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

[saniflash]

Oh, also, I'm very impressed by their reduction in the vehicles-in-transit count. They really are sorting out that part of the logistics.

as they say in Marketing: Always optimize the funnel from the top. After production, now logistics, maybe next service? I hope so at least.

All the best for you @neroden

 

[Right_Said_Fred]

Poor Troy. I really appreciate his efforts, but his estimates were way off, in contrast to Q1, Q2 and Q3 when he was really close. Tesla must have changed something, probably used a higher % of available VINs, which broke his calculation method.

 

[Ratanpara]

If one look beyond 90 days performance window, Tesla is doing excellent job synchronizing supply and demand,

 

[anthonyj]

When do institutional investors report their holdings? Isn’t it every quarter?

 

[kyzhk]

market manipulation is so obvious

Just give a bullshit over optimistic estimate, so that you can claim a "miss". The production and delivery numbers are about in line with the estimates from this board.

How can we call out bullshits on wallstreet's estimates?

Scenario1
1) over-pessimistic estimate. Headline: XXX beats estimate by Y%! Stock jumps.
2) over-optimistic estimate. Headline: XXX misses estimate by Y%! Stock plunges.

We need headlines that call out how poor the wall street estimates are. Tesla's Q4 PD numbers are really good and shown growth over Q3. They are about at max production capacity without major capex in fremont now. (avg ~4.7k model 3/week, but the average includes the holidays and downtime for maintenance and tweaking)

Well, at the end should we really complain? Once you realize this is what the game is about we can squeeze extra money out of this bs.

I bought back all of my covered calls with handsome profits and loaded on some 2021 leaps this morning.

 

[ninpb]

A little help by SCE (socal) upping their EV rebate from 450 to 1k in 2019.

 

[Alphacrux]

I posted this on Xmas Day and got 2 'likes' and a 'funny', but no real responses:

TSLA Market Action: 2018 Investor Roundtable

"Asking the experts here a what if scenario. What if na demand for model 3 has reduced to 4K per week and they deliver just slightly more m3 than in q3, yet come out with a highly optimistic q4 conf call in feb due to high demand in Europe and reiteration of mod y unveiling in March. What happens to stock price between now and then?"

While the numbers were not quite as bad as I had theorized (indeed, they are not bad but points to less than unlimited demand of higher-priced M3's in North America), it shows that I had the right idea.

We've now seen what the analysts think about the Q4 production and delivery numbers. Anyone care to guess what happens to the stock price after the Q4 conference call in Feb?

 

[SO16]

...I'm not sure how a company, at the center of a global problem such as climate change, goes from 100k -> ~250k cars delivered y-o-y (i.e. 250% improvement) and it's market price goes down ~3% y-o-y.

I'm heartbroken. Not even sure who to be disappointed in.

Elon is probably saying “WTF” too.

But I look at this is an opportunity to buy more “cheap” shares. Yup.... ultra bull here.

I prefer to see the positive in hard work. Shorts like to tear down hard work to make a profit. I realize it’s still spin either way but I feel like it’s immoral to want to discount someone else’s hard work.

 

[M3Rider]

Indeed, with a 15% increase in Model 3 production in Q4 vs Q3, labor cost per vehicle should go down by a similar percentage (labor cost is fixed; production is variable, so labor cost per vehicle decreases with increasing production).

Given that approx. half the cost of a Model 3 is in labor, then the gross margin per car should also increase by half, roughly 7%.

Then, a 7% increase in gross margin yields roughly a $200M increase in gross profit, (assuming an ASP around $53.5K per each Model 3 in Q4).

So that's yields about 20% more profit in Q4 than in Q3. I think. Please feel free to correct my estimates, @Fact Checking

I think 2018 Q4 financials are going to be huge.

Cheers!

Anybody feels like the media focus will not be on Q4 profitability, but on $2k price cut and saying it doesn't matter what happened in Q4, going forward Tesla margins will be cut in half, so margins are doomed, SP targets need to be cut in half etc. ? Even though the cuts only apply to U.S., which means 50% S/X and probably less for Model 3... If Europe gets 3k/week and China gets at least something, maybe 1k? then assuming production won't exceed 7k/week in Q1, that leaves 3k/week for U.S., which is <50%.
Btw, even with those recent tariff cuts, the prices in China will be biting - Tesla cuts Model 3 prices in China | Reuters
$72k for an entry level car? I assume MR, which will now be $44k in U.S.
This is expensive, I don't think I would have spent this myself. Unless there are tons of well off people there who don't care about money, I think this will mean a lot less sales than in Europe. Which is why I'm thinking 1k/week.
Anyway, this $2k/car price drop in U.S. will mean less than $1k/car for Q1 on average.

 

[MXWing]

For those outside of CA, I wanted to share a reply to someone in SoCal who thinks the market is cratering.

My two cents. is that because of the reduction in the EV Tax Credit that essentially had the effect of pulling forward purchases from Q1 2019 into Q4 2018. People on the fence about buying a Tesla or not those that wanted one made the decision in Q4 to purchase or decided to pass on the car.

Many reasons why someone cannot close a deal even at the "best timing".

-Existing leases
-Waiting for tax refund
-Winter drags down car sales as a whole
-Not everyone knows about the intricacies of the tax credit
-240 million people in the US, DO NOT follow Elon Musk on Twitter
-Only lease cars

YMMV but with an INCREASE in utility incentives, Model 3 is effectively $1,250 more expensive on Jan 1st than it was on Dec 31st for your particular market.

Really not consequential big picture.

Over two hundred thousand cars just got knocked out of the carpool lane in California as well. Whats the best car that will let them back in?

 

[wnorris]

...I'm not sure how a company, at the center of a global problem such as climate change, goes from 100k -> ~250k cars delivered y-o-y (i.e. 250% improvement) and it's market price goes down ~3% y-o-y.

I'm heartbroken. Not even sure who to be disappointed in.

There is a lot with $ investing in seeing Tesla fail.

I am surprised at how effective the negative PR push has been. In due time this will fail and it will likely fail spectacularly. Too many shares shorted on this one. Story is improving and will continue to in 2019 with Autopilot, Model Y, Semi, Roadster, Pick-up, and Tesla Energy.

The troubles of last summer created a situation that forced Elon to tighten the screws. This is finally starting to play out. Just needs a little more time.

 

[SOULPEDL]

We saw this bear response coming and it could be painful waiting for earnings in a month. But I've said that's where the news is going to be great as it's all about the Gross Margins. Feb 6 can't come soon enough, so I'm back to buying on this low low. Hopefully Elon can enlighten the world with some more candy before then. Summons update?

@Fact Checking, can we do another sampling on Q4 Model 3 margins (or better, earnings)? I'm in for 23.5% GM and $7.50/share earnings (swag). We've seen the analysis that says ~25% is possible (and the 6% earnings from somewhere here, I forget). However that could be based on conventional auto manufacturing and past material costs.

I really don't think this margin thing has been comprehended by the stock at all. Once again, quoting Google:

As a general rule, new vehicle auto dealers have a net profit margin of 1-2% on new vehicle sales. (This approaches 0% with Tesla). Gross margins, however, run between 8 and 10% for most full-line automakers, and luxury cars often earn 10-15% margins. Depends on the vehicle, market conditions, etc.​

Obviously the case has been made, even if EV competition warms up in 2020, Tesla still has a HUGE lead on the Manufacturing costs, especially with battery and low part counts/automation. If you think the car is new, smart, and efficient, we can assume production is also very new, smart, and efficient. And this may be the biggest unknown with Tesla.

OK, here goes some numbers, I could be way off in my analysis so could use some help... Model 3 margins were ~20% in Q3 so every car beyond the break even is closer to pure profit in terms of overhead?

15.32% improvement in deliveries this quarter: Q4 (61,394) - Q3(53,239) = 8,155 more Model 3's in Q4.

8,155 * $30K pure icing each = $245M (Maybe more. Anyone have actual material costs?)
~300M shares (outstanding + float?). That's about $1/Share in earnings increased from just the Model 3 uptick in Q4.

Anything to correct/add here to get closer to Q4 profits or Model 3 Margins?

 

[thx1139]

Millions of cars just got knocked out of the carpool lane in California as well. Whats the best car that will let them back in?

What cars got knocked out?

 

[tivoboy]

And in other news....

Once again GM totally fails at strategy.

https://www.cnbc.com/2019/01/02/gm-hit-200000-us-electric-vehicles-sold-in-2018.html?


Total preventable fail IMHO

 

[MP3Mike]

YMMV but with an INCREASE in utility incentives, Model 3 is effectively $1,250 more expensive on Jan 1st than it was on Dec 31st for your particular market.

What is the tax rate in California? 8%? Wouldn't that drop the effective cost increase down to $1,090? (Plus a reduction in the annual VLF.)

 

[MarcusMaximus]

I posted this on Xmas Day and got 2 'likes' an a 'funny':

TSLA Market Action: 2018 Investor Roundtable

"Asking the experts here a what if scenario. What if na demand for model 3 has reduced to 4K per week and they deliver just slightly more m3 than in q3, yet come out with a highly optimistic q4 conf call in feb due to high demand in Europe and reiteration of mod y unveiling in March. What happens to stock price between now and then?"

While the numbers were not quite as bad as I had theorized (indeed, they are not bad but points to less than unlimited demand of higher-priced M3's in North America), it shows that I had the right idea.

We've now seen what the analysts think about the Q4 production and delivery numbers. Anyone care to guess what happens to the stock price after the Q4 conference call in Feb?

>75% were non-reservation-holders. That doesn’t sound like a drop in demand. The incredibly low level of inventory also suggests that they’re still selling every car they can make; still production constrained, despite higher levels of production and shrinking supply of reservation holders(in the US, who wanted long range).

 

[MXWing]

This is expensive, I don't think I would have spent this myself. Unless there are tons of well off people there who don't care about money, I think this will mean a lot less sales than in Europe. Which is why I'm thinking 1k/week.

Can not apply Western thinking to China.

Brands like Apple and Tesla are Veblen goods in China. Lower prices are good, but you don't want them too low so anyone can afford them.

It's a paradox, yes.

The gateway to success over there is going to be celebrity endorsements and Musk kissing babies.

 

[Chickenlittle]

market manipulation is so obvious

Just give a bullshit over optimistic estimate, so that you can claim a "miss". The production and delivery numbers are about in line with the estimates from this board.

How can we call out bullshits on wallstreet's estimates?

Scenario1
1) over-pessimistic estimate. Headline: XXX beats estimate by Y%! Stock jumps.
2) over-optimistic estimate. Headline: XXX misses estimate by Y%! Stock plunges.

We need headlines that call out how poor the wall street estimates are. Tesla's Q4 PD numbers are really good and shown growth over Q3. They are about at max production capacity without major capex in fremont now. (avg ~4.7k model 3/week, but the average includes the holidays and downtime for maintenance and tweaking)

Well, at the end should we really complain? Once you realize this is what the game is about we can squeeze extra money out of this bs.

I bought back all of my covered calls with handsome profits and loaded on some 2021 leaps this morning.

I believe it's time for Tesla to start reporting monthly PRODUCTION rates I agreed with the current qrtly reports but now that they are up to 400,000 cars a year, the numbers will have more meaning and cut back on the manipulation the qrtly production numbers system made more sense when they were producing 20K or less cars

 

[MP3Mike]

Once again GM totally fails at strategy.

https://www.cnbc.com/2019/01/02/gm-hit-200000-us-electric-vehicles-sold-in-2018.html?

Total preventable fail IMHO

How exactly would GM prevent independent dealers from selling cars they have in inventory?

 

[Heimdallr]

Tesla Production & Delivery Estimates

#3 out of 100 on overall accuracy and #1 for Model 3 deliveries. I'll take it.