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

[Antares Nebula]

Jobs was a marketing genius, not an innovation genius. He mainly took things that other people were already doing (for example, Nomad vs. IPod), made versions that may not have always won the stats race but were stylish and user friendly (rather than tools for nerds and businesspeople), and convinced people to not only buy them en masse, but to do so at a premium. And each new product launch was tied into a single ecosystem that just further encouraged people to stay within Apple's sphere.

Personally, I'm not much of a fan of Jobs as a person. But his marketing acumen can't be denied - spotting places where existing niche products can be transformed into mass-market phenomena, and convincing people about how this product is going to change their world and how anyone who doesn't have one is falling behind the times.

IMHO, he was a very different person to Musk. If there's anyone out there in the present who's most like Musk - and I know Musk would hate to admit this, but... it's Bezos. And in the past, I know he'd hate to admit this too (as he's a huge Tesla fan), but... he's most like Edison (the R&D-heavy, works-himself-and-his-workers-hard-but-they-still-line-up-for-the-chance-to-work-with-him-because-he's-doing-all-the-neatest-things CEO simultaneously involved in dozens of revolutionary "sci-fi" fields and bringing them to reality). Tesla, by contrast, had some brilliant insights into some specific fields (to the point of obsession and a bit of madness later in life), but was a terrible CEO and excelled at going broke while other people profited off of his work. Elon probably has a number of "Teslas" working for him right now

I think you're missing a key part of the equation. There is marketing and engineering. And then there is vision. Jobs was not really an engineer (whether software or hardware, though he did help out here and there). But he had the vision. Musk also has the vision (though he is in fact also an engineer, unlike Jobs). Everybody else just copies the vision. It's not about pure engineering or even pure invention. You have to have a creative vision, and of a special kind that is very, very rare. And the will to bend the world to that vision.

For example, Apple right now has both great engineering and marketing, but really no vision. No amount of marketing or engineering would have given Apple the Mac, the iPod, or the iPhone. Same for the Model S, X and 3. Need to have that special creative vision. That's the key. People like Musk and Jobs are once in a lifetime, if even that.

 

[Nocturnal]

I'm more bullish now than I was back when that first "possible record delivery" email was leaked. The gross margin is great and every other metric aside profit is up.

I think I converted another ICE guy last night. Went with my buddy to a tractor pull (oddly I wasn't the only model 3 there lol) and his friend was there. Both guys are major car guys. My buddy just gutted an older mustang and is doing a frame off restoration. Over the course of grabbing dinner and the drive up the friend went from "I don't know anything about Teslas" to "wow, I'm convinced, I really want one."

 

[KarenRei]

No, the trip to $180 was based on fake news and the company is in a stronger position now than they were then. $6.3 billion in revenue/qtr equals over $25 billion annually and growing rapidly with the addition of GF3 in China. The really important fact is that the cost to produce electric cars is dropping all the time and it drops further with volume efficiencies.

Indeed, Tesla's efficiency improvements in all regards has been spectacular, when you compare their production volumes to their costs. S&X being produced at ~15k/q with a single shift. SG&A low, despite increasing volumes. Non-credit margins rising ~2% even while ASPs plunge. Tesla becoming more efficient each quarter is about as reliable of a prediction as the sun coming up in the morning**. We just need a quarter where ASPs stop plunging (which is guidance for Q3) and we're golden.

** Unless you're in or near Antarctica right about now

 

[SageBrush]

That is a great podcast and I highly recommend everyone here listen to it.

Thanks -- very informative for a finance doofus like me.

 

[SageBrush]

People like Musk and Jobs are once in a lifetime, if even that.

How many reincarnations have you gone through ?

 

[kbM3]

Haven’t seen anyone do the math for GF1:

28 GWh / year
- 3 GWh / year for Tesla Energy
= 25 GWh / year for Model 3.

50/50 split of LR and SR = (52 kWh + 78 kWh) / 2 = 65 kWh average. per Model 3.

25 GWh per year / (65 kWh per Model 3 * 52 weeks per year)
= ~7400 Model 3’s / week current production.

Tried to be conservative. Any feedback?

 

[KarenRei]

Haven’t seen anyone do the math for GF1:

28 GWh / year
- 3 GWh / year for Tesla Energy
= 25 GWh / year for Model 3.

50/50 split of LR and SR = (52 kWh + 78 kWh) / 2 = 65 kWh average. per Model 3.

25 GWh per year / (65 kWh per Model 3 * 52 weeks per year)
= ~7400 Model 3’s / week current production.

Tried to be conservative. Any feedback?

They're AFAIK not doing a 50/50 split. More LRs still. They can be expected to steadily shift more to SRs as time goes on, of course.

IMHO, more interesting is that they had over 20% cell production growth in one quarter. Yeah, let's keep doing that every quarter! TWh-scales in 5 years.

 

[njzimmic]

Have we bottomed? I think we did. TSLA stock will trickle up from here. Reason? We have Central Banks getting back into Quantitative Easing QE. Good for tsla and the market as a whole. Half a decimal point in rates is a good direction.

 

[KarenRei]

Have we bottomed?

 

[brian45011]

How exciting is the recycling business. Makes no sense from my vantage point.

Very little information about Redwood Materials is publicly available but it apparently is uses electro-plating to recover elemental metals for re-use. The are numerous nasty chemicals involved with electro-plating, including strong acids and bases for cleaning/surface preparation, cyanide compounds, etc. Can be every exciting in the event of fugitive emissions.

 

[Joe F]

1) I saw a post on Reddit that someone supposedly said they've been investing in Tesla for a while and this is the first time they are scared.

I've been investing in TSLA for a while, and I have 1 million shares. I'm scared, too.

See how easy it is to write a line of nonsense on any social media platform?

 

[KarenRei]

Very little information about Redwood Materials is publicly available but it apparently is uses electro-plating to recover elemental metals for re-use. The are numerous nasty chemicals involved with electro-plating, including strong acids and bases for cleaning/surface preparation, cyanide compounds, etc. Can be every exciting in the event of fugitive emissions.

I think that's going a bit far on the assumptions end. This isn't about trying to get some consumer finish plated to an arbitrary object. The process is unlikely to remotely resemble commercial aesthetic electroplating (e.g. chrome plating, etc).

ED: Looking through some existing electrodeposition processes, I see, for example, the reduction of LiCoO2(s) with HCl and H2O2 to CoCl2(aq), O2, LiCl(aq), and H2O; the cations of CoCl2 and LiCl are thus present as Co+2 and Li+, which can then be electroplated out onto steel or other electrode materials.

 

[brian45011]

Umicore is a nice long term investment

It's been a dog lately.

 

[X Fan]

What Amazon has done is relatively easy to grasp and understand. They're just a very efficient online retailer. They never really, as I mention, throw out seemingly ridiculous ideas without already having worked it out.

For example, 1-2 day shipping has always been available but prohibitively expensive. Amazon says they'll do free 2 day shipping. It's easy to understand. We're left to wonder how they'll pay for it, but if they're not bkrupt then we get it that they figured out a way to do it. Very simple.

C'mon care bear: Amazon's Cloud fueled their e-commerce success (and in 2018 AWS NI was higher).

 

[kengchang]

3) But the bad part is we still aren't even beating Q3 2018 revenue levels. I think if there is a YoY increase in revenue for Q3 this year it will really help the stock. I don't see why there shouldn't be with more battery capacity online and price cuts being relatively minimal.

Q3 18 was really pent up quarter due to Tesla holding back delivery and stock up inventory to keep Fed credit from expiring in Q3.

 

[traxila]

Yeah, I am obviously clueless here. Guess we have to remember that the stock did methodically go up over 40% from its recent lows and the narrative was somehow allowed to change to expectations of great results that were clearly in contradiction with what was communicated by both management and what anyone who was paying attention had figured out for themselves. When it hit 180 it was because all the manipulators had finally gotten the investment world to agree that Tesla demand had fallen off a cliff (finally) and would never recover as it death spiraled. A few scant weeks later all of this crap is solidly disproved but it does not matter for the SP.

I still see Tesla crushing the competition, making the most and best batteries, having designs to make better batteries, steadily increasing production and about to open a homegrown Asian factory. I see their competitors flailing about trying to deal with a slowdown that Tesla has definitely been a part of, especially in particular market segments. Seems like right now they are so concerned about their ICE business slowing that they are inclined to ignore BEVs again for a while, which is absolutely the wrong move, but typical with corporations in legacy businesses. Tesla is the dominant BEV manufacturer now, and I believe it is doing what it needs to do to continue that. Does anyone here foresee a future Global BEV market where Tesla is not a huge player, if not the largest? Please comment, am interested as to how it is all supposed to fall apart at this point.

I do not know what to tell anyone about the stock price. Tesla is my biggest holding and I see no reason not to continue to accumulate, which I am. If you are going to play options, make sure you know what you are doing. Savvy traders are making a killing on TSLA, but I am sure I do not qualify.

 

[brian45011]

The process is unlikely to remotely resemble commercial aesthetic electroplating (e.g. chrome plating, etc).

From process flow diagrams shown by other re-cyclers, separating the amalgam of valuable cathode metals may be far more difficult than "commercial aesthetic electroplating." JB's mission is commendable; and, if he succeeds, the sustainability of EVs will be greatly advanced.

 

[KarenRei]

From process flow diagrams shown by other re-cyclers, separating the amalgam of valuable cathode metals may be far more difficult than "commercial aesthetic electroplating." JB's mission is commendable; and, if he succeeds, the sustainability of EVs will be greatly advanced.

I simply raise issue with your assumption that the chemicals involved will remotely resemble that of those used in aesthetic electroplating operations. There's no connection.

 

[SageBrush]

Tried to be conservative. Any feedback?

I really have no idea how much to give to energy storage but you ignored the Model S and X now; and in the near future Y, truck and roadster.

So far as I know GF1 is not able to meet all of the Tesla cell demand currently.

 

[ReflexFunds]

I really have no idea how much to give to energy storage but you ignored the Model S and X now; and in the near future Y, truck and roadster.

So far as I know GF1 is not able to meet all of the Tesla cell demand currently.

S&X cells come from Japan. Elon and Drew both said GF1 cells are matching current car production.
Tesla will have to expand cell production significantly beyond Pansonic’s 35GWh capacity/contract for Model Y production next year, most likely with their own in-house cell production.