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

[StarFoxisDown!]

Let's assume for a moment that Tesla is limited in its ability to produce/procure battery cells, so for each bunch of cells they have to choose whether to put them in a Model 3 or a Tesla Power Pack/Wall.

Where would they then get the most profit ?
Also, would the relevant metric be profit in dollar amount or in percentage?
- I guess the answer to that depends on the price for a Model 3 per kWh (e.g. 750 $/kWh) and ditto for the Power Wall (500 $/kWh ? ) - and Power Pack ( price/energy ?).

Yeah, I agree with the priority of Model 3 over the past year both in terms of the view of the company from everyone(media, wall st, etc..) as well as having higher margin and thus profit. Model 3 needed to scale to that 5k(well really 4k) output in order to turn that corner. Just to clarify a bit, I don't hope or expect TE revenue to greatly increase in Q1/Q2. What I'm hoping plays out is that Tesla gets Model 3 production to 7/8k /week, stabilizes, and then switches over to giving TE some priority. Additional Model 3 production can come from China in Q4/Q1 2020 to keep expanding Model 3's reach. After Tesla reaches 7.5k/week Model 3 production, I would rather them focus on ramping TE. Ideally a scenario on the Q1 earnings is the actually put out guidance/forecasts for TE in the 2nd half of 2019 that shows exponential growth.

I will say that there is some merit in changing the appearance and narrative of Tesla as a higher priority over doing higher model 3 production(greater than 8k/week)……..strictly from a stock price/company value perspective. Right now, the media/analysts/FUD'sters and so on continue to push this narrative of Tesla is a automotive company and thus should trade at P/E multiples and valuations as other automotive companies. They also constantly bring up the addressable market and that Tesla shouldn't have a very high PE because the overall automotive segment is stagnant. We all know this isn't true because it's the ICE Auto market that is stagnant.....the EV Auto market is exponentially growing. But that's the narrative Wall St and the media push. The only thing that's going to break that is TE and/or FSD.

 

[tivoboy]

Nice price action today although the cautious optimist in me (that's my base case) says the volume for the buying was more back to historical levels of regular action - meaning someone could have been encouraging buyers with what LOOKED like a lot of buying but was really more what should be perceived as normal. I'm not yet convinced this wasn't a head fact vs. ACTUAL REAL interested buyers trying to get ahead of ER.

I still think we could ultimately be LOWER after ER than most of these recent levels. 275-310$ range, if we get significantly above 320$ either in advance or ER or during ER announce or CC then I'd lighten up a tad - barring some really extraordinary and UNEXPECTED news

 

[tivoboy]

View attachment 371470
Michael Williams on Twitter

I think they could do this with the M3, as a paid upgrade for users in the future. Small additional revenue source, but would really LOCK in buyers.

 

[Nocturnal]

I think they could do this with the M3, as a paid upgrade for users in the future. Small additional revenue source, but would really LOCK in buyers.

Lock in buyers AND neuter the next gen BMW M3 (and competitors) which will presumably gain performance over the current version.

 

[Buckminster]

The shorts may have won the past 10 battles but they will not win the war. Because of this war, we have lost much of our mojo regarding some longer term developments. We are all very focussed on the short term. To counter this, I give you:

This is the Tesla Semi. Does anyone remember it? It is gonna be huge - literally and figuratively.

 

[shlokavica22]

It's possible, but Elon did say that the very fast Model 3 product cycle was a mistake, which they don't want to repeat again.

If memory serves me right, he also said that they will target the next ramp-ups to be very fast. I don't remember where I heard/read that, but it was in the last couple of months I think.

 

[Fact Checking]

Right now, the media/analysts/FUD'sters and so on continue to push this narrative of Tesla is a automotive company and thus should trade at P/E multiples and valuations as other automotive companies. They also constantly bring up the addressable market and that Tesla shouldn't have a very high PE because the overall automotive segment is stagnant. We all know this isn't true because it's the ICE Auto market that is stagnant.....the EV Auto market is exponentially growing. But that's the narrative Wall St and the media push. The only thing that's going to break that is TE and/or FSD.

The thing is, the "narrative" is dishonest: it's always about the weakest point of Tesla:

• When Tesla was an upstart the narrative was to be "worried about competitors",
• when Tesla was crushing the competition, growing massively and investing cash, the narrative was "cash burn worries",
• when Tesla started generating serious cash and is cutting back on investments the narrative became "demand and growth worries" again.

The common theme: fundamental dishonesty.

The antidote: ignore it when it's silly, refute it if there's a new variation, and generally let the results speak for themselves.

I'm reasonably confident that with Tesla's new strategy (Cash is King: the AMZN growth model), within a few quarters the shortz will evaporate like early morning fog, under the sun of reliable Tesla execution.

 

[Unpilot]

The thing is, the "narrative" is dishonest: it's always about the weakest point of Tesla:

• When Tesla was an upstart the narrative was to be "worried about competitors",
• when Tesla was crushing the competition, growing massively and investing cash, the narrative was "cash burn worries",
• when Tesla started generating serious cash and is cutting back on investments the narrative became "demand and growth worries" again.

The common theme: fundamental dishonesty.

The antidote: ignore it when it's silly, refute it if there's a new variation, and generally let the results speak for themselves.

I'm reasonably confident that with Tesla's new strategy (Cash is King: the AMZN growth model), within a few quarters the shortz will evaporate like early morning fog, under the sun of reliable Tesla execution.

Don't forget "panel gaps" ,Elon is unstable,...plenty of other nonsense trying to scare people away.
I hate to be coarse...but I say poo on them.

 

[omarsultan]

It seems like competitors are trying to match the specs of the current gen S and X. Hopefully when they come to market in a big way Tesla will have their Gen 2 versions with even better specs.

I agree. The smart move would be to come at Tesla off-center in areas like interior with better materials, or like Porsche is doing with faster charging. It doesn't have to be technical spec. IMO, Tesla's biggest long-term exposure is the delivery and support experience, which is a shame because it used to be the opposite.

 

[MarcusMaximus]

Some slightly positive news about my ongoing flat tire service battle:

Today I got a pro-active call from Sunnyvale Service Center offering to change my appointment to a mobile service one, so it’ll get done about a week earlier. Great.

Some caveats: they can’t do the Bioweapon Defense Mode retrofit because they haven’t gotten the parts and order info for it. I actually have all the parts already(bought them ~6 months back to do the retrofit sans firmware support myself), but apparently they can’t see anything from shop.tesla.com until the parts are sent out. They also won’t be doing the tire rotation since they now charge $88 for it(seems odd, since I was under the impression this was included for life of the tires when I got them installed there).

 

[Zaxxon]

If memory serves me right, he also said that they will target the next ramp-ups to be very fast. I don't remember where I heard/read that, but it was in the last couple of months I think.

Let's not go there. Recall that we were to be at 5k/week by end of 2017 and 10k/week by end of 2018, and people should have absolutely zero concern about that. Can we agree to go ahead and evaluate the next ramp-ups as they ramp up? They'll target what they target, and will hit what they hit. Many were convinced that after the X ramp they had figured it out and the 3 would be to plan. It very much was not, and now we're seeing the same things said about the 3 ramp having informed them for the Y ramp. Maybe, maybe not.

I certainly hope so, but I've been around too long to assume so.

 

[myt-e-s-l-a]

For anyone playing with options and leverage, I want to share my experience.

These kind of slides I used to find gut wrenching. I tried to keep brave face, and I probably didn't comment much, trusting it will recover (as it did. So I'm not sure how visible my state of mind was even to regular, long-term members of this forum.

I find this last move inconsequential and irrelevant, even-though I'm close to 100% TSLA invested.

Difference is that I don't have leverage, and small ones I'm considering would be well under 10% of my portfolio.

I just sold 100 shrs of amzn and substituted a call spread to maintain my pos. Need free cash to leverage up for tsla ER

 

[Mader Levap]

What does this have to do with this thread?
I'd be happy to see every politician in D.C. fired and sent home, but I don't feel the need to post about that in a thread that's supposed to be about Tesla and market action.

He is just buttering ya all up.

 

[Unpilot]

In others news the "wall" is starting to develop some cracks.
Six GOP senators vote to end shutdown without wall funding

 

[Fact Checking]

Don't forget "panel gaps" ,Elon is unstable,...plenty of other nonsense trying to scare people away.

That's true - but note that there's a flip side to that: while the demand reduction FUD is deterring some customers, there's a dependable 'core' of Tesla owners and supporters who can dispel most of these myths in face to face discussions - which social interaction is much more powerful than pretty much any news source.

The artificially lowered expectations can in fact cause such a shock when experiencing a Tesla first hand that will 'trap' new owners in the Tesla experience even stronger, and makes them (and their families) immune against future FUD.

With every passing quarter it becomes easier and easier to 'face reality', run into a Tesla owner you know, or to take a Tesla test drive.

 

[Fact Checking]

In others news the "wall" is starting to develop some cracks.
Six GOP senators vote to end shutdown without wall funding

So there's a majority both in Congress and in the Senate to vote for the exact same "end the shutdown" budget that was passed 100-0 in the Senate just a few short weeks ago.

While I'm sure Fix News will find a way to spin this into a win for Trump, the Trump Shutdown is becoming more and more politically untenable for Republicans every passing day.

I expect Pelosi to extract a high political price for this farce Trump started, no face saving fake 'win' this time I'm afraid.

 

[Cherry Wine]

Don't forget "panel gaps" ,Elon is unstable,...plenty of other nonsense trying to scare people away.
I hate to be coarse...but I say poo on them.

To be fair, Elon did get, uh, a little unstable for a bit there. But agreed.

 

[jhm]

Headline: Shortsville Times
Respected stock wizard says "Tesla looks like it's on a heart monitor." Will it live till tomorrow ?

To Boss Short:
Notice how I cleverly ended that miss quote before adding the sting ?

Your Partner in Crime
Chief Editor
Shortsville Times

Ask your doctor if you're healthy enough for Tesla.

 

[Zhelko Dimic]

I just sold 100 shrs of amzn and substituted a call spread to maintain my pos. Need free cash to leverage up for tsla ER

Hummm, that could be a good way. I recently converted small portion of my TSLA into 100 AMZN, and was thinking about converting back, but this is a decent alternative to do both. My brokerage insists though on time difference in settlement btw. shares vs options, so I would have to lose exposure for one day to achieve this... It's a Canadian Bank owned brokerage, you know, those banks that never had to be bailed and with insanely strict rules and strong risk management policies...

 

[Driver Dave]

As an investor in the company, if there are no plans for a S/X refresh right now I would seriously consider how much stock I own at this point because it would show to me management that is not forward enough thinking or prioritizing short term over long term too much.

Those cars are still way ahead of anything on the road. I'm not sure a refresh is needed for a while.

Better to focus on Model Y and Pickup and expand than to iterate on things already ahead.