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

[ZachF]

Summed up; smart Alec quotes like the above are just that and don’t represent the whole picture.

 

[Krugerrand]

Companies should always try to give conservative targets then over achieve them. In many cases, it's better to not mention them until you are done. Investors should keep expectations low, then be positively surprised. If a company gives high targets then can't achieve within the predicted timeframe, it's the supporters who suffer the most.

I feel Tesla has been doing the opposite for quite a while. I understand there are all sorts of reasons to set high expectations. In the end it's not worth it.

That is akin to telling someone to keep their standards low and expect the same low standards from everyone else, so they and everyone else never fail to meet them, then can act shocked and awed when those low standards are met.

 

[Krugerrand]

Many thanks for proving my point.

 

[ZachF]

Many thanks for proving my point.

 

[Doggydogworld]

Last quarter they got worked into a frenzy because Tesla had not given any guidance. This quarter there was clear guidance: 90.000-100.000 deliveries.

Q1 S/X guidance was very clear - "slightly less than Q1 2018" (21,815). So 21k, give or take a few hundred.

Model 3 guidance was fairly clear:

"Model 3 vehicles produced should increase sequentially in Q1."
"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."
"deliveries will be lower than production by about 10,000 units due to vehicle transit times"​

This translates to 5500/week or ~70k production and 60k deliveries in the quarter. 81k total S/X/3 deliveries matches full year 360-400k guidance using a smooth 81/90/100/110k quarterly rate.

People here thought Tesla would blow guidance away based on the Bloomberg tracker, AlphaHat, Carsonnight, Vincent's photos of lines at Chinese DMVs and a bad Canadian sales report. Wall Street analysts and bears though Tesla would miss guidance badly based estimates channel checks (especially in China) and InsideEVs numbers. One side had good data, the other had bad data. Simple as that.

 

[lascavarian]

Is there anyone who truly thought ASPs weren't going to drop a lot as the pent up demand for higher trims was supplied?

I can take the position that this is an unknown and far from a safe assumption. Personally I spend 3x times what I had ever spent on a vehicle before and data was suggesting that there was a trend supported by trade-in brands that validated that people were lining up to buy up.

There are several reasons to support the logic of buying up to top trims.

For me, I did a study of the history of EVs within the evolution of combustion based engines starting with external combustion - steam. Progressing from there to ICE and fossil fuel development and the development of modern branding. There are patterns.

There was proof that Tesla had broken a trend line when they did not go bankrupt nearly immediately and that cast doubt on assumptions built on past trend lines. Who in 2002 for example, would have seen a a mobile phone priced at $1,000 or $800?

Rationally, a Model 3 (battery pack @ 300k to 500k miles of life) doing 15k miles a year will last pretty easily north of 25 years and if driven 12k per year up to 40+ yrs in some cases and even then it is only a battery swap that might be needed.

This realization rocks the purchase price rationale. Given fuel cost saving and reduced maintenance and extending the purchase years a bit, it is possible to rationally buy a MUCH more expensive vehicle and this is even before the safety profile and FSD are taken into consideration.

I understand the tendency to project that ASP will drop after early adopters are satisfied but it is hardly a given and I think there are forces that might suggest otherwise.

So I would say that there may be new trends developing that break from older patterns and we don't really know what that means to ASP.

Further, my head swims with the thought that a million mile battery which is in the wings where the life of the vehicle could be north of 50 years pretty easily. Could it be rational to make the vehicle the most valuable purchase in a marriage instead of a home that is high maintenance and can't be taken with you?

 

[Krugerrand]

Why not just go to a political forum to discuss politics? But, it's typical of the tolerant types to not give a [email protected] about what anyone else thinks.

Um...a tolerant personality would tend to care what other people think.

 

[MABO]

Well, I’m seeing tons of reports now of Model S/X ordered in April with no delivery scheduled and no VIN. Odd thing to be making S/X that there’s no demand for and then not shipping them to the people that ordered one...

I'm one of those folks (I've seen several others just on this forum as well). We called Tesla this week. They thought we'd get a VIN in about 2 weeks and delivery a few days later. I'm guessing the production cutover isn't all that simple. But if the latency is half a quarter, or so, it's not that bad. I do think this will hit Q2 as another weak S/X quarter. That will be seen as a negative. But if there really is pent up demand, Q3 should be strong for S/X as they catch up to hard backlog.

 

[RFernatt]

Yep. All we have here are opinions on both sides and that's cool. Musk had confidence in 2015 with AP1 and then life happened. So, keep your timelines to yourself until you have fully understood and solved the problem to 98% (and the two percent isn't critical). Especially when the problem hasn't been solved by anyone to this point. I can be a fan and not be an apologist for the missteps. Demo the tech if you want (not sure I even agree with that), but don't put dates on it. It's not like most in the market are buying that line any longer. Until you can put up, shut up, especially when you've proven you can't forecast.

And that's my opinion, YMMV.

 

[Pezpunk]

Um...a tolerant personality would tend to care what other people think.

It’s a tired sarcastic dig at liberals, common from people who operate in a conservative fishbowl. Usually some form of “SO MUCH FOR THE TOLERANT LEFT!” Shouted by someone upset that their misogyny or racism was called out. Ironically, it’s ONLY sarcastic conservatives who talk about “tolerance”. Real progressives / liberals know tolerance is a red herring. There’s no good reason to be “tolerant” of bigotry or stupidity.

 

[Singuy]

This is total nonsense. You're suggesting not only that there is zero price elasticity to all the things we import from China, but that they are also a monopoly producer with no alternative suppliers globally to what they produce.

You need to read up on previous trade wars. The surplus countries lose the most. Its very simple math. The US got hosed worse than any other during the great depression because of this.

There really isn't. China HAS became the monopoly producer because their infrastructure for mass production is unmatched. If you ever kickstart anything, you'll realize everything being kickstarted are being produced in China because they can manufacture from your prototype to mass production in 5 months time. They can pretty much do this with high or low tech goods because the amount of skilled workers in China blows other low cost countries out of the water. People keep saying "oh they have moved production to other third world a long time ago". Yeah?. I challenge you to find goods(besides some clothing) that are made in other countries at your local mall. You'll find that over 90% of everything you find at the mall is from China. They have became the blood line of consumer goods and you can't just tell Indonesia "hey I need 50 million toilet scrubbers by next shipment".

 

[Dan Detweiler]

It’s a tired sarcastic dig at liberals, common from people who operate in a conservative fishbowl. Usually some form of “SO MUCH FOR THE TOLERANT LEFT!” Shouted by someone upset that their misogyny or racism was called out. Ironically, it’s ONLY sarcastic conservatives who talk about “tolerance”. Real progressives / liberals know tolerance is a red herring. There’s no good reason to be “tolerant” of bigotry or stupidity.

I gave this a "like" because it literally made me laugh and I like laughing.

So, just for kicks, who gets to define bigotry and stupidity?

Dan

 

[Anstandswauwau]

It's a common myth among those who don't know anything about software development that just adding more people will solve your problems.

1. I'm working in this industry, for what, 25 years now? Your attempt to school me on this very topic, is at best cute, at worst, offensive. So if you have any dignity, I wouldn't mind an apology.
   
   
2. I never actually said that, but thanks for putting words in my mouth.

Yes, it's a common misconception by outsiders that productivity increases linearly with the headcount, when, in fact, the opposite is true – as you correctly stated. BUT this is not the issue with the Tesla UI team, I can assure you, knowing people first hand that worked for and with them:

They are simply overworked und understaffed for the amount and scope of their work they have to deliver.

This is not general assembly where you can add a few hours of physical labour that you can sleep off the next day. Designers and engineers are productive for what, 4-6 hours net per day? Beyond that, they produce garbage and garbage only. Garbage that has to be fixed eventually. Letting them work 60h+ a week doesn't result in more amazing code or design, it results in more subpar work you can trash the other week.

Letting people work to a point where they fall asleep during mission-critical meetings – as I was told – is not a sign of great work ethics but rather of weak ass management.

There is no reason, no ****ing reason, why they shouldn't hire another 10-30 designers. There's a difference between being "spartanic" and "idiotic" and as things are right now, the Tesla UI team setup is clearly in the "idiotic" category – hence why design superstars like Andrew Kim are leaving.

As far as the "We want to ship feature X so you better make it work SOMEHOW" approach.". That's their job. Not sure what is at issue here. Management wants some feature and its the staff's job to design and implement it and to do it well. What else are they supposed to do?

Oh God, please tell me you're not in charge of … anything. This very thinking led to the demise of many, many enterprises during the dot.com-era. It's so outdated and obviously wrong, I'm actually dumbfounded.

But for starters: It's the "SOMEHOW" part that's the problem. UI- & UX-design is supposed to be holistically embedded in the very DNA of a company, bottom up – commanding "great design" top down simply won't cut it the long run. Now if your management orders to patch in feature X, Y, Z SOMEHOW it most likely will result in weak design decisions – and the name-giving "user" will notice.

See how properly design-driven companies like Google, Facebook and Apple are set up. They got it. You, obviously, don't.

Your posts here show what your real intent is and its not as a investor who is long the stock. That's fine, but stop being a wolf in sheep's clothes because you are not fooling anyone.

I've been super transparent in that regard, feel free to look it up. Thanks for the allegation, though!

 

[22522]

Yep. All we have here are opinions on both sides and that's cool. Musk had confidence in 2015 with AP1 and then life happened. So, keep your timelines to yourself until you have fully understood and solved the problem to 98% (and the two percent isn't critical). Especially when the problem hasn't been solved by anyone to this point. I can be a fan and not be an apologist for the missteps. Demo the tech if you want (not sure I even agree with that), but don't put dates on it. It's not like most in the market are buying that line any longer. Until you can put up, shut up, especially when you've proven you can't forecast.

And that's my opinion, YMMV.

The first two sentences were good.

Then, in a time competitive space, your suggestion will not work.

... JFK said, "Man on the moon in this decade."

Was that wrong to say?

...

 

[Krugerrand]

From 10,000 without a doubt, to always profitable, to never having to raise ,
To the opposite, undermines their projections.

Now Add Robotaxi and the appreciating car asset to that pile and it’s too much to ask.

Eventually they will restore their credibility , though it with take execution

It’s called fluidity. The Tesla pace is at a level of rapidity that very few can wrap their brains around it, yet alone believe and accept it. Case in point, you and many others here and pretty much the financial world at large.

NOTHING is (should be) static in the world, least of all Tesla. Get that into your head and you’ll stop being upset when Tesla/Elon changes direction.

The constant reevaluating at Tesla, pushing the limits, fearlessness to challenge anything and everything, to try and fail without remorse is such a stomach upsetting event to the status quo that they scream at the top of their lungs at every turn. And that constant screaming has sucked you into thinking that what Tesla/Elon is doing is bad, negative and just plain wrong, or you’ve always been a status quo person yourself.

What’s actually wrong is stagnation. What’s actually wrong is thinking that trying and failing is bad. What’s actually wrong it trying with all your might to shove a square peg into a round hole.

No matter how much they scream, no matter how much you complain or dream, Tesla/Elon are in fact going to do things their way. Always and forever. That is their nature. If your nature is the opposite, get out and save yourself the constant upset. You have less than zero chance of changing Tesla/Elon, resistance is futile, your wishes falling on deaf ears.

Even if momentarily perception of some changes that credibility has been restored through execution, I guarantee in the very next second that perception will be changed back by something Tesla\Elon does.

 

[MarcusMaximus]

I gave this a "like" because it literally made me laugh and I like laughing.

So, just for kicks, who gets to define bigotry and stupidity?

Dan

Weekend OT:
Whoever wants to? There’s no requirement(on the political left or much of anywhere else in the civilized world) that anyone be “tolerant” of others opinions, statements, or beliefs, so long as they refrain from violence or threats of violence.

The appeals for “tolerance” from the left refer to ingrained, unchangeable characteristics of people like skin color, gender and sexual orientation(religion is often included too, despite being a fluid choice, but it is by the right as well, so...). And are largely enforced by using free speech rights to criticize those showing intolerance.

There are, of course, calls from the fringe to ban things like “hate speech”, but that’s not terribly surprising. Free speech is an issue a lot of people have trouble with, roughly equally, on all sides of the political spectrum.

 

[electracity]

The best strategy would be to have three factories, US, EU and China, and all of them producing all mainstream cars (S, X, 3, Y). The GF1 can be used for Truck, Semi, Energy, and cell manufacturing.

Producing all cars in all markets would be extremely expensive. Model Y production is a big problem for Tesla. It appears what they will go for is entry level 3 (and a later entry level Y) made in China for export. Fremont will have one model 3 line for upscale cars and build out Y production.

Non of this is ideal but they are time and capital constrained. What they can control is to be as flexible as possible in 3/Y production planning to be able to shift production as demand shifts.

The whole gigafactory concept applied to autos has always been a joke. There are enough people and logistical support in low cost areas like Reno to allow huge auto factories. Employee and land costs are too high in places like the Bay area. Auto plants are typically distributed and medium size because that approach produces the best economics.

 

[RFernatt]

The first two sentences were good.

Then, in a time competitive space, your suggestion will not work.
... JFK said, "Man on the moon in this decade."
Was that wrong to say?...

Fair point, but I do see it as different. A national government with nearly unlimited resources setting an aspirational goal years into the future is one thing. The leader of of a commercial entity setting "3 months maybe, 6 months definitely" time frames is not an aspirational goal any longer, it's a forecast that is used for investment decisions and comparisons with competitors. If the forecast had been FSD in the next decade - no harm, no foul. The thing that's curious is that there doesn't seem to be any empirical learning in regard to communication, date setting, etc. It's like Dr. Jekyll, Mr. Hyde, you don't know which personality is in charge this week.

Not selling any stock, actually been buying recently, but it is an area where Tesla could use some work IMO.

 

[Drumheller]

Can I be a mod with delete rights, please? I'd like to trim this thread down to the 50 pages of useful posts it contains.

Thanks.

 

[Krugerrand]

Not a great news. You don't reorg team that's working great.

Or you reorganize a good team to make it an even gooder team. The difference between a division winning team and a Stanley Cup winning team.