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

[Causalien]

Telling them your car is powered by rooftop solar unusually stops "most" of their argument, until they tell you how its made or some other tangent to avoid your facts.

They are going to start arguing that rooftop solar pollutes more than normal shingle rooftops. Then argue about the pollution from production of solar cell, the waste. How dirty transporting it to each house is going to be. It's going to be dirtier than just have coal fired power plant providing power (DUH. More stuff = more CO2, but over the lifetime, solar has less).

I seriously had an argument with people the other day (when they lost the argument that EV produces less CO2 over its lifetime than gasoline cars) who argued that Hydro pollutes more than coal because it produces more methane than we originally thought. Therefore, BC with 95% hydro pollutes more than Alberta at 45% Coal and 41% natural gas.

 

[Nocturnal]

The day will come where Tesla are selling so many cars and are so profitable, that the shorts and FUDsters will be out of the game. I personally think we'll see that in 1H2020.

Edit: What the grumpy mod said...

My thought as well. Basically once GF3 is up and cranking and the market has some time to fully appreciate that.

 

[Tslynk67]

Rated this funny because:
- Nuremberg=Nürnberg=German City - easy to make it around
- Nürburg-Ring Nordschleife=Nürburg loop (Northern part)=Race Track (very hilly), hard to make it around - I tried on a bicycle and hit over 55mph on a downhill

Jeeze, that's rather brave!

I have lapped Nürburg-Ring in, 6 minutes 45 seconds, but that was on X-Box Forza II with some Porsche Le Mans monster-thing.

 

[JusRelax]

I feel none of these matter as such. What will turn the page is profit - 2 or more quarters of it. That can happen because of any number of things that you have listed or nothing at all.

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I don't think two profitable quarters is enough. Q3/Q4 last year were profitable. And then it all came crashing down again Q1 of this year.

I'm not an expert with tons of experience in the stock market though, so I definitely won't take a guess at what would be enough.

 

[willw64]

Sequential delivery growth is important because the company reaffirmed its annual guidance on the last call. Elon has a credibility issue as it is so if Tesla falls short much short of 100k vehicles the stock price is in trouble. The 2nd near term marker is going to be gross margin, and the 3rd will be V10 of the software and any meaningful improvements in autonomous driving with the new software releases.

The other points which were mentioned are more about the long term investment thesis IMO.

 

[StarFoxisDown!]

I get the skepticism to a degree and every company is a short at one time or another for a whole host of reasons. One reason to temper views on Tesla in the near term is that the auto business isn't great for anyone. However, there isn't an auto/quasi tech company which has the potential upside as Tesla, especially at the current market cap. The risk-reward trade off is what baffles me most about the continuous onslaught of short sellers.

Tesla is trying to solve a very hard problem, maybe they will fall short of full FSD, but even if they only get to Level 3+ there is still a ton more value creation ahead.

It's super rare for a company to be posting 50% growth with 24 billion + annual revenues with upcoming years that will accelerate revenue growth. Even taking out FSD potential...……. the Y, Semi, Pickup, Model 3 expansion, and TE expansion offer a very clear path to 50% growth or more for 2020, 2021, and 2022. That's higher growth than Amazon was experiencing(while making little to no profit) and we all saw what happened with Amazon's valuation.

 

[RobStark]

Honda to pull plug on Argentina vehicle output

Will still manufacture motorcycles in Argentina.

 

[EVNow]

I don't think two profitable quarters is enough. Q3/Q4 last year were profitable. And then it all came crashing down again Q1 of this year.

I'm not an expert with tons of experience in the stock market though, so I definitely won't take a guess at what would be enough.

The problem with Q1 was it wasn't anticipated and guided properly. Infact, if they had some inkling, they would have raised money in Q3 when the SP was ~350, instead of when it was ~230.

I actually don't think, there is one "turning point". It will happen gradually - after every good ER, the SP will go up to a new higher level and short interest will slowly reduce.

Only "turning point" would be a sudden Level 5 FSD announcement. But, that isn't going to happen. FSD will come slowly, one feature at a time over several quarters.

 

[ZsoZso]

I don't think two profitable quarters is enough. Q3/Q4 last year were profitable. And then it all came crashing down again Q1 of this year.

I'm not an expert with tons of experience in the stock market though, so I definitely won't take a guess at what would be enough.

I would guess once most major legacy automakers (BMW, Daimler, VW, GM, Ford, FCA, Nissan/Renault)* have been driven into bankruptcy and Tesla has become the #1 automaker not only in revenue but also in volume of vehicle sales, then the Shorty Air Force will finally give up and the SP can rise without crazy manipulation. How long that will take ? I leave that to others to speculate on...

*

Spoiler

I left out Toyota and Honda from the list on purpose, because they are mostly focused on cheaper market segment so they will survive much longer.

 

[Singuy]

But Tesla is planning to scale cell availability to coincide with their product launches. So we don't need cells to fall out of the sky, they will just make them as they need them. (Which no other car manufacturer is currently planning to do, they have to go to other suppliers and beg for cells.)

Tesla needs to manufacture cells for other manufactures as well(which is something that's part of the master plan and said by Elon). Having a 2% of the automobile market captured is not a time to think cells are raining out of the sky. First you convert the 75-90% of car buyers, then you focus on the 1 percenters. So Tesla and the world will be cell limited massively until 2040.

 

[RobStark]

I will just repeat what I said before of any Chinese tech company.

If they advertise themselves as the "so and so" of China. Like iPhone of China, Tesla of China, Facebook of China. Then do not invest.
.

How about the Ebay of China?

 

[Right_Said_Fred]

The day will come where Tesla are selling so many cars and are so profitable, that the shorts and FUDsters will be out of the game. I personally think we'll see that in 1H2020.

Edit: What the grumpy mod said...

I am a friendly mod, the grumpy picture is just a mask to scare off trolls.

 

[RobStark]

We have found that going around in circles on a track is not what keeps people from buying EVs. Here are the things that are needed to convert ICE to EVs.

1. The price.
2. The software
3. The efficiency
4. The range
5. The infrastructure
6. Aesthetics

The model S/X solved 5/6 and sold 100k/year combined. The model 3 solved all 6 and are selling 100k/quarter.

Ipace has 1/6 and is dying
Etron has 1/6
Niro has 4/6
Porsche has..maybe 3/6?
Bolt has 3/6

There are plenty of evidence that if you don't have 6/6 today then there's no chance of your EV surviving vs a Tesla. So any company who doesn't strive for all 6/6 are not serious. The bias toward ICE is strong and it took a crap ton of mountain moving from Elon and the Tesla team to convince people to switch.

And if you are really good, make a 7th thing that even Tesla haven't thought of that makes your EV stands out. No, the 7th thing is not going around in a circle really fast.

Tesla does not and will not have 100% EV market share.

 

[Lessmog]

I am a friendly mod, the grumpy picture is just a mask to scare off trolls.

Mostly worked on me ...

 

[MP3Mike]

Tesla needs to manufacture cells for other manufactures as well(which is something that's part of the master plan and said by Elon).

Can you reference that because I can't find it.

Part 1: The Secret Tesla Motors Master Plan (just between you and me)

1. Build sports car
2. Use that money to build an affordable car
3. Use that money to build an even more affordable car
4. While doing above, also provide zero emission electric power generation options

Part Duex: Master Plan, Part Deux

1. Create stunning solar roofs with seamlessly integrated battery storage
2. Expand the electric vehicle product line to address all major segments
3. Develop a self-driving capability that is 10X safer than manual via massive fleet learning
4. Enable your car to make money for you when you aren't using it

Nowhere in that does he saying anything about supplying other manufacturers anything.

The only sharing he mentions is sharing your Tesla via the Tesla Network.

 

[SOULPEDL]

The day will come where Tesla are selling so many cars and are so profitable, that the shorts and FUDsters will be out of the game. I personally think we'll see that in 1H2020.

Edit: What the grumpy mod said...

How are the shorts "out of the game"? (FYI, I hate my side of the debate by the way... I really do believe truth prevails eventually, but sometimes too late).

• Do analysts get their soul back? Nope, souls go for about $5/lbs so I just read.
• Lack of money to short - obviously not.
• Lack of stocks to short (maybe that's where we're at now?)

No, I think it happens when congress gets more honest about the environment, and if they don't, they lose their seats. So 2020 could be an interesting year.

I think Tesla is synonymous with this oil battle, and many will stretch-buy the product because of this connection. Unfortunately, all the Dem's talk about is healthcare (more like health-scare with a drug market). Speaking of greedy Pharma, same freak'n problem right? So why should I believe TSLA would prevail when drug prices and the AMA are still so corrupt after decades?

I'm drawing a line connecting Medical, Energy, Education, Guns, Environment... None of these money-bought problems have really been addressed. So how does Tesla Stock win in 2020?

(Geeze, where did I wake up this morning, right?)

 

[humbaba]

Tesla does not and will not have 100% EV market share.

While I agree, the frustration of watching the incumbents trip over themselves to make compliance vehicles can awaken a desire for them to get their just reward.

If the EV market were like smartphones I'd say Tesla would end up with 10% to 20% of the market and all of the profit. But, for better or worse, that isn't how it works. The biggest constraint is cell production and no one seems to be interested in ramping up production beyond what Tesla is planning for.

There will be leafs and others that will represent some fraction of EV market share (I don't expect the Taycan to register: its at the high end of the market so numbers just won't ever be that high) but for the foreseeable future I think that Tesla will have a de-facto monopoly.

What may end up happening is that Detroit goes to the lawmakers and the courts to force Tesla to sell cells on an open market rather than consuming all of their own production. Bonus points if they can wrangle it to where a certain number must be allocated for non-Tesla use so they can simply squat on them to slow the transition down.

Of course I hope it doesn't go down that way, but I think you are right: Tesla will not have a monopoly. I'm just hoping that Tesla won't have a monopoly because VW's battery venture goes well and others do their own. That LG really tries to scale their own production up. Maybe China will find the right incentives to make them the powerhouse of alternative energy. But I fear for a future that is bought and sold by oil interests.

 

[Lessmog]

(Geeze, where did I wake up this morning, right?)

Right. Goodnight.

 

[Cherry Wine]

What turns this page? This does:

- Model 3 output reaching 10,000 per week after GF3 production catches steam.
- Start of mass production of the more profitable Model Y.
- Energy storage deployment tripling yoy (megapack)
- Solar roof reaching production of 1,000 roofs per week.
- FCA paying Tesla $1.7 billion.
- Tesla introducing a wicked pickup that is the coolest car on earth and that everyone wants.
- Semi production starting up.
- Tesla showing a clear path to 2 TWh of battery production capacity.
- Tesla showing a clear path to better, lighter and cheaper batteries (Maxwell).
- Tesla improving hugely on FSD and - bonus - maybe even attaining level 5.
- Tesla improving service.

And ALL of this will be happening in 2020!!

So we just have to hang in there for one more year (or sooner if the market opens it eyes).

I will sell my shares at 420*

* After a 10-for-1 split

The future for Tesla is bright, provided that the world doesn't go to hell in a handbasket first.

 

[Singuy]

Can you reference that because I can't find it.

Part 1: The Secret Tesla Motors Master Plan (just between you and me)

1. Build sports car
2. Use that money to build an affordable car
3. Use that money to build an even more affordable car
4. While doing above, also provide zero emission electric power generation options

Part Duex: Master Plan, Part Deux

1. Create stunning solar roofs with seamlessly integrated battery storage
2. Expand the electric vehicle product line to address all major segments
3. Develop a self-driving capability that is 10X safer than manual via massive fleet learning
4. Enable your car to make money for you when you aren't using it

Nowhere in that does he saying anything about supplying other manufacturers anything.

The only sharing he mentions is sharing your Tesla via the Tesla Network.

"...We need to ramp up production, we need to supply powertrain to other car companies..."

This was 2012. Don't know if plans has changed but he called for other companies to make more gigafactories because he said Tesla cannot do this alone. He got laughed at about the gigafactory idea vs other manufactures embracing it. He was throwing some shade about the matter Q3 2018 conference call. Now with his plan on terawatt hrs of batteries, I think it's safe to say Tesla is taking matters into their own hands.