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

[KarenRei]

On the surface this isn't a good look:


VICKI SALVADOR on Twitter

Worth an attempt to bring it to attention...

 

[KarenRei]

My sense is that it's overly optimistic to assume that a large fraction of 75D sales will convert to P3D sales.

The acceleration of the Model 3 AWD is already pretty great, with a 0-60 mph time of about 4.5 seconds. Not everyone cares about accelerating faster than that. If downsizing from a 75D, buying a non-performance Model 3 AWD car is a very easy way for the buyer to save another $10K.

Even then, LR AWD PUP margins are probably already similar to S 75D margins - not just from a percentage point of view, but an absolute dollar point of view. Remember that they (along with P3D)s are what offset the low margins on the MRs in Q4.

The difference will become all the more dramatic with time.

 

[hacer]

A question to @ReflexFunds, @luvb2b and other modeling experts, I was reading through Elon's Q4 announcement email again, and noticed the following:

"In Q3 last year, we were able to make a 4% profit. While small by most standards, I would still consider this our first meaningful profit in the 15 years since we created Tesla."​

I don't see where the 4% figure comes from:

• Q3 GAAP profit was $311.5m, on $6,824.4m of revenue, which is 4.64% profit. All the other, non-GAAP profit metrics are much larger percentages.
• Using EPS would be sloppy as the stock price wasn't constant - but if we use the ~$350 stock price when he wrote the email and the lowest EPS figure ($1.75 GAAP EPS per diluted share), then we get a return of 5.0%.

Any ideas? Did he just round down the 4.64% to 4%?

Perhaps he was refering to

 

[EVNow]

Larry Sabin on Twitter
Parking lot full of inventory in Bellevue, WA

This seems to be close to Seattle ports, so are we gonna see some shipping activity(to China) from here? ~ cheers

Don't know how many are there - but Bellevue used to deliver 100 cars a day.

Remember, this is < 5miles from Microsoft campus - where 50k people can easily afford this car.

BTW, I've to check the video again. I should be able to figure out where this is and check it out.

 

[anthonyj]

We’ve went through a week of FUD and short interest dropped A LOT. This will be a good ER

 

[Tifighter]

Saw this today while flying through Schiphol-

Definitely Y sized, with a conventional interior, complete with center console and a transmission shifter. I guess it will appeal to a traditionalist or current Audi owner for whom the minimalist interior of a 3/Y might be too different. Or maybe to those who have something against frunks. Regardless of the charging rate, Y for me, please.

 

[avoigt]

Indeed - let's be careful with going over-board here. Sure I think there is reason to be optimistic. But overall I think we should not ignore possible pitfalls. Let's not forget that in the beginning Tesla thought it would sell more Model S in Germany than it ended up selling. Germans can be stubbornly loyal to the home team... (I do believe these times are different as more and more people are upset about VW&Co. for their Diesel cheating - but still, the amount of prejudices against US, Japanese and French cars are staggering).

I'm carefully optimistic. But I don't think that's in the bag yet.

I understand you to be careful with drawing conclusions out of the data but let me give you some further information.

You can only apply for the German incentive if you upload the contract that you bought the 3. All of those are right now scheduled for delivery in February and March. The only uncertainty we have is how many of the total 11k is from other EVs. In the past that seems to be rather low but I still search for hard data.

The EU Google sheet gives us 3k orders for Germany alone which is what I call the floor. It will be low to reality because people do not get anything putting their car in the sheet but they get €4k if the apply officially for the Bonus. Most may not know about the sheet at all.

So we can conclude this 11k applications in the last week are real. The assumption is that less than 300 are orders from other BEVs and PHEVs in that specific week where the incentive could be applied for.

If there would have been other fancy EVs just ready to be ordered in the same week I would say we could fairly assume that the amount of incentives we have seen in the past have been driven up from them as well and a lower number can be called to be 3s. But I do not see any other EV that was ready to be ordered in that week and as we are in Q1 the motivation for people to buy cars as such is lower than usual.

So adding all together we can predict with a small error margin that the demand for 2s in German alone for Q1 is about 10k. Let me know if I overlooked something.

 

[KarenRei]

2/22 350 is 5.08. 2/15 340 is 5.85. These are mid prices.

Only good thing about getting 2/15 instead of 2/22 is that being the monthly, 2/15 has more volume. But then, 350 has more volume than 340.

Are you planning to hold till expiry or just sell when SP reaches what you think is the high point ? If former, this change would matter - otherwise it is not significant.

I'd like to roll 2-4 days after ER - sooner if at least mildly ITM 2 days after ER, ~4 days regardless. I see the same dynamics potential as in Q3: a moderate spike followed by a steady rise, as the stock starts suddenly seeming "investable" to a new class of buyers. Q3 opened it up to people who wanted to see a profit. Q4 will open it up to those who want to see sustained profit. The new-investor potential exists even if the immediate reaction to the ER isn't great, so long as the ER isn't bad enough to outright scare people off.

You'd stick with a higher strike but lower theta?

 

[KarenRei]

Saw this today while flying through Schiphol-
View attachment 372306
Definitely Y sized, with a conventional interior, complete with center console and a transmission shifter. I guess it will appeal to a traditionalist or current Audi owner for whom the minimalist interior of a 3/Y might be too different. Or maybe to those who have something against frunks. Regardless of the charging rate, Y for me, please.

Physically Y-sized, but poorly packaged. Look at how far back the driver sits from the front end of the car. Same width as a Model 3, too. From an interior perspective, you're mainly getting more height.

Trunk is sized about halfway between that of a 3 and an S. Not remotely comparable to an X.

 

[sweter]

I understand you to be careful with drawing conclusions out of the data but let me give you some further information.

You can only apply for the German incentive if you upload the contract that you bought the 3. All of those are right now scheduled for delivery in February and March. The only uncertainty we have is how many of the total 11k is from other EVs. In the past that seems to be rather low but I still search for hard data.

The EU Google sheet gives us 3k orders for Germany alone which is what I call the floor. It will be low to reality because people do not get anything putting their car in the sheet but they get €4k if the apply officially for the Bonus. Most may not know about the sheet at all.

So we can conclude this 11k applications in the last week are real. The assumption is that less than 300 are orders from other BEVs and PHEVs in that specific week where the incentive could be applied for.

If there would have been other fancy EVs just ready to be ordered in the same week I would say we could fairly assume that the amount of incentives we have seen in the past have been driven up from them as well and a lower number can be called to be 3s. But I do not see any other EV that was ready to be ordered in that week and as we are in Q1 the motivation for people to buy cars as such is lower than usual.

So adding all together we can predict with a small error margin that the demand for 2s in German alone for Q1 is about 10k. Let me know if I overlooked something.

How about e-tron? I haven't followed it too much, but I'm reading it will start to be delivered in Germany in February. And what about Kona? Do they qualify for the incentive?

Highest invoice number from Germany, reported today, is 3168. Are you saying that ~7k cars were ordered via 3rd parties?

Sorry, genuine questions.

If the super optimistic numbers are correct then I'd say we're not aware of all ships. So far there are only 3 ships heading to Europe and each has been estimated to have 2-3k cars on board. That's 6-9k cars spread for delivery in February. This would mean that Tesla would need to deliver ~30-40k cars in Europe in March. They did register almost 45k international VIN's, though.

 

[Buckminster]

Physically Y-sized, but poorly packaged. Look at how far back the driver sits from the front end of the car. Same width as a Model 3, too. From an interior perspective, you're mainly getting more height.

Trunk is sized about halfway between that of a 3 and an S. Not remotely comparable to an X.

Poorly packaged - are you crazy? You can easily get a cat in the frunk!

 

[SebastianR]

I understand you to be careful with drawing conclusions out of the data but let me give you some further information.

Danke

You can only apply for the German incentive if you upload the contract that you bought the 3. All of those are right now scheduled for delivery in February and March. The only uncertainty we have is how many of the total 11k is from other EVs. In the past that seems to be rather low but I still search for hard data.

Agree. But remember that the taxation for Dienstwagen (company cars) just changed. I would expect a bucket load of Model 3, Model S and Model X to be sold because of that. BUT - I would expect all of the segment to get a huge boost from this change in taxation. Of course Model S, X, iPace and eTron won't show up on this list. But Kona, Ioniq, E-Golf, Zoe, Leaf etc. will.

The EU Google sheet gives us 3k orders for Germany alone which is what I call the floor. It will be low to reality because people do not get anything putting their car in the sheet but they get €4k if the apply officially for the Bonus. Most may not know about the sheet at all.

Agree. I think that's a good floor.

So we can conclude this 11k applications in the last week are real. The assumption is that less than 300 are orders from other BEVs and PHEVs in that specific week where the incentive could be applied for.

I think that much more could be other cars since the 0,5% Regel ist in Kraft now - as a matter of fact, we simply don't know how many Zoes, Konas & Co. that moves.

So adding all together we can predict with a small error margin that the demand for 2s in German alone for Q1 is about 10k. Let me know if I overlooked something.

Really, the Tesla Fan in me is all with you. But the investor in me doesn't believe the hype yet. I do think that the Model 3 will eventually be big in Germany. But generally German folks are careful, slow and very conservative when it comes to adopting new things. Of course people watch NextMove & Co. but until the neighbour has one, they test drove the car and ADAC wrote with more details than the little teaser they did 2 days ago, I don't think they will order the car en-masse...(btw: I'm German myself so I hope I don't get too much flak for stereotyping Germans...)

 

[PaulRocket]

I understand you to be careful with drawing conclusions out of the data but let me give you some further information.

You can only apply for the German incentive if you upload the contract that you bought the 3. All of those are right now scheduled for delivery in February and March. The only uncertainty we have is how many of the total 11k is from other EVs. In the past that seems to be rather low but I still search for hard data.

The EU Google sheet gives us 3k orders for Germany alone which is what I call the floor. It will be low to reality because people do not get anything putting their car in the sheet but they get €4k if the apply officially for the Bonus. Most may not know about the sheet at all.

So we can conclude this 11k applications in the last week are real. The assumption is that less than 300 are orders from other BEVs and PHEVs in that specific week where the incentive could be applied for.

If there would have been other fancy EVs just ready to be ordered in the same week I would say we could fairly assume that the amount of incentives we have seen in the past have been driven up from them as well and a lower number can be called to be 3s. But I do not see any other EV that was ready to be ordered in that week and as we are in Q1 the motivation for people to buy cars as such is lower than usual.

So adding all together we can predict with a small error margin that the demand for 2s in German alone for Q1 is about 10k. Let me know if I overlooked something.

Sorry but this makes absolutely zero sense. The EU Google sheet collects the invoice numbers and the date of ordering. It clearly says in the sheet that 2 people ordered a Model 3 in Germany today and submitted their orders to the sheet. One received the invoice number 3166, the other one got 3168.

In other words it doesn't matter how many people submit their order to the sheet, because as long as there is a minimum of 1 recent entry (today there are 2) then we have the most recent order count.

I am not saying that I have an explanation for why there have been 11k applications to the BAFA, but to just assume that this means there have been 11k Model 3 orders in Germany is a stretch, when the sheet clearly tells a different picture.

 

[ReflexFunds]

How about e-tron? I haven't followed it too much, but I'm reading it will start to be delivered in Germany in February. And what about Kona? Do they qualify for the incentive?

Highest invoice number from Germany, reported today, is 3168. Are you saying that ~7k cars were ordered via 3rd parties?

Sorry, genuine questions.

If the super optimistic numbers are correct then I'd say we're not aware of all ships. So far there are only 3 ships heading to Europe and each has been estimated to have 2-3k cars on board. That's 6-9k cars spread for delivery in February. This would mean that Tesla would need to deliver ~30-40k cars in Europe in March. They did register almost 45k international VIN's, though.

The c.3.2k German invoice numbers might relate to something like 2.7k individual's orders averaging close to 1 car per order and c.0.5k company/lease company orders averaging 15 per order. That would mean c.2.7k cars going to individuals and c.7.5k cars going to business fleets. This doesn't seem so unrealistic; we know in 2H16 c.50% of EV purchases were for business fleets (Germany’s electric vehicle incentive program is off to a slow start: 9,000 out of 300,000 by 2019) and that is likely to be significantly higher in 2019 due to new corporate BIK tax savings for EVs.

 

[SebastianR]

How about e-tron? I haven't followed it too much, but I'm reading it will start to be delivered in Germany in February. And what about Kona? Do they qualify for the incentive?

The list is here:

http://www.bafa.de/SharedDocs/Downl...ige_fahrzeuge.pdf?__blob=publicationFile&v=58

Ioniq, Kona, Zoe & Co. are in.

iPace, eTron, Model X (and as of lately Model S) are out.

 

[avoigt]

Good point, c.3k average European deliveries per week could be c.26k total deliveries in Feb and March, while 5k/week would be c.43k.

Elon said he expected to have to launch the MR in Europe in May.

I would be interested to know which countries are likely to have as high % of company cars as Germany. In Germany it looks like around 50% of EVs purchased in the first 6 months of the incentive scheme were business fleet purchases. Germany’s electric vehicle incentive program is off to a slow start: 9,000 out of 300,000 by 2019
I wouldn't be surprised if this had increased with the significant new corporate tax savings for EVs in Germany.

Some more new data points to chew on:

In the past 6 months ending 2018 the average application for the German EV incentive has been between 3 and 4k. Thats about 850 per week. Right now I do not see any reason why that should have increased for all other models in Q1 which is historically a weak month for car sales.

That leaves us again with about 10k firm orders for the 3 in the last week in Germany alone to be delivered in February and March still counting.....

I can confirm that more than 50% of all car sales in the past with EVs has been companies ordering cars. I know a company who has 50 3s in Germany on order. With the 50% lower tax it will go even higher as the 3 is indeed a perfect company car.

Germany is a lagger with EVs versus other European countries. Smaller countries with way lower population like Norway and Netherland have outsold Germany by a large margin. Hard to say what the demand in other countries will be but I predict that this two contries should have a demand at least as high.

If Tesla does manage to produce and ship 3k 3s to Europe every week and the first ship arrives in 2 weeks thats about 18k 3s will arrive in Q1 which looking at the orders should be completely and easily absorbed.

 

[NicoV]

I am not saying that I have an explanation for why there have been 11k applications to the BAFA, but to just assume that this means there have been 11k Model 3 orders in Germany is a stretch, when the sheet clearly tells a different picture.

The only thing the sheet says is that there have been 3168 invoices. Most of them will be for individual orders, but lease companies may have ordered hundreds at once, which would appear on the same invoice (Tesla is not going to send an individual invoice for each car in such an order, no company would do that). For all we know, lease companies may even be in a separate sequence.

 

[gringotuanis]

We're at the lower end of the Bollinger band... Does really anyone expect the stock to tank?

Anything can happen with the stock and the market at any time.

 

[RobStark]

Used Tesla Model S Prices Show Signs of Weakness - Tesla Motors Club

"As we reported, the Tesla Model 3 is retaining its resale value better than all other electric vehicles – and much better than conventional compact cars. Resale value for Tesla Model X SUV is also holding up. But there are signs that the value of Tesla’s Model S is starting to wane."

 

[elasalle]

... ... cheers!!