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

[JusRelax]

Drop in pre-market likely because of this article by Bloomberg:

https://twitter.com/x/status/1600811950568394752

This is recycled news... it originally came out on Dec 5th here, not sure if maybe even earlier elsewhere:

Tesla Cuts Production at Giga Shanghai to Meet Decreasing Demand

After expanding the production capacity of its Chinese plant, Tesla tried lowering prices to attract more customers, but it did not work as planned.

www.autoevolution.com

Once again, MSM recycling old news to drop the SP.

 

[traxila]

China is in the throes of a bad and mostly self created recession. The people took to the streets because of the horrible fire that roasted people alive due to COVID zero, yes. But the core reason was the same that is has been forever in human history; they took to the streets because they cannot feed themselves.

The economy flat out sucks over there now, and all car manufacturers are getting slammed one way or another. The fact that Tesla sales are still exploding is unfathomable, and has probably made the FUD manufacturers even more furious in seeking retribution.

Between COVID zero policies, a real estate market reckoning twenty years in the making and the normal business cycle that is in a trough right now, China’s economy is a mess. Xi reversed course for many reasons, but the main one was that he saw many people were ready to take to the streets to publicly wring his neck. All Chinese people know the consequences of this action, but many did it anyway. He knows that they know, and it made him pay attention for certain.

China should begin recovering as people are allowed to actually move around freely, or more so than before. I have no doubt that China Tesla sales have been severely hurt, but I do not understand why they would cut production with Backlogs in other places. If they are, then the reasons are not ‘we cannot sell them’ but rather ‘there are issues we have to deal with right now that do not allow for full throttle production‘. What those are exactly we can only speculate or now, but they will probably be revealed at some point when it does not matter at all anymore to be along the lines of ‘COVID zero messed up supply chains’.

 

[InDaClub]

https://twitter.com/x/status/1600801871572389889

 

[Huskyf]

This is recycled news... it originally came out on Dec 5th here, not sure if maybe even earlier elsewhere:

Tesla Cuts Production at Giga Shanghai to Meet Decreasing Demand

After expanding the production capacity of its Chinese plant, Tesla tried lowering prices to attract more customers, but it did not work as planned.

www.autoevolution.com

Once again, MSM recycling old news to drop the SP.

Why SEC not stop that ????

 

[Phobi]

...ah nvm, you guys know

 

[TSLA Pilot]

What would responding accomplish? I just went and reviewed the transcripts from the last five earnings calls, and on all of them Tesla said demand was strong, using language like:

• “profound awakening of the desirability of electric vehicles”
• “accelerating demand”
• “remain confident of exceeding 50% annual growth for the foreseeable future for basically several of the next years”
• “we’re obviously not demand limited. We are production limited by … Very much production limited”
• “Our problem is overwhelmingly that of production”
• “the demand is not something we spend really any time talking about”
• “we have so much excess demand. That is really just not an issue for us. It might be an issue for some other companies but it is not an issue for us.”
• “Q4 is looking extremely good”
• “We've got a lot of questions about demand in recent weeks. I can't emphasize enough, we have excellent demand for Q4, and we expect to sell every car that we make for as far in the future as we can see. So, the factories are running at full speed…”

These aren’t even half of the demand comments from Tesla, and doesn’t include additional comments Elon may have made on Twitter in the last year.

Is insufficient frequency of the message the problem? How much more hand holding and reassurance do skittish emotional investors need? I don’t understand the point of even having these quarterly Q&A sessions with company leadership if people aren’t going to listen to the answers and are just going to invent their own different ideas anyway.

And, yes, but . . . what if, hypothetically, all of that demand rainbow and unicorns talk isn't exactly true now?

Just wondering how all those positive words on demand comport with price cuts (x2, so far), and spiffs in China, and the US rebate, etc.

Spoke with a relative who purchased a bunch of shares at $220 and, well, it's hard to explain why we're seemingly in a race to half of that . . . with complete silence from the board, et al.

 

[cliff harris]

The way I see it, and this is my totally rough guessing, the possible explanations for a china production cut are:

1. The demand has dropped more rapidly than Tesla expected, and they cannot sell full production even with price cuts (10% likely)
2. There are logistics challenges outside of Teslas control, and they phjysically do not have space to hold production until these are fixed (20% likely)
3. There are upgrades coming to the model 3, starting in China, and they need to scale back production so they can integrate a new model 3 (35% likely)
4. They are supply constrained in shanghai due to covid affecting a parts supplier. (35% likely).

I don't think Tesla really need to comment yet, especially as they can do so in a more orderly fashion on the next earnings call. I find it hard to believe that they are incapable of adjusting price to meet local demand, so even with a complete collapse of China demand, they could sell model 3s and Ys at just above cost if they absolutely had to. This just feels unlikely to me.

Berlin & Texas are mid ramp, and fremont is a hugely over-stuffed frankenstein factory. If Tesla wanted to work on an upgrade to the model 3 that dramatically reduced its production cost, and allow for a cheaper model to be made, then IMHO Shanghai is the best market to do so. The market for a cheaper model 3 there is probably pretty big.

The problem we have right now as shareholders is that it genuinely looks like Elon is ignoring Tesla. So many tweets about twitter, and even spacex, but not about Tesla. I would love to see him tweeting more about the semi, or about FSDs progress.

 

[Optimeer]

Drop in pre-market likely because of this article by Bloomberg:

https://twitter.com/x/status/1600811950568394752

Soon the IRA subsidies are kicking in which is why it might be favorable to increase production for Model Y in Austin, Semi in Nevada, Megapack in Lathrop and possibly also for Powerwall by January 2023
So Tesla might be shipping Batteries in December to these Factories and therefore they need to reduce Production in December in Shanghai and maybe this is also a factor for the delayed ramp up from 3300 to 5000 in Berlin which happens now in January instead of in mid December. Then we also learned that they sent some of the top engineers from Shanghai to the US, possibly also to be prepared for a production increase in January 2023.

I see these developments as a sign that the + 50 % production goal compared to 2021 (930‘400 Cars) will be largely met for 2022.

 

[Mengy]

The way I see it, and this is my totally rough guessing, the possible explanations for a china production cut are:

1. The demand has dropped more rapidly than Tesla expected, and they cannot sell full production even with price cuts (10% likely)
2. There are logistics challenges outside of Teslas control, and they phjysically do not have space to hold production until these are fixed (20% likely)
3. There are upgrades coming to the model 3, starting in China, and they need to scale back production so they can integrate a new model 3 (35% likely)
4. They are supply constrained in shanghai due to covid affecting a parts supplier. (35% likely).

I don't think Tesla really need to comment yet...

I don't understand, hasn't Tesla China already publicly stated they are NOT cutting production? Isn't any talk about production cuts in China simply discussing FUD and not true production cuts?

I mean, have I missed some news in the past day or so about actual production cuts?

 

[MrMoo]

I don't understand, hasn't Tesla China already publicly stated they are NOT cutting production? Isn't any talk about production cuts in China simply discussing FUD and not true production cuts?

I mean, have I missed some news in the past day or so about actual production cuts?

You need to get the quote that they said which was "untrue" i think it was just 1 word. Are you seriously going to take 1 word as to mean they are not cutting production? If it turns out that they do will you be angry because you felt like they lied to you? Or do you think there is a chance you are making an assumption on a 1 word response.

 

[replicant]

Why SEC not stop that ????

Because even Tesla did not say it the production cut is false (saying some information in a report is false does not deny a specific statement). Should the SEC approve every news report before they're printed? That does not sound very "free speech" to me.

 

[replicant]

hasn't Tesla China already publicly stated they are NOT cutting production?

What is the exact statement from Tesla?

 

[transpondster]

Soon the IRA subsidies are kicking in which is why it might be favorable to increase production for Model Y in Austin, Semi in Nevada, Megapack in Lathrop and possibly also for Powerwall by January 2023
So Tesla might be shipping Batteries in December to these Factories and therefore they need to reduce Production in December in Shanghai and maybe this is also a factor for the delayed ramp up from 3300 to 5000 in Berlin which happens now in January instead of in mid December. Then we also learned that they sent some of the top engineers from Shanghai to the US, possibly also to be prepared for a production increase in January 2023.

I see these developments as a sign that the + 50 % production goal compared to 2021 (930‘400 Cars) will be largely met for 2022.

LG batteries aren't used in US, while it's possible due Berlin rampup they are sending more batteries there

 

[elasalle]

Biggest news out of China is that they are relaxing zero Covid
Still stupid that they will not use western mRNA vaccines

Everything else will fall into place

 

[elasalle]

I don't think it's been mentioned here, but Emmet Peppers went to the Tesla Semi event and he was prodding around trying to find information about the share buyback (youtube video listed below). It wasn't directly told to him, but he inferred from the answers (and non-answers) he received that Elon is 100% completely fine with the share buyback, as he has stated on Twitter. Thus, as Elon also stated on Twitter, the board is the one that is hesitant to green light the share buyback, but the most interesting thing Emmet inferred from what was said to him was that the reason for the board's hesitancy is because institutional investors are telling the board not to do the share buyback.

If this is true, here are some points I'd like to make:

1. Contrary to the beliefs of many on social media, including here on TMC, the Tesla Board IS actively looking in the best interests of it's shareholders. It just so happens that institutional investors have a much stronger and persuasive voice than retail investors (most likely due to them owning more shares than retail I'm guessing?)
2. Why do institutional investors not want the buyback to happen? There are two possibilities I can think of. The first is that having less cash on hand could be an added risk to the company that institutional investors prefer not to take. The second is that it might be possible that institutional investors are interested in still being able to get shares on the cheap while they're able to.

Note that there are also some other takeaways from the rest of the youtube video related to Cybertruck that I thought were interesting as well, so it's probably worth listening to the whole video. It seems that the Cybertruck project is called 'Project Everest' and Tesla has told it's suppliers to delay 4 months for it's production. This causes Matt to believe that very few cybertrucks will be produced next year, and that Cybertruck production will most begin around Q4.

So Tesla China production decreased to allow institutional investors to buy more shares

 

[Singuy]

You need to get the quote that they said which was "untrue" i think it was just 1 word. Are you seriously going to take 1 word as to mean they are not cutting production? If it turns out that they do will you be angry because you felt like they lied to you? Or do you think there is a chance you are making an assumption on a 1 word response.

I get that Tesla China wants to mislead more when talking about price cuts as that affect sales. I have zero idea why you want to mislead with production cuts. If the purpose is to protect the stock price, then wouldn't a production cut drop the stock price anyways? And if the "false information" part is about the demand cliff reason, then isn't this a nothing burger?

 

[PeterJA]

It is darkest before the dawn. It is driest on the beach before the tsunami hits.

Clearly Big Money and many retail investors (like Chicken Genius) are waiting for the tide to turn before jumping back into TSLA. This has happened many times before. Last time, as I recall, the tide turned for the silly reason of Hertz ordering some Model 3s.

Nobody knows what will turn it this time, but I hear the roar of approaching tidal waves: Berlin, Austin and Lathrop ramp-ups, Semi, Cybertruck and the mother of all tsunamis, which is FSD. FSD Beta V11 is days away from first release to customers.

When the market figures out that FSD will obsolete non-Tesla cars, look out beachgoers (and all Tesla competitors),

 

[Singuy]

So Tesla China production decreased to allow institutional investors to buy more shares

Never understood the logic to this. Institutions are the ones dumping so they can buy more?

 

[elasalle]

Soon the IRA subsidies are kicking in which is why it might be favorable to increase production for Model Y in Austin, Semi in Nevada, Megapack in Lathrop and possibly also for Powerwall by January 2023
So Tesla might be shipping Batteries in December to these Factories and therefore they need to reduce Production in December in Shanghai and maybe this is also a factor for the delayed ramp up from 3300 to 5000 in Berlin which happens now in January instead of in mid December. Then we also learned that they sent some of the top engineers from Shanghai to the US, possibly also to be prepared for a production increase in January 2023.

I see these developments as a sign that the + 50 % production goal compared to 2021 (930‘400 Cars) will be largely met for 2022.

A bird in hand (q4) is worth more than two in the bush

 

[PeterJA]

Never understood the logic to this. Institutions are the ones dumping so they can buy more?

Buy back lower, just like the shorts.