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

[printf42]

Elon Musk on Twitter

Lol

I like Baby Shark even better:
Timothy Williamson on Twitter
Elon liked it too.

 

[Oil4AsphaultOnly]

Exactly. I don't want the call being misused as a complaint/suggestion box. I want A) to know about Tesla's future plans/expectations, and B) not hear anything that will disappoint investors or give them the jitters. That's it. Comfort people about S/X volumes/revenue/margins going forth, comfort people about Model 3 demand and margins on the SR, reiterate that the convertibles will be paid in cash, boast about what you've been working on behind the scenes, talk up China, talk up all your great plans for the coming year, etc.

Pair it with a report with solid FCF, automotive margins resembling or beating the 20% guidance despite the lower ASP, a rosy outlook in Tesla Energy, and an EPS that at least "roughly matches" FactSet expectaitons. And then we're golden, with two consecutive profitable quarters under out belt and none of the "doom" that's currently priced into market expectations.

Sorry KarenRei, but must strongly disagree on that one. As shareholders, we should be made aware of potential problems with our investments and hopefully also hear about what management is doing to resolve it. We might cut Tesla some slack because of the mission, but we should NEVER ask to be ignorant about the problems a company is having.

 

[Drumheller]

335mi x 1.26 = 422mi range

Very funny Elon.

Model S Standard (100 pack, 335mi range (non-peformance))
Model S Long Range (125 pack, 420mi range (non-performance))

 

[Compton]

View attachment 372222
Vladimir Grinshpun on Twitter

The person he is referring to is not a BMW chief but rather an union chief. More details in Vladimir's Twitter feed where he corrects himself.

 

[UncaNed]

Elon Musk on Twitter

Lol

Inspirational post.

 

[KarenRei]

... when they could be selling the 75kWh cash cow.

What gave you the impression that the 75D is a cash cow? They were selling the 100D for $18k more than the 75D ($76k vs. $94k), yet it only had $4-5k more cells in it. That's $13-14k more profit on it. I doubt that 75D margins were even in the double digits unoptioned.

P3D margins, however, are very large. If they hit a 20% margin in Q4 with an ASP of $55k on Model 3s in general, then it costs them $45,833 to build an "average" Model 3 today. Say $48k to build a P3D. Which they then sell for $62k. That's a 29% margin before you start optioning it out.

This margin will only grow quarter after quarter. Picture how large it'll be when a $35k Model 3 is profitable - you're talking ~100% margins unoptioned. Even putting it in absolute dollar terms rather than percentage terms, P3D is already - and ever-increasingly so - a much more profitable vehicle for Tesla than a 75D. And Tesla can scale Model 3 production much more.

It's in Tesla's best interests to convert people from 75D sales into P3D sales. All issues of potentially freeing up floor space at Fremont, reallocating S/X paint shop and stamping time to the 3, etc aside.

 

[davecolene0606]

It is a bit ambiguous due inability to deliver by midnight if ordered by midnight, however they were likely concentrated in Q4:

The email calls out that the FSD team will contact you within a few hours to deliver, not days.

If it was not 'take possession by Dec 31st' then the 7,500 fed tax credit mentioned in the e-mail is irrelevant.

It was on a first to purchase basis with matching financing within 7 days.

So anyone in CA/ GF1 could have gotten near same day delivery from new production. Sorry east coast...

So, the question should seek data re company wide stats on customer satisfaction for delivery and service with a mention that there is anecdotal evidence of an increase in complaints on social media. This is an answerable question and seeks info rather than just throwing a spear evoking a defensive stance. That is why I suggested it smells of nefarious origins.

Also, the point about how the info is presented i.e. voter v share# doesn’t allow for fair ranking and the whole EULA thing is very uncomfortable.

Fire Away!

 

[KarenRei]

OT: Stephen Colbert cracks a Tesla joke in last night's routine:

"Meanwhile, in the WORLD OF WHEELED MEAT! Oscar Meyer is accepting applications for Weinermobile drivers. Or as the company calls them, 'Hot-Doggers'. It makes sense. If you drive a hot dog, you're a 'Hot-Dogger'. If you drive a truck, you're a 'Trucker'. If you drive a Tesla, you're 'A middle aged man with something to prove'." (waits for audience laughter, raises his hand and nods with an "Yeah, I'm talking about myself!" grin on his face).

Wonder what model he drives...

 

[KarenRei]

So, the question should seek data re company wide stats on customer satisfaction for delivery and service with a mention that there is anecdotal evidence of an increase in complaints on social media. This is an answerable question and seeks info rather than just throwing a spear evoking a defensive stance. That is why I suggested it smells of nefarious origins.

Also, the point about how the info is presented i.e. voter v share# doesn’t allow for fair ranking and the whole EULA thing is very uncomfortable.

Fire Away!

That's much better. Back in the Model 3 Owners Survey, which was done last summer, most people were quite happy with their delivery and service, even though there was minority that had a bad experience.

 

[Tslynk67]

Gas is not the only contributing factor. Oil changes and brakes come to mind. 25000 miles is between 5 and 8 oil changes. In comparable car that can cost upwards of $500 alone. At 100k even more work is required with transmission service, belts and more depending on diesel or not.

So many oil-changes, really? I think the dealers in America are scamming you here. Every car I've ever owned has an annual oil-change, or every 20.000km

 

[Fact Checking]

Fact of the matter is, I don’t have a clear answer on this, you did not show a conclusive one either.

Yes, there is no clear answer, if you ignore absolutely everyting that @MarcusMaximus and @printf42 said.

Hope someone can prove me wrong, but officially Tesla has been silent on this front.

@MarcusMaximus and @printf42 did exactly that - you ignored it and decided to stay "concerned" about this.

But until Tesla officially confirms this, nothing is settled.

Tesla has no obligation to answer your "concerns".

That domestic firms do not pay import tariffs is an International Trade 101 level fact, generally there's a few regulations to avoid loopholes: minimum thresholds of assembly are defined, you cannot import a car without wheels and "assemble" domestic wheels and call it "domestic assembly" to avoid customs, but it's all common-sense.

It's why many ICE carmakers do assembly in China and are largely unaffected by the import tax on whole cars.

The big coup Tesla achieved in China is that they were allowed to create a mainland China manufacturing corporation that is 100% owned by Tesla. No other big carmaker was allowed to do this, they had to partner with Chinese firms to gain access to China's internal market.

 

[RobStark]

So many oil-changes, really? I think the dealers in America are scamming you here. Every car I've ever owned has an annual oil-change, or every 20.000km

A couple of years ago Mercedes USA dealers rebelled when MB wanted to change service recommendation for oil changes from every 3k to 10k miles.

I think they now say 3k for severe service and 8k for normal service.

Urban Mercedes dealers in LA say stop and go freeway traffic is severe service.

Rural Mercedes dealers in California's Central Valley say dust storms/dirt in rural areas make it sever service.

Almost any car under normal conditions can run synthetic oil for 15k miles/ 1 year with proper extended service oil filter. Running a turbocharged engine at redline on a regular basis would fall under severe service.

 

[davecolene0606]

OT: Stephen Colbert cracks a Tesla joke in last night's routine:

"Meanwhile, in the WORLD OF WHEELED MEAT! Oscar Meyer is accepting applications for Weinermobile drivers. Or as the company calls them, 'Hot-Doggers'. It makes sense. If you drive a hot dog, you're a 'Hot-Dogger'. If you drive a truck, you're a 'Trucker'. If you drive a Tesla, you're 'A middle aged man with something to prove'." (waits for audience laughter, raises his hand and nods with an "Yeah, I'm talking about myself!" grin on his face).

Wonder what model he drives...

Pretty sure a 2013 MS85

Fire Away!

 

[Fact Checking]

What gave you the impression that the 75D is a cash cow? They were selling the 100D for $18k more than the 75D ($76k vs. $94k), yet it only had $4-5k more cells in it. That's $13-14k more profit on it. I doubt that 75D margins were even in the double digits unoptioned.

P3D margins, however, are very large. If they hit a 20% margin in Q4 with an ASP of $55k on Model 3s in general, then it costs them $45,833 to build an "average" Model 3 today. Say $48k to build a P3D. Which they then sell for $62k. That's a 29% margin before you start optioning it out.

Also note that the Model 3 has no cell production constraints on it.

Tesla had to sell the 75D to maintain revenue and sales growth levels. I believe they'd even have sold it at a loss - and at times they probably did.

So it makes sense to shift the Model S/X upwards on the price scale, and allow the Model 3 to take the place of some of the 75D demand.

The only hole for now is the SUV form factor: the Model Y cannot come fast enough.

 

[Buckminster]

Inspirational post.

Yup - Rick and Morty - I need to watch it all over again.

This guy Bach is pretty inspirational too. Does he have a Twitter account? Has he done anything else?

He seems to have cleverly joined up 3 or 4 modern well known modern melodies into a single song that sounds like it is from the early 20th century (ancient - pre Beatles era).

 

[avoigt]

About layoffs:

Tesla reaches out to Nevada high school grads with job opportunities

Tesla Doubled Service Staff in Key Norway Market Last Year
Bloomberg - Are you a robot?

With building up in 2019 GF3 in China and installing delivery centers in Europe alone, Tesla will increase their global manpower significantly. I bet no one will report anything about it unless Tesla decides to increase profitability again one day and calls a round of layoffs.

Its like to say because you grow actually only 50% instead of 70% we recorded last 6 months you are now shrinking 20% and are doomed....

 

[Fact Checking]

Just a small n=1 story from Twitter, which I reckon is likely the same for everyone who drives a Model 3 for the first time.

I'm off to Paris shorty - taking one of my kids to a concert. Wouldn't even consider doing that in an ICE, not only would ie be expensive, but I wouldn't accept the pollution it would produce for something fairly frivolous.

Having a Tesla opens up many opportunities IMO.

View attachment 372234

Small anecdote and fun fact about Tesla's "attention to details". Remember the Tesla supplier leak from yesterday, who reported a 50% cut in Model S/X orders and who complained how difficult Tesla is to work with, compared to other luxury car makers?

Here's one of the complaints:

Tesla's mass layoffs and reduced car production have Wall Street 'waking up from the dream' : technews

"Not at the moment. I’m working on a project right now, I assist with some of the interior colors approved and we are working through an approval right now that’s going to trials with their molder, but that takes a while. Tesla uses mainly subjective measures to approve colors so it’s a lot of back and forth. Last time it took 20 iterations for one black for the side panels."​

Think about it: 20 iterations of plastics composition to get a black panel right - Tesla is driving suppliers crazy! Tesla is acting like a consumer electronics firm (Apple), not like a proper car manufacturer.

(Comment is deleted now.)

BTW., the "project" in the comment might be referring the the Model S/X interior refresh.

 

[Fact Checking]

So i also agree switching customers from S 75D to 3 P should increase gross profit per car (by $4-6k). But you will also lose a lot of customers because some S75D would have wanted a larger sedan than the 3, and X75D buyers don't yet have a Y P to switch to.

So one detail I find interesting is that Elon really under-sold the 75D removal: it was done on very short notice and was removed unceremoniously.

If they really wanted to, they could have created a lot of 75D sales by saying: "we will not be selling this small Model S/X ever again, we are shifting our product palette up". There were even rumors that the 75 kWh battery pack will remain but will only be renamed - and Tesla could have addressed those rumors by making it really unambiguous that it's going away.

Instead they announced it in a minimal fashion, almost as if they didn't want an inrush of new 75D orders, fully aware of the fact that the 75D variants make up 50%+ of the sales.

This supports @KarenRei's point that this is done to improve margins even at the expense of sales. My guess is that they have a number of new features lined up to increase demand again:

• Faster charging speeds on SuperCharger v3. It's much overdue now, and I believe the recent price increase was part of the SuperCharger v3 plan. 100D and 100DP packs can probably make use of the full SuperCharger v3 speeds.
• New HW3 modules installed in all newly made cars starting on April 1.
  
• Possible FSD features switched on this year.
• The rumored Model S/X interior refresh - which should further streamline manufacturing and increase margins.
• Possible use of the more efficient (?) Model 3 power train in the Model S/X.

I'm wondering whether Tesla is playing the Intel Extreme CPUs game: make sure they are the fastest in town, and charge a steep premium for it. But don't over-do it and be much faster - only 10-20% better than the competition to milk 'premium products' sales.

 

[KarenRei]

So one detail I find interesting is that Elon really under-sold the 75D removal: it was done on very short notice and was removed unceremoniously.

If they really wanted to, they could have created a lot of 75D sales by saying: "we will not be selling this small Model S/X ever again, we are shifting our product palette up". There were even rumors that the 75 kWh battery pack will remain but will only be renamed - and Tesla could have addressed those rumors by making it really unambiguous that it's going away.

Instead they announced it in a minimal fashion, almost as if they didn't want an inrush of new 75D orders, fully aware of the fact that the 75D variants make up 50%+ of the sales.

This supports @KarenRei's point that this is done to improve margins even at the expense of sales. My guess is that they have a number of new features lined up to increase demand again:

• Faster charging speeds on SuperCharger v3. It's much overdue now, and I believe the recent price increase was part of the SuperCharger v3 plan. 100D and 100DP packs can probably make use of the full SuperCharger v3 speeds.
• New HW3 modules installed in all newly made cars starting on April 1.
  
• Possible FSD features switched on this year.
• The rumored Model S/X interior refresh - which should further streamline manufacturing and increase margins.
• Possible use of the more efficient (?) Model 3 power train in the Model S/X.

I'm wondering whether Tesla is playing the Intel Extreme CPUs game: make sure they are the fastest in town, and charge a steep premium for it. But don't over-do it and be much faster - only 10-20% better than the competition to milk 'premium products' sales.

Agreed re: the low-key way that they announced the end of the 75Ds.

BTW, I think the penny-pinching we've seen relates to the March convertibles; Tesla needs to maximize FCF until then in order to stop the market from needlessly freaking out about them (and also doesn't want to show a really bad FCF in Q1 as a result of paying them off). After that, FCF is no longer such an important metric.

But by then, Tesla is going to have a ton of things fighting for its capital.

 

[avoigt]

The person he is referring to is not a BMW chief but rather an union chief. More details in Vladimir's Twitter feed where he corrects himself.

It needs to be said that Unions in Germany have a very different standing in are mostly highly recognized, have quite some power and their chiefs are sitting on the board of the large automakers in Germany.

They are pushing and preaching their companies going electric since years against all their fellows on the board. The deciscion from Daimler to go electric happened after the Unions mobilized the workers to stand up which they did. Management reconsidered and made some decisions against their previous believe that the Diesel has potential and will be the future.