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

[LN1_Casey]

At least July 4th and Labor day are national holiday in Q3.

Yeah, but Q4 has Thanksgiving, and Christmas holidays during. I don't think compairing Holidays between quarters really works to offset the reason they didn't hit a higher per week average.

I'm curious if they'll go back to around the clock shifts, since I think they're currently have only 2 or 3, from morning to evening.

 

[Thekiwi]

Yeah, but Q4 has Thanksgiving, and Christmas holidays during. I don't think compairing Holidays between quarters really works to offset the reason they didn't hit a higher per week average.

I'm curious if they'll go back to around the clock shifts, since I think they're currently have only 2 or 3, from morning to evening.

The point of noting that Tesla has downtime in each quarter is to note that the sustained weekly output rate is higher than the quarterly weekly average.

For instance a sustained output rate of 7,000 per week would only equal a 6,615 weekly average rate in a quarter if Tesla has 5 days downtime.

 

[RobStark]

The production constraint is the main issue, higher volumes of production will increase margins and allow slight price reductions which can spur demand. Tesla can continue to improve the product, specifically the software, which can also help spur demand..
IMO even a 1K-3K price drop on a SR Model 3 can unlock significant additional demand, that will be true as long the price is above 35K.
Increasing experience of friends/neighbours Model 3s, should also increase demand...
Model Y will have strong initial demand...
With the exception of Model S/X, demand is not a significant problem,

Placing Model 3 SR for sale on Tesla's website would significantly increase demand.

Model 3 SR is like an In N Out Double Double Animal Style. It is a kinda secret off menu item. Put it on menu and demand increases.

Put a Model 3 on the Tesla's website for sale at $37k and it increases demand.

 

[LN1_Casey]

The point of noting that Tesla has downtime in each quarter is to note that the sustained weekly output rate is higher than the quarterly weekly average.

For instance a sustained output rate of 7,000 per week would only equal a 6,615 weekly average rate in a quarter if Tesla has 5 days downtime.

Yes, the purpose of my previous comment wasnt to note that down days didn't lower the average, but to note that there was holidays in both quarters. It was my impression the original comment intended that there was 2 holidays in Q3, to imply that Q4 would not have them.

Actually, now that I think of it, Q4 has October 14th Columbus/Indigenous People day, Veteran's day, Thanksgiving, and Christmas, so may have more holidays total than Q3 (if Tesla grants days off for the listed ones), and thus lowering the over all average.

 

[Phil Seastrand]

The way I look at the demand/supply constraint issue is with this question:
If Tesla could somehow increase production by 25%, would they be able to sell all these new cars without significant pricing changes?

If the answer is yes, then they are supply constrained. If the answer is no, they are demand constrained.

I believe the answer is yes. What do you believe?

 

[Singer3000]

The point of noting that Tesla has downtime in each quarter is to note that the sustained weekly output rate is higher than the quarterly weekly average.

For instance a sustained output rate of 7,000 per week would only equal a 6,615 weekly average rate in a quarter if Tesla has 5 days downtime.

Indeed. In the past we have normally figured there are only 48 productive weeks per year when all is said and done (days off for holidays, rejigging equipment, spooling up again). On the basis of 12 weeks of production, Tesla made 6,650 Model 3s per week this quarter. Based upon that, I'd say it's a dead cert actually that Tesla exited at a 7k rate.

And there's this from the Q2 call:

Joseph Osha​

And just as a follow-on then, could we see you manage to make 8,000, 7,500, 8,000 Model 3s in Fremont by the end of the year you think?​

Elon Musk​

Yes. I mean I feel confident it's -- let's just say that the trend is very clearly towards being able to get to 10,000 vehicles a week of which that would be -- there is rough numbers like 8,300 to 8,600 Model 3s and the balance in S and X. So, there's sort of 1,600 to 1,800 SX. In round numbers 8,500 3s, 1,500 SX per week, but probably a bit more than that.​

 

[KSilver2000]

At least July 4th and Labor day are national holiday in Q3.

Yeah, but Q4 has Thanksgiving, and Christmas holidays during. I don't think compairing Holidays between quarters really works to offset the reason they didn't hit a higher per week average.

I'm curious if they'll go back to around the clock shifts, since I think they're currently have only 2 or 3, from morning to evening.

What does it matter if there are holidays? From what I know, there are no holiday days off in manufacturing at Tesla. The hourly workers get paid extra, though. Same with companies I’ve been at in the past that had a large scale manufacturing on site.

 

[SpaceCash]

What does it matter if there are holidays? From what I know, there are no holiday days off in manufacturing at Tesla. The hourly workers get paid extra, though. Same with companies I’ve been at in the past that had a large scale manufacturing on site.

Oh rly? What companies were those, and for what timeframes were you working at them? It's just so interesting how most paid bashers claim authority/experience and can't ultimately back it up, but I'm sure you aren't one.

 

[StealthP3D]

You seem to not understand how AI requires big data. No beta versions on the road means you will never see full self driving. This is why Waymo, Uber, and the rest will probably never get there in a reasonable time with general autonomous driving outside of specific geofenced areas.

Sometimes you have to take slightly larger short-term risks to achieve much greater long-term safety. Generalized FSD will never come unless you release it to the masses and iterate with data.

It sounds like you're saying the belief that there should be no "beta versions" on the road would be analogous to saying "I don't want any new, inexperienced drivers, fresh outta drivers ed, in the same parking lot as me!". Well, I have news for those people, not only will inexperienced and/or inattentive human drivers be in the same parking lot as you, they will be on the same freeways you drive on. You should thank your lucky stars that Smart Summon doesn't even work on public roads (let alone highways).

This kind of naturally nervous and scared person basically believes the parking lots of the world are already scary, dangerous places and they don't have the confidence to deal with safely. Smart Summon is actually very safe but, as with humans navigating parking lots, there are bound to be occasional minor incidences. What you really want to avoid is people getting hit. And Summon has the leg up here.

This afternoon I took our dog for a walk. He weighs 32 lbs. and stands 1 foot tall at the shoulders. At the end of our walk, I summoned our car across a rather large parking lot. Our dog saw a white Model 3 that looked like "his" car approaching and ran out to meet it half-way. He acted a little hesitant and confused. He didn't get really animated until he ran past the drivers door around to the rear. At this point I saw that he got a whiff of cabin air exiting around the bumper and knew it was "his" car at which point he started barking excitedly and ran up beside the driver's door and got real bouncy as if he was trying to see what was going on inside (but he's too short). About this time the car stopped for an "intersection" in the parking lot. After a brief pause it started cruising towards me again at 4 or 5 mph and our dog ran forward and rounded the front bumper with only inches to spare. Before he got to the front plate the car had come to an abrupt halt.

This is a dog that's too short to see from the driver's seat but the sensors mounted in the front bumper had no trouble picking up this fast-moving little dog. If I had small children whose favorite activity was lying down in various parking lots just for the fun of it, I would want every car to be in summon mode, not driven by a distracted human trying to get to their next appointment.

 

[StealthP3D]

Are you saying that anyone investing in tsla should be prepared to lose it? This is worse FUD than AJ's $10 price target.

No. I'm saying you should never invest any money you are not prepared to lose in anything. Meaning no matter what you are investing in. This makes investing a lot more fun and I believe it makes it more profitable as well (when you don't have counter-productive fear affecting your decisions).

 

[MC3OZ]

The way I look at the demand/supply constraint issue is with this question:
If Tesla could somehow increase production by 25%, would they be able to sell all these new cars without significant pricing changes?

If the answer is yes, then they are supply constrained. If the answer is no, they are demand constrained.

I believe the answer is yes. What do you believe?

Yes for me as well 3K-5K additional sales from China GF3 into China and surrounding countries with no price adjustments... a 35K version would make that certain.

That puts Fremont at say 7K per week for the rest of the world... I'm still saying no price adjustments are needed, but a 35K SR on menu would make that certain.

When Model 3 production Fremont + GF1 is at 10K per week, it is highly likely a 35K version from both factories is possible...

Model S/X steady until production of the higher priced higher margin Plaid versions which made add 300-500 per week to (overall) demand.
Plaid demand may be higher but will eat to P100D sales.

 

[StealthP3D]

The way I look at the demand/supply constraint issue is with this question:
If Tesla could somehow increase production by 25%, would they be able to sell all these new cars without significant pricing changes?

Actually, it's better than that, they can raise the average selling price by a couple thousand and sell three times as many. The not-so-secret weapon is Model Y.

 

[Antares Nebula]

So ~255k total now. Need ~105k in Q4 to hit 360k minimum guidance.

I think it is very doable. Can break it down as approx 85k M3 and 20k S,X.

I would expect Tesla to deliver at least this many of each of these models, and perhaps even a few thousand more total. So 105-110k would be my range. (This does not include any GF3 contribution, as I consider any data about GF3 production to be too indeterminate currently.)

And this is not based on prior guidance, but based on the trend, given the most recent quarterly numbers, and taking into account:

- continued EV market penetration (YoY and QoQ growth)
- strong Q4 seasonality
- and the final little bit of tax credit drop off
- and continued improvement in Tesla efficiency and production rates

 

[Thekiwi]

I haven’t heard of it before, but someone from Tiger21 (described as a large network for “high wealth individuals”) was just on CNBC international talking about how bullish they are on Tesla. Just an FYI.

 

[jeewee3000]

There was zero reason for Musk to mention 100k in the email. He should have just said something about having another record breaking quarter.

Once that mail came out people bought hoping for 100k. When that didn't happen they sold.

After all the SP went up quite a bit after that mail.

If Musk had not mentioned 100k, this would have not been a "miss" and the SP would have moved little.

Not to be paranoid, but do we know for certain Musk ever e-mailed this number? I have yet to see a copy of the leaked e-mail. It is only referred to as a source, without it being shown. (I could be wrong, but haven't seen it myself).

On another note, I had 30 pages of this tread to catch up and stopped after five since the forum is riddled with:
A) fudsters spewing nonsense (not naming names);
B) bulls/gamblers that are angry they bet wrongly regarding the delivery report.

Can't we just discuss facts and forecasts instead of attacking one another?

My 2cents: as I posted yesterday a drop was likely, but in my opinion it is just as likely that we recover to at least $245 before the ER. Not an advice, but I will enter a small position today and/or tomorrow.

 

[Tslynk67]

So if Fremont just repeats its performance, and GF3 can produce 7,000 cars in 90 days, and a shorter logistics chain, it would seem to be possible ;-).

I get the impression that 100k wasn't hit due too logistics in NA deliveries.

Europe, on the other hand seems to have less issues and I think could take more volume in Q4.

So given than no more SR+ will be sent to China, this gives the possibility to send more to Europe.

Plus there must be quite a number of cars-in-transit in NA, so if all these things come together, could be very decent indeed.

 

[adiggs]

Oh rly? What companies were those, and for what timeframes were you working at them? It's just so interesting how most paid bashers claim authority/experience and can't ultimately back it up, but I'm sure you aren't one.

I know the factories don't stop for holidays at Intel. It's in the nature of that manufacturing process (and I expect any other semiconductor manufacturer) that the line keeps moving all the time, even during holidays.

I'd expect something similar at any manufacturer of something that comes from a continuous flow process, where the cost of stopping the flow and then restarting it later is just too high. The only other example I can think of off hand is plate glass manufacturing. From watching How It's Made (hey - it's a source, and if you haven't watched it, I warn you to really consider whether to start or not - it's addicting), plate glass comes from a continuous flow of molten glass into the rest of the downstream processing.

 

[Right_Said_Fred]

The AlphaZero discussion was getting too technical for this thread, so it has earned a place of its own: AlphaZero (out of main)

 

[Artful Dodger]

Here is my estimate for 2019Q4 Model 3 Production: 988/day (86,944 tot. for Q4)

This is a purely naive statistical estimate based on an ordinary-least-squares fit of production data to a linear model for the 3 preceding quarters in 2019.

Notice the insane R^2 (R-squared) value of 0.9999996 Curves don't fit any tighter.

To me, these are the kind of numbers you get from production planning done months (or years) in advance, with a complicated and lengthy supply chain that reacts slowly, as you would expect for any large auto manufacturer.

I think these numbers are planned way in advance, and all the drama and intrigue is partly Kabuki theatre on the part of Wall St. analysts, and partly Tesla not wanting to reveal their hand too soon. Well howdy...

Per the table above, this model predicts 302,287 Model 3s produced in 2019. Adding in the YTD Model S/X production of 44,985 then that leaves just 12,718 Model S/X production required for Tesla to produce 360K total vehicles at Fremont in 2019. Easy-peasy.

A more reasonable estimate is that Tesla can at least maintain the Q3 Model S/X production rate, which then puts Fremont at 363,600 total vehicles produced in 2019.

Remember, GF3 production is a bonus. I've seen 2019 estimates here as low as 3K units by year end, and some at 5 or 10K. Let's be clear though: any number in those ranges puts Tesla total production for 2019 between 366K and 374K.

More projections for the GF3 + Model Y 2020 rampup to follow (maybe next week).

Cheers!

 

[samppa]

Not to be paranoid, but do we know for certain Musk ever e-mailed this number? I have yet to see a copy of the leaked e-mail. It is only referred to as a source, without it being shown. (I could be wrong, but haven't seen it myself).

On another note, I had 30 pages of this tread to catch up and stopped after five since the forum is riddled with:
A) fudsters spewing nonsense (not naming names);
B) bulls/gamblers that are angry they bet wrongly regarding the delivery report.

Can't we just discuss facts and forecasts instead of attacking one another?

My 2cents: as I posted yesterday a drop was likely, but in my opinion it is just as likely that we recover to at least $245 before the ER. Not an advice, but I will enter a small position today and/or tomorrow.

This. AFAIK no one has seen the whole e-mail. Only Freds published parts of it. Makes me wonder if there ever was a leaked e-mail..

"The that I'm not paranoid doesn't prove that everyone is not watching me" (-dont remember who said that)