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

[KarenRei]

Concerning the hearing:

• What's the sense of the timing? Are such rulings generally released on the same day? Subsequent day? Significantly later?
  
• Is the ruling a single-stage event, or is it often divided into multiple stages? For example, if it were a negative ruling, would there be a separate ruling issued later defining any punishments, or would that be issued at the same time as the ruling?

Just trying to get a sense here.

 

[aubreymcfato]

While these numbers are great - I think we still need to figure out what the steady state numbers are. Only when the steady state numbers are known will the "demand issue" bear argument get quashed.

Just as Q1 / Q2 numbers in US will establish the steady state demand.

True, but to be honest, we should put in perspective that these are premium cars, LR and P.
Can you imagine what will be the market for SR and SR+? These will be compared to short range cars as I3, Leaf, eGolf.
If the price is similar, but you get sexiness, AP, OTA, longer range, performance... will you buy a Zoe or a M3?

My guess is: Tesla SR/+ will get 70% of the new cars market.

 

[KarenRei]

Any thoughts on why 7 months after starting to install PV panels on GF1 Tesla has stopped adding to the first section?

Other things higher on the priority list.

 

[ggr]

Registreringer av nye elbiler i Norge

Tesla Model 3: 4198
Volkswagen Golf: 808
Nissan Leaf: 644
Bmw I3: 634
Audi E-tron: 596
Jaguar I-pace: 366
Hyundai Kona: 323
Hyundai Ioniq: 302
Tesla Motors Model X: 264
Renault Zoe: 247
Nissan Nissan E-nv200: 215
Kia Niro: 172
Tesla Motors Model S: 150
Kia Soul: 103
Opel Ampera-e: 59
Volkswagen Up!: 53
Fiat 500 Electric: 42

... and so increasingly minor players. 9287 total this month.

So Model 3 is over 50% of all EVs.

 

[jhm]

The thing that is so precious about pent up demand is that no competitor had what it took to satisfy that demand.

 

[ZsoZso]

Since we're discussing this topic, I'm now expecting a false flag scenario. The TSLAQ crew will just hire actors, give them pro-tesla gear and (ranting lunatic) scripts.

I gave that a “helpful” rating, but I want to clarify this idea is mostly helpful to the Shorty Air Force

 

[NicoV]

EU proposes to control vehicles speeds by 2022.

That could hurt Tesla sales

and cause the mother of all delivery hells in 2021

 

[AlMc]

Is it allowed to record sound ?

A USB stick with a microphone and solid state memory fits in the smallest of pockets.

No idea. I have been researching some aspects of the court etiquette on line but it looks like I need to call today/tomorrow to make sure I have all info needed to make sure after traveling up on the 4th that I don't find myself standing outside the courtroom.

Doubt they allow recording devices of any kind and I don't want to be 'that guy' who gets in trouble/thrown out by security.

My wife has also added this journey to her list of 'Crazy a$$ Tesla stuff that Al has (will do in this case) done'

 

[Carl Raymond]

Yes, die building has a long lead time and it’s expensive. On the plus side, for China they’d essentially ‘only’ have to make a copy set of dies for the 3. This should reduce a bit of time, but not nearly as much as one might think. We aren’t copying fork dies. Tesla may be making some die improvement changes with the next set unless they already feel the dies are perfect. I doubt it. So, that would require time added at several steps.

Y dies will be brand new so full time required.

Tesla does have the die shop in Michigan to make dies, but it’s not nearly a big enough place to make all the dies. Not even close, so Tesla has to have outside die sources. That can add time. Logically, you’d build the copy dies in Asia somewhere to reduce time and expense just on the shipping side of things.

So a new and copied die is made from a digital, rather than a physical master? TIA.

Edit: Am thinking about the remarkable similarity between 3 and Y, as though they applied mathematical transformations to enlarge by 10%. That might make it possible to create new digital die files by applying the same mathematical transformations.

 

[ReflexFunds]

Also, Elon did not suggest that all stamping would be at GF-3 before the end of 2019. 'stamping' could include some small, light parts as well as the major body/chassis panels. It would not be a stretch to see them import things like the body pan and difficult body panels while initially stamping other parts.

Frankly I know I have no knowledge any more than anyone else. I do know Tesla regularly does things faster than others, more innovatively than most and vastly faster than most. I am also quite confident that everyone involved wants some Model 3's leave GF-3 factory does and be delivered before 2019 ends. All of our debate is about how in the world they can achieve that feat.

OTOH, just imagine if one of those gigantic presses was ordered the day they knew there would be a new factory. Imagine a major paint line was ordered at the same time. Imagine Grohmann has been building even more of those speedy lines than we know. Imagine both the major robotics suppliers had been in the mix. If all that had happened they just might do the entire thing before year end. That is imagining on the order of John Lennon, probably...but it might be possible.

One key point on how GF3 can be built so fast.

I get the strong impression that most of Tesla's current Model 3 manufacturing equipment was built for a design specification of 5k per week. I think the plan was to get to 5k/week and then sign off on capex for duplicating the equipment to get to the original 10k per week Fremont target. This means new equipment purchases were likely already lined up as early as late 2017.

However, at this point Tesla realised much of the equipment could be pushed past 5k/per week with minor modifications. The trade war also meant GF3 in China had to be expedited. Hence I think Tesla chose to redirect equipment already lined up for Fremont to China, which massively reduced the lead time to get GF3 up and running.

 

[hoang51]

Any thoughts on why 7 months after starting to install PV panels on GF1 Tesla has stopped adding to the first section?
PV on building appears to be only 10% complete. I thought Panasonic was producing substantial volume of older style
panels at GF2.

Possibly to control cash burn rate.

 

[lklundin]

No idea. I have been researching some aspects of the court etiquette on line but it looks like I need to call today/tomorrow to make sure I have all info needed to make sure after traveling up on the 4th that I don't find myself standing outside the courtroom.

Doubt they allow recording devices of any kind and I don't want to be 'that guy' who gets in trouble/thrown out by security.

My wife has also added this journey to her list of 'Crazy a$$ Tesla stuff that Al has (will do in this case) done'

Since I realize that my post was open to interpretation, I just want to point out that I would not recommend anyone to break the law (nor the etiquette).

 

[Fact Checking]

My hope, and this is clearly only hopeful speculation on my part, is that they have chosen to do so in an effort to try to hit that small profit for 1st quarter. Although anything will get spun negatively, a small profit still sounds better than a LOSS! It has the advantage of moving up SP500 inclusion as well assuming they remain profitable throughout the year which guidance seemed to indicate would be easier after Q1.

Here are the current S&P 500 inclusion thresholds, to the best of my knowledge:

• S&P 500 inclusion of TSLA in Q1 will require a Q1 GAAP profit of at least ~$267m - making May-June inclusion possible.
• If Q1 profits are smaller than $267m or Tesla posts a small loss, but Q2 is profitable by any minimal margin, then S&P 500 inclusion conditions will be met by Q2 - making August-September inclusion possible.

Latest guidance from Elon was this, 4 week ago:

Elon Musk: "Given that there is just a lot happening in Q1. And we're taking a lot of sort of a lot of onetime charges and there's a lot of challenges getting cars to China and and Europe. We do not expect to be profitable in Q1. But we do think that profitability in Q2 is likely."​

I.e. Elon reduced guidance from Q1 "tiny profits" to "we do not expect to be profitable in Q1".

I'd say that $267m+ profits have low probability at this point. The deliveries & production report will refine this.

Not advice.

 

[EVNow]

True, but to be honest, we should put in perspective that these are premium cars, LR and P.
Can you imagine what will be the market for SR and SR+? These will be compared to short range cars as I3, Leaf, eGolf.
If the price is similar, but you get sexiness, AP, OTA, longer range, performance... will you buy a Zoe or a M3?

My guess is: Tesla SR/+ will get 70% of the new cars market.

Just to compare to US, in Q3 we had 55k Model 3 compared to 15k S&X. All high trims. But, in steady state with lower trims, 55k would be a good sales number. Basically, the market thinks this is all just pent up demand and not steady state demand.

In steady state (next year) this is what we need.

US production : 7k/week = 90k per quarter.
NA : 60k
EU : 30k

China production : 3k/week = 35k per quarter
China & rest of Asia : 35k

 

[Carl Raymond]

Let's not pretend the stock price wouldn't take a major hit if Elon was forced to step down.

The stock price would take a hit, but the difficult work has been done. CAGR would scarcely be impacted and ultimate (4 figure) share price would be about the same, assuming a highly competent replacement.

 

[Nocturnal]

Here are the current S&P 500 inclusion thresholds, to the best of my knowledge:

• S&P 500 inclusion of TSLA in Q1 will require a Q1 GAAP profit of at least ~$267m - making May-June inclusion possible.
• If Q1 profits are smaller than $267m or Tesla posts a small loss, but Q2 is profitable by any minimal margin, then S&P 500 inclusion conditions will be met by Q2 - making August-September inclusion possible.

Latest guidance from Elon was this, 4 week ago:

Elon Musk: "Given that there is just a lot happening in Q1. And we're taking a lot of sort of a lot of onetime charges and there's a lot of challenges getting cars to China and and Europe. We do not expect to be profitable in Q1. But we do think that profitability in Q2 is likely."​

I.e. Elon reduced guidance from Q1 "tiny profits" to "we do not expect to be profitable in Q1".

I'd say that $267m+ profits have low probability at this point. The deliveries & production report will refine this.

Not advice.

I'm still banking on the EAP and FSD fire sale this past month to provide a nice bump in revenue and maybe profit. Tesla obviously doesn't plan this kind of thing out so if the income there is sizable that should also be a surprise.

 

[KarenRei]

Here are the current S&P 500 inclusion thresholds, to the best of my knowledge:

• S&P 500 inclusion of TSLA in Q1 will require a Q1 GAAP profit of at least ~$267m - making May-June inclusion possible.
• If Q1 profits are smaller than $267m or Tesla posts a small loss, but Q2 is profitable by any minimal margin, then S&P 500 inclusion conditions will be met by Q2 - making August-September inclusion possible.

Latest guidance from Elon was this, 4 week ago:

Elon Musk: "Given that there is just a lot happening in Q1. And we're taking a lot of sort of a lot of onetime charges and there's a lot of challenges getting cars to China and and Europe. We do not expect to be profitable in Q1. But we do think that profitability in Q2 is likely."​

I.e. Elon reduced guidance from Q1 "tiny profits" to "we do not expect to be profitable in Q1".

I'd say that $267m+ profits have low probability at this point. The deliveries & production report will refine this.

Not advice.

It should be reiterated that S&P inclusion is not an automatic process. That said, so long as Tesla unambiguously meets the guidelines, I'd think it hard to reject them.

 

[Car In Ray]

Fisker wants another shot at Tesla with a new Model Y fighter

Amazing how everyone wants to "take aim" at Tesla, but they are just a small player doing nothing novel, everyone will be able to make what they make, yada yada.

 

[ZachF]

Hopefully we can bust out of this wedge soon

 

[Fact Checking]

Any thoughts on why 7 months after starting to install PV panels on GF1 Tesla has stopped adding to the first section?
PV on building appears to be only 10% complete. I thought Panasonic was producing substantial volume of older style
panels at GF2.

Possibly to control cash burn rate.

Yes, reducing costs is certainly a part of it, Tesla is a lot more capex conscious now, there's a backlog for Tesla Energy products AFAIK, and by selling those same solar panels to paying customers they'd generate new capex cash instead of consuming it.

But there's possibly another factor: Nevada is on a very aggressive path to change most of their power grid supply to renewable energies. Right now it's already a pretty high percentage IIRC. So if Tesla waits a few more years their Gigafactory electricity use would be entirely free of fossil fuels.