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

[davecolene0606]

Bloomberg - Are you a robot?

“Panasonic will study additional investments over 35 GWh in collaboration with Tesla,” the Japanese company said in an emailed statement in response to the Nikkei report.“

Seems confirmed by Panasonic.

That is a boiler plate comment they made in the last earnings (Panasonic) call.

Fire Away!

 

[Navin]

The other nikkei reporter has done this sort of shock Panasonic / Tesla reporting before

Panasonic rattled by high-maintenance partner Tesla

Panasonic uneasy about partner Elon Musk's bombshells

Panasonic profit sinks as Tesla partnership hits speed bump


Again it seems like an old trick. Look at this media groups track record with Apple.
Another January, another misleading iPhone supply cuts story from Nikkei

 

[bdy0627]

In an attempt to keep a realistic balanced view, who can provide some reasons as to why this report being this early would NOT necessarily be bullish?

My initial impression is that they are doing it earlier than normal because of the very positive FSD event a couple of days before. I think there is no reasonable way for Q1 ER to be positive. This timing messes with the stock manipulators/traders. I really think this is a matter of wanting to rip the bandaid off fast rather than waiting. It's going to be painful so let's get it over with and get healing. Just my opinion.

 

[LordAstinus]

...
I don't want to speculate too much, but if anyone's been wondering about the lack of GigaFactory Europe news...

I hope they don't start building it before 2020H2. So by the time they can start working on machinery, China, Semi and MY are kind-of sorted out.

 

[Singer3000]

did not saw this reported here this AM

https://ir.tesla.com/news-releases/...date-first-quarter-2019-financial-results-and

I think April 24th is early.... and 2 days after Autonomy day.

This might be bullish. Early results often indicative of an upside surprise.

But it might not. Could be that a cap raise is planned off the back of the autonomony event and they need to get the numbers out there too.

Play carefully any amateur options players, people here saying it’s definitely bullish might well be wrong.

 

[googlepeakoil]

“Panasonic established a battery production capacity of 35GWh in Tesla’s Gigafactory 1 by the end of March 2019 in line with growing demand,” Panasonic said.

“Watching the demand situation, Panasonic will study additional investments over 35GWh in collaboration with Tesla.”

Panasonic's response...
So the only real news is GF1 capacity is already at 35gWh rather than previously expected 24-26gWh. So main question is, what are they doing with all the batteries?

If you do the maths on Panasonic / Tesla's output.
5500 model 3 cars a month x 65kwh average capacity (some 75's some 65's a few 50s) x 52 weeks a year - you get 18,947,500 (about 19kWh). That's only 60% of 35kWh. I doubt that Powerwall and Powerpack capacity are anywhere near that equivalent given all the delays customers are reporting in getting their Powerwalls (remember that 18650's are made elsewhere and supplied to Fremont)
The problem might be Panasonic installed 35kWh of capacity years ago. Then Tesla and Elon on a conference call announced their infamous problems with assembling the batteries into a pack (the 3-6 month delay). So Panasonic have had all this capacity to do 35kWh and maybe Tesla has only had demand and capacity to use max 25 for the last 1-2 years. So no surprise Panasonic might not expect Tesla to need 50+ kWh capacity - and have put on hold their plans. Panasonic reported a massive loss on their battery manufacturing division. If your profit is based on producing 35GWh - but you only end up producing a fraction of that for the first year, then 60% after 2 I can imagine Panasonic aren't happy with Tesla!

 

[ZsoZso]

Help me out here. Are you saying that people are *less* likely to buy an EV *because* it doesn’t pollute?

If that’s the case, I’m giving up on the human race. We don’t deserve to survive.

I have concluded the same after observing the TSLAQ crowd and their cronies in the main stream media!

 

[Fact Checking]

“Panasonic established a battery production capacity of 35GWh in Tesla’s Gigafactory 1 by the end of March 2019 in line with growing demand,” Panasonic said.

“Watching the demand situation, Panasonic will study additional investments over 35GWh in collaboration with Tesla.”

Panasonic's response...
So the only real news is GF1 capacity is already at 35gWh rather than previously expected 24-26gWh. So main question is, what are they doing with all the batteries?

Observations:

• : "The Nikkei" is the somewhat shadowy Japanese old-money financial publication that owns the Financial Times, which broke the recent FCA news. One way to read that would be that breaking the FCA news can now be seen to get a Tesla positive news leaked, to give greater impact to a supposed negative story and pressure Tesla in negotiations. The reporter who reported today's Panasonic news is an author of reliable hit pieces (hat tip to @Nevin):
  • "Panasonic rattled by high-maintenance partner Tesla"
  • "Panasonic uneasy about partner Elon Musk's bombshells"
  • "Panasonic profit sinks as Tesla partnership hits speed bump"
  • "Another January, another misleading iPhone supply cuts story from Nikkei"
• : I'm pretty sure Panasonic pressured Tesla to expand faster and to give them the Shanghai battery deal. Tesla either refused or stalled. Whether it's caution or "waiting for Maxwell" is unclear. I can very much see Tesla punting to not expand GF1 from 35 GWh/year to 50 GWh/year this year, because Tesla would be obligated to buy all the cells that Panasonic makes before Model Y output is ramping up - giving Panasonic leverage over Tesla if they don't grow that fast. As Elon said: no more "bet the farm" decisions.
• : The 35 GWh/year cell output at GF1 is a positive surprise - Carsonight estimated total output to be around 27 GWh. Crow eating times for the bulls who underestimated cell capacity by 30%. Lends support to the thesis by @neroden that the primary constraints now are Fremont and N.A. demand.
• : April 24 Q1 earnings is normally bullish AF - just like the delay of the Q1 deliveries & production report was bearish. (But who knows.) The usual Q1 earnings report release date is early May.
  
• : ARK Invest's Cathie Wood just tweeted this:
  • "Not in the least: our investment time horizon is five years. Our conviction in $TSLA has increased in the last three months. Tune in to its #autonomy day on April 22. It will put $LYFT to shame."
  • My take is that major Tesla shareholder ARK Invest is probably better informed then the rest of us what kind of demonstrations are going to be made in 10 days...

What is interesting is that the Nikkei story broke just hours after Tesla announced earnings for April 24 - it gives the pattern of a positive news nullification attempt.

 

[Carl Raymond]

I have concluded the same after observing the TSLAQ crowd and their cronies in the main stream media!

I’ve never considered the TESLAQ few as representative of humanity. Dregs.

 

[hacer]

... I did mean to imply that testing is utter rubbish if thousands of tests didn't bring up that 100% consistent deficiency once. ...

So then you must think all other car makers testing is rubbish too. Because every single OEM has had to issue major recalls at one time or another because something defective in the design of their cars that they were not immaginative enough to develop the test case to discover it until real world experience came along. Any rational person would not call this rubbish, simply ordinary mistakes or failures.

In Tesla's case that you sight, the stopping distance was increased slightly over one car length. Nobody died and there isn't even any evidence that any accidents were caused before it was fixed. Compare that with Boeing's 737 Max 8 or BWM for its fire problems while parked BMW recalls 1 million vehicles for fire risk, or Mercedes for brake problems Mercedes-Benz Recalls SUVs for Brake Issue or Volvo not bolting down their seats Model year 2018-2019 Volvo XC60s and S90s recalled. I could go on and on but I've made my point. I won't even bring up the many wrongful death lawsuits that have brought to light various malfeasance from a variety of car makers.

My opinion is that most of this is not "rubbish" in testing or elsewhere. Mistakes and oversights happen to everybody. Somehow certain people want to hold only some entities to a higher standard even when their actual record is among the best of all auto manufacturers.

 

[Fact Checking]

This might be bullish. Early results often indicative of an upside surprise.

But it might not. Could be that a cap raise is planned off the back of the autonomony event and they need to get the numbers out there too.

Play carefully any amateur options players, people here saying it’s definitely bullish might well be wrong.

I agree that caution is warranted and that the timing of the early earnings report (a week before the usual early-May date) is not 100% indicative of positive Q1 results.

But the timing is nevertheless weird: reporting deep losses just 2 days after the Autonomy Investor Day would completely nullify any investor confidence and uptick from the autonomy demonstrations. Many news sources probably won't even have reported by the autonomy event by that date. Both dates are highly discretionary by Tesla, and keeping at least a week between a positive and a negative event, for the news cycle to be completed, seems prudent.

I.e. if Q1 financials as awful as expected by @luvb2b, @ReflexFunds, @schonelucht and others, then the timing of putting it just two days after the Autonomy event is really bad - which of course is not totally impossible - Tesla PR has been bumpy in the past. Negative TSLA news tends to nullify positive news pretty reliably, due to the Tesla-negative 'common wisdom' of most mainstream media outlets.

I also agree that leveraged bets around options need to be careful: only risk what you can afford to lose. Not advice.

 

[AudubonB]

Phone is about to die; can’t charge.
@hiroshiy or others:
Pls pull up Panasonic day chart wrt Nikkeibun article, tho I’m betting it appeared after TSE closed.
This smells like something left in a Tsukiji drainpipe over a holiday weekend.

 

[seldon]

If you do the maths on Panasonic / Tesla's output.
5500 model 3 cars a month x 65kwh average capacity (some 75's some 65's a few 50s) x 52 weeks a year - you get 18,947,500 (about 19kWh). That's only 60% of 35kWh. I doubt that Powerwall and Powerpack capacity are anywhere near that equivalent given all the delays customers are reporting in getting their Powerwalls (remember that 18650's are made elsewhere and supplied to Fremont)
The problem might be Panasonic installed 35kWh of capacity years ago. Then Tesla and Elon on a conference call announced their infamous problems with assembling the batteries into a pack (the 3-6 month delay). So Panasonic have had all this capacity to do 35kWh and maybe Tesla has only had demand and capacity to use max 25 for the last 1-2 years. So no surprise Panasonic might not expect Tesla to need 50+ kWh capacity - and have put on hold their plans. Panasonic reported a massive loss on their battery manufacturing division. If your profit is based on producing 35GWh - but you only end up producing a fraction of that for the first year, then 60% after 2 I can imagine Panasonic aren't happy with Tesla!

My theory is the unaccounted for batteries are going into TE products. Probably commercial powerpacks and grid solutions. Telsa has given guidance that TE will revenue will double in 2019. The new Grohman line started operating at the end of Q4. We also have reports of an intense pack production push in GF1. Unexpected revenue from TE could be one of the positive surprises in Q1 ER.

 

[Hock1]

I think the simple answer is "China".

“Panasonic established a battery production capacity of 35GWh in Tesla’s Gigafactory 1 by the end of March 2019 in line with growing demand,” Panasonic said.

“Watching the demand situation, Panasonic will study additional investments over 35GWh in collaboration with Tesla.”

Panasonic's response...
So the only real news is GF1 capacity is already at 35gWh rather than previously expected 24-26gWh. So main question is, what are they doing with all the batteries?

Perhaps building 120 kwh packs for S-X refresh.

 

[neroden]

I.e. if Q1 financials as awful as expected by @luvb2b, @ReflexFunds, @schonelucht and others, then the timing of putting it just two days after the Autonomy event is really bad - which of course is not totally impossible - Tesla PR has been bumpy in the past.

I'll go full "unlikely conspiracy" for a moment and suggest that management could have reasons to prefer a temporarily lower stock price. I mean, I can think of two off the top of my head. I think both are unlikely, but possible.

 

[jerry33]

On paper these new emissions limits will kill 20,000-40,000 people per year in the US if applied nationally, and that's before global warming damage. How does the media let this go with so little focus or outrage?

Media in the U.S. is controlled by six corporations. None of whom care about anything other than profits and the CEO's salary.

 

[hiroshiy]

Phone is about to die; can’t charge.
@hiroshiy or others:
Pls pull up Panasonic day chart wrt Nikkei article, tho I’m betting it appeared after TSE closed.
This smells like something left in a Tsukiji drainpipe over a holiday weekend.

The article was released after close of Tokyo so it might be targeted to pre market trading of US market. Panasonic shares doesn't seem to be affected.

 

[Fact Checking]

The problem might be Panasonic installed 35kWh of capacity years ago.

I don't think this is accurate: just today Panasonic said that they have completed expanding GF1 to 35 GWh/year on 2019 March 31, and last year Tesla reported cell output capacity at around 18 GWh/year, before the Panasonic expansion (which involved installing new lines).

Here is a Tesla's Q2'2018 10-Q:

"At the end of July [2018], Gigafactory 1 battery production reached an annualized run rate of roughly 20 GWh, making it the highest-volume battery plant in the world by a significant margin. Consequently, Tesla currently produces more batteries in terms of kWh than all other carmakers combined."​

So Tesla and Panasonic almost doubled GF1 capacity within about 6-7 months, from 18 GWh to 35 GWh.

This is how Tesla characterized their GF1 expansion plans back in the 2015 10-K:

"By the time the Gigafactory reaches full, annualized production in 2020, we expect battery pack production capacity to reach 50 GWh. Of this, we expect to build 35 GWh of cell production capacity at the Gigafactory and purchase 15 GWh of cells from other manufacturers, potentially including Panasonic."​

So the 35 GWh GF1 target and intention to use non-Panasonic cell suppliers dates back to 2015, and their deadline for that was 2020, not 2019...

They dropped this language from 2016 and later 10-K's - i.e. they went more opaque about their Gigafactory expansion plans.

 

[Pras]

"Panasonic established a battery production capacity of 35GWh in Tesla's Gigafactory 1 by the end of March 2019 in line with growing demand," Panasonic said.

"Watching the demand situation, Panasonic will study additional investments over 35GWh in collaboration with Tesla."

Tesla did not immediately respond to a request for comment.“

I mean they said, they’re just done with the expansion planned and will evaluate whether to continue. What’s surprising? Of course they’d expected shanghai deal, and now that Tesla is sourcing local, they have to evaluate.

 

[schonelucht]

If you do the maths on Panasonic / Tesla's output.
5500 model 3 cars a month x 65kwh average capacity (some 75's some 65's a few 50s) x 52 weeks a year - you get 18,947,500 (about 19kWh). That's only 60% of 35kWh. I doubt that Powerwall and Powerpack capacity are anywhere near that equivalent given all the delays customers are reporting in getting their Powerwalls (remember that 18650's are made elsewhere and supplied to Fremont)
The problem might be Panasonic installed 35kWh of capacity years ago. Then Tesla and Elon on a conference call announced their infamous problems with assembling the batteries into a pack (the 3-6 month delay). So Panasonic have had all this capacity to do 35kWh and maybe Tesla has only had demand and capacity to use max 25 for the last 1-2 years. So no surprise Panasonic might not expect Tesla to need 50+ kWh capacity - and have put on hold their plans. Panasonic reported a massive loss on their battery manufacturing division. If your profit is based on producing 35GWh - but you only end up producing a fraction of that for the first year, then 60% after 2 I can imagine Panasonic aren't happy with Tesla!

I believe this is likely the best explanation. The purchase obligations are really starting to bite this year. In fact, looking at evolution of the disclosed numbers some purchase obligations moved from 2018 to 2019. At the time it wasn't clear if this was due to Tesla not ready to absorb whatever Panasonic was producing or that Panasonic wasn't able to deliver what Tesla wanted to purchase. Now that we have confirmation that the Gigafactory is running at 35GWh but Tesla is at best absorbing 21 GWh on a yearly rate, there is no way to spin that as good news. And that 20GWh rate is based on 5500 cars sustained every single week (Tesla is still not there) with a very generous average capacity 66kWh per car (doubtful they'll maintain that kind of average once SR is available worldwide) and doing slightly better than guided 2GWh energy product. Tesla will need to find a way to soak up 14GWh of cells very soon now.