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

[Sparky]

Toyota Camry 4 cylinder will get you about 30 MPG, 0-60 7.6 seconds
Toyota Camry Hybrid will get you about 50 MPG, 0-60 7.9 seconds.
The slowest Model 3 will(123 MPGe) do 0-60 in 5.5 seconds, quicker than a Camry V6 XSE( MSRP $35k Plus).
Then there is safety.......

I saw the breathless Electrek headline on this topic and I guess it could have become newsworthy without the layoff news and accompanying price drop overshadowing things. But, SC fees are still not a big deal in my mind. As others posters mentioned, the % of long distance charging is low. Most trips will start with a full charge and may only need one SC stop on the way. The key thing is there has to be enough stalls with enough juice. When you're not waiting to charge and you get nearly full kW the extra $2 or so that Tesla is charging just doesn't matter. The tension in the next year is to have enough Superchargers for all the damn 3's they're selling without breaking the bank. For trips, waiting in line is just a bad user experience and that story will hurt sales IMO. Tesla knows all this. Here's how it's supposed to work:
Yesterday, dog and I traveled NorCal to SoCal in my Model 3; 340 mi. I left with almost a full charge, 300 mi.
Stopped once in Buttonwillow, CA. 2 out of 10 stalls in use. Got out after 3+ hours ready for a break. Let the dog out for a bio break.
Walked across the street, decided to see what Popeye's Chicken was all about. Almost zero service there since everyone was watching Pats beat Chiefs in OT. Walked over to next FF joint and got a couple of tacos (I know it's bad but my dog loves the crunchy taco shells). Stopped at Starbucks for a double espresso.
We finished tacos got in car and drove home. A screenshot of my charging episode below. 500 mi/hr!
Cost $10.14. Whole trip took 5hrs, 40 mins.
Honestly, if it used to be $8 then they're not charging nearly enough. Really, $18, I wouldn't notice. The crappy tacos were $7.
If Tesla can make 90% of the travel charging work like this; the extra $2-$4 isn't an issue. I'm not jumping back in, kicking on AP with NOA and thinking "damn, shoulda taken the Corolla and saved $3".

 

[AlMc]

JayinShanghai on Twitter Model 3s arrive in China

 

[SebastianR]

JayinShanghai on Twitter Model 3s arrive in China

Am a bit surprised to see both EU and China cars so early already. Wasn’t really expecting them until mid-/end February to be honest. Seems like Tesla has the logistics under control...

 

[ls7corvete]

Am a bit surprised to see both EU and China cars so early already. Wasn’t really expecting them until mid-/end February to be honest. Seems like Tesla has the logistics under control...

Certainly seems like they beat expectations on this one.

 

[HG Wells]

But did they come by boat or plane ?
One car looks like its on a sled that's used on planes.

Cars may be for training.

 

[keydiver]

Bad "analyses" from Forbes 2 Reasons To Sell Tesla: $920M And $26,250

What do you expect when they get there "facts" from Bloomberg and Gordon Johnson.

 

[Bobfitz1]

I don't see how, if you don't know the initial demand, you can then say you don't understand how "continuing U.S. demand for high margin versions should decline as steeply as it has" ?

For all we know it hasn't declined at all, no?

No. It's understood that a major reason for great Q3 results was due to a substantial percentage of the total M3 mix sold being AWD and Performance, and those having higher margins. Last week's letter states "However, that was in part the result of preferentially selling higher priced Model 3 variants in North America. In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3."

From this It seems logical, if not obvious, that in Q4, while the number of M3s sold was higher than Q3, higher priced variants were a small portion of the total sold than in Q3, and this is at least one reason why Q4 profit will be less than Q3.
If the number of customers willing to buy the two higher priced versions (demand) had not declined in Q4, they would have surely made and sold as many as in Q3 to again maximize that quarter's revenue and profit. So that U.S. demand for these declined in Q4 seems clear based on the letter. I characterized the U.S. decline as 'steeply' due to the urgency expressed in subsequent parts of the letter, that it was critical for Tesla to reduce costs in every way possible so they can offer one or more lower cost variants and continue profitability in coming quarters. Steeply also seemed likely, given that Q1 M3 sales to Europe and China are going to be higher priced variants, yet Musk states that Q1 profit could be 'tiny'.

I'm not following why you don't view Tesla selling fewer high priced versions in Q4 as evidence of lower demand for them. Demand for a variant is how many people want that version AND are willing to pay the higher price.

 

[anthonyj]

I think if the 420 means anything at all, it has to do with the new battery pack for the model S.
It will have a range or around 420.

Actually didn’t think of this. Genius. Laughing my ass off because this is something he would do

 

[JustAaronnoraA]

I think if the 420 means anything at all, it has to do with the new battery pack for the model S.
It will have a range or around 420.

Would 120kw pack or 2170 cell fit the bill + removing 75kw pack making room for ELR??

 

[Bet TSLA]

If the number of customers willing to buy the two higher priced versions (demand) had not declined in Q4, they would have surely made and sold as many as in Q3 to again maximize that quarter's revenue and profit. So that U.S. demand for these declined in Q4 seems clear based on the letter.

This is you making stuff up. People bought everything Tesla made. Tesla made a whole bunch of MR cars that they didn't make in Q3, and they sold them all. This does not mean they couldn't sell any other mix of cars they chose to make. That they must behave in a way that maximizes revenue for this quarter above all other possible goals is strictly your fantasy, not obvious, not inevitable, not even likely.

 

[Carl Raymond]

No. It's understood that a major reason for great Q3 results was due to a substantial percentage of the total M3 mix sold being AWD and Performance, and those having higher margins. Last week's letter states "However, that was in part the result of preferentially selling higher priced Model 3 variants in North America. In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3."

From this It seems logical, if not obvious, that in Q4, while the number of M3s sold was higher than Q3, higher priced variants were a small portion of the total sold than in Q3, and this is at least one reason why Q4 profit will be less than Q3.
If the number of customers willing to buy the two higher priced versions (demand) had not declined in Q4, they would have surely made and sold as many as in Q3 to again maximize that quarter's revenue and profit. So that U.S. demand for these declined in Q4 seems clear based on the letter. I characterized the U.S. decline as 'steeply' due to the urgency expressed in subsequent parts of the letter, that it was critical for Tesla to reduce costs in every way possible so they can offer one or more lower cost variants and continue profitability in coming quarters. Steeply also seemed likely, given that Q1 M3 sales to Europe and China are going to be higher priced variants, yet Musk states that Q1 profit could be 'tiny'.

I'm not following why you don't view Tesla selling fewer high priced versions in Q4 as evidence of lower demand for them. Demand for a variant is how many people want that version AND are willing to pay the higher price.

It’s your phrasing. To say that demand declined makes it sound like market enthusiasm waned over time. That’s not true. The high number of high end orders in Q3 were to people who were on a reservation list that pre existed from a time when there was no model 3. Tesla do have to deliver to all reservation holders. Naturally they start at the top end.

We’re a long way from having any sort of steady state where the phrase “demand declined” is appropriate. And it won’t decline, by then it will be increasing as the word spreads.

 

[tsunamiofhurt]

Reuters Business on Twitter

TESLA HAS SIGNED PRELIMINARY AGREEMENT WITH TIANJIN LISHEN TO SUPPLY BATTERIES TO SHANGHAI FACTORY-SOURCES - Reuters News

 

[scaesare]

No. It's understood that a major reason for great Q3 results was due to a substantial percentage of the total M3 mix sold being AWD and Performance, and those having higher margins. Last week's letter states "However, that was in part the result of preferentially selling higher priced Model 3 variants in North America. In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3."

From this It seems logical, if not obvious, that in Q4, while the number of M3s sold was higher than Q3, higher priced variants were a small portion of the total sold than in Q3, and this is at least one reason why Q4 profit will be less than Q3.
If the number of customers willing to buy the two higher priced versions (demand) had not declined in Q4, they would have surely made and sold as many as in Q3 to again maximize that quarter's revenue and profit. So that U.S. demand for these declined in Q4 seems clear based on the letter. I characterized the U.S. decline as 'steeply' due to the urgency expressed in subsequent parts of the letter, that it was critical for Tesla to reduce costs in every way possible so they can offer one or more lower cost variants and continue profitability in coming quarters. Steeply also seemed likely, given that Q1 M3 sales to Europe and China are going to be higher priced variants, yet Musk states that Q1 profit could be 'tiny'.

I'm not following why you don't view Tesla selling fewer high priced versions in Q4 as evidence of lower demand for them. Demand for a variant is how many people want that version AND are willing to pay the higher price.

But for all we know, demand for the higher-spec'ed cars averaged 2-3K a month, and was backlogged while they ramped up model 3 production. Once they surpassed that production rate and know their future production will more than satisfy the demand for the higher-end cars, they know they will have lower ASP cars in the mix, hence the overall revenue/profit may average less.

That doesn't mean a sharp decline in demand, no?

 

[scaesare]

The Porsche Toucan may take some sales from Tesla, I've no doubt, but primarily it's going to osbourne other Porsches.

Sam agrees!

 

[Bobfitz1]

It’s your phrasing. To say that demand declined makes it sound like market enthusiasm waned over time. That’s not true. The high number of high end orders in Q3 were to people who were on a reservation list that pre existed from a time when there was no model 3. Tesla do have to deliver to all reservation holders. Naturally they start at the top end.
We’re a long way from having any sort of steady state where the phrase “demand declined” is appropriate. And it won’t decline, by then it will be increasing as the word spreads.

It is not true that the high number of AWD and P3 sold in Q3 were all to people on the reservation list. Why do you think they opened sales of AWD and P3 to individuals with no reservation at all, promising delivery sooner than less expensive models?

I did not say that market enthusiasm waned over time. Market enthusiasm reflects how many people wish they could buy a performance model someday. That is not the same thing as actual demand this quarter or next.

One more correction. Tesla does NOT have to deliver to all reservation holders. They only have to return a holder's reservation deposit if they request a refund. A reservation holder with the necessary cash can buy any of the versions currently being sold. As can any non reservation holder. Since about June they have sold M3 versions they can build profitably to reservation holders and non holders alike.

As long as Tesla fixes it's customer service problems, demand for all versions should increase over time as owners show what they can do to family and friends. I'm still confident 2019 will be a huge year for Tesla on many levels. Reading the latest company letter to employees and accepting it has revealed some short term limits to actual U.S. demand for the higher cost versions, doesn't mean I'm no longer bullish on Tesla and it's mission. Part of what we do here on TMC is try and understand when our models and expectations don't square with what the company reports and gain further insight into how to do better next time.

 

[Fact Checking]

"Tesla cuts Supercharger prices back down after customer backlash over increase"

It's still a net increase, just not as steep.

On one hand the "Fred tax" strikes again: it was him who described an around +33% increase as a "drastic increase" to begin with.

On the other hand it's good to have better road trip prices than even the most efficient hybrids. So I'm not unhappy about this.

 

[SebastianR]

"Tesla cuts Supercharger prices back down after customer backlash over increase"

It's still a net increase, just not as steep.

On one hand the "Fred tax" strikes again: it was him who described an around +33% increase as a "drastic increase" to begin with.

On the other hand it's good to have better road trip prices than even the most efficient hybrids. So I'm not unhappy about this.

I'm not on the happy side of this

Yes, of course cheaper stuff is always great. And yes, of course it is great to listen to your customers. But Fred's screaming and complaining is becoming a nuisance. Ever since the time he bought a car he started to have too much skin in the game and used his blog to his own advantage.

In my mind Supercharger are a tool for long-distance travel. I like the idea that early buyers get a an advantage here on the network and the price adjustment was a way to also maintain value on the "free super charging for life" cars. More importantly, I think that building out the network is really important.

I get why Tesla reduced the price: they most likely want to counter the "it is cheaper to drive a Camry than to super charge" argument that started to float around. But I'm a bit disappointed we got to this point...

 

[BioSehnsucht]

If Tesla misses profitability for Q1, do we get to blame Fred? I'm only half joking...

 

[Thekiwi]

Reuters Business on Twitter

TESLA HAS SIGNED PRELIMINARY AGREEMENT WITH TIANJIN LISHEN TO SUPPLY BATTERIES TO SHANGHAI FACTORY-SOURCES - Reuters News

This is good news - having multiple suppliers is a bonus.

 

[lklundin]

actually that ship is not part of the owned or chartered ships by the used shipping company (hyundai glovis) so time will tell.

But in a few hours the glovis symphony will arrive in SF , you can bet your ass that it is going to pier 80 because it is quit full !

It's moored at Pier 80 now, in the usual place,
GLOVIS SYMPHONY Current position (Vehicles Carrier, IMO 9702429) - VesselFinder

Also, in addition to having new Tesla's lined up there (see link in above posting) Pier 80 appears to be getting a Supercharger:
Still trying to get to the cool table. on Twitter

PS. The 1st shipment (primarily) of Model 3s on Glovis Captain is in the Caribbean, and the 2nd shipment (primarily) of Model 3s on Glovis Cosmos has passed the Southern tip of Baja California.