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

[Stars aligned]

Looks like everyone now realizes that the drop was based on nothing. We have a whole weekend for people to re-read the numbers and re-listen to the call and then realize they should have bought, not sold. Hoping for some solid green starting monday.

Maybe based on nothing, but quite refreshing. Like a jump into the cold water of a mountain lake.

 

[Thekiwi]

Bear thesis : no demand, losing money, about to go bankrupt
Reality : record sales, positive cash flow, cash reserve increased to a record $5B

Maybe I'm just dense, but I don't buy the bear thesis

I think to be fair you have to separate the crazy $TSLAQ troll theories from the “reasonable bear” thesis.

The “crazy $TSLAQ” theories are the “bankruptcy imminent/zero demand/fraud”. they will never change. What will change is media will cover them less and less as Tesla finances continue to improve.

The “reasonable bears” Thesis has actually been improving over the last year as Tesla finances have improved. Their main arguments aren’t about going bankrupt, but are about the company being overvalued as they think Tesla will have to lower prices and margins to continue growing, and that they will continue to need to borrow money/issue more shares to fund the expansion, and that they won’t achieve long term margins better than the rest of the auto industry and so don’t deserve the current market valuation.

As Bulls we very likely disagree with the reasonable bears, but their arguments aren’t to be dismissed completely (as opposed to the TSLAQ crazies who should be laughed out of the building at every opportunity)

 

[dc_h]

Star Wars joke incoming:

Jobs and Musk were Sith Lords. But there can only be two: a master and apprentice. Jobs was secretly training Musk all those years. But then Musk wanted all the power for himself, so he gave Jobs pancreatic cancer, and took over as the new Sith Lord.

Wonder who is now Musk's apprentice?

Is that OT?

MOD EDIT:
By that, do you mean Out There?????

 

[Right_Said_Fred]

Not if a company grows by mergers and acquistions. Under GAAP, that allows them to claim the income of the acquired company but not their expenses (I've linked an article explaining this before. Search my History if you haven't read it). That's how Microsoft grew so fast in the 1990s, doing ~200 acquistions per year.

Which reminds me: what happened to the story of Tesla being able to claim Maxwell's income but not their expenses? Is there any evidence in Q2 numbers that they did that?

 

[Singuy]

Can you blame him? If the entrenched executives at the OEMs are too addled to appreciate the genius of Elon's visions, don't they deserve an agonizing, but quick, demise?

Especially when E-trons are parked out side of Tesla centers and superchargers. Completely missing the point of transitioning to EV. I hope Elon smash all of them emission cheating asses to pieces. F them.

 

[Carl Raymond]

I don't expect the ovens to go anywhere, though. As long as they keep needing more 2170s it makes sense to use DBE for new lines and keep the old lines running.

It’s a puzzle. How to add capacity without subtracting first to make space.

If there is to be no subtraction, we would surely be seeing sods turned in Nevada by now to create a bigger factory. Carsonight reports that the place is chock full. (Chockas, in Australian slang).

Maybe those ovens are modular and can be made redundant and the space repurposed in say 5 steps of 20%? Please enlighten if in the know.

 

[Doggydogworld]

It's completely another to accuse of them lying about facts that are stated in the financial statements.

I said nothing of the sort.

In 2Q19 yoy Tesla increased volume 134% while reducing R&D 16% yoy and reducing SG&A 8% yoy.

They had 10k car/week infrastructure in place in 2Q18 because they thought they'd be making that many by then. That's why I argued against Mr. 20k SG&A per car on SeekingAlpha. It was a temporary situation.

I just don't see evidence of radically more efficient R&D efforts or SG&A infrastructure. Low inventory sounds great, but inventory financing is only 1% per quarter. Tesla's ~0.5 quarter advantage saves them ~200 per car. But the wave costs significantly more. Penny wise, pound foolish. No haggle pricing without commissioned sales people sounds efficient. But no haggle dealers have been around for decades without putting hagglers out of business. Different doesn't automatically mean more efficient.

Oh, I think I get what you're thinking. You're thinking that opex grows in proportion to number of different models, which might be correct to some extent.

That's part of it. Pickup R&D will obviously be a lot less per unit if they sell 500k/year vs. 50k. But it's more than that. Demand for 2 million 3/Y per year (at current pricing) is a different market. You don't need sales and support infrastructure to truck cars to delivery centers where people are standing in line with huge cashier's checks. Getting into the trenches and selling cars is different. The guy who did the wildly successful Apple Stores tried the same approach at JC Penney and destroyed the company.

SCTY had a huge outbound sales infrastructure and was #1 but drowning. Tesla slashed SG&A and deployments fell 90%. That's how it works in competitive markets. The US EV market isn't nearly that competitive yet, but China is and Europe is getting there. To keep growing rapidly I believe Tesla will have to get in the trenches and sell, and that requires spending.

​

 

[X Fan]

Looks like they just randomly threw in those maintenance costs of $4,000 and $8,000.

My BMW going on 6 years, and my in-law’s BMW at 5 years, haven’t even cost close to $4,000 in maintenance costs. Of course our Tesla’s have cost even less. But, nothing like the discrepancy they’re trying to show.

But, my parent’s 7-year old Odyssey has had less maintenance costs than our Tesla’s though because the Tesla maintenance service, just like with every other luxury automaker, is an arm and a leg compared to likes of Toyota/Honda.

Edit: that comparison is a little funnier now. How in the world is insurance $6k for the Camry but less than that for the Tesla?? If that ain’t some FUD, I dunno.

So, without those unsubstantiated outrageous expenses attributed to the Camry, they basically showed that a Camry’s up-front and overall cost are lower than the cheapest 3.

For one, BMW's 4yr/50K coverage for new purchases covers your maintenance. However, tires are very expensive and c'mon, those 6 yr old & 5 yr old BMWs have seen at least one high cost maintenance failure (which is big bucks).

 

[Cartegena]

You're always going to have mis-information in the media, either inadvertently or maliciously. You can't rely on the media, especially when it comes to Tesla, to communicate the correct message for you..

That's the role of competent, articulate, knowledgeable and honest Public Relations specialists in other companies perform. Tesla seems to dance around/evade direct substantive questions on earnings calls, and relies on vaporous questions from cheerleaders to consume the tightly controlled allotted one hour every three months.

 

[Alphacrux]

Interesting article about Amazon today:
Amazon CEO Jeff Bezos has kept the same message to Wall Street for 22 years

Hopefully it applies to Tesla in regards to the subtitle:
"For the past two decades, Amazon CEO Jeff Bezos has told investors that long-term growth is more important than short-term profits"

 

[Thekiwi]

Tesla Model 3 Cost of Ownership Slightly Cheaper Than a Camry | Loup Ventures

The bottom line: Model 3 is a superior car (electric, safer, Autopilot) compared to a Camry, and is slightly cheaper to own and operate over 5 years

Why does he have base model as $38,900 and multiple times says the $35k model 3 “did not come to fruition”???

Anyone in the US can order a $35,400 SR today by phone/store from Tesla right?

And why use an arbitrary timeline of 5 years? The comparison swings heavily in the model 3s favor as you increase the years.

 

[Dwdnjck]

Climb the Wall of Worry one more time.

 

[Fred42]

44C in Paris yesterday. Hottest day ever measured there, as hot at the US midwest was last week.

And its not just Europe baking in the sun, Arctic Sea Ice is at the lowest level for today since records began. So 44 TWh of batteries needed by 2040? Tic Toc.

Too bad it's not 44C in Washington.

 

[Thekiwi]

Important to remember the stock is trading around where it was just 2 weeks ago - when everyone was pretty happy we had climbed from the 170s lows.

 

[kengchang]

Climb the Wall of Worry one more time.

At least we start at ~230 instead of 180

 

[Ratanpara]

Interesting article about Amazon today:
Amazon CEO Jeff Bezos has kept the same message to Wall Street for 22 years

Hopefully it applies to Tesla in regards to the subtitle:
"For the past two decades, Amazon CEO Jeff Bezos has told investors that long-term growth is more important than short-term profits"

I am a TSLA holder since 2013, sometime I look back and think about I could have made more money in Amzn( I also own Amzn) then I am looking at TSLA from product roll out prospective then I am thinking Tesla is just starting out ,Model 3 is their first mass production product so I am going to hold my position through thick and thin for at least next 5-7 years.

 

[EVNow]

SCTY had a huge outbound sales infrastructure and was #1 but drowning. Tesla slashed SG&A and deployments fell 90%. That's how it works in competitive markets. The US EV market isn't nearly that competitive yet, but China is and Europe is getting there. To keep growing rapidly I believe Tesla will have to get in the trenches and sell, and that requires spending.

Tesla strategy is not a me too product. Its differentiation and brand pull. It is working so far. Their sales cost is much less than any other competitor. Even in China & EU. It could be different in a few years/quarters - but currently it is not.

Same with SolarCity. Either they make a differentiation (solar roofs) work or they shut it down. No point fighting with others selling a me too product.

 

[Carl Raymond]

Important to remember the stock is trading around where it was just 2 weeks ago - when everyone was pretty happy we had climbed from the 170s lows.

And just as tightly compressed through short selling as it was then. Possibly more so. Shorts stretched to their limit. No ammo. No FUD. We should use the words “5 billion in the bank, with more coming” often. Make it obvious to all and sundry how absurd the letter “Q” on #TSLAQ is.

 

[generalenthu]

Love this news from elsewhere on the forums. In my neck of the woods, there is a new supercharger location that's opening. It's a new Wawa, with the 250 kW superchargers. Kicker is - there is no gas station!

Supercharger - Vienna, VA

For those not familiar with Wawa, its one of the biggest gas station / convenience store chains in the US East Coast.

Wawa (company) - Wikipedia

 

[Pezpunk]

Love this news from elsewhere on the forums. In my neck of the woods, there is a new supercharger that's opening. It's a new Wawa, with the 250 kW superchargers. Kicker is - there is no gas station!

Supercharger - Vienna, VA

Bummer that it’s only 20 minutes from my house. Means I’ll never have a reason to stop there!

(So hard to get that concept through to people used to gas stations...)