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

[Artful Dodger]

Except for today, TSLA has handily beat the market this whole week. It has to rest sooner or later.

Its technical selling on a low volume day (not enough buyers to push SP through the trigger point):

• Halfway through today's session (12:45pm) the Mid-BB was at $244.36
• today's high was $244.51

Let's wait and see if some buying interest appears during the afternoon session. It will take some volume to bash through the technical selling. The Mid-BB is a natural defense point for the Shortzes, and a profit-taking point for traders.

Cheers!

 

[Nocturnal]

Spoken like someone who lives in a city. I have reading this for years, and it has not come to fruition. Nothing comes close to the freedom of movement one has than having a car.

Despite 'Car-Free' Hype, Millennials Drive a Lot - CityLab

Uber and the like are hurting taxis and mass transit more so than car ownership.

For now. I do think that massively available robotaxis will change that calculation. Why don't people use Uber instead of driving now?

1. Volatile pricing (is my ride $10 or $30)
2. Uncertain availability (is it 4 minutes or 15?)
3. Dealing with a random stranger driving you (annoying, scary, smelly etc.?)
4. Dealing with a random quality of vehicle (dirty, unreliable etc.)
5. Cost

I can't see how robotaxis wouldn't reduce all of those to various degrees. Other cultural shifts are offering a headwind here as well. Online shopping, grocery delivery, and even increased urbanization.

 

[EVNow]

Sigh … familiar territory.

Insideevs numbers look solid. Model 3 at 34% QoQ growth is impressive and unexpected.

 

[brian45011]

Last 4 quarters when Tesla has started selling Model 3 in volume has resulted in 2.8 Billion of Operating Cash Flow.

But I get the larger point. Tesla is not in a position to buy Panasonic part of GF1 with cash and Pana won't probably take equity (though if I was Panasonic, I would at the current price).

Yoshihiko Yamada who was a consultant to Panasonic at the 2016 GF-1 first grand opening,

Bloomberg - Are you a robot?

is now Tesla's VP at GF-1 (he signed the Factory Lease modification that is attached as Exhibit 10.3 in the latest 10Q.)

 

[elasalle]

Norwegian papers report that EV sales in Norway is halved in july compared to june.

Kraftig fall i elbilsalget

EV sales in Norway lowest in 12 months, less than half of June.

This newspaper interviewed the Norwegian EV Club aka Elbilforeningen. Their representative belive introduction of road tolls for EVs in several cities has contributed. EVs pay half of what the fossil car pays. Until now EVs had no road tolls. Many people got an EV just to escape the road tolls.

Commenters belive the Tesla wave may be just as important. Tesla had their end of quarter push last month.

Edit: IMHO Nettavisen is pretty tabloid and click-baity.

Per teslastats.no July numbers are down as compared to April(496 vs 822)
One change is now UK is also in the EU mix

First Q3 ships set to arrive in EU tomorrow. ...

+UK has had good reviews in media for M3. 19/20 days Power Stations running without Coal etc. Anyone know UK trends and figures? I think will be important market for Q3 ...

 

[EVNow]

Did our accumulator have their fill?

Definitely not operating today. May be waiting for Insideevs numbers ?

 

[jbcarioca]

Spoken like someone who lives in a city. I have reading this for years, and it has not come to fruition. Nothing comes close to the freedom of movement one has than having a car.

Despite 'Car-Free' Hype, Millennials Drive a Lot - CityLab

Uber and the like are hurting taxis and mass transit more so than car ownership.

Of my seven nephews and nieces, all between 30 and 45 years of age only one owns a personal vehicle (he has a pickup and several motorcycles). Of course they are all urban or suburban. Worldwide it is a statistical fact that fewer younger people ahve personal vehicles than did their parents and fewer have driving licenses. "fewer" does not mean "few". In large cities which have decent public transportation that has long been true. The changes have been evident in suburban, urban and even rural settings. However almost everywhere in the middle-class and above a majority fo people still drive and often own their personal vehicles. Beware 'mother-in-law research' since all of us are more likely to know younger people who also both drive and own their own personal transportation.
Those trends might well augur well for BEV anyway because those urbanites who want their own vehicles are apt to want to minimize maintenance and servicing hassles.

 

[RobStark]

The car industry as a whole has headwinds, at least in the US. Teenagers are delaying getting their drivers licenses, and the entire population is slowly moving towards using Uber/lyft more. Uber is so fast and efficient that more and more people are opting not to buy cars at all.

A smaller percentage of the population has been delaying or not getting drivers licence for 40 years as the population urbanizes. Yet the absolute number of drivers keeps growing.

This phenomena started way before Uber/Lyft were a twinkle in Silicon Valley's eye.

Uber and Lyft are not cheap for someone that needs to travel significant road miles per year.

It is cheaper in places like New York and San Francisco where cost of parking at your resident co-op or condo is very expensive.

 

[KarenRei]

Per teslastats.no July numbers are down as compared to April(496 vs 822)
One change is now UK is also in the EU mix

First Q3 ships set to arrive in EU tomorrow. ...

NL+NO+ES nearly identical, despite Q2 getting a head start.

And now, as you note, NL+NO+ES now represents a significantly smaller fraction of the EU total, since RHD deliveries just started. So EU deliveries appear to be rocking it this quarter.

 

[Antares Nebula]

QoQ change (US):

Model 3: +34% (10050->13450)
Model S: +18% (825->975)
Model X: +17% (1050->1225)

For the record, here's what some various changes mean globally (deliveries, revenue, profit), and how much income they represent at a steady $50k ASP and 20% margin:

+5%: 100k, +$238M, +$48M
+10%: 105k, +$476M, +$95M
+15%: 109k, +$714M, +$143M
+20%: 114k, +$952M, +$190M
+25%: 119k, +$1,2B, +$238M
+30%: 124k, +$1,4B, +$286M

As a reminder, Q1->Q2, production grew by 13% and deliveries grew by 51%.

It is decent numbers. QoQ growth is positive and suggests Q3 is on track to beat Q2.

But the media and markets are going to focus on the negative YoY growth (compare July 2018). S,X,3 all down a bit. But last year, Tesla was only selling Model 3 in NA. This year global. So YoY USA down does not imply TOTAL July shipments down. Thus YoY USA down still translates to YOY global up (as also suggested by the QoQ USA growth).

However, YoY S,X sales down does not look good. As S,X was selling globally last year. So this suggests that the high margin S,X sales will likely be lower in Q3 YoY. This may in fact be what the market is currently focusing on. Tesla's high margin cars trending down is not a good look. Have to see how much the Raven upgrades help this quarter.

 

[KarenRei]

However, YoY S,X sales down does not look good. As S,X was selling globally last year. So this suggests that the high margin S,X will likely be lower in Q3 YoY.

S/X keep growing QoQ, and that's what needs to happen.

Besides, Tesla couldn't make as many of them as last year even if they wanted to. Last year they were mostly 75kWh packs, now they're all 100kWh packs. Their theoretical max this year is probably just a bit over 80k S+X (avg. 20k/quarter). How close they get to that is of course yet to be seen; it depends on how growth continues. They sold 17722 last quarter, so with 13-14% growth in Q3, that'd be around 20k. But they're burning down inventory rather than manufacturing that fast. So I don't see them burning through their 18650 cell supply this year.

 

[Cherry Wine]

Definitely not operating today. May be waiting for Insideevs numbers ?

Was my thought too -- but those have already been released.

 

[KarenRei]

#TeslaKillers

Earl of Frunkpuppy on Twitter

 

[StealthP3D]

By using titanium alloys I think they might be able to make a unibody pickup truck with good off-road characteristics - versus the more traditional body-on-frame approach that for example the Rivian R1T uses too. But body-on-frame would be acceptable too I suspect - and it's a natural design approach with a rigid skateboard design.

IMHO it would be a major product design mistake if it wasn't a "real" pickup truck that can withstand hitting rocks. Such a truck would be mocked no end. Maybe the 'off-road' version will be a higher priced model variant - but I really hope off-road robustness has a central place in their thinking.

A great off-road rig and a great street rig are largely mutually exclusive.ven the off-road version of the F-150 (Raptor) is not that good for extreme off-roading. Musk has already said the Pickup will handle like a good sports car. So I think we can rule out that it will crawl rocks better than a LR Defender or CJ-5. A ladder frame offers quite a bit of twist which gives it awful driving dynamics on-road but, off-road, it increases the effective amount of wheel articulation which provides better traction on uneven surfaces.

That said, the battery should be armored and the best way to do that decreases the ground clearance and raises the center of gravity. The weight of the battery protection can be minimized by using a corrugated aluminum sheet covered with a hard but thin steel plate to distribute impact loads. The aluminum would be considered sacrificial and would require replacement after it had been compromised by hard bottoming. This sandwich construction would also contribute to protecting the battery from side impacts and increasing the rigidity of the chassis for towing heavy loads.

A rigid uni-body chassis is what will allow the Tesla Pickup to handle like a sports car. To make this suitable for extreme off-roading would require a very large amount of total wheel travel which would necessitate active management of individual wheel travel and ride height to retain good road handling. This all gets very heavy and expensive to manufacture and especially to maintain.

There are increasingly fewer places to drive off-road so Tesla would do well to make the truck tough but not give it extreme off-road pretensions. It would make more sense to have a modern truck for paved and gravel roads, muddy construction sites, etc. and another shorter wheelbase vehicle for extreme off-roading. But that would be a low volume vehicle and is probably not in the near-term plan. The road-going version needs to be tough but it doesn't need to excel at extreme off-roading. That's not what pick-up trucks are good at.

 

[Antares Nebula]

Now we got tariff tantrum too. Perfect storm. Yikes!

 

[MarcusMaximus]

Gee, thanks, Trump.

 

[Joe F]

1 - Alert family to go short.
2 - Tweet bad stuff.

 

[willw64]

Was my thought too -- but those have already been released.

Considering the strong June to close out the quarter that July number looks pretty decent. I wonder if that captures a lot of the P3-'s being sold right now? I would think to hit the reconfirmed guidance for the year that Tesla will have to crack 100k vehicles this quarter and/or roll out the new software with solid results.

 

[Fact Checking]

Gee, thanks, Trump.

Just to recap what this drop is about, Trump is threatening new China tariffs:

Donald J. Trump on Twitter

Our representatives have just returned from China where they had constructive talks having to do with a future Trade Deal. We thought we had a deal with China three months ago, but sadly, China decided to re-negotiate the deal prior to signing. More recently, China agreed to...

...buy agricultural product from the U.S. in large quantities, but did not do so. Additionally, my friend President Xi said that he would stop the sale of Fentanyl to the United States – this never happened, and many Americans continue to die! Trade talks are continuing, and...

...during the talks the U.S. will start, on September 1st, putting a small additional Tariff of 10% on the remaining 300 Billion Dollars of goods and products coming from China into our Country. This does not include the 250 Billion Dollars already Tariffed at 25%...

...We look forward to continuing our positive dialogue with China on a comprehensive Trade Deal, and feel that the future between our two countries will be a very bright one!​

China will obviously retaliate with a "small" 10% tariff over all sorts of U.S. products.

(In a 100% coincidence Trump announced this just 1 day after the Federal Reserve cut interest rates. )

If Trump wants to crash the U.S. economy then his reelection prospects are not good, so there's not much time for him to first crash the economy and then let it recover...

If he thinks that China will respond kindly to his threats and the humiliating treatment of Chinese leadership then I think he's badly mistaken.

In terms of Tesla impact: since GF3 is supposed to start trial production runs in September and will reach higher capacity by end of December if all goes well, the long term impact is not that grave - but this would hurt all September Q3 sales and all of Q4 China sales.

 

[dc_h]

Norwegian papers report that EV sales in Norway is halved in july compared to june.

Kraftig fall i elbilsalget

EV sales in Norway lowest in 12 months, less than half of June.

This newspaper interviewed the Norwegian EV Club aka Elbilforeningen. Their representative belive introduction of road tolls for EVs in several cities has contributed. EVs pay half of what the fossil car pays. Until now EVs had no road tolls. Many people got an EV just to escape the road tolls.

Commenters belive the Tesla wave may be just as important. Tesla had their end of quarter push last month.

Edit: IMHO Nettavisen is pretty tabloid and click-baity.

Or no ships from Tesla in July.