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

[Singuy]

Huh. I guess margin loans are better than Elon having to sell large blocks of Tesla stock semi regularly to keep Twitter afloat?

Well these margin loans has like half the interest rates, and rates have come down a bit. So it's

1. Refinancing of current debt

2. Saving millions in interest a year

3. Tesla stock price is low, chance of margin call is lower so it's a risk off move. Elon can actually rescue the stock and end up with 2x as many shares if he were to buy if Tesla tanks another 30% with his spare cash.

 

[PeterJA]

This is not the first time Tesla reduced prices and has a short wait time in China. This is the first time we hear nonstop antics about demand problems despite they have already delivered record number of cars to China this Q. Back in the days first month of thr Q deliveries are like a few thousand. However "wait times" were 2 months because they only export the first 2 months so no one said anything except GJ because Tesla has a "backlog".

Maybe it's not easy to understand Sasha's point in the video I posted on Monday, so I'll repeat it in his words (the video transcript) instead of my brief summary.

"...As sale volumes grow, Tesla begins having the luxury of being able to import cars without having to wait for the order to come through. This is really important. When your sale volumes are low, you run the risk of importing a car that will then sit around for months because there isn't a buyer who is interested in that specific configuration.... So the beauty here is that as your production scales you can start taking advantage of stopping making cars to order and just manufacturing every combination and shipping those cars over knowing that each of those cars is going to sell anyway. This way you can set a factory to be way more optimal....​

​

But the thing with inventory is that it creates a vicious cycle. Once cars are available in the inventory in every possible configuration that somebody might want it there isn't really a demand for people to place orders because if you want to go and buy a particular car it is available within the inventory so you can go and purchase it while Tesla is making more cars to backfill the inventory..."​

And of course this has been Tesla's stated goal, because instant availability increases demand even more.

"But the real question is why would Giga Shanghai slow down their production. Europe is still having wait times of a few months. Australia and New Zealand have even longer wait times. There are still many countries where you cannot buy a Tesla which can be opened up to increase the total addressable market..."​

Sasha mentions several possible reasons for production slowdown {Covid lockdowns, tooling upgrades, Model 3 refresh} IF the rumor is true. But anyone who fears slowing demand is one of them is not thinking logically.

 

[ByeByeJohnny]

Almost nobody talked about this here in the Investor's Forum, but Wu Wa posted a video of what he referred to (almost certainly incorrectly) as a "temporary hospital" built on the plot of land immediately to the South of Giga Shanghai:

The land south of the Tesla factory is covered with buildings\Giga shanghai\4K \493 | Dec 3, 2022

This is no hospital. It's obviously the exact same type of temporary worker accommodation trailers that Tesla Shanghai has already installed on the SE corner of the Model Y plant for over a year now. My quick eyeball estimate was room for ~6,000 workers. And 2x that if one shift is on, while the other is off. 12K production workers is more than enough to run the factory.

Seriously? You gotta stop making things up just to be able to keep your daily post count up.

There are 80 modules in each block. Six which are stairs/other use, so 74 living modules. There are 9x8 blocks in the central part. That's 74x9x8=5328 living modules. But wait, there are more at both ends. Looks like at least another 2x54+2x66=240+5328=5568 total. But not even in North America would a remote worker get a module like that to themselves. Here in Scandinavia I've seen modules like this where east european construction workers live 12 in a module this size for months. Even with a lower number like say eight it would be something like 45.000 bunks. That's 90k workers in your two shift theory. This is way more beds than Tesla would need to host every single worker. It's not even close.

I have no idea if the were intended for guaranteeing covid sick people or something else but unless every single factory in the area got together they were not intended to host workers.

 

[SmokyPeat]

Good: saves him money and gives him extra incentive to support the share price through his words and deeds

Bad: if the share price drops far enough he could be obligated to sell shares in a margin call, adding fuel to the fire

How far would it have to drop for scenario b though? Below $30?(obviously dependant on the size of the loan) Elon owns a lot of shares.

 

[30seconds]

Lots to keep up with on this thread, but I really appreciate how this thread is moderated and how the vast majority of members here will take it to other threads when directed.

 

[30seconds]

To me a few salient facrs

- Tesla Model Y is absolutely crushing sales in terms of absolute vehicle counts in most countries where it is available in volume.

- As of a few weeks ago the Model Y is the top selling auto, in absolute number, in California this year.

- The Model Y will be the absolute top grossing vehicle in the WORLD this year

- There is no credible current volume competition for the Model Y currently. There is no likely contender in at least the next 2-3 years.

- This is unprecedented territory for cars at this price point

- This is unprecedented territory for EVs

- Cybertruck volume production scale is very cloudy

- Robotaxi / Model A is unknown

- Next GF is unknown

- Berlin and Texas ramp is unknown

Long way of saying that I’m REALLY REALLY REALLY interested in Tesla’a plan to scale - A.K.A Secret Master Plan Part III “Elon Loves Triplets.”

 

[JustMe]

How far would it have to drop for scenario b though? Below $30?(obviously dependant on the size of the loan) Elon owns a lot of shares.

Don’t know - it depends on how big the loan would be. But you’re right - he has plenty of shares to back even a huge loan.

 

[wipster]

First I've seen of this, makes sense hope it's true:

https://twitter.com/x/status/1600715805552828416

Edit: Bloomberg Headline reads

Elon Musk Brings Tesla's China Chief to run Texas Gigafactory​

This could be huge... wish I could get past the fracking paywall.

Edit 2: Got behind the paywall. As soon usual the headline isn't accurate. Looks like Zhu and the team he brought with him are not there permanently, just to help with the ramp. Still big though. Probably the start of the global CEO rumor this morning.

 

[MrMoo]

To me a few salient facrs

- Tesla Model Y is absolutely crushing sales in terms of absolute vehicle counts in most countries where it is available in volume.

- As of a few weeks ago the Model Y is the top selling auto, in absolute number, in California this year.

- The Model Y will be the absolute top grossing vehicle in the WORLD this year

- There is no credible current volume competition for the Model Y currently. There is no likely contender in at least the next 2-3 years.

- This is unprecedented territory for cars at this price point

- This is unprecedented territory for EVs

- Cybertruck volume production scale is very cloudy

- Robotaxi / Model A is unknown

- Next GF is unknown

- Berlin and Texas ramp is unknown

Long way of saying that I’m REALLY REALLY REALLY interested in Tesla’a plan to scale - A.K.A Secret Master Plan Part III “Elon Loves Triplets.”

I am also interesting in how they plan to scale.

They are giving a $3750 credit for pick ups in December. What is their plan next year when they have 700,000 more cars to sell (50% production year on year). Somehow I don't think $3750 discounts aren't going to cut it. Then 1.1 million more (on top of the 700k, which is on top of the 1.45 mil) in 2024.

 

[MC3OZ]

A very good example is Tesla China denying price cut rumors but then we eventually see price cuts. A lot of bulls question why they denied the price cuts in the first place. The point is there's a lot of moving parts when it comes demand and pricing so it's important to be nimble. There will be no end to FUD if Tesla starts providing daily updates.

I wish there were no price cuts but I'm hoping we can absorb any impact to margins. The only way to find out will be to wait for the quarterly earning reports. No amount of PR clarifications from Tesla will help in this regard.

https://twitter.com/x/status/1600314700083838977

TS:A wait times are too long, Tesla wait times are too short. Tesla prices are too high, Tesla prices are too low. Too much demand, no demand. Too much production, not enough production. This is getting quite silly. Record quarter after record quarter is signal, rest is noise.

Price cuts are going to happen, I definitely expect a lot of price cuts over the next 5 years, but I also expect growing revenue and profits.

FUD is a fact or life, we should be used to it. Daily updates are just more opportunities for journalists to spin a narrative.

 

[wipster]

I am also interesting in how they plan to scale.

They are giving a $3750 credit for pick ups in December. What is their plan next year when they have 700,000 more cars to sell (50% production year on year). Somehow I don't think $3750 discounts aren't going to cut it. Then 1.1 million more (on top of the 700k, which is on top of the 1.45 mil) in 2024.

Remember the IRA is going to help out with discounts as well, at least in the US. Plus the more they can save in COGS the more they can reduce pricing without affecting profits.

https://twitter.com/x/status/1600314700083838977

Price cuts are going to happen, I definitely expect a lot of price cuts over the next 5 years, but I also expect growing revenue and profits.

FUD is a fact or life, we should be used to it. Daily updates are just more opportunities for journalists to spin a narrative.

Exactly. The more they can reduce COGS and streamline manufacturing, the more they can reduce pricing without affecting margin and perhaps increasing it!

 

[Cosmacelf]

This caught my eye on Twitter.

https://twitter.com/x/status/1599890728762867712

Musk seems to be clamping down on security a lot. This isn’t the only place I’ve seen it, but good to see. Guard look alert.

Trying to figure out if they cut their hair weirdly trying to mimic Musk or if they are all former mobsters.

Um, why the heck was Elon walking through the General Aviation terminal anyways? He can have a car on the tarmac in the airplane taxi area waiting for him. Much more secure.

 

[MC3OZ]

Remember the IRA is going to help out with discounts as well, at least in the US. Plus the more they can save in COGS the more they can reduce pricing without affec

Exactly. The more they can reduce COGS and streamline manufacturing, the more they can reduce pricing without affecting margin and perhaps increasing it!

With Model Y production ramping at Berlin Shanghai could be shipping fewer Model Ys on boats to Europe.

Short term, that frees up some space for more Model 3s to Europe.

Instead Model Ys can be shipped to nearby South East Asian, Asia Pacific and Middle East locations including Israel, with less time in transit.

Price and the range of models helps with demand allowing more and more countries to be export destinations.
To export to a new location, they need sufficient demand, and sufficient inventory,

Should we reach a time when Tesla can't reduce COGS, can't design and manufacture newer cheaper models, and can't open new markets. The it is time to sing the demand tune.

 

[Chenkers]

Don’t know - it depends on how big the loan would be. But you’re right - he has plenty of shares to back even a huge loan.

They're talking about a $3B margin loan. This would be to replace a part of the overall $13B of loan package that currently attracts an 11.75% annual interest rate. While the $13B of loans are currently to Twitter, it's reported that Elon would take on this $3B portion personally. None of this is settled and could be viewed as an overall positive as a lower interest rate should reduce the risk of Elon having to sell TSLA shares.

 

[MikeC]

This may be related to the “Global CEO” rumor. Maybe more of a future COO?

https://twitter.com/x/status/1600726422892744706

https://twitter.com/x/status/1600728552311164930

 

[Cosmacelf]

First I've seen of this, makes sense hope it's true:

https://twitter.com/x/status/1600715805552828416

Edit: Bloomberg Headline reads

Elon Musk Brings Tesla's China Chief to run Texas Gigafactory​

This could be huge... wish I could get past the fracking paywall.

Edit 2: Got behind the paywall. As soon usual the headline isn't accurate. Looks like Zhu and the team he brought with him are not there permanently, just to help with the ramp. Still big though. Probably the start of the global CEO rumor this morning.

Isn’t this like old news? I swear I heard about Tesla Shanghai executives helping Austin well over a week ago.

 

[thesmokingman]

Isn’t this like old news? I swear I heard about it over a week ago.

Yea, rather old and I was thinking the same thing. They didn't just bring one dude, they brought a whole team to improve the US gigas. Shanghai is a lot more efficient given its small size comparatively speaking.

Tesla China Engineers Go To Fremont Factory To Help Boost Production

Around 200 engineers and production staff from Tesla Shanghai, which recently achieved record production, will be coming to California, the first as early as this month.

insideevs.com

 

[wipster]

Isn’t this like old news? I swear I heard about Tesla Shanghai executives helping Austin well over a week ago.

Don't know, but this just came out about an hour ago. Maybe because of Tom Zhu? He's the Elon of GigaShanghai...

 

[StealthP3D]

A surprising MotorTrend article fighting EV FUD:

You're Being Lied to About Electric Cars

Sorry, that meme you just retweeted isn't correct.

www.motortrend.com

Nothing we don't already know, but a very fact-based look comparing ICE cradle to grave emissions with EV. I think MotorTrend figured out they will have no customers and little to write about if they only have ICE loving customers.

 

[WADan]

Random Thoughts from Recent Migraines::

1. Had to funnel some funds in to avoid margin calls. That was painful but a lesson learned (I had never used margin b4 and my timing here sucked).
2. Sold covered calls last two days. Immediately bought more shares.
3. Wishing someone would piss all over the liars and FUDsters out there. I don't care who. Use positive news–the results will eventually drive the SP the right way.
4. HODLing still and hopefully past point of inflection in SP. This has been tough to deal with as my NPV has dropped about 50% last few months......much like many others here.
5. Don't want to ever hear about the 'coil' or 'spring' being 'just there' again. That's just getting annoying.
6. Need a way to disagree with disagrees without posting. Seems some are just being petty.

“Need a way to disagree with disagrees without posting. Seems some are just being petty.“

I don’t pay attention to disagree in general, especially with those without posting!