree we're likely in a trap here and people's shares will get called away then......zoom!

China numbers should be out between tomorrow and Friday. Looks to me like MM's just wanna secure that $949 close Friday. No real reason for volume to spike too much, so they should be successful.

With any luck I can close out these CC's for 70% profit and reopen on the China spike.

 

[Jetpad]

Two Insights from Tesla's Inventory Details:
I just started looking at the 10K. I went straight to the Inventory details because I had seen a pattern developing in Q2 & Q3.

View attachment 765947

Raw Materials
While Cost of Goods Sold (COGS) grew 49%, Raw Materials grew by 87% and now sits at a whopping $2.8B. Raw Materials should increase as your production grows but the $2.8B in raw materials is high even taking into account the 49% growth and the Austin/Berlin launch inventory. I suspect, Tesla increased its safety stock on key components by at least $600m.
Key Take Away: Tesla enters 2022 with a better stock position to deal with shortages than 2021 (edited to correct years mentioned).

Work In Progress (WIP)
WIP grew 121% vs PY and this cannot be the automotive division as Tesla did not double it's manufacturing lines and we don't see thousand of unfinished cars anywhere. My guess is that this increase is related to Energy and its Megapacks. We have seen many megapacks sitting around at the Sparks GF. I suspect, these Megapacks are waiting for a part. This is the reason why Energy sales and margins were so disappointing in Q4.
Key Take Away: Once the missing parts arrive and megapacks delivered, we could see a nice bump in sales possibly adding $0.25 to EPS for the Qtr.

View attachment 765959

Maybe the Work In Progress is the stockpile of 4680s that they've produced to use in the Austin factory.

 

[replicant]

Mayur on Tesla's "excessive" ROI:

https://twitter.com/x/status/1490728167480479750