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

[Krugerrand]

Some Commentary on Q2 EPS Estimates

When a public company is facing a difficult quarter, they can take one of three approaches:

Kitchen Sink approach:
With this approach, a company will try to get all the bad stuff out of the way in one quarter.
They may accelerate spend into the quarter, take a larger restructuring charge to address changes to the business, etc.
Gary Black appears to have assumed this approach with his $1.40 estimate. IMO, Gary's $180M restructuring charge is very high for the 10% salaried headcount reduction.

Business as Usual approach:
With this approach, a company takes no special action to either improve or worsen the quarterly results. They move ahead with business as usual. I would say that James Stephenson has taken this approach with his $1.73 estimate.

Save the Quarter approach:
With this approach, a company will take actions that will increase revenues and/or decrease costs to improve and save the quarter.
This may include a hiring a freeze, travel freeze, reduction in the use of contractors, prioritizing the shipment of higher margin products, etc.
My $2.01 estimate and I believe Matt Smith's $1.94 estimate assume this approach. Matt is assuming Tesla takes $480m in FSD revenue recognition. I have assumed prioritization in high margin vehicles (Plaids/Performance models), tight control on production costs during the Shanghai lockdown period and SG&A cost controls.

Wall Street now at $1.85 and the Whisper Number at $1.63. I assume these numbers have no Bitcoin, Severance or FSD.

View attachment 828861

83 cents. You heard it here first.

 

[M|S|M MYP]

Close enough to $720 close.....funny how that works out.

 

[wipster]

If it only would have closed at 720.420...

Still good though!

 

[insaneoctane]

Some Commentary on Q2 EPS Estimates

When a public company is facing a difficult quarter, they can take one of three approaches:

Kitchen Sink approach:
With this approach, a company will try to get all the bad stuff out of the way in one quarter.
They may accelerate spend into the quarter, take a larger restructuring charge to address changes to the business, etc.
Gary Black appears to have assumed this approach with his $1.40 estimate. IMO, Gary's $180M restructuring charge is very high for the 10% salaried headcount reduction.

Business as Usual approach:
With this approach, a company takes no special action to either improve or worsen the quarterly results. They move ahead with business as usual. I would say that James Stephenson has taken this approach with his $1.73 estimate.

Save the Quarter approach:
With this approach, a company will take actions that will increase revenues and/or decrease costs to improve and save the quarter.
This may include a hiring a freeze, travel freeze, reduction in the use of contractors, prioritizing the shipment of higher margin products, etc.
My $2.01 estimate and I believe Matt Smith's $1.94 estimate assume this approach. Matt is assuming Tesla takes $480m in FSD revenue recognition. I have assumed prioritization in high margin vehicles (Plaids/Performance models), tight control on production costs during the Shanghai lockdown period and SG&A cost controls.

Wall Street now at $1.85 and the Whisper Number at $1.63. I assume these numbers have no Bitcoin, Severance or FSD.

View attachment 828861

Isn’t it usual for WS to be this high? I’m used to them underestimating Tesla by a long shot. With the Shanghai shutdown a known occurance it seems strange for them to be so high....unless they're just setting up for a big miss.

 

[Zero CO2]

We have certainly used restrooms but rarely make a purchase; not sure how to count when a Dairy Queen is attached to the Chevron gas station (Beaver Utah).

Agree many of us on TMC (saving all $$ we can for TSLA shares) don't make many purchases in these shops .. however my anecdotal evidence says a lot of people do make purchases ...some on everyday commutes getting coffee etc.
The Bucees in Daytona Beach off I95 for example was absolutely packed when i was there last April and it was the size of a department store .. so yeah i think they have a good business model .. lets not forget the ICE fleet will be around for quite a while longer .... Tesla to add 26 new Superchargers at Buc-ee's locations in new partnership

have a good weekend TMCers

 

[insaneoctane]

The gas station vs charge model will need to adjust. The current gas station model for around town locations is simply about foot traffic. The whole gasoline aspect is extremely low margin, it's about selling something to the customer while they're there for 5 minutes. Local EV chargers will attract far less foot traffic, but their average time spent will likely be 3x what the gasoline customers spent. So what's a better model for less foot traffic, but increased time?

 

[aGreenGuy]

I was wondering if Norway (since it has one of the highest adoption rates) is seeing closing of gas stations - is there any data on that?

According to Norwegian «Petroleum institute» there has actually been a slight increase (~1%) in total number of gas stations, but manned stations have seen a ~20% decline since 2012. Source www.drivkraftnorge.no

We have also widespread, rater abundant type2 charging stations in areas with high population density, some owned by the municipalities and some by housing cooperatives. I have not seen any reporting on widespread vandalism on these.

Edit: more and more common is also type2 and combo/chademo stations on parking lots outside local shopping malls.

 

[TheTalkingMule]

Goin back to sleep....$720 it is for today hopefully it gets steamrolled...not holding my breath.

 

[2daMoon]

Somehow I don't think Elon has taken into consideration how the negative effects on human health from having a little more time to consider that corn dog, burrito, egg roll, or pizza slice while charging at a C-store may go against any plan to protect the human race against itself.

That, or, this very fact is one of the driving forces behind those engineers tasked to design for quicker charge times.


Food for thought?
(of course the pun was intended)

 

[The Accountant]

Isn’t it usual for WS to be this high? I’m used to them underestimating Tesla by a long shot. With the Shanghai shutdown a known occurance it seems strange for them to be so high....unless they're just setting up for a big miss.

Wall Street has not included the Bitcoin charge and likely missing the severance costs too.
To get apples to apples, deduct about $0.40 from the Wall Street number to adjust for Bitcoin/Severance.
So their $1.85 is really about $1.45 (very close to Gary's number of $1.40)

 

[The Accountant]

Wall Street has not included the Bitcoin charge and likely missing the severance costs too.
To get apples to apples, deduct about $0.40 from the Wall Street number to adjust for Bitcoin/Severance.
So their $1.85 is really about $1.45 (very close to Gary's number of $1.40)

By the way . . . .including or not including the Bitcoin and Severance charges is going to cause enough confusion to allow the usual suspects to proclaim that Tesla missed consensus even if they in fact beat it.
It's going to be nice getting this quarter behind us.

 

[StealthP3D]

I stopped and charged at the Buccees between Austin and San Antonio. I had never seen 24 charging stalls in a row (I know, you Californians will laugh at that). Wow! Good chargers and a big enough store to spend some time in. The only downside was the 80 yard walk through 2 lines of gas-fume-pumps to get to said store.

You call that a downside, I call it good people watching. Yes, I don't like the fumes either, so I'll walk on the upwind side even if it's farther, that just gives me more time to people watch. You see the strangest things at fueling stations, probably because almost everyone has to go there except perhaps a portion of the top and bottom 1%. I also feel superior walking by a bunch of people paying big bucks to juice up their inefficient cars. It's even better when I see someone pop their hood, not to get a cold beverage, but to check the oil or add some anti-freeze or something.

 

[Cosmacelf]

My account is over 90% TSLA, so I made very little on the small amount of investments that were being borrowed. It was usually around 1% per month, of the value of what was being borrowed.

As far as risks go, I think that's as small as possible, and essentially nothing. The same risk would apply to having any financial assets being held by another organization.

Regarding selecting what assets are available to loan, no with TD Ameritrade, it is all or nothing. If you agree to be in the program, you are giving them permission to loan anything.

Ignoring the TSLA then, sounds like 12% per year of the assets being borrowed. I imagine which stocks would depend on what kind of other assets you have. Broadly growth stocks or dividend paying stocks. Just trying to figure out if it's worth it...

 

[hobbes]

Berlin Y performance deliveries are resuming in Norway, so technical problem with drive unit seems to be solved (at least for new cars), these are yesterdays´s deliveries:

These VINs are in the 11,000 range just like the ones we saw in German showrooms a few days ago. The highest VINs we saw in Norway before (when the drive unit problem came up) was in the mid 7,000s. Wonder where those 3,500 other cars went, likely to some other European countries or Tesla skipped some VINs just to confuse us ..

 

[hobbes]

According to Norwegian «Petroleum institute» there has actually been a slight increase (~1%) in total number of gas stations, but manned stations have seen a ~20% decline since 2012. Source www.drivkraftnorge.no

We have also widespread, rater abundant type2 charging stations in areas with high population density, some owned by the municipalities and some by housing cooperatives. I have not seen any reporting on widespread vandalism on these.

Edit: more and more common is also type2 and combo/chademo stations on parking lots outside local shopping malls.

Combo=CCS, right?!

 

[ZeApelido]

Using the bathroom while supercharging is a fine way for one to gather their thoughts for a few minutes, read, and relax.

 

[Fred42]

Combo=CCS, right?!

yes

 

[ammulder]

The gas station vs charge model will need to adjust. The current gas station model for around town locations is simply about foot traffic. The whole gasoline aspect is extremely low margin, it's about selling something to the customer while they're there for 5 minutes. Local EV chargers will attract far less foot traffic, but their average time spent will likely be 3x what the gasoline customers spent. So what's a better model for less foot traffic, but increased time?

Around PA and VA a lot of the SuperChargers are at WaWa or Sheetz stores... if you're not familiar they're convenience stores that also have food you can order at a kiosk and they'll prepare (sandwiches, burgers, pizza, tacos, etc.). A number of Sheetz locations have seating areas as well. So I think that's the better model than candy bars and coffee if you're going to be making 20-30 minute stops. On my recent road trips with the kids I think we might have spent more in the Sheetz than on the SuperChargers...

 

[TN Mtn Man]

That's how they make nearly all of their money now even. The problem is that EV throughput will be lower than gas so the small corner stations won't make it, only the larger ones that are already convenience stores/restaurants.

True, but at the same time, customers will be stopped for a longer time. I'd guess based on my experience over the years that 80% of those that buy gas never go in the store. When people are there for 30 minutes instead of 2-3 minutes, I'd guess that would be a lot more likely. So you're revenue per "fueling" may well be considerably higher, leading to higher profits. I do wonder what the investment to put in say 10 DCFC stations vs a similar number of gas pumps would be. I would think the underground gas tanks and hardware would be a lot more expensive, yet at the same time a lot of places might not have 440 volt 3-phase power for a DCFC. (speculating on the last-given the power throughput of a DCFC I'm assuming that's their power source, if not please enlighten me).

 

[MC3OZ]

The only time I go buy stuff there is when I am in the middle of nowhere during a bike ride and want to buy a Gatorade or when I supercharge on a road trip and buy snacks at the same time.

I know my brother goes to the local gas pump store to buy snacks to avoid the line at the local grocery store but now you can do that with Uber Eats groceries who charge a 25% fees to get it delivered for people who don’t mind their budget.

The only way I see those gas station stores to survive in the next decades is bringing EVs on the spot to get them buy snacks in which they make probably more margin than on selling gas. Not that it’s a good business model but a business model that is going to save them from bankruptcy.

In some cases the gas station land might be valuable real estate which can be redeveloped.

EV charging is compatible with multi-storey development.