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

[abasile]

I converted all my short puts into put spreads by buying deep-deep-in-the-money puts

I think you meant out-of-the-money puts, right? For example, you could have purchased June 2020 $100 puts to reduce the margin requirement on June 2020 $200 short puts.

 

[Pras]

May be he is getting ideas from Troy

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These numbers aren't that unreasonable. Q3 could be lower than Q2.

I'd like these to be the analyst consensus estimates. Upto Tesla to beat them.


I think the margins in Q2 will be lower (because of pre-raven discounted S/X) and higher number of SR+ in the mix. He is setting them up for a revenue miss.


Because he thinks Tesla will be selling less than 1M cars even 3/5 years from now.

To keep it honest and with all due respect to Troy, his estimates have changed over time from his early estimates. Troy starts with low estimates and revises them up multiple times in the quarter as signs/data allow him to. So 78k may be just a low side of his estimate.

Per my estimate, which I avoid revising unless there is a material change in strategy, the pullback due to tax effect will have ~5k US delivery impact. This gap can be filled by seasonally higher order rate in Q3 and new delivery market. So I think, Q3 should remain at 90k target. One puzzling point is the EU SR deliveries. Not sure how much is the demand vs slower SR ramp up.

 

[urarthur]

If they can pull forward sales, they can pull forward costs.
I think Tesla pulled-forward Q2 costs in Q1 so they may have a decent chance to end in green in Q2.

I strongly believe Elon pushed for a bad quarter in Q1 in order to have positive/profitable quarters going forward. Q1 was a lost quarter anyway. In hindsight that might not have been a good decision, but who could've thought SP would crash to 177 (partly thanks to bad macro's) while they'd be guiding for 90-100k /quarter.

Let's say they pulled-forward 200 mln costs:

Q1 -/-700 mln + 200 mln one time thing + 200 pull forward costs = 300 mln loss.
If that's the case, break-even is very likely with +50% more sales in Q2.
ZEV credits + 'free' cash (flow) from FCA could set up Q2 for a +250 mln profit

 

[LN1_Casey]

It's been awhile since I've checked Barchart for TSLA options activity, but of note, the put/call ratio is highest in favor of calls that I have seen since tracking - 63.3% to 36.7%.

Most Active Stocks Options - Barchart.com

Can someone please explain to the newb?

 

[jerry33]

Yeah... so...

The economics for rural gas stations, especially away from expressways, are going to get dreadful. They don't get enough business to stay open. (I have watched many close already.) But very rural areas may be late adopters of electric cars, due to a lack of fast charger availability and lots of long drives. What they DO have is a lot of empty space to store gas cans. We're going to see people in these rural areas carrying around lots of cans of gas in the back of their pickups, and "going to town" 500 miles away to stock up on gasoline occasionally. Yuck.

Or they may surprise us and get on the bandwagon once range is enough for them to feel comfortable. It's cheaper and easier to put in a charging station (even if it's only a 14-50) in a rural setting because the infrastructure is already there (for the barn), no HOA, or landlord, city rules, etc.

 

[Chocochip]

It would be a waste to sell to "drivers" who keep the car parked 95% of the time. By running the car 24/7, lot more emissions can be cut.

Let's make one thing super-clear right now, so we don't need to revisit it: all current Tesla vehicles are waaay over-engineered to be used exclusively as taxis. They are driving machines first and foremost, and they have the level of interior finishing that would be completely lost on occasional passengers that pay a very low amount for a quick ride. Would you put fine Italian leather seats on a city bus? Exactly!
So to think that in the not-so-distant future Tesla will be exclusively producing these engineering masterpieces -- including the Faberge egg of cars -- solely as robo-taxis is ridiculous!
At some point they might consider producing a different type of vehicle, build specifically to ferry passengers at relatively low speeds in an urban environment as comfortably as possible. But at the moment we don't have that. So the X, S and 3 will always be produced to be sold to customers.

 

[neroden]

75%!!!!

thanks for the description of how you ‘unwound’ the high requirement.

You're welcome. This was a learning curve. I modeled the margin requirements in the scenario where the broker declared TSLA unmarginable (100% requirement), and then modeled the same requirements for a spread.

i don’t know whether to read the 75% as an alarm directed more towards those leveraged short or long, obviously it affects both but...

not every broker has the same requirements. one is 40% one is 45% now schwab is 75%

Yeah; I've considered switching brokers. The thing is, any broker could make the stock unmarginable at any time, so it might not be an improvement. I just had to get in a safe position. (I would have been OK if they hadn't simultaneously made my other stock non-marginable.)

obviously their retail books look different, what id like to know is how much different

 

[jerry33]

Deadheading alone will increase miles driven 50-100%.

Ideally there won't be that much deadheading. Drive to passengers destination, park somewhere near, wait for next passenger. It's not like the car would have to go home after each trip.

 

[neroden]

Or they may surprise us and get on the bandwagon once range is enough for them to feel comfortable. It's cheaper and easier to put in a charging station (even if it's only a 14-50) in a rural setting because the infrastructure is already there (for the barn), no HOA, or landlord, city rules, etc.

True. I recently met a farmer who had multiple welding outlets (6-50) in his barn. He doesn't have the cashflow for a new Tesla, but is now seriously considering a used Tesla (though probably only when the Pickup becomes available used).

 

[mongo]

It's a fallacy that body on frame is better for towing, the better rigidity of unibody reduces dangerous trailer sway and improves handling with heavy loads.

How is that? Tongue weight is the biggest factor, and weight distributing hitches are not usually compatible with unibody.

Putting a fifth wheel or goose neck on a unibody would be impressive.

 

[Dutchie]

Go call it out on his Twitter account then. We’ve heard it here plenty. Everyone here is already standing in their respective corners.

Doing that all the time. I get no reaction

 

[neroden]

But it only takes $2,500 or so for a new MCU and screen. Also I kept the first new vehicle I bought for twenty years

True. I am unsure how long Tesla is going to offer retrofits, however. I think my 2013 Model S can be upgraded to MCU2 and the higher-resolution screen... but at some point, the cars stop being upgradeable and the parts stop being available.

 

[Tslynk67]

I think Rivian’s R1T/R1S launch is more like S/X: relatively low volumes (20k-40k max for Y1) of high-priced, luxury vehicles at high margins. Biggest barrier to sales relative to Tesla may be charging network. The CCS DC charging network is still tiny and over-hyped (lots of stations are “capable” of fast DC but I believe still way slow now), but encouraging that Walmart is starting to add them in lots of locations. I think many R1T buyers will be comfortable charging mostly at home. In fact many are happy Tesla owners like myself.

Disclosure: I have a deposit on an R1T, will wait to see what Tesla reveals before locking it in. From what I have seen the R1T will be a much more capable off-reading vehicle (which matters in Northern AZ) and likely lots more luxurious than the Tesla pickup, but we shall see, it will be great fun to watch. I am really hoping for another successful BEV startup, IMHO only good news for Tesla owners and stockholders. Two companies that beat the odds and deliver vehicles starting with a clean slate, no conflict of interest with legacy oil, would be a good wake-up call to the industry and to the public.

I can't possibly imagine Rivian making 20-40k vehicles in their first year. I expect them to experience the same growing pains that we went through. And yes, maybe they have Ford backing them up somewhat, but I don't think it will make that much difference. If they do 5k in the first 12 months I'll be impressed.

I do wish them the best of success though, don't misunderstand me there. As someone once said: "The issue is not about coming up with a car design — it's absolutely about the production system. You want to have a good product to build, but that's basically the easy part. The factory is the hard part."

 

[neroden]

I think you meant out-of-the-money puts, right? For example, you could have purchased June 2020 $100 puts to reduce the margin requirement on June 2020 $200 short puts.

*cough* yes, I meant out of the money *cough*

 

[Cherry Wine]

Not sure IF posted already but this would be nice for potential Cali EV buyers: California bill could triple rebates for electric car buyers

This would be huge -- but I won't hold my breath with the price tag that's being put on the bill. I expect it to die quietly in Appropriations. I hope I'm wrong.

 

[Tslynk67]

So what's your Q3 delivery forecast? The "minimum" 18% uplift = 112k? Or something higher?

I think Jonas is too low again. He shaped his Q3/Q4 numbers to hold his full year forecast constant. That seems dumb, even for Jonas. I'll say 97k. Model 3 production should be up, but deliveries flattish. I'm not sure what to think about S/X, so I'll say flat there as well. High demand for Raven would push them above 100k, but I'm skeptical.

Jonas could be right if they finally unwind the wave, but LOL. I do expect more Q3 boats, however. Looks like we'll have the first this week.

AJ is talking out of his AH - Tesla already stated that they have more orders coming into Q3 than they had for Q2, there is no bringing forward of demand from H2 into H1, there is no lack of demand.

How hard do you actually have to try in order to not understand this?

 

[Cherry Wine]

Can someone please explain to the newb?

A potential indicator of investor sentiment. More information is here. Basically, more calls than puts is an indicator of bullish sentiment, and vice-versa would be seen as bearish.

 

[Fact Checking]

Average taxi miles per year range from 30K (London) - 50K (New York).

Firstly, New York appears to be 70K miles per year:

https://www.quora.com/How-many-miles-does-a-NYC-taxi-do-in-its-life-as-a-taxi​

But note that NYC taxi utilization is higher because of the medallion system that creates an artificial scarcity of taxi cabs.

The utilization of taxi cars with human drivers is very low in general:

• About 50% of the time is spent waiting for a customer and taxi drivers won't drive to the other end of town to pick up another customer - if they are already at the airport they'll wait for a customer at the airport and eat the 30-60 minutes wait time. Traditional taxi service cost of goods is dominated by fuel cost and labor cost, which is about 60-70% of the total cost. With an EV FSD taxi there's basically zero labor cost, there's fuel cost that is maybe 10-20% of gas cost in city environments, and the biggest cost is basically amortization of the vehicle in taxi duty - which is likely a fraction of the cost of regular taxi service.
  
• Many taxi drivers in cities where there's no artificial scarcity have their own cars which is only used when they are working. Plus there's naturally lower demand for taxi services at night, which over-allocates cars for the daily peaks and leaves them idle during the rest of the day. This lowers their 'miles driven per taxi' number to the low figures you cited.

An EV robotaxi has no such constraints and can be used around the clock and 100k miles per year doesn't look unreasonable, given the 70k/year NYC figures that are limited by 'human driver' constraints.

 

[Tslynk67]

Seriously. Since they merged the threads this forum has become nearly unbearable. I check in occasionally out of habit. But the new norm seems to be 10 pages of nonsense based on feeling and assumptions followed by one thoughtful or well researched post.

Feel free to rain down dislikes followed by “why don’t you stop complaining and contribute.” Regardless, I can’t help but miss the TMC of years past. Thoughtful investor posts, intelligently written involving numbers.. ah those were the days.

Sure, but how many of those thoughtful posts had the SP at $230 in mid-2019? None of them, I betcha!

 

[JusRelax]

Average taxi miles per year range from 30K (London) - 50K (New York). (Probably lower in more rural areas.) Robotaxis would be similar. Do your homework before spewing nonsense, people.

How Many Miles Does an Average Taxi Cab Driver Drive Yearly?
Taxi Driver Survey 2016 | Taxi Insurance

The problem, as people who have actually studied transportation know, is "rush hour". You can't get taxis, or personal cars, or buses, or trains, full 24 hours a day because the demand simply isn't there 24 hours a day. And we actually know the demand pattern.

The only way to change that is staggered shifts and people *hate* staggered shifts.

Anyway, those are some actual numbers to use when making projections related to any taxi market.

I was using the NY taxicab factbook (potentially slightly outdated) and then assuming that robotaxis without drivers that need to sleep/have a life outside of work can drive more often than a normal 12-hr taxi shift: