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

[Tslynk67]

I am hoping your “Oct 2018” is a typo. I purchased my MS in Sept 2018, it was an inventory car made in late Feb 2018, and I paid for FSD as part of the purchase. I believe the car has AP2.5.

I have been assuming that my FSD purchase gets me a free upgrade to HW3. Any reason that it might not?

Thx

Yeah, it’s incorrect. Anyone AP2 onwards purchasing FSD will receive HW3, they have to, FSD won’t be fully available otherwise.

I would assume pre-AP and AP1 don’t even get the option on their car management page...?

 

[Tslynk67]

This is not a thinking moment in time, this is a doing moment.

Totally agree, I’m gonna stop thinking about a beer and get one from the fridge immediately!

 

[Krugerrand]

Definitely worried about a text battle I had with my dad yesterday. He is one of the smartest people I know (and I'm a surgeon). He is a VERY successful long term investor in the market, focusing on multiple companies, and selling options. He reads constantly. He keeps telling me to stay away from TSLA. That the stock is going to drop more. That Tesla is getting killed by Jaguar and Audi in Europe, etc. If he is getting mislead by the Bear articles, it makes me worry what less intelligent investors think after reading the headlines.

Nobody’s perfect. Even smart people. And in the end he’ll be happy to know that his progeny ended up smarter than he.

 

[Silent Ludicrosy]

Twitter should introduce an optional feature that allows you to have your tweets forwarded to someone you trust before publishing. It would make Elon’s day less stressful. I bet a lot celebrities would use it, especially those who use ambien (Roseanne).

 

[ggr]

I think 2013 counts. But technically the real oldtimer is someone who bought in 2010 and didn't sell after they were up 20% on the first day like I did. (I still bought back in at $40 though after the profitability tweet.)

I had IPO stock at $17, which I've been giving away to charities over the years. If I had thought about it, I'd have kept one share. As it is, I still have 33 shares with a cost basis of $33.76. I must remember to only donate 32 of them...

 

[bdy0627]

Not really. The source of the wave is Tesla's desire to drive in transit as close to zero as possible by the end of each quarter to make the numbers look good. The logistics of batching overseas production and shipments kind of made sense when they were much smaller, but at their current scale the wave is horrific for logistics, customer service and other important operating metrics. That's why they've promised to stop doing it for a year now.

But killing the wave means one quarter of depressed deliveries, revenue and profit. It also means elevated inventory and lower cash from that point on. That's why they keep putting it off.

It sounds like we are seeing the first indication that they are actually unwinding the wave approach now with both U.S. and international batches being produced rather than just international, according to the earlier post from @neroden. Since the wave approach focuses on international 1st half of quarter, U.S. second half, with it becoming more balanced, we should see relatively increased U.S. deliveries possibly as early as this month then. Perhaps that is also one reason why they are seeing a record number of deliveries in April in terms of 1st month of any quarter. Previously, 1st month deliveries did not go to the U.S.

 

[Artful Dodger]

I think Elon’s justification of the 500k vehicles tweet was because it was stated on the call. But I don’t know that it was “written” in official communications. So I do think that tweet would now be considered in violation per the new rules if it was to have happened now.

No, it was clearly stated in the Q4'18 Update Letter: (PDF)

"OUTLOOK

"Model 3 production volumes in Fremont should gradually continue to grow throughout 2019 and reach a sustained rate of 7,000 units per week by the end of the year. We are planning to continue to produce Model 3 vehicles at maximum production rates throughout 2019. Inclusive of Gigafactory Shanghai, where we are initially aiming for 3,000 Model 3 vehicles per week, our goal is to be able to produce 10,000 vehicles per week on a sustained basis. Barring unexpected challenges with Gigafactory Shanghai, we are targeting annualized Model 3 output in excess of 500,000 units sometime between Q4 of 2019 and Q2 of 2020.
​

The letter to investors also provided clear guidence for 10K Model 3s expected to in transit at the end of Q1 (the final number was just 6% higher than guidence at 10.6K in transit):

"While the number of Model 3 vehicles produced should increase sequentially in Q1, deliveries in North America during Q1 will be lower than the prior quarter as we start delivering cars in Europe and China for the first time. As a result of the start of Model 3 expansion into Europe and China, deliveries will be lower than production by about 10,000 units due to vehicle transit times to these markets."
​

This update letter was released on Tesla's IR website BEFORE the Conference Call.

TL;dr The SEC can't read AND doesn't listen.

 

[bdy0627]

You are not alone

<not an advice>
I'm thinking of leveraging up i.e. move the calls to either higher OTM or earlier expiration. But not sure we have reached the bottom or how long it might take to come up - even with the SEC settlement.
</not an advice>

This is what I am looking at as well. Weather the storm and then increase leverage however you can. I have been doing that for a while and it used to work incredibly well. However, with this falling wedge, where our climbs have been rather modest, I haven't been selling enough of the calls before we dip again. That's been the killer for me. Total bloodbath. Each time, I add a little more to the pot and a month later find myself in an even bigger hole. If I could do it over again, I would just wait for the breakout from the downtrend. You miss the bottom, but it's way safer that way. That's not exactly an option at this point. No way I'm selling here and sitting on the sideline. Bottom line - long falling wedges like we have been in are brutal for longs. I'm sure most of our accounts, at least those with a significant percentage of calls, look awful right now.

 

[Silent Ludicrosy]

Besides the RHD variant, what parts are different in the European models? Just charging port and taillights?

 

[bdy0627]

A good percentage of luxury car buyers at least casually follow business news.

"Another Yuge Loss for Tesla" headlines don't help demand.

Absolutely. It's naive to think the negative Tesla financial headlines don't have any effect on potential buyers.

 

[TradingInvest]

Tesla's solar panel online ordering is very simple. You can order the whole package, see how much you pay, and how much money get generated each year. In addition to federal incentives, some states also offer credits or rebates. Hawaii's pay back period is only 4 years.

• Arizona Solar Rebates
• California Solar Initiative
• Colorado Solar Rebates
• Connecticut Solar Rebates
• Hawaii Solar Tax Credit
• Maryland Energy Grant & SRECs
• Massachusetts Solar Rebates & SRECs
• New Hampshire Rebates
• New Jersey Rebates & SRECs
• New York Solar Rebates
• Pennsylvania Rebates & SRECs
• South Carolina Rebates

 

[bdy0627]

I guess... I won't be too popular here, but I'm just a lurking retail investor monitoring the bulls' sentiment. It amazes me how could anyone enter into a trade with NO (up/down) exit strategy. Especially when there is a relatively lot of money at stake. I'd rather donate that money to non-profits.

You are talking about investing vs trading. Buffet vs Livermore. Investors are investing in a company they have confidence in. They step out when their thesis/confidence in the company changes, not based on stock movements.

 

[Artful Dodger]

Retrofit will only be free to those Oct 2018 or later cars which have paid for FSD. Sounds like the historical take rate for FSD is approx 10%. Every one else pays cash to upgrade to FSD Computer (its not required just to run std AP).

<==MOD: This statement needs to be fact-checked. This Mod Flag will remain until this is verified or debunked. Caveat lector.​

EDIT: A helpful comment pointed out a typo quoted in my comment above. Tesla cars produced "post-MobileEye" beginnning in Oct 2016 come with HW2+ sensors and are upgradable to FSD Computer.

Sep 2016 and previous Teslas can not be upgraded to FSD (Elon says all the changes to the wiring would cost more than building a whole new car).
______

On March 29, Elon tweeted that FSD Computer will be a free upgrade for everyone that purchased FSD package with the HW2+ Tesla. Here's the tweet: (MOD: if you choose to remove your flag, kindly also remove this comment. Tks).

Elon Musk‏ Verified account @elonmusk Mar 29​

"Anyone who purchased full self-driving will get FSD computer upgrade for free. This is the only change between Autopilot HW2.5 & HW3. Going forward “HW3” will just be called FSD Computer, which is accurate. No change to vehicle sensors or wire harness needed. This is v important"​

 

[Artful Dodger]

I am hoping your “Oct 2018” is a typo

Oh of course it is. It's common knowledge HW2 started shipping in Oct 2016 with the end of the Mobileye arrangment. Pardon any confusion.

Cheers!

 

[Remus]

Last Friday Chicago was at 32 3s. After the weekend it was low teens. Over the week inventory jumped two times.

S and X have been high and more were add this past week. I’d think they would need to be discounted to move with the refresh vehicles coming.

We have 4-8 inches of snow coming so I bet this weekend will be soft.

OT

I lived in Chicago suburbs for 5 years. The most depressing time of the year for me is April to May, as I waited so damn long for spring to come but it just won't. It tends to be overshadowing weather too, adding to my depression. When snow comes early May I always wanted to cry. Watching my coastal friends enjoying their spring won't help either.

 

[bdy0627]

Elon is not stupid.

No, but he does stupid things sometimes.

 

[izemize]

You are talking about investing vs trading. Buffet vs Livermore. Investors are investing in a company they have confidence in. They step out when their thesis/confidence in the company changes, not based on stock movements.

And investors shouldn't have a downside stop-loss limit? You can still believe in a company and re-enter whenever you feel comfortable.
If it's just "play money", it's all fine, but people in this thread were talking about "year's worth of salary" losses in option contracts. In my mind that's trading and not investing.

4 ships out of SF80 and were told they’re full this quarter. That’s at least 4000 per boat and it’s april still. 30,000 in April still seems tough, but 30,000 in May seems in the bag. I think 25,000 in April should be a bullish sign on path to 90k for Q2.

Here you can follow the ships: Tesla Carriers
With the hashtags you can search for photos and do your own estimates. So far this quarter, one ship dropped off some S/X in Japan. One ship is on its way to the EU with about 3500 cars. And one ship is on its way to China with about 1,000 cars. Currently there are about 4,000 cars lined up for the next two ships, expecting to leave in April. I'd say that's about 9,000-9,500 cars in transit to the EU/Asia in April.

 

[Artful Dodger]

I agree that it's looking like they should hit 10,000 model 3/week between Fremont and Shanghai some time during Q1 or possibly Q2 of 2020. I think everyone should scale back expectations of hitting 10,000/week in 2019.

Again, that's the 'care bear' practise of going by memory to 'quote' Tesla's guidance instead of going to the source. Lets read from the actual Q4'18 Update Letter:

"Barring unexpected challenges with Gigafactory Shanghai, we are targeting
annualized Model 3 output in excess of 500,000 units sometime between Q4 of 2019 and Q2 of 2020."​

Again, this Update Letter was published on IR.TESLA.COM before the 2018 Q4 Conference Call, and is still available for download there right now.

It'd be helpful if certain people quoted the source instead of relying a faded, inaccurate memory. Would save many inaccurate, misguided conclusions, and jumping the shark to claim hubris. Rediculous.

Regards.

 

[dc_h]

The idea that solar technology/pricing wouldn't improve markedly during the twenty years of phases 2 and 3 to the extent most property owners, rather than renewing for an additional ten years, would tell SCTY (now Tesla) to "get that antiquated mess off my roof" always seemed like an inevitable outcome --yet lease/PPA extensions between years 20 an 30 were a major component of the financial "no brainer" justification for buying out SCTY. If removals rather than renewals ensue, phase 4 will not be monthly cash flow receipts but a profit/cash drain.

Installation costs need to fall more then performance needing to improve. You are right that new systems will decline in cost and increase in performance, but an existing system requiring no service would still likely be cheaper then a new system due to one time installation costs. Reduce installation cost by 75%, which is possible, or cost effectively integrate with roofing and the story changes. I think uptake on 20-30 years should be over 50%. Not sure what is needed to break even, curious if you or neroden have thoughts on required percentages.

 

[bdy0627]

Definitely worried about a text battle I had with my dad yesterday. He is one of the smartest people I know (and I'm a surgeon). He is a VERY successful long term investor in the market, focusing on multiple companies, and selling options. He reads constantly. He keeps telling me to stay away from TSLA. That the stock is going to drop more. That Tesla is getting killed by Jaguar and Audi in Europe, etc. If he is getting mislead by the Bear articles, it makes me worry what less intelligent investors think after reading the headlines.

That's funny. My Dad's the same way. He's very into stocks. He's a very successful diversified investor. He watches the business channels a LOT. No surprise that he is telling me to run for the hills. Tesla is going to fail. I think what he fails to realize is that Tesla is a difficult to understand hyper growth company. He doesn't understand, or even care to understand, the forces against it. He is also an older (and wiser?) investor who, for whatever reason, trusts the financial media a whole lot more than I do. IMO, once financial media is telling you a stock is in trouble and going down, that's about as good a contra-indicator as I've seen. When they are shouting how much lower a stock is going to go and how bad the company is doing, that's the time to seriously start thinking about buying.