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

[Unpilot]

I bought into the 2016 Feb dip as it was a general market correction and Model 3 was on the horizon as a growth story. Now it is a bit more complicated as the big growth story Model 3 is done and it looks like it is not as big of a cash cow as I expected.

New story is FSD but I am not buying it and most of the institutional investors are also not buying it.

If TSLA makes a raise to speed up production of Y end of this year on the line of 3 then it would give the stock another growth story. Currently Y is too far out to have any material impact on the stock price.

This is a "demand" issue post...where is that cat fellow?

 

[Chunky Jr.]

Also, and most BEV fans refuse to see this in the eye... High charge rates at the cell level allow for smaller batteries, more affordable cars to WORK for actual people looking to replace their super average petrol car, which are a majority of the market

If there's one thing history has taught us, it's that technology does not get better and cheaper over time

 

[neroden]

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

Wow, that's great. With the Michigan anti-Tesla laws, I've been saying Toledo made tons of sense for years.

It's like they've got someone in charge of geographic distribution of service centers now

 

[neroden]

OT

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

FWIW, this means reverse psychology works on me. If everyone is badmouthing something, I start wanting to buy it...

... occasionally I worry that this has caused me to buy TSLA stock when I shouldn't.

Also, I probably should have just gotten a smartphone, but everyone was pushing them so hard, that I really don't want to. And I avoided buying cars until Tesla, which is probably partly because cars were advertised so heavily -- and that was probably irrational too.

 

[mongo]

Expensive, yes at this moment only high end cars can afford it.
Ugly? Maybe not.

How does it deal with bug impacts? (along with gravel thrown by truck in front)

 

[bdy0627]

Expensive, yes at this moment only high end cars can afford it.
Ugly? Maybe not.

That is going to make for some very expensive collision repair bills.

 

[Cloxxki]

If there's one thing history has taught us, it's that technology does not get better and cheaper over time

100 kWh packs are NOT needed to get an hour's worth of driving in a 15 minute road side charge.
If 40 kWh can do the same drive in the same time, why dump 60 kWh extra into the environment, doubling the break even mileage over a big BMW type car? Bragging rights over environmental concerns?

 

[neroden]

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.

InsideEVs April delivery estimates will come out sometime in May, and there may be a reaction to that. Or there may not.

 

[Navin]

Nice to see a little roar in Tesla.

 

[Cloxxki]

Damn. I thought it was dirt cheap.
Seriously, Ferrari competitor with lesser specs would have been at least 400-500K, maybe 1M, depending on how exclusive it is.

Tesla may choose to make it uber exclusive, slap $500K price, build it by hand and all that. This is a hallo car, they don't need to sell many, it just needs to exist. It never was going to be large profit center anyhow, but it needs to exist, so it can end up reviewed by magazines and on the wall posters.

Ferrari will sell zero fewer cars due to Roadster. Ferrari owners might add a Roadster because they want it. Causing a nice CO2 dump into the environment for zero extra miles driven.

 

[KarenRei]

The low resolution of radars is not related to the wavelength. The wavelength of the 77GHz signal is 4mm. But in order to create a high resolution receiver the array antenna has to be large.

The minimum resolvable detail for any electromagnetic-based sensor system (non-SAR) is proportional to the product of the wavelength and the aperture size. E.g. for a given aperture, radar resolutions will be orders of magnitude lower than optical. You can of course increase the resolution with a larger antenna (or multiple antennas acting as a larger antenna via interferometry).

Side lobes apply to visual-spectrum optics as well (airy disk). The larger the aperture relative to the wavelength, the narrower both the main beam and the side lobes become.

 

[EVNow]

I bought into the 2016 Feb dip as it was a general market correction and Model 3 was on the horizon as a growth story. Now it is a bit more complicated as the big growth story Model 3 is done and it looks like it is not as big of a cash cow as I expected.

New story is FSD but I am not buying it and most of the institutional investors are also not buying it.

If TSLA makes a raise to speed up production of Y end of this year on the line of 3 then it would give the stock another growth story. Currently Y is too far out to have any material impact on the stock price.

Depends on what you mean by "big growth". Q4 '17 to Q4 '18 was 3x. (30k vs 90k). That kind of 300% growth in delivery in one year will not repeat for Model 3.

Again I don't know what you mean by "big cash cow" - but when the production volume goes up, they can generate half a billion in cash flow every quarter. That along with loans should be enough to fund new GF and new products.

 

[Alexander Grea]

InsideEVs April delivery estimates will come out sometime in May, and there may be a reaction to that. Or there may not.

Uber's IPO on the 10th of May might help as well. Not because I think that TSLA will have a robotaxi fleet anytime soon. They won't.

However, it will show the insane valuations of the bigger private companies and might boost TSLA a bit.

 

[Chunky Jr.]

40 kWh can do the same drive in the same time, why dump 60 kWh extra

I can do a 300 mile drive much faster with a 100kWh battery that requires zero stops than a 40kWh battery that requires 2 or 3 stops.

All your concerns are temporary. What we have today was unimaginable 10 years ago. Maybe in 10 more years we'll have 500 miles of range that charges in 5 minutes and costs less than ICE. We don't know where the breakthroughs will come from, but we can be fairly certain that they will come.

 

[neroden]

Never been a big fan of SolarCity, as you all know. So not a big surprise :

FWIW, I am pretty sure this was Silevo.

While I've also never been a big fan of SolarCity, most of what they did was financially a lot better than most people thought; they just got way in over their head in risk terms by starting a shadow bank without Federal Reserve backstop.

The Silevo purchase, unfortunately, was not one of these things; it was actually just bad. The Silevo tech simply didn't pan out in production; the extreme competitiveness of the solar tech business meant that it was clearly a major gamble at the time, and not a good one.

I wonder if SolarCity is still using ZEP's patents -- that was their other significant acquisition. Their third acquisition, of a company which got "leads" for solar sales, was flat out stupid.

 

[Artful Dodger]

In market news - first time 240 was breached, the volume was 190k.

Yup, and 5.6M shares traded in the 1st hr of the session; another 2.5M in the 2nd hr for a total of 8.1M shares traded so far today.

Looks like plenty of buyers today with news of the SEC settlement, with SP up about $10 intraday. Let's see what the Short volume looks like at the end of the session.

Cheers!

 

[bdy0627]

Not expecting it, but if we can get above Friday's HOD, there would likely be a significant squeeze of the momentum shorts.

 

[HG Wells]

Just crossing the daily average volume now.
Lots of volume.

 

[Alexander Grea]

Depends on what you mean by "big growth". Q4 '17 to Q4 '18 was 3x. (30k vs 90k). That kind of 300% growth in delivery in one year will not repeat for Model 3.

Again I don't know what you mean by "big cash cow" - but when the production volume goes up, they can generate half a billion in cash flow every quarter. That along with loans should be enough to fund new GF and new products.

I agree there was a big growth due to M3. But most of the revenue jump has been done now.

The growth story is necessary if there is no profitability. In 2016 TSLA was not profitable and it was not a problem because we knew that Model 3 is coming and will make TSLA hugely profitable. Q1 and Q2 is probably temporary but it puts us into a position where we don't have either profits or a growth story in the future that will bring huge profits. Unless you buy into robotaxis being this story.

If TSLA will be sustainably profitable from Q3 onwards then the problem is solved.

 

[neroden]

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.

I think you're right. I suspect the $140mm in deferred revenue really is the first FCA payment.

Refresher on deferred revenue: this is where the cash has been received but the obligations related to the cash have not been performed. The obligation in the FCA case being "deliver so-and-so many cars in Europe so as to reduce our fines". That will take place over the next several years, as the filing states.

FCA probably has arranged to make several more payments to Tesla, which will also become deferred revenue. I suspect revenue will be recognized each time a calendar year ends and FCA's level of fines is assessed for that year, based on how many cars Tesla delivered. (I strongly suspect that Tesla can't recognize the revenue until FCA has certainty on how much they're being fined in a given year -- if I were at FCA I'd have written the contract that way.)