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

[Leo9]

Tesla CEO Elon Musk launches new ‘hardcore’ cost-cutting effort, will review all expenses

Musk made the announcement in an email sent to all Tesla employees and obtained by Electrek.

In the email, the CEO argued that it is “extremely important” to “examine every expenditure at Tesla, no matter how small.”

He referenced Tesla’s last quarter during which the automaker lost $700 million.

Even Tesla still had a $2.2 billion cash position at the end of last quarter, Musk said that it wouldn’t last that long with their burn rate:

“This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!”

In order to stop the bleeding, the CEO is implementing a new cost-cutting initiative that will see all the teams examine every payment, including “parts, salary, travel expenses, and rent.”

The CEO added that Zach Kirkhorn, Tesla’s new CFO, will review and sign every page of outgoing payment while Musk himself will review and sign every tenth page.

Musk described the effort as “hardcore”:

“This is hardcore, but it is the only way for Tesla to become financially sustainable and succeed in our goal of helping make the world environmentally sustainable.”

He said that employees have a few weeks to take ownership of expenses and find ways to make improvements.


Déjà vu

 

[Cherry Wine]

RIP stock price tomorrow. Should have sold more call spreads.

Never fails.

 

[JusRelax]

Tesla CEO Elon Musk launches new ‘hardcore’ cost-cutting effort, will review all expenses

Musk made the announcement in an email sent to all Tesla employees and obtained by Electrek.

In the email, the CEO argued that it is “extremely important” to “examine every expenditure at Tesla, no matter how small.”

He referenced Tesla’s last quarter during which the automaker lost $700 million.

Even Tesla still had a $2.2 billion cash position at the end of last quarter, Musk said that it wouldn’t last that long with their burn rate:

“This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!”

In order to stop the bleeding, the CEO is implementing a new cost-cutting initiative that will see all the teams examine every payment, including “parts, salary, travel expenses, and rent.”

The CEO added that Zach Kirkhorn, Tesla’s new CFO, will review and sign every page of outgoing payment while Musk himself will review and sign every tenth page.

Musk described the effort as “hardcore”:

“This is hardcore, but it is the only way for Tesla to become financially sustainable and succeed in our goal of helping make the world environmentally sustainable.”

He said that employees have a few weeks to take ownership of expenses and find ways to make improvements.


Déjà vu

What's the over/under on Elon reading this tmc thread, and having multiple emails with a few words different implemented to catch any leakers through this email?

 

[Prunesquallor]

And a big THANK YOU to FCA for paying for Maxwell! How generous of them...

Good observation. I would conclude that the CO2 pooling continues to have unintended consequences. Not only is it subsidizing a non-EU EV manufacturer, but it’s potentially increasing Tesla’s dominance.

FCA’s hole just keeps getting deeper.

 

[Artful Dodger]

Maxwell Technologies acquisition has the following 5 benefits for Tesla:

1. 16x production density increase
2. 10-20% cost reduction
3. Energy density increase: 300 wh/kg - 500 wh/kg
4. 2x increase in battery pack life
5. Battery cell production vertical integration

Here's the video explaining the details:
"5 reasons why Tesla bought Maxwell"
Sean Mitchell • 3.8K views 11:26'

 

[JRP3]

Former NVDA employee and current ARK Invest analyst discusses Tesla's chip building efforts:
"This is a chip NVDA will be able to build in maybe a year or two"
ARK Invest on Twitter

 

[Artful Dodger]

RIP stock price tomorrow. Should have sold more call spreads.

Never fails.

Lol, you are getting a little gunshy, wot? Any other big automaker announces belt tightening and their SP goes UP!

Just curious, is your investment horizon less than 1 year?

Cheers!

 

[Prunesquallor]

Yeah, the Maxwell Technologies acquistion (technically a merger) was a stock swap deal (less the ~21% of shares not tendered, which will be paid in cash at the tender price).

So approx. $46M in cash to acquire Maxwell. That's not even a MONTH of FCA cash, which continues for 3 years...

And Tesla gets to DOUBLE their battery specs with 'Maxcells' during the course of those 3 years:

• cost
• range
• lifetime

Cheers!

And I don’t believe for a minute this is the end of the FCA “gift that keeps on giving”. Their explanation of how they were going to get whole in the out-years was really suspect in my mind. It was going to take a LOT of EVs in ‘22 and beyond.

And these aren’t compliance cars. They actually have to SELL them for them to count - as @Artful Dodger implied, potentially competing with Maxwell-powered Teslas.

 

[azaz]

Tesla CEO Elon Musk launches new ‘hardcore’ cost-cutting effort, will review all expenses

Musk made the announcement in an email sent to all Tesla employees and obtained by Electrek.

In the email, the CEO argued that it is “extremely important” to “examine every expenditure at Tesla, no matter how small.”

He referenced Tesla’s last quarter during which the automaker lost $700 million.

Even Tesla still had a $2.2 billion cash position at the end of last quarter, Musk said that it wouldn’t last that long with their burn rate:

“This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!”

In order to stop the bleeding, the CEO is implementing a new cost-cutting initiative that will see all the teams examine every payment, including “parts, salary, travel expenses, and rent.”

The CEO added that Zach Kirkhorn, Tesla’s new CFO, will review and sign every page of outgoing payment while Musk himself will review and sign every tenth page.

Musk described the effort as “hardcore”:

“This is hardcore, but it is the only way for Tesla to become financially sustainable and succeed in our goal of helping make the world environmentally sustainable.”

He said that employees have a few weeks to take ownership of expenses and find ways to make improvements.


Déjà vu

things are going great!

 

[Prunesquallor]

I think the parallels with Amazon are quite interesting. Amazon was very willing to forego profits for many years to built up vertically and to build large moats around their business. Now they are reaping the rewards of that effort.

Tesla still has significant capital expenditures to come in order to continue on the grand plan, so we are not there yet. The other problem is that to fund this plan you need to sell and make more cars to get the $$$ you need to expand more. So it all comes back to plain old manufacturing execution. The demand IMO is there in spades, they just need to make all the cars\batteries people want to buy and not one more...and do it with heavy automation.

So we need one more gigafactory started in europe somewhere. Maybe after that one on Mars or Moon? (kidding...but wouldn't that be cool?) We need the Model Y and it needs to be built cost effectively and at scale. With the SEXY lineup business should be good as long as they then iterate on key items like battery tech (e.g. more range, cycles, etc), interior improvements to car (they still aren't as nice inside IMO as an S-Class), and FSD. Each of these are then demand levers for existing tech such that Tesla can be huge company with much higher revenues than now.

Of course there is semi and pickup and roadster, but part of me wishes they would focus on the SEXY lineup + solar + storage and get really really good making these things and then build out service centers and superchargers and then, and only then, expand the product portfolio.

Some level of ambition is good, too much ambition can be deadly. With all that said, I am excited to see the pickup truck reveal and the semi get on the road en masse.

So unless we get real close to FSD in the next 12 months, you should stock up on bottled water, twinkies and some good books as the moat gets wider and deeper before we rule the world. All this is my opinion...so take it for what its worth.

It would be interesting to know which is projected to be the biggest money-maker, Semi or Pickup. I know Elon loves his pickup, but that Semi just pushes my profit buttons.

 

[Prunesquallor]

I've mentioned earlier that the oil price has my attention.

Wish Tesla had an S and X going back and forth between SF and LA all day, every day - livestreamed. Including the Supercharging. Then advertise the [new, improved] range. Show maps of superchargers. Destination chargers. Show home charging.

The Tesla twitter feed has been pushing essential information out there. More of that to the eyeballs and wallets that matter right now.

CA this instant is showing 61% renewable electricity generation. 13% natural gas. 11% large hydro. 9.6% nuclear. Many people actually still think coal provides more than half the nation's power, when it's shrunk to a good quarter [off the top of my head] and continuing its inexorable decline.

Electrek article: “Cloud Peak Energy” (sheesh), fourth largest US coal produced filed Chapter 11.

 

[UnknownSoldier]

Tesla CEO Elon Musk launches new ‘hardcore’ cost-cutting effort, will review all expenses

Musk made the announcement in an email sent to all Tesla employees and obtained by Electrek.

In the email, the CEO argued that it is “extremely important” to “examine every expenditure at Tesla, no matter how small.”

He referenced Tesla’s last quarter during which the automaker lost $700 million.

Even Tesla still had a $2.2 billion cash position at the end of last quarter, Musk said that it wouldn’t last that long with their burn rate:

“This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!”

In order to stop the bleeding, the CEO is implementing a new cost-cutting initiative that will see all the teams examine every payment, including “parts, salary, travel expenses, and rent.”

The CEO added that Zach Kirkhorn, Tesla’s new CFO, will review and sign every page of outgoing payment while Musk himself will review and sign every tenth page.

Musk described the effort as “hardcore”:

“This is hardcore, but it is the only way for Tesla to become financially sustainable and succeed in our goal of helping make the world environmentally sustainable.”

He said that employees have a few weeks to take ownership of expenses and find ways to make improvements.


Déjà vu

So they are giving themselves 10 months to have Shanghai ramped, Model Y launched, Semi launched, etc.
I don't know that Elon realizes he just put a deadline on Tesla's return to profitability.
I also don't see any reason to hold any TSLA for the next 10 months....

 

[adesai]

So they are giving themselves 10 months to have Shanghai ramped, Model Y launched, Semi launched, etc.
I don't know that Elon realizes he just put a deadline on Tesla's return to profitability.
I also don't see any reason to hold any TSLA for the next 10 months....

...because maybe you're already a 7 year investor and plan to stay in, maybe, for another 5-10 years and don't care about what's currently going on at all? In fact, maybe, you might find it fascinating?

 

[EVNow]

So they are giving themselves 10 months to have Shanghai ramped, Model Y launched, Semi launched, etc.
I don't know that Elon realizes he just put a deadline on Tesla's return to profitability.
I also don't see any reason to hold any TSLA for the next 10 months....

Huh … that doesn't make much sense. Because the burn rate isn't going to continue (and they got more money too).

 

[UnknownSoldier]

...because you're already a 7 year investor and plan to stay in for another 5-10 years and don't care about what's currently going on at all? In fact, maybe you might find it fascinating?

Sorry, I didn't come to Tesla already rich and using their shares as a plaything like most of the really long longs here. I needed to fund my retirement and Tesla has failed to do anything to help me there. I'll wait until there's more to the story before I think about investing again.

 

[Carl Raymond]

I also don't see any reason to hold any TSLA for the next 10 months....

Because the stock market is forward looking.

Stock is down because the narrative changed, twice. Went from story stock, to profit valued stock, suddenly back to story stock. Takes time for the stock to find people who trust the story again. Maybe they will, maybe they won’t. I’m certainly not taking the risk for the sake of 10 months liquidity. I’m staying in.

 

[Pras]

What is the meaning of break even here? Out of cash? Or PBT?

“This is a lot of money, but actually only gives us about 10 months at the Q1 burn rate to achieve breakeven!”

 

[mickificki]

So they are giving themselves 10 months to have Shanghai ramped, Model Y launched, Semi launched, etc.
I don't know that Elon realizes he just put a deadline on Tesla's return to profitability.
I also don't see any reason to hold any TSLA for the next 10 months....

I'm going to hold but you have a very good point. Elon STILL hasn't learned his lesson on public predictions. Media will have a field day with the 10month projection and burn rates.

 

[azaz]

Fred Alert: New Employee email from Elon. (But Electrek did not publish the full text so hard to know the full message)

More extremely stupid and misleading negative hyperbole from Elon to justify further (and sensible) continued cost cutting. His communication skills can be so incredibly bad at times - I know this is a part of who he is and he can't help it but its so counterproductive to all of his huge talents. There is no need for this hyperbole to justify and excuse cost cuts. He should just tell the truth that he is going to continue to cut costs to increase profit. No need for him to create an excuse with literal TSLAQ data cherry picking and misleading presentation.

maybe not everything TSLAQ says is nonsense?

 

[Krugerrand]

So, yeah, share price... down 3.5 bucks today, when Tesla confirmed the acquisition of a company with battery tech that could double their energy density in the next couple of years. This, I may add, against the competition that can't match Tesla's current technology and can neither source the volumes of cells that is needed to mount a credible challenge.

This is all without factoring Tesla's huge lead in autonomy - don't be drawn into the "they're in last place" bullshit, they're not, they are in front by a long way and it's going to increase very quickly. Also this doesn't take into account the hardware/software integration - aka the Mac versus the PC, if you like, where Tesla is out of sight, over the horizon.

So battery tech, autonomy and integration, for me, these are the critical success factors and no-one else is even in the frame. You can add OTA, lack of dealers, bottom-up design, GF1 and GF2, pending product launches, TE, roof shingles, etc.

Seriously, I look at the SP and I find it quite hilarious, but also somewhat comforting as I have a certain amount of common stock.

It’s like you must be imagining things. Or it’s too good to be true. Yet here we are. I’ve added almost 10% more shares this month. That’s more than 1 share but less than 10,000 shares (just to narrow that down for you). I am not comforted, though. Why, you ask? Because I have this nagging feeling that I still haven’t bought enough, while the ultra practical side of me argues incessantly that I will never find a use for two yachts.