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

[Fred42]

2019 Q1
We ended the quarter with $2.2 billion of cash and cash equivalents, a $1.5 billion reduction from the end of 2018
Outlook
Our 2019 capex, the vast majority of which will be to grow our capacity and develop new vehicles, is expected to be about $2.0 to $2.5 billion

May 02, 2019 :Tesla Announces Offerings of Common Stock and Convertible Senior Notes
The aggregate gross proceeds of the offerings, assuming full exercise by the underwriters of their option to purchase additional securities, would be approximately $2.3 billion

based on the above, cash equivalents end of 2019 would be $2 billion

(So the letter on cost savings must have been to avoid barnacles and flufferbots)

You've given up on positive cash flow 2Q-4Q?

 

[elasalle]

You've given up on positive cash flow 2Q-4Q?

Not giving up or taking away anything. Just defining the start point.

 

[ZachShahan]

I was just about to quote this. With all of this talk about lack of or poor communication affecting the SP, this kind of behind the scenes interview is encouraging.

I repeatedly come back to this initial broad takeaway from the visit: The World Inside Tesla Is Completely Different From The Media's Portrayal Of Tesla | CleanTechnica

 

[ZachShahan]

OT,

Talked with a random guy who claims he works for Tesla as interior engineer.
I asked about model S&X interior refresh.
He said for X, “yeah they started that, and probably will be out next year”, “the big screen will be like Model 3”, “and they are going to keep the small dash screen”.
For S, he was not clear on it.

So the reports on a Q3 or Q4 refresh are way off, also I got the feeling this interior refresh is not going to be as big as people are expecting.

Btw: he said Palo Alto head quarter building is all AP now, all other engineering has been moved out to Fremont, I didn’t know AP/FSD teams are that big now.

Also, Tesla is really a leaky bucket, the guy seemed to be thinking of NDA, but said those anyways. Apple engineers are clear contrast, I have much closer contacts who doesn’t comment on anything none-public.

Oh, if there is Tesla people reading this and trying to figure out who that was. Just to let you know, I completely made this story up to make my point.

Something like 101% of cars in that employee parking lot are Teslas.

Of course, vast majority are Model 3.

 

[ZachShahan]

Reuters specifically? (since their FUD triggered Fridays drop in SP)

Reuters Spreads Electric Vehicle FUD On Behalf Of Laggard Japanese Auto | CleanTechnica

Ongoing Media FUD in general? Cleantechnica.com covers it with a routine series:

"Check our Pravduh reports to see how common it is for established media outlets like Reuters, which purports to be a factful source of information, are instead spreading disinformation. This case is just one amongst many"
​

Btw, this is 10 seconds of Googling. But I type slow.

Cheers!

I am generally with tinm on this topic, but I will say that the three outlets I'm most suspicious of are NYTimes (Broder now on editorial board, and I simply don't see how some people can be on staff after what they've written on Twitter without extreme bias from above), Reuters (years of history smearing EVs — though, seemed to be much worse years ago before the environment editor moved on to work in the oil industry, iirc), and LATimes (seriously have no idea why they have such horrible pieces on Tesla, but holy batman they do).

 

[SO16]

A minor one that I have heard various opinions on but not sure if it’s a real issue. We travel a lot and are gone for months at a time. The leaf can be left for months without any drop in charge. No worries of bricking. Having said that I would think one could just set the Tesla to 60 percent and leave it plugged in.

Not an issue at all with a Tesla. I keep mine plugged in for 5 months during the winter set at 50%. Works just fine.

 

[Webeevdrivers]

Not an issue at all with a Tesla. I keep mine plugged in for 5 months during the winter set at 50%. Works just fine.

Thank you for that. Kinda thought so. That approach will work fine for us when the time comes.

 

[Chunky Jr.]

I'm very tempted to sell all my shares, take the loss, wait a month, then buy them back. But I probably won't because things like that rarely work out for me.

 

[TSLA_Hopeful]

That feeling as a shareholder when you can't supercharge because there are too many Teslas...

 

[ZachShahan]

Too many folks replying to my questions to answer individually on this iPhone so here’s a general reply.

My Occam’s Razor says reporters write poor/negative stories about Tesla because they don’t care or they’re cynical or they resent the elitist Silicon Valley rich-bro vibe that Tesla sometimes gives off or they’re just sloppy reporters or deep down they’re grizzled veteran Detroit gas-car people who love the rumble of an ICE or they can’t stand billionaire Elon or they’ve read too much of and buy into TSLAQ propaganda, or they believe they could never personally afford a Tesla and maybe resent those who can, or they’re sick of the drama and hype that surrounds Tesla and annoyed that the company’s corporate PR people are impossible to work with and don’t give them any useful info, or they’re stuck in the day-to-day/quarter-to-quarter mindset and can’t/won’t take a longer term view, or they’re just chronically skeptical of anything Tesla claims... or a dozen other similar reasons. Or, likely, often some combination of the above.

Does the legacy auto industry have influence over the media? No doubt. Autos are deeply embedded in the culture especially in the US. Historically the auto industry has been one of the largest advertisers in print and broadcast. But a lot’s changed with the rise of the Web.

A lot of TMC folks here seem to have different Occam’s Razors, ones that tell them that obviously the auto industry is directly influencing/ordering media outlets to be negative on Tesla. I disagree it’s that blatant or simple. I think editors and reporters are fully capable of being negative on Tesla for their own reasons without pressure from execs upstairs. And I base this on conversations I’m having with individual reporters some of whom have written infamously negative stories on Musk/Tesla.

So for me, until hard evidence says otherwise, I’ll continue to place the source for the media negativity on Tesla largely on the reporters themselves.

I'm with you on this.

I don't think many outlets or reporters spin Tesla news negatively because of Big Auto or Big Oil money biasing them. I think other factors (including ones you mentioned) are the core problem.

More about this in the middle of a long podcast chat with Zac from Now You Know: Tesla Marketing, Consumer Awareness, Tesla FUD, Tesla Communications, Elon Musk, & More — CleanTech Talk with Zac from Now You Know | CleanTechnica

I think the biggest issues are: 1) journalists not really knowing what they are reporting on (not understanding Tesla or the market well), 2) an enormous amount of FUD from "expert" Wall Street analysts who have quite successfully framed the narrative, 3) bias against rich, quirky tech billionaires.

 

[mongo]

2019 Q1
We ended the quarter with $2.2 billion of cash and cash equivalents, a $1.5 billion reduction from the end of 2018
Outlook
Our 2019 capex, the vast majority of which will be to grow our capacity and develop new vehicles, is expected to be about $2.0 to $2.5 billion

May 02, 2019 :Tesla Announces Offerings of Common Stock and Convertible Senior Notes
The aggregate gross proceeds of the offerings, assuming full exercise by the underwriters of their option to purchase additional securities, would be approximately $2.3 billion

based on the above, cash equivalents end of 2019 would be $2 billion

(So the letter on cost savings must have been to avoid barnacles and flufferbots)

How does GF3 being financed through local loans figure into the 2019 CapEx vs cash equation?

 

[BornToFly]

Sure. It wasn’t one single thing. But a scaling of plus and minuses that were important to us. Soooo

The model 3 uses a proprietary charging system which isn’t well supported in the areas where we travel. This was a tough one for us as we also have a property in Palm Springs and it would have been nice to use the Supercharger systym for our once per year trip between BC and Palm Springs. But we do a lot of driving in BC and going back to level two charging on road trips would suck. Supercharger support is well covered on the main BC routes but that’s not where we travel. CCS and Chademo locations out number Superchargers 10 to 1 in BC and the goverment is expanding the network fast. Our Tesla rep says there is still talk of a Chademo or CCS adapter but I think if there was going to be one it would have come out by now. Added on edit. I believe we are a fringe case in this regard and most BCers wouldn’t have charging issues. Has to do with where we have to go.

A hatchback is a real good fit for us right now. We probably could have made the trunk on the model 3 work but the hatchback is a huge plus for us. A couple years from now we’ll probably still get a model 3 to replace our other car. (We are still on the fence whether to trade in our smart ED or our other Leaf).

Don’t laugh but the heated steering wheel on the Eplus is kind of important for us. We are in our mid fifties and cold winters are starting to bring sore hands.

Entry and egress of the Eplus is much easier for us.

The Eplus is a much quieter car than the 3. Really not a big deal and from what I read there are after market products one can get to quiet the model 3 down.

A minor one that I have heard various opinions on but not sure if it’s a real issue. We travel a lot and are gone for months at a time. The leaf can be left for months without any drop in charge. No worries of bricking. Having said that I would think one could just set the Tesla to 60 percent and leave it plugged in.

We are leaf fans from the point of view of reliability. Ours has been bullet proof. I’m sure the model 3 would be fine but the service centre is 500 km away. It won’t stop us from buying a model 3 in a couple years to replace our second car but it is in the back of our mind. We work about 8 months a year but when we work it is pretty much 6 days a week 10 hour days. Rewarding but we absolutely would not have time to bring a car in for maintenance.

There are a ton of things we prefer about the Tesla but this time around the scales tipped to the Eplus.

We’ll continue to support Tesla but not from the drivers seat. Then again if they check off a couple of boxes on the Tesla side before our Eplus arrives who knows.

Honestly it was a tough decision but we need a solution by early next year. So we put our name on an Eplus.

We used to own a Leaf. It was reliable (except for the terrible battery), but it was the worst driving car we have ever owned. On the highway, over 65 mph, it can't hold a candle to a real car like a Model 3, and it was almost scary. The Leaf also is not great in crash tests, while the Model 3 has the lowest probability of injury. You must not care about safety or driving dynamics (maybe you've never owned a nice car?).

 

[Silentk]

I'm with you on this.

I think the biggest issues are: 1) journalists not really knowing what they are reporting on (not understanding Tesla or the market well),

Quite decent article in the Guardian about Tesla coming to UK:

Electric dreams? What you need to know about Tesla's Model 3

“Interest in going electric is growing fast: research from Close Brothers Motor Finance suggests 15% more motorists are looking to buy an electric car with their next purchase compared with two years ago.“

 

[DaveT]

i respectfully disagree. The nice thing about the initial Semi rollout is that it will be very small compared to the ultimate size of the program. Not a few dozen but low single digit thousands to fulfill their initial orders, hopefully ramping into the six figures 2 or 3 years later. (There might be an initial stage of a dozen or two prototypes maybe as early as later this year).

Semi "production" will start mid next year but for only internal Tesla usage. Tesla's "aim" right now is to try to deliver the Semi to real customers by end of next year. But this seems aspirational. I estimate a very slow Semi ramp to real customers that starts first half of 2021.

 

[DaveT]

I disagree with your Semi comments. I think they need to accelerate that development. It sounds like customers are lining up.

I think pickup will be a hard sell.

It appears the Semi is going to rely on Maxwell battery tech to achieve the 1M battery pack, thus it's unlikely Semi will be accelerated in timeline.

 

[Webeevdrivers]

We used to own a Leaf. It was reliable (except for the terrible battery), but it was the worst driving car we have ever owned. On the highway, over 65 mph, it can't hold a candle to a real car like a Model 3, and it was almost scary. The Leaf also is not great in crash tests, while the Model 3 has the lowest probability of injury. You must not care about safety or driving dynamics (maybe you've never owned a nice car?).

Heh heh. Maybe not. Our leaf drives fine and we have had no problems with our battery. Safety is a thing but then again I drove a motorcycle for a good part of my life soooooo.

If it makes you feel better demeaning us please continue to do so. Whatever it takes to spread a little joy. . Then again, most people eventually learn that that they can’t build themselves up by tearing others down.

Enjoy your Tesla. Great car.

 

[Pras]

From GK on twitter, seems the white knights are coming! (BTW BOL for GOT tonight!!).

Ross Gerber on Twitter

 

[EinSV]

Semi "production" will start mid next year but for only internal Tesla usage. Tesla's "aim" right now is to try to deliver the Semi to real customers by end of next year. But this seems aspirational. I estimate a very slow Semi ramp to real customers that starts first half of 2021.

Good clarification, thanks @DaveT. Yes, Tesla has said they will be the first customer for the Semi so the initial ramp may look more like what @TradingInvest proposed (very small initially), then moderate initial deliveries to customers before something that looks more like a high volume production ramp.

 

[DaveT]

Just because Shanghai GF building is near completion doesn't mean they will be starting production anytime in the next few months.

There's still likely a lot more work to be done to start production.

Equipment needs to be delivered and installed. Robots. Stamps. Lines. Etc.

Workers and people need to be hired.

Battery supply chain in China needs to be hammered out.

Parts supply chain in China needs to be hammered out.

In my opinion, best case scenario is that they produce a few thousand Model 3s by end of the year in Shanghai.

 

[JusRelax]

There is no real difference in range between a Leaf Eplus and a model SR. The model 3 feels however like it is a whole generation ahead. Also handles better, accelerates faster and looks better. (Then again I am partial to the look of a sedan). Price is comparable.

However some (my wife and I) May have practical reasons for buying something like the Eplus. Last week we ordered a Leaf Eplus SL with every bell and whistle after multiple test drives of various EV’s including four test drives in Tesla’s (two in a model 3). It doesn’t mean we didn’t love the Tesla and appreciate it for what it is. It just doesn’t do what we need it to do as good as the Leaf. It does some things remarkable better but overall it’s the wrong choice for us. I think some Tesla owners will now want to have us removed from this board but c’est la vie. We will continue to recommend any Tesla to any one who asks...just too many things that we would have missed by not getting the Eplus. Having said all of that we are probably an edge case in our needs.

Jmho.

This is the reason why my family ended up buying a used 2016 leaf sv instead. Well, that and it cost $11k.

I'm a cheapo, so my plan is to replace the battery when I hit 95k miles and then run that thing into the ground until the battery can no longer support my commute (I'm estimating 2030ish timeframe).

Don't worry, my other EV will (eventually) be a model Y.; current reserved. The M3 just doesn't fit within our family's dynamics.