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

[Electroman]

Elon Musk Confirms That Construction Of Tesla's New Gigafactory In China Is On Track | CleanTechnica

Elon Musk Confirms That Construction Of Tesla’s New Gigafactory In China Is On Track

Material ! Material !

Call the SEC

 

[Krugerrand]

Musk has said they spend zero time thinking about demand. And if you believe this I’ve got a bridge to show you...

The incessant messing about with pricing last quarter was for what other reason exactly? The Y event that spent almost the entire event showcasing existing products? The massive drops in sales for S&X?

Out in the real world where I occasionally venture, Tesla is either not known at all or is known as being a company always in trouble with the SEC and with quality and production problems. Or as some have said to me, a joke of a company.

Others here have spoken eloquently about the need for Tesla to own the narrative. With the existing poisoned public narrative, it will not be as easy as you think for Tesla to go from selling to green loving early adopters to the mass market. And what we’re all here for is for Tesla to sell millions of units a year and surpass Toyoyat’s valuation, are we not?

If this nauseates you, makes you think I have a small brain or bores you to sleep, well I’m glad you’re not the one running this company.

We’ve had lots of discussion here about the pricing changes. Lots. And plenty of possibilities other than demand. Plenty.

I will not repeat those eloquent posts but if the authors of them would like to link you, that might be helpful.

 

[ggr]

Mod: It was too hard to sort out all of the snippy posts from all the off-topic ones, so 12 posts have simply gone missing. We are definitely not discussing climate change here. --ggr.

 

[Pras]

How many people outside of North America do you think have even heard of Joe Rogan?

How many of Elon’s 25million Twitter followers can afford a car costing $35k to +$100k?

If you think people don’t know Tesla outside of the US you are from a different planet. Two CXOs of two large banks have recently talked about Tesla car to their global town hall audiences, suggesting how they want the organization to become Tesla like. People still cite case examples how Tesla was able to increase the range during the FL hurricanes. If you are in the market for $35k car, most likely you have heard of Tesla.

The question with new technology is always about the pace of change people accept it. With cars, being a large ticket item, it will come slowly. An ad will not change someone’s mind.

The more people see Tesla cars in their neighborhoods and see them not falling apart, the demand will pick. It seems nobody questions the car and how good it is....so people will know. It has hardly been 9 months since the first full
Rollout and Model 3 is already outselling 3 series.

 

[bdy0627]

Musk has said they spend zero time thinking about demand. And if you believe this I’ve got a bridge to show you...

The incessant messing about with pricing last quarter was for what other reason exactly? The Y event that spent almost the entire event showcasing existing products? The massive drops in sales for S&X?

Out in the real world where I occasionally venture, Tesla is either not known at all or is known as being a company always in trouble with the SEC and with quality and production problems. Or as some have said to me, a joke of a company.

Others here have spoken eloquently about the need for Tesla to own the narrative. With the existing poisoned public narrative, it will not be as easy as you think for Tesla to go from selling to green loving early adopters to the mass market. And what we’re all here for is for Tesla to sell millions of units a year and surpass Toyoyat’s valuation, are we not?

If this nauseates you, makes you think I have a small brain or bores you to sleep, well I’m glad you’re not the one running this company.

If they had thought a little more about demand, perhaps Q1 wouldn't have been so bad. Lots of moves made pretty chaotically to deal with the drop in demand in the US for the available model 3 trims and S/X.

 

[bdy0627]

“A lot” is a relative term. That’s ~2 weeks worth of production(also, where did you get in transit M3 volumes? Are you assuming 100% of all S/X produced were ordered?).

The highest it had been prior was 6,833 at the end of Q4. I'm surprised that amount of model 3 hadn't sold as of the end of the quarter. Why aren't more of them sales in transit? M3 in transit sales are listed similar to S/X on Tesla's quarterly delivery reports.

 

[dgodfrey]

ARK Invest will conduct its monthly webinar at 1:30 pm EDT today: ARK Invest | Innovation Is Key to Growth and Alpha

It will be led by CEO Cathie Wood. Tesla is the largest holding among their ETFs. I own shares of their ARKK ETF. The webinar will conclude with a Q&A session during which you can send questions.

Curt or Neroden or anybody that can chime in;
I have an IRA and a Roth but none of the funds available through our company's retirement plan hold any Tesla as far as I can tell. When I asked our broker, he wasn't much help. Can an individual divert Roth monies into ARKK?
I get a company contribution so I may not want it to replace my Roth contributions but my expectation of where Tesla will go, it may still make it worthwhile.
How does her fund perform overall?
Does she try to keep her Tesla holdings to around 10%?
Any suggestions?
I can provide a list of the available funds or if anyone know which ones are heavy with Tesla, I'd appreciate it.

 

[EVNow]

They were probably not considering a smart phone in 2008, but have one now. Tipping points have a way of being overwhelming. The EV tipping point comes, with or without advertising. Since mainstream advertising costs money that would otherwise provide utility, without is preferable. Tesla continue to get great mileage from free channels. In effect, Tesla *are* advertising.

Not really. I'm talking about people who were all probably earliest adopters of smart phones, drive premium cars, have vacation homes etc etc.

 

[jerry33]

Curt or Neroden or anybody that can chime in;
I have an IRA and a Roth but none of the funds available through our company's retirement plan hold any Tesla as far as I can tell. When I asked our broker, he wasn't much help. Can an individual divert Roth monies into ARKK?
I get a company contribution so I may not want it to replace my Roth contributions but my expectation of where Tesla will go, it may still make it worthwhile.
How does her fund perform overall?
Does she try to keep her Tesla holdings to around 10%?
Any suggestions?
I can provide a list of the available funds or if anyone know which ones are heavy with Tesla, I'd appreciate it.

My understanding (which might be faulty, or only applicable to the company I worked for):

1. Company 401Ks are very limited in what you can invest in.
2. Once your company fund is rolled over (presumably after you leave the company), it can be rolled over into a self-directed IRA.
3. Most socially responsible funds are that in name only.

 

[jhm]

An SA bull (with a spotty track record, IMO):

Tesla's Rough Ride In The First Quarter - Tesla, Inc. (NASDAQ:TSLA) | Seeking Alpha

"Unfortunately, most analysts still appear to be far too bullish on Q1 numbers. Consensus revenue estimates call for Q1 revenues to come in at $5.66 billion, with top end estimates going all the way up to $6.97 billion.

However, my estimates call for revenues of just $5.17 billion, and that's with a $55K ASP for Model 3 vehicles (higher end target). If we apply a slightly lower ASP of $50K, which is my lower end target, we arrive at Q1 revenues of just $4.92 billion, far below consensus estimate figures....

However, market participants should not be alarmed, as the company likely has plenty of cash to absorb the loss ($3.7 billion at the end of 2018). Moreover, the weak quarter does not appear to imply that there are systemic troubles at Tesla. Instead, Q1 likely represents a transitory time for the company as Tesla transforms its Model 3 logistics network to cater to international markets.

I expect sideways price action into earnings with a possible gap lower once Tesla reports a weaker than expected quarter. However, I would use any significant weakness in the stock as a buying opportunity. Sales of the Model S/X and 3 vehicles are likely to recover throughout the year, and the company’s revenues and EPS are likely to improve going forward, paving the road for a higher stock price post Q1 earnings."

If revenue hits $5.11B, a 50% y/y increase, I'm completely satisfied. If $4.77B, a 40% y/y gain, I'm still okay.

 

[EVNow]

Material ! Material !

Call the SEC

We think this is funny - but SEC probably thinks this should go thr' pre-approval. Essentially anything & everything related to Tesla for them, needs pre-approval.

 

[printf42]

OT
I have been reading the EVO article about the electric Aston Martin:
Aston Martin Rapide E specs revealed: it's a £250,000, 602bhp electric 4-door
Which supposed to be a halo car that has ridiculous spec and lift brand image.
But these following quotes struck me so hard I am in denial about how low the auto journalism standard can get.

Rapide E, says Aston, will have a target range of 200 miles

When it comes to charging...with 310 miles of range achievable after an hour hooked up to an 800V outlet of 100kW or higher.

How?

 

[Pras]

We think this is funny - but SEC probably thinks this should go thr' pre-approval. Essentially anything & everything related to Tesla for them, needs pre-approval.

That is why SECs case is weak. While the tweet did mention GF3 plans, the stock didn’t react. So they can’t consider any or all communication as material. The same point EMs lawyers have made. I think SEC has to be very prescriptive.

 

[jhm]

Elon Musk Confirms That Construction Of Tesla's New Gigafactory In China Is On Track | CleanTechnica

Elon Musk Confirms That Construction Of Tesla’s New Gigafactory In China Is On Track

Oh, come on. If this were a tent, we'd be rocking and rolling already. So slow.

 

[Singer3000]

If you think people don’t know Tesla outside of the US you are from a different planet.

Ok but that’s not what I said. I said almost no one knows Joe Rogan outside the US. Tesla is known outside of the US, hence about half its sales being international.

What I did say was that the perception of the company and its products it’s very different outside the early adopter and aspirational fanboy bubble of which we are all a part.

By a mile the best halo advertising Tesla has at its disposal is the success of SpaceX. But some direct brand enhancement that cuts further than generation YouTube wouldn’t go amiss. I think 100% EV adoption is an inevitability and that Tesla will be front and centre of that. But it needs Joe Average to think the same and not worry that the company will go under before the warranty expires.

For instance, I know someone that has sufficient interest from my constant blathering that they’ve been to a store and are considering a test drive. And yet they still didn’t know about the Supercharging Network and said they’re not too interested in a test drive until the local government puts charging points on every lamppost. Something is going wrong when a prospective buyer (with off street parking at home!) walks out a store with that perception.

 

[elasalle]

If they had thought a little more about demand, perhaps Q1 wouldn't have been so bad. Lots of moves made pretty chaotically to deal with the drop in demand in the US for the available model 3 trims and S/X.

I don't think a big drop in US demand was anticipated .. but looking at big pic, it did bring about SR timeline earlier than previously planned.

Not just demand though, even production was not much above 5K. Lot's of changes with intro to EU/CHN models, international deliveries etc etc.

Let's just hope these are resolved for Q2.

Any one look at M3 availability recently? - SR+ and up still says 2 weeks. (which worries me)

 

[bdy0627]

Right, given Q1 production, without GF3, Model3 production will be well short of 360,000 - 400,000. Unless, Q1 production was an anomaly, held back, or there is some information that I don't understand... Given Q1 low production, I am having great difficulty understanding the facts behind EM's SEC tweet (implying 10K/WK) and the reiteration of the numbers in the P+D letter, 90,000 cars a quarter, more now that Q1 was short.

I expect that someone, a financial analyst will be asking these questions soon...

Elon's typically optimistic regardless. Remember the model 3 ramp? I suspect they may need to reduce guidance a bit but no need to do it right now. Of course, Elon has more info than we do.

 

[Curt Renz]

Curt or Neroden or anybody that can chime in;
I have an IRA and a Roth but none of the funds available through our company's retirement plan hold any Tesla as far as I can tell. When I asked our broker, he wasn't much help. Can an individual divert Roth monies into ARKK?
I get a company contribution so I may not want it to replace my Roth contributions but my expectation of where Tesla will go, it may still make it worthwhile.
How does her fund perform overall?
Does she try to keep her Tesla holdings to around 10%?
Any suggestions?
I can provide a list of the available funds or if anyone know which ones are heavy with Tesla, I'd appreciate it.

You may have to ask your company to include ARKK in its list of funds available for your account. Your company in turn may have to demand it from the financial firm associated with their employee's accounts.

ARKK is ARK Invest’s largest and most diverse ETF (exchange traded fund). They manage two other ETFs heavily invested in Tesla: ARKQ & ARKW. They are all very actively managed. Reports of trades are emailed almost every day.

Tesla is currently about 9% of ARKK. CEO Wood's policy is to not buy additional shares of a stock when it exceeds 10% of a fund. She usually buys Tesla on dips. Occasionally when another one of her stocks has dipped, she may sell some Tesla to buy more of the fallen stock.

ARKK was initiated at $20.42 on 2014 OCT 31. It fell to $14.87 on 2016 FEB 08. It rose to $49.87 on 2018 AUG 31. It fell to $34.75 on 2018 DEC 27. It closed today at $48.30.

Link to ARK Invest: ARK Invest | Innovation Is Key to Growth and Alpha

 

[bdy0627]

Elon’s latest statement on this topic was that the Y will be a manufacturing revolution.

He said this AFTER he talked about his execs reeling him back from the brink of insanity.

Edit: It will be interesting to see how much they change in the manufacturing and how many of those changes make their way to the 3.

Elon used to say that about the model 3 until it just didn't happen that way. He's a very optimistic guy. I wouldn't expect a huge revolution in manufacturing technology for the Y, but who knows. Probably pretty similar to the 3 but with some adjustments based upon what they learned.

 

[Doggydogworld]

This has been touched on before, but it's bothering me. When you add up all of the model 3 production and subtract the deliveries and the in transit sales from Q1 2019, you get a current inventory of 11,400. That's a lot of model 3 inventory. Any thoughts on why and when Tesla will reduce that number? I'd like to think they can cut that in half, but that would probably require deliveries of over 70,000 in Q2 along with only mildly increased production over Q1. I'm not personally expecting record deliveries in Q2 but I hope I'm wrong. I can't imagine Tesla would want inventory at that high of a level right now, particularly with how tight cash is again.

Model 3 Production
Q3 2017: 260
Q4 2017: 2425
Q1 2018: 9766
Q2 2018: 28578
Q3 2018: 53239
Q4 2018: 61394
Q1 2019: 62950
Total: 218,612

Model 3 Deliveries
Q3 2017: 222
Q4 2017: 1542
Q1 2018: 8182
Q2 2018: 18449
Q3 2018: 56065
Q4 2018: 63359
Q1 2019: 50900
Total: 198,719

In transit sales from Q1 2019: 8480

Total Deliveries + in transit sales from Q1 2019 = 207,199

They ended Q1 with roughly 20k of Model 3 inventory, which I split as 8k in transit and 12k unsold because round numbers warm my heart. I further guess regional splits as:
Europe - 2k in transit, 0k unsold
China - 2k in transit, 6k unsold
US - 4k in transit, 6k unsold

The Europe and China in transit are just delivery problems. I guess 6k unsold in China because 8 ships should hold close to 16k but the number suggest they only delivered ~7k. I figure they wisely shipped a lot of unsold cars to China ahead of the potential April 1 tariff step-up, so that should be a one-time thing. The US in transit are mostly SR+ orders they couldn't satisfy by 3/31.

Europe and China in transit will grow if they smooth out their overseas production cadence as promised for almost a year. History indicates they won't, though. US in transit should decline over time as they build SR/SR+ inventory. China should evolve to a US-like inventory model next year as Shanghai ramps.

Bottom line, I expect Model 3 EOQ inventory to shrink somewhat unless they smooth out their production cadence as promised or demand weakens further.