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

[printf42]

I hope volatility next week will be kept in check. E*Trade just raised the margin requirement on TSLA today from 35% to 45%. It cannot go under $250 or I will get a margin call

They are clearly harvesting, I stopped using margin a while ago, if I want leverage I use Leap calls.
Holding TSLA on margin is too stressful to me.

 

[Fact Checking]

From carsonight's comments, I got the impression that cell production expansion was more or less continuous until they ran out of physical factory space, and now they have to build another unit of building. So look for heavy construction building more of the building as the next sign of cell production expansion.

(I wonder what the next bottleneck is. I do not want them to hit the raw materials bottleneck, because starting up mines is slooow.)

Correct, they ran out of physical GF1 factory floor space on both the Tesla and the Panasonic side. This is how Carsonight described it recently:

• "My information is that GF1 is maxed out on both sides, the Tesla side and the Panasonic side. There is no more room for cell machine lines until the building is expanded, and on the Tesla side I hear stories about "turf wars", with competing interests needing available space. There have been bursts of ingenuity brought to this problem, though. I have listened with fascination to how the new Grohmann machine being installed on the third floor is being installed in two levels to maximize use of floor space."
• "Better than a link, my information is "factory floor". I have friends and family working there and when the conversation turns to work, sometimes in my kitchen, I'm an attentive listener.
  To break it down, there are 10 of the old lines each producing 300k cells per day, and 3 new improved lines each producing 400k cells per day. That totals 4.2 million cells per day. Multiply that times 365 days in a year, then times 18 Wh per cell, and you arrive at 27.5 GWh per year. Alternatively, multiply 4.2 million cells times 7 days in a week and divide by 4416 cells in a LR Model.3 to see max capacity. Keep In mind one of the old lines is currently configured for storage."
• "The battery pack factory at GF1 is running around the clock, and the complaint in maintenance is lack of downtime for preventive maintenance. I am told 6k+ packs per week, and assume that they are all going into cars."

The GWh capacity figures are consistent with Tesla's guidance and recent business decisions.

This is why Tesla Energy is still not growing:

• TE is a nice business, but margins are 20-30% on top of every $1 of cell output.
• With Model 3's the margin is about 80%-120% of every $1 cell produced, because cells are put into cars that increase product value 4x-5x where that product has 20%-30% profit margin.

So as long as they are cell constrained it's much more profitable to make cars from cells. Once there's excess cell supply they'll spool up TE I'm sure.

It's a happy problem to have: it means they are selling every Model 3 they can make - and it also gives another good reason for the SR introduction: saving cells.

 

[Carl Raymond]

I find this quite a puzzle actually. It makes sense that Tesla is cell constrained, because how else to explain the lack of progress on Tesla Energy? Is this because Tesla didn't build out the plant and infrastructure at GF1? Or because they couldn't persuade Pana to commit to its share of capex? Or some other bottleneck entirely (doubt it's raw material supply but who can say). There seems to be a slight contradiction between an apparent inability of Tesla Energy to get close to matching demand and the repeated statements that Tesla is not capital constrained.

I put that down to the delay between making a decision to expand and the actual completed expansion, roughly 9 months.

We have to remember that Panasonic sat for 6 months, Jan thru Jun 2018, with cell output in excess of Tesla’s capability to use them. I suspect that when Tesla finally caught up, Panasonic waited to see if the Model 3 was on track before committing to further expansion. Once bitten...

It’s like a bad clutch drop. If it starts bad, it continues bad. Smoother acceleration from here on.

 

[Silent Ludicrosy]

Speaking of EV vouchers, $90,000 for a Tesla semi is a pretty good deal with California’s zero emissions fleet rebate. HVIP
Anyone want to start a TMC fleet?

 

[BrianZ]

Did you order the white interior? Also, what paint color?

Tesla is batching the interiors and paint colors in a pretty extreme fashion, probably more than they should.

I ordered red with black interior, which shouldn't have a delay like the white interior. Maybe I am simply be pushed to the last minute since I'm within 50 miles from Fremont.

 

[NicoV]

I hope volatility next week will be kept in check. E*Trade just raised the margin requirement on TSLA today from 35% to 45%. It cannot go under $250 or I will get a margin call

Seems everyone is conspiring to go after the small retail investor who has been there from the beginning believing and supporting Tesla’s mission to save the planet...

Isn’t that same percentage used for short positions? That would be good, not?

 

[sundaymorning]

I hope volatility next week will be kept in check. E*Trade just raised the margin requirement on TSLA today from 35% to 45%. It cannot go under $250 or I will get a margin call

Seems everyone is conspiring to go after the small retail investor who has been there from the beginning believing and supporting Tesla’s mission to save the planet...

Good luck, I think we have a good chance at beating the SEC here. These guys lose cases all the time, and it appears Elon has a strong case. Deliveries so far look solid and European reviews of Model 3 look stellar. Momentum shift a tad bit today so I hope we hold this level going into the last few days of the quarter.

 

[Antares Nebula]

I hope volatility next week will be kept in check. E*Trade just raised the margin requirement on TSLA today from 35% to 45%. It cannot go under $250 or I will get a margin call

Seems everyone is conspiring to go after the small retail investor who has been there from the beginning believing and supporting Tesla’s mission to save the planet...

Some brokers will allow you to increase margin, up to a point, by buying/holding puts. The idea is that you now have some insurance in case the underlying goes down, so they're willing to lend you more money. The more puts you buy and higher the strike, the better.

 

[SPadival]

Elon should probably consider being present at the April 4 Court room, to show how much he respect the court, judge and legal system.

Not advisable, given the media circus that will form outside the court as he goes in and out. The media will give you the impression that there is a murder trial and Elon is guilty

 

[schonelucht]

Have you seen European immigration restrictions? They don't WANT most Americans.

Look up the Dutch American Friendship Treaty. Under it, it is trivially easy to move to the Netherlands as an American citizen (the USA doesn’t hold up its end of the bargain under that treaty, making it much harder the other way around).

Once you have a legal right to stay in the Netherlands you have an automatic right to stay anywhere in Europe. But the Netherlands is like Europe for American beginners, so I’d recommend staying there for a little while before you tackle the more unamerican ones like France or Italy.

I can hook you up with accountant to set up the required company. Initial investment of 18k which you’ll be allowed to take out after founding and I estimate total for legal and registration filings of a few thousands euro and you are in.

 

[Mars ☰mperor]

Can anyone explain why China is cutting subsidies when they are/were so hell bent on EV adoption and lowering pollution? The above article seems to suggest something about "boost high-quality development "-- can anybody translate?

Simply put, it's always part of the plan.

Most local brands are doing EV specifically for the sake of government subsidies.
People who chose local brands EVs simply can't afford imported Tesla. They know their choices are inferior on all fronts compared to Tesla, but they simply have no alternatives.
The CCP is not stupid. They want to force Chinese car companies to produce more technological advancements.

The 2018 requirement for all electric vehicles started from 150km range
150-200 15,000 yuan
200-250 24,000 yuan
250-300 34,000 yuan
300-400 40,000 yuan
400 and more 50,000 yuan

The 2019 one is as follows
250-400 18,000 yuan
400 and more 25,000 yuan


Additionally, the requirements for battery energy density and energy consumption per 100km have all been raised.
FYI, Tesla easily surpasses all requirements.
But for many Chinese brands, it's going to be the beginning of the end.

 

[Fact Checking]

I find this quite a puzzle actually. It makes sense that Tesla is cell constrained, because how else to explain the lack of progress on Tesla Energy? Is this because Tesla didn't build out the plant and infrastructure at GF1? Or because they couldn't persuade Pana to commit to its share of capex? Or some other bottleneck entirely (doubt it's raw material supply but who can say). There seems to be a slight contradiction between an apparent inability of Tesla Energy to get close to matching demand and the repeated statements that Tesla is not capital constrained.

End of 2018 and beginning of 2019 storm clouds were gathering and Tesla was boarding up the windows to prepare for a Category 5 macroeconomic storm: the Federal reserve was increasing rates, NASDAQ crash, China tariffs of up to 65%, 25% European tariff threat, Canadian tariffs, Brexsh1t threat, plus post tax credit cliff in their home market and seasonally weak Q1 expectations.

This is what the layoffs and the conservative guidance was about most I believe and Tesla would have done just fine in a recession too.

It takes time to install new cell supply on the Panasonic side: it took about 5 months after Tesla hit 5k/week end of June 2018, and they already had the factory space waiting for the new lines. The next round of expansions in the GF1 will have to provide enough space for Semi and Model Y production, Panasonic expansion, Tesla battery pack assembly line expansion and I'm sure Tesla's powertrain side would want to expand a bit as well. Deep foundations take time to pour and set, multi-story buildings take time to be raised - I'd guess at least another 5 months before lines can be moved in.

Maybe Tesla has a trick up their sleeves, but normally I'd guess GF1 would be expanded by early next year, and more capital wouldn't really speed up this process. (The European Gigafactory could perhaps be sped up with more capital.)

 

[RobStark]

Norway Top 10 Auto Sales, all categories not just PEV

EV Sales: Norway February 2019

 

[Tslynk67]

Was out at a gig last night (Neal Morse), so way behind, so apologies if this has already been posted twenty times, but Jeeze, 580 cars delivered in Norway yesterday, five hundred and eighty.

That's just, mega-wow! No freakin' demand, my arse!!

 

[Tslynk67]

Norway Top 10 Auto Sales, all categories not just PEV

EV Sales: Norway February 2019

Wait until March figures and M3 is >5000!!

 

[Earlian]

Norway Top 10 Auto Sales, all categories not just PEV

EV Sales: Norway February 2019

Thank you! Great news.

In an environment, were they don’t have an ICE industry and a government serious about a sustainable future, one can see, that the people only desire pure electric cars.

With the top 7 of all sales being pure electric, there is only one exception: The Mitsubishi Outlander PHEV.
Why on earth are they buying it? Because they can’t buy a pure EV of this size and price!

So what car would the people buy, if only there was a similar pure electric SUV?

Model Y will surely top the already incredible Model 3 Selling Numbers.

 

[SPadival]

Maybe Tesla has a trick up their sleeves, but normally I'd guess GF1 would be expanded by early next year, and more capital wouldn't really speed up this process. (The European Gigafactory could perhaps be sped up with more capital.)

Another tent or GF2 ?

Seriously, I can't wait for the Maxwell acquisition and using their tech to also reduce the floor space required on the Pana side.

EDIT: Just in time

Tesla’s New Chairman Says Elon Musk Uses Twitter ‘Wisely’


Aussie, Aussie, Aussie ..

 

[Artful Dodger]

I put that down to the delay between making a decision to expand and the actual completed expansion, roughly 9 months.

We have to remember that Panasonic sat for 6 months, Jan thru Jun 2018, with cell output in excess of Tesla’s capability to use them. I suspect that when Tesla finally caught up, Panasonic waited to see if the Model 3 was on track before committing to further expansion. Once bitten...

It’s like a bad clutch drop. If it starts bad, it continues bad. Smoother acceleration from here on.

Tesla might also hold off bty cell expansion if new Maxwell manufacturing tech was about to be acquired... jus' sayin'

Cheers!

 

[oneday]

Another tent or GF2 ?

Seriously, I can't wait for the Maxwell acquisition and using their tech to also reduce the floor space required on the Pana side.
.

Lathrop?

 

[RobStark]

Is Panasonic going to invest in new ovens at GF1 if they know the Maxwell dry tech is viable?

Or are we going to have to wait ~1 year before GF can expand beyond ~27 GWh per year?