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

[anthonyj]

Darn you guys buying the dip. Oh well. I’ll sell some at $380 in a few months and buy some more at $230 in maybe December?

 

[neroden]

I will say that I think Tesla is seriously working on the service issues. Last time I communicated, comms were far better than before. Every report is saying that parts availability is improving substantially and quite quickly. And they've actually got a service center in Albany, which shows some attention to geography!

 

[techmaven]

Looking at the 10-Q, cash doesn't look nearly as bad as I had thought. They had almost $200 million more in unused, committed credit line QoQ, which means they could have put that into the cash balance without anyone batting an eye. Accounts receivable is now over $1 billion, or about $400 million higher versus Q1 2018. The timing of the quarter end snapshot likely made things look worse. Likely one week later the cash balance is closer to $2.7-2.8 billion, adjusted for the same level of unused recourse credit.

They likely also drew down finished goods inventory in April, also raising cash balance and then with the ending of extreme geographical batching due to working capital constraints, they probably have the choice of raising capital now or later.

 

[pnungesser]

i was looking at that too. isn’t it the zev credits they’ve accumulated and not to do with FCA yet? i thought FCA was speculated to be a 200-300mm anyway. yes more than the 140 but not so much that the company depends on it ??

I think you are right. zev credits are actually sold. The FCA pooling is probably dome by contract, not sale, and payment is structured in the contract. Not a lawyer, so take it for what it's worth.

 

[Cloxxki]

- 2170 enable a much higher charge rate
- 2170 arguably have a longer life cycle

We are holding off on our purchase till the battery pack update on the X or the model Y.

Actually that's incorrect.
- There is no reason that 18650s can't get the same chemistry as used in Model 3. Both charge rate and cycle life are more about chemistry than packaging and in any case, the smaller package is better for both.
- Why? Well, larger cells have worse surface to volume ratio (2170 added +16.6 diameter => +16.6% surface and due to squaring +36% volume) which affects cooling and with it, (dis)charging rate and duration before suffering degradation.

 

[mongo]

I will say that I think Tesla is seriously working on the service issues. Last time I communicated, comms were far better than before. Every report is saying that parts availability is improving substantially and quite quickly. And they've actually got a service center in Albany, which shows some attention to geography!

One is listed in Toledo, OH now also. Much better for SE Michigan. 2 hours closer than Cleveland (each way).

 

[lklundin]

Yep, it makes me not buy the product which is advertised. Even if the product is actually good.

There are two ways to respond to subconscious suggestion. I happen to be what they sometimes call "oppositional-defiant", which is relatively uncommon.

So most advertising flat-out backfires on me: the more you advertise, the less likely I am to buy your product.

Unfortunately, I'm in a tiny minority of humans.

Awesome! Until now I thought I was alone...

 

[Mike Smith]

I think $240 will be vigorously defended. Getting back above that would make this drop look like a look below and fail with obvious climb potential. Shorts cannot let that happen if they can help it.

Ihor said last week that the big shorts are fully invested, and that it would require momentum to get new shorts involved (which we saw Friday).

Ihor Dusaniwsky on Twitter

 

[Silent Ludicrosy]

Actually that's incorrect.
- There is no reason that 18650s can't get the same chemistry as used in Model 3. Both charge rate and cycle life are more about chemistry than packaging and in any case, the smaller package is better for both.
- Why? Well, larger cells have worse surface to volume ratio (2170 added +16.6 diameter => +16.6% surface and due to squaring +36% volume) which affects cooling and with it, (dis)charging rate and duration before suffering degradation.

Maybe new packs w/ 18650s and ribbon cooling loops in the works? 300kw charging possible?

 

[lklundin]

"Automotive Regulatory Credits

We recognize revenue on the sale of regulatory credits at the time control of the regulatory credits is transferred to the purchasing party as automotive revenue in the consolidated statement of operations. Deferred revenue related to sales of automotive regulatory credits was $140.0 million and $0 as of March 31, 2019 and December 31, 2018, respectively. We expect to recognize the deferred revenue as of March 31, 2019 over the next 2 to 3 years."

Is this FCA? As I'm reading this it's a one time payment of 140m$, but that doesn't square up for me at all.

Given that the exact terms of the EU pooling agreement with FCA are confidential Tesla's filing may be formulated to be within the letter of the law while disclosing the minimum amount of details, on e.g. similar, subsequent income.

 

[kakamora]

I heard the same way that yes it makes sense but only when the time is right. I assume he thinks maybe waiting a few quarters. If we see the debt repayment, next one is in Q4, maybe best to raise right before that or try to roll forward the debt. Also instead of equity, why can’t they issue convertibles? That should be less dilutive than the current stock levels.

Source: SA: TSLA Q1 call transcript
Elon Musk

Yes. I don’t think raising capital should be substitute for making the company operate more effectively. So that in that sense, I think it’s just, it’s important to have strong financial discipline of the company and just to make sure we don’t have extraneous expenses and we’re just being frugal with capital. If we keep raising capital every time, then it just takes we now have the forcing function improving the functional operation of the business. So, I think it is healthy to be on a Spartan diet for a while. At this point, I do think there are it is similar to raising capital. That’s a but this is sort of probably about the right timing, but yes. [the sentence that is causing some confusion]


Toni Sacconaghi

So, does that mean that investors should expect the capital raise in the near to medium term? And I hear you on the force and constraint, but I mean growth does eat cash especially in a capital-intensive business. If you really do believe you have a first mover advantage, why wouldn’t you want to push it as quickly as possible even if it meant raising capital in the short term.

Elon Musk

Yes. First of all, I’ll just say that I don’t think capital has been constrained on our growth thus far and the type of those fund in fact, if there was a final constraint on growth would’ve faced capital before now. But I think it is very important as company scales to make sure we are on a solid foundation and that we’re we have the appropriate financial discipline throughout the company and are spending money very efficiently. At this point, I think we are doing that. There’s more work to do, and Tesla today is far more efficient operating organization than it was a year ago. We’ve made dramatic improvements across the board. And so, I think there’s merit to the idea of raising capital at this point. [This is super clear though. No?]

 

[uselesslogin]

Well, I missed the best price to buy at but either way I had decided to buy today. (at $238)

1) Model S/X sales were a huge issue with the Q1 report. More range and the full return of the entry level price level standard range will worst case get these back up to 20k. They will then be helped in Q3 with the interior refresh.

2) I don't see a reason not to believe that they produced as many Model 3 as they could with the given battery constraints. Now, with SR+ they can produce more.

3) After the big splash for the $35,000 version there was an obvious uptick in demand which led to slight price increases.

4) I've been seeing a lot more posts on the reddit daily discussion thread from new or prospective owners.

5) Tesla.com traffic almost doubled in March. Amazon statistics it continues to move up in traffic ranking during April. This is a strong indicator of demand.

6) Model 3 inventory at ev-cpo.com is moving briskly. I don't know how useful this would be but I would think Tesla would want to make any inventory car visible on the website to encourage immediate purchases.

7) The posts here. It just looks like a good time to buy based on my 6 years of obsessively following this forum and the kinds of posts I see and how the affect market sentiment.

Of course I still have cash left over if I need it and what I buy today will all be sold at around $320 so that I have money to trade the next dip.

Edit: just re-reading this and would also like to mention I have a core untouched position and then trading shares/cash.

 

[schonelucht]

Seems like if you were having that big an issue with the 3s you would have taken them out of service and sold them for sometimg else (especially if you had other makes of cars too). If you went out of business why are you using your last $$ to buy a billboard adv.? If I was your creditor I would have some issues with that.

The billboard thing is the Chinese company, see here for the full story. The Dutch company obviously didn't have 3's since they refer to service issues going back to December 2018.

 

[Cloxxki]

Maybe new packs w/ 18650s and ribbon cooling loops in the works? 300kw charging possible?

That seems the way to go.
With 100 kWh still doable with the chemistry we know and love from the Model 3, plus the cooling tech that seems to work so well for even those thicker harder to cool cells, a lot is possible.
Let's start with claimed peak charge rate for Model 3. 256 kW / ~80.5 kWh = 3.18C
Let's assume 102.4 kW as with old chemistry in the 18650 100 packs: 102.4/80.5 = 1.27x higher charge
1.27x 256 kW = 325 kW.
And that's before taking into account the thinner easier to cool cells.

350 kW to max out most CCS chargers would be totally on the cards.
To make that work though, charge voltage may need to be upped. Porsche didn't go for 800 V just to make a prettier number than 400 V. And seeing how thin Tesla's water cooled cable is, I don't know that there is no voltage doubling switch in there. And I don't know if such would even be noticed by excellent hackers if they weren't look for it. That's pure speculation on my part. But surely going 350 kW or even 400 kW which I bet at the cell level would be fine with the new parallel cooling tech, 1,000 Amps may be pushing it. Cool (no pun intended) for dashes and even crazy regen but for a multi-minute charging session...
I fear that Tesla slightly dropped the call and is stuck with <400 Volt architecture. And 256 kW may be all even S and X are going to get. They got a lot right but I fear that here they miss out due to a simple historical self inflicted limitation. Hope to be proven wrong, S and X buyers pay enough to deserve Mach 1.5 charging, if you ask me.

 

[Nocturnal]

So we aren't going to see any upsides large enough to materially shift the SP upwards until after Q2 numbers right? Barring the randomness of the market of course.

Semi-OT data point/story. My local Tesla club was invited to the Earth Day sermon our local megachurch was doing. The sermon focused on caring for the planet etc. and called out driving more efficient cars, walking, biking etc. We had 2 model 3s and 2 model Xs, talked to a bunch of people and just gave others a chance to actually look at one in person. Most Tesla owners are constantly spreading the good word, let's hope it works.

 

[keydiver]

Tesla: 41.3B
Ford: 40.5B

That didn't last long..

Yes, but don't expect anyone to report it.

 

[EVNow]

I didn't ask about marketplace, I asked a technical question. Why advantage does Tesla have over Waymo solving unprotected left turns?

Because all things are not technical questions. Some of them are about management - and ability to take risks.

Tesla can put the left turn algorithm out as Beta and let the fleet make it better. Apparently an approach Google doesn't take. Remember to get good training data - you need a lot of variations. Both "good" and "bad" variations. That is when NN learns the best.

The other thing to consider are your assumptions. That they have better "sensors". May be they don't - may be Lidar is not the right sensor. Humans use vision and if you want to mimic human actions through NN, may be the right sensor is to use cameras. Not Lidar.

 

[Nocturnal]

Because all things are not technical questions. Some of them are about management - and ability to take risks.

Tesla can put the left turn algorithm out as Beta and let the fleet make it better. Apparently an approach Google doesn't take. Remember to get good training data - you need a lot of variations. Both "good" and "bad" variations. That is when NN learns the best.

The other thing to consider are your assumptions. That they have better "sensors". May be they don't - may be Lidar is not the right sensor. Humans use vision and if you want to mimic human actions through NN, may be the right sensor is to use cameras. Not Lidar.

Lidar is also ugly and expensive. You will never have personal cars that are shared via ride services with a giant LIDAR array on top.

 

[Spacemanspliff]

One is listed in Toledo, OH now also. Much better for SE Michigan. 2 hours closer than Cleveland (each way).

I posted in the service center thread but since about January Tesla has gone from 78 listed service centers to 97. With ones listed in Iowa (close to Omaha Neb) and Pearl, Miss. I’m also tracking some that aren’t listed like Superior, Co and one recently posted on reddit in the Chicago burbs, but seem close to coming online.

Interesting note is outside of the Tesla website I can’t pull any info on the one in Iowa or Pearl so if anyone sees anything post in the service thread.

 

[lklundin]

Good luck. Nobody in the commercial software business seems to provide release notes at all any more. Software development standards everywhere are awful these days compared to the 1970s.

Well, that depends.

Some years ago (and possibly still now) the Linux that the Tesla car runs internally was/is a Ubuntu distribution.

So just as a relevant example:

While a Ubuntu system installs itself it displays above the progress bar a slideshow with various highlights from its new functionality, basically notable parts of its release notes with a pretty-print function.

I don't see why a Tesla upgrading its firmware couldn't do the same thing for the highlights of e.g. new FSD functionality. That would at least mean that some people would see it, and those who wanted to could easily do so.

If such a slideshow was created, there could be a tick-box somewhere in the GUI where the owner could indicate that the slides are not/no longer of interest, and until that has been ticked, the slides could also pop up during e.g. Supercharging.

A mean, everyone talks about how cool it is that their Tesla gets better with each firmware upgrade, so why not provide this information?

(Yes, I know, USB playback is probably still borked, but knowing how the FSD has changed its behaviour is also up there on the priority list).