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

[Zero CO2]

The used car business has been a bad deal for Tesla, and as an investor I am glad they are lowballing offers. Make private party sales if you want a good offer for your Tesla. If you get a sales tax break on trade-ins in your state, Tesla will do a "courtesy trade-in" for the private sale you arranged.

Unless there's something wrong with your buddy's car, it's worth at least $35K. But Tesla isn't interested in buying it for what it's worth; they only want to buy it if they can make a significant profit on it.

I actually got a quote for my 2017 Model S for $43000 fro Tesla the rep said I could do a lot better with a third party or by myself

 

[Remus]

Point is, Elon didn’t even have to write that email or include such details. Also a CEO running two company’s should not be revieweing expenses individually. It signals red flags to the market

What if I tell you that he still reviews and approve every single hiring decision at least the software side of the company?

 

[AcesDealt]

Tesla has been hitting 25k+ production on S/X for years and so I wonder what their actual theoretical top speed is. The S/X is most responsible for the damage in Q1, and I think the market is most stressed about the bottom line, so I would prefer to see strength in this number and not another 15k-17k quarter full of excuses.

 

[StarFoxisDown!]

Yes, unfortunately it is still structurally unprofitable...on balance, she shorts have been right about as often as we bulls. "One bad quarter" my ass - there has been consistent overpromising and underdelivering on Elon's part. No wonder he has lost call credibility.

A few examples:
Model 3 ramp
Model 3 base price
Model S/X margin
Coast-to-coast by "end of the year" (2017)
2-4 gigafactories announced by "end of the year" (2017)
Solar Roof
And the worst of all...alien dreadnought! Where is this super factory that he has promised? They have barely passed 5k per week, wasn't he absolutely certain of 10k per week by the end of 2018? Tesla has a hard time hitting production levels and the margins they had forecast. Anyone remember 30% gross margin for Model S/X? Last conference call, this changed to something along the lines of "we are still expecting 25% margin for Model 3 and Model S/X".

That said, TSLA is still my best long-term bet. There is no demand problem - everyone and their will want a Tesla. They will continue to innovate and move fast - if anyone thinks that the competition will catch up they will soon find that Tesla is a moving target. They will continue to ride down the cost-curve of batteries and other associated technologies and I wouldn't discount the probability that things like FSD or the Alien Dreadnought will come true one day. I certainly would never bet against Elon Musk.

Elon's and Tesla's investor communication is simply awful.
“What people should absolutely have zero concern about, and I mean 0, is that Tesla will achieve a 10,000 unit production week by the end of next year. […] I think people should really not have any concerns that we won’t reach that outcome from a production rate.” And then later "I've never done this before. How am I supposed to know how long it takes?!" Hahaha, it would be funny if we weren't all personally affected. There's an easy fix: just STFU and execute. Don't say there should be zero doubt when you have no idea about the timeline. He would have fewer haters too. I believe a large part of the financial media has turned on him mostly because of his stupid predictions.

You clearly do not understand how Tesla's business works nor do you understand logistics when it comes to delivering vehicles across the entire world from one location. Tesla is structurally profitable.....in one of the most expensive places to manufacture in the world. Keep holding on to Elon quotes from 2-3 year ago Talk about living in the past lol

One bad quarter my ass...….do you actually understand why Tesla posted a loss in Q1? I'm serious...….I think you don't understand what's happening with the company. Bringing up S/X margins? Really? S/X margins have always been around 30% and they have one quarter where they are getting ready for a motor updates, thus losing margin points because they S/X lines were idle

 

[sparcs]

I would want a CEO who knows how to hire, delegate to and retain strong people who can put in place proper operational and financial controls.

The problem is that they have been trying to hire people, but they haven't found people for some of those roles. They've been trying to hire a COO for years.

The hope is that people like Robyn Denholm will help share the load, but i'm not even sure she has started her role yet. Zero information to indicate that she has started.

 

[Webeevdrivers]

About 10k cars were in transit, about 8-10k was inventory at the end of q1, max possible deliveries of newly produced M3 is 50k probably 45k is safer number to calculate. If we assume all is good it is 63k cars and ideally 12k newly produced SX deliveries it will be 75k best case scenario. That also means that almost all new inventory left in Q1 is sold. Maybe with better luck in overseas logistics it will reach 80k. But guided 90k deliveries will not happen.

20k SX is not possible

Thanks for the reply. I am obviously out of tune with the logistics reality. So I’ll optimisticslly hope for 80 K. I’m hoping those 10300 or whatever cars in transit to buyers at the end of last quarter will get them there.

Cheers.

 

[SPadival]

Nah I live in New Mexico and I read their tweets regularly and they do have pretty hardened, negative, perma-skeptic views on Tesla. They follow many of the noisiest TSLAQ perps. Neither of them got that way because Tesla refuses to advertise in their respective publications, though.

Wow.. and I thought journalists were supposed to be neutral and objective.

You really are a comedian .. Iggy for you.

 

[MarcusMaximus]

Ooh, ooh, can I play?

I ordered a Model X on Thursday and I don't have it yet. Unacceptable failure to execute.

Impossible. I’ve been told there’s no demand.

 

[AcesDealt]

Someone posted this link earlier, it's about California sales March YTD: https://www.cncda.org/wp-content/uploads/Cal-Covering-1Q-19.pdf

It's astounding that model 3 was over 30% and S/X close to 40% of global sales in Q1. I wonder if Tesla would be more profitable if it sold just to California.

 

[MarcusMaximus]

About 10k cars were in transit, about 8-10k was inventory at the end of q1, max possible deliveries of newly produced M3 is 50k probably 45k is safer number to calculate. If we assume all is good it is 63k cars and ideally 12k newly produced SX deliveries it will be 75k best case scenario. That also means that almost all new inventory left in Q1 is sold. Maybe with better luck in overseas logistics it will reach 80k. But guided 90k deliveries will not happen.

20k SX is not possible

So you’re assuming S/X production will be *lower* than Q1?

 

[bsilva]

The problem is that they have been trying to hire people, but they haven't found people for some of those roles. They've been trying to hire a COO for years.

The hope is that people like Robyn Denholm will help share the load, but i'm not even sure she has started her role yet. Zero information to indicate that she has started.

Hire and retain. They've had some good people but also very high exec turnover. There might be a reason why they haven't found the right people yet ... Extreme micromanagement is not something that attracts or keeps the very best people for long. There might be a few exceptional individuals who can thrive and stay in that kind of environment but not a formula for scaling a successful big company. Jeff Bezos has built an org with people he delegates to and trusts, even though he's intimately involved in the details of the most important business and the company's strategy. Steve Jobs learned the hard way; the Mac team pretty much scattered after shipping the initial version. When he came back after selling NeXT to Apple, he was a very different person. Still Steve, but learned to let go more and build a sustainable, scalable company that built and rode the iPhone rocket ship.

 

[AlexS]

So you’re assuming S/X production will be *lower* than Q1?

I am talking about deliveries not production. but both deliveries and production will be higher than in Q1 for SX

 

[abasile]

Just added a little more at $204. We never thought we'd own this many TSLA shares, and it hurts to see our portfolio down as a result, but my wife and I agree that TSLA is a bargain right now. If it goes lower, we'll almost certainly buy more. It's been a battle to keep up with this thread, and I've had to skip pages at times, but I'm thankful for much of the information and analysis that's being shared.

 

[mickificki]

About 10k cars were in transit, about 8-10k was inventory at the end of q1, max possible deliveries of newly produced M3 is 50k probably 45k is safer number to calculate. If we assume all is good it is 63k cars and ideally 12k newly produced SX deliveries it will be 75k best case scenario. That also means that almost all new inventory left in Q1 is sold. Maybe with better luck in overseas logistics it will reach 80k. But guided 90k deliveries will not happen.

20k SX is not possible

The way the Ravens are being held up I cringe at the thought we might have less than 10k MS/X this quarter.

 

[Heimdallr]

You clearly do not understand how Tesla's business works nor do you understand logistics when it comes to delivering vehicles across the entire world from one location. Tesla is structurally profitable.....in one of the most expensive places to manufacture in the world. Keep holding on to Elon quotes from 2-3 year ago Talk about living in the past lol

What about quotes from a few weeks ago then? FSD will be feature-complete by the end of the year? Yeah, I guess maybe one feature will be complete...Advanced Summon perhaps? ;-)

In all seriousness, it could as well be Elon who doesn't understand how his business works if he predicts "all quarters profitable" going forward and then goes on to announce a $700 million loss. As a matter of fact, about 30 days before these horrible results he said something about "a small loss". How can the CEO be so clueless...and a genius (depending on one's definition) at almost everything else.

 

[elasalle]

Someone posted this link earlier, it's about California sales March YTD: https://www.cncda.org/wp-content/uploads/Cal-Covering-1Q-19.pdf

It's astounding that model 3 was over 30% and S/X close to 40% of global sales in Q1. I wonder if Tesla would be more profitable if it sold just to California.

..unwinding the wave ..
we've learnt the hard way that a balanced approach is better long term
..(CA demand is required for each quarter)

 

[Zero CO2]

In terms of finances, they would operate the same way they plan to as a public company, which is primarily from internally generated cash flows. No one seems to notice but free cash flow (operating cash flow minus capex) for the past 12 months is positive $111 million, even though it included an intense ramp up quarter (Q2 2018) as well as Q1 2019.

If they need more cash they can easily raise it as a private company. SpaceX, for example, raised $1 billion over the past six months without batting an eyelash.

Elon said the go private ship had sailed, but it can always come back into port.

Translated for those who hate to do financial analysis but like machines
" The Tesla money printing machine is getting started.... it too will take time to ramp

 

[StarFoxisDown!]

The way the Ravens are being held up I cringe at the thought we might have less than 10k MS/X this quarter.

According to reports, while the deliveries were being held up(which has been fixed for days now), Tesla was building up inventory/production of the updates S/X. It's not like production was idle until they fixed the hold up with being able to deliver the vehicles.

 

[Zaxxon]

According to reports, while the deliveries were being held up(which has been fixed for days now), Tesla was building up inventory/production of the updates S/X. It's not like production was idle until they fixed the hold up with being able to deliver the vehicles.

It's unclear. While some have been delivered, the large majority of post-Raven April orderers here seem to still be waiting for VINs. They are definitely delivering cars, but there've been no floodgates opening thus far.

 

[Singuy]

You clearly do not understand how Tesla's business works nor do you understand logistics when it comes to delivering vehicles across the entire world from one location. Tesla is structurally profitable.....in one of the most expensive places to manufacture in the world. Keep holding on to Elon quotes from 2-3 year ago Talk about living in the past lol

One bad quarter my ass...….do you actually understand why Tesla posted a loss in Q1? I'm serious...….I think you don't understand what's happening with the company. Bringing up S/X margins? Really? S/X margins have always been around 30% and they have one quarter where they are getting ready for a motor updates, thus losing margin points because they S/X lines were idle

The guy has a point. Elon gets some guidance right and some timing way off. It's okay to be off but at least express uncertainty. When he talks about GF3, he built in uncertainty there. When he's talking about FSD, he shouldn't use phrase such as "I would be surprised if people can't fall asleep in the car by end of next year". I mean he's 2 months late on advance summon already so how are were are we suppose to put his confidence in FSD? Honestly if Elon just stick to conservative guide and take out all the "I am 100% certain, or people shouldn't have any doubt"...SP would be 500+ today. His guide is so liberal that it has created these short sellers saying how he's a fraud selling snake oil. Just because he eventually get it done or the tech eventually exist doesn't mean he should give wild guide. Imagine if steve job said in 1995 "There shouldn't be any doubt that we will make a smart device that is 50 times faster than the fastest computer today and can also make phone call by next year" and then release said product in 2007.