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

[Fact Checking]

Actually, the recent trade agreement between the EU and Mercosur removes the 35% import tax on cars of Brazil.

So a European GF4 could serve that market. (The only problem is that while GF3 was built in 9 months, it could take as many years to get GF4 up and running in Germany or France).

Which is why I think they should be building GF4 in one of the new EU member states that don't have a traditional automotive industry, such as Poland. Population size makes them the 5th most influential EU member state.

Spain would be a good choice as well - but Poland's geographical location and level of wages is better.

By building GF4 close to the German border they could have the location and road network advantages of Germany, without the bureaucracy and the almighty political influence of the German car industry that Tesla has no chance to counter within Germany IMHO.

 

[Mike Smith]

I just filed a complaint with the SEC against NBC Universal. Their false report that Tesla is under investigation by NHTSA caused a six dollar drop in Tesla's share price.

 

[TheTalkingMule]

I disagree with the implication here. It's apparent that Musk wants to fund his Mars colony with eventual profits from Tesla. His Mars plans are hugely expensive. i mean, a bare-bones Mars colony is hardly an appealing proposition for a billionaire (or anyone for that matter). There's no way he's going to fund his grand vision just with Space-X and satellite revenues.

The bottom line is Musk cares about eventually bringing Tesla to huge profitability in a big way. He is in no hurry to do it though if it will allow it to eventually become more profitable. Mars is not cheap!

Absolutely. I was only implying concern over climate change isn't a very big motivation for Elon.

 

[StealthP3D]

Tesla bulls take a stand against negative TSLA narratives in Q3's aftermath

Loup Ventures

That analysis makes a very important point:

Tesla built and sold a record number of vehicles in Q3. Deliveries were up 16% y/y on a tough comp from Q3 of 2018 when deliveries more than doubled sequentially to 83k. In the update letter, the company said that they achieved record net orders and that nearly all of those orders came from people without previous reservations. In other words, all signs point to the fact that organic demand, which is the crux of the bull/bear debate, is intact.

Remember what we told back in Q3 and Q4 of 2018? That the high sales numbers were the result of finally fulfilling all the pent-up Model 3 reservations but that then demand would dry up and settle down to about 25-50% of Q3/Q4? Low numbers in Q1 2019 seemed to support the thesis that demand was drying up (if you ignored a number of relevant factors) and TSLA was taken down to $180 (however briefly).

Now, Q3 2019 numbers have blown that thesis (lack of demand) wide open. We will shortly be rallying again. Those perceptions take more time than someone who is sitting on the edge of their seats watching every new number like a hawk think it should take. Most investment capital is not moved around on a minute/minute basis, it is allotted after careful consideration.

 

[ZsoZso]

What market. There's virtually no choices. Do you read what I post? The competition will be out in two, three years.
...

Selling a few hundred thousand cars is not dominating the market. Tesla has shown the world it is possible, but I've already said what their limitations are. Really it's twofold. 1) They can't grow as fast as the other companies can change course.

LOL, thats EXACTLY what TSLAQ was saying 3 years ago*.
I bet they will still be saying the same in 3 years from today.
Competition is always coming in the next 2-3 years and -- watch it, they will wipe out Tesla.

Spoiler

* Remember this presentation?
Mark Spiegel - Tesla Motors Inc (TSLA) Is A Zero [Slides]

 

[Curt Renz]

It's an idiom, in this case you can infer an synonym of 'spending'...

"Burning" implies wasted spending of money.

 

[Paracelsus]

Which is why I think they should be building GF4 in one of the new EU member states that don't have a traditional automotive industry, such as Poland. Population size makes them the 5th most influential EU member state.

Spain would be a good choice as well - but Poland's geographical location and level of wages is better.

By building GF4 close to the German border they could have the location and road network advantages of Germany, without the bureaucracy and the almighty political influence of the German car industry that Tesla has no chance to counter within Germany IMHO.

Without getting into details, I feel very strongly about this for all the reasons you just mentioned @Fact Checking. Thank you for you post.

 

[KarenRei]

Without getting into details, I feel very strongly about this for all the reasons you just mentioned @Fact Checking. Thank you for you post.

I've been of the same view. I think they could get things done faster in Poland, cheaper, with a more enthusiastic government. Germany seems to be bending over backwards to not ingratiate themselves to Tesla. Political stability isn't as good as Germany, but it should be "fine".

But, Tesla seems to really want to have it in Germany. I guess we'll see.

 

[Skryll]

I understand why it triggers highly sensitive people, but I wish folks here should be more concerned with substance and real dialogue than nit-picking the language people use.

The whole point of FUD is creating negative sentiment and tainting the way we talk about things is a typical propaganda tool.

 

[Ulmo]

Which is why I think they should be building GF4 in one of the new EU member states that don't have a traditional automotive industry, such as Poland. Population size makes them the 5th most influential EU member state.

Spain would be a good choice as well - but Poland's geographical location and level of wages is better.

By building GF4 close to the German border they could have the location and road network advantages of Germany, without the bureaucracy and the almighty political influence of the German car industry that Tesla has no chance to counter within Germany IMHO.

To you and me, that would be the smart thing to do. However I wonder:

• How much the information we don't know about a factory in Poland (or Spain) is relevant.
• How much political pressure or miscomprehension queers the deal putting it into a suboptimal location, or a politically optimal location.
• How much business plan additional market ambitions could factor in.

For instance, maybe they have a political position that would get around or solve some bad politics by putting a factory in Germany, since that's where some of their competitors are. I wouldn't dare guess what those perceived politics would look like, but sometimes, becoming part of the party is thought to be a good idea (whether or not it is). For instance, hypothetically (this is an oversimplification), Germany could pass a law against cars not made in Germany. Well, if the factory is made in Germany, that law wouldn't apply. A step more complicated (still an oversimplification), what if Germany lawmakers were considering a regulation to only support German-headquartered manufacturing, and since Tesla was there, their employees would write their legislatures asking them to go easy on it. This might somehow conceivably be converted into a bit % more market share at some point in time. But I just don't see it being that valuable because I am not an insider to their thinking on this. To me, going someplace less overheated with existing manufacturing seems like a nice way to build a cool fresh manufacturing plant without the potential for problems that are related to excess activity (lack of attention to detail, confusion, scammers leveraging one party against another, no one being held accountable, etc.). The other side of that is that maybe the suppliers they are trying to use are already in Germany, and not in Poland, and maybe the politics of Poland are bad (I actually assume the opposite: the Polish politics seem more stable than Germany). Who knows! But with a unique drivetrain like Tesla, it seems like a fresh start location for an established company with new products seems like a cleaner way to do it and it would work out fine. Maybe the non-German suppliers aren't up to it (something as complicated as machines needed, or something as simple as chemicals needed). Or more pointedly, maybe Tesla has secret ambitions to become a supplier to other manufacturers that are local that wouldn't happen if they weren't local to them (say, sell stuff to VW, MB, VWMB, etc.).

 

[Right_Said_Fred]

I just filed a complaint with the SEC against NBC Universal. Their false report that Tesla is under investigation by NHTSA caused a six dollar drop in Tesla's share price.

I wouldn't mind if some big TSLA shareholders sue a few news outlets for the financial damage done by spreading false facts (not freedom of speech stuff, but proven falsehoods). That alone would make them think twice about the accuracy of future reporting.

 

[Ulmo]

15 Tesla Semi electric trucks to replace diesel trucks at Pepsi facility - Electrek

According to PepsiCo’s filing with the San Joaquin Valley Air Pollution Control District, Tesla would also supply charging stations, a “large” solar array, and two energy storage systems of undisclosed sizes:

“Original Equipment Manufacturer (OEM) [Tesla] will deliver 15 highly anticipated Tesla Semis along with battery electric truck charging infrastructure, a largescale solar PV system, and two energy storage systems for facility peak shaving and heavy-duty electric truck charging.”

PepsiCo says that they expect the project to be completed by 2021.

"We hope this work will become an operating model for all of our facilities across the U.S., and that we act as the catalyst to accelerate adoption of alternative fuel vehicles across the industry.”

I should go over to the Semi thread and see what's up.

Edit upon return: practically nothing there on TMC. Looking on Electrek I just found this old article I already read referring to information I already heard when I first read it: Elon Musk updates Tesla pickup and semi truck timelines - Electrek. It's kind of a nice refresh to read it again though.

 

[MarcusMaximus]

They are already on the road to that now with EVs. 2022 they will have models out, by 2025 they will be swamping the market with them.

We’ve been hearing this refrain for a very long time. Still waiting. Porsche is finally releasing something that can almost compete with a 2012 Model S(better in some ways, worse in a lot of ways and way more expensive) and nobody else has anything close.

The fact is, none of the big players know how to make these cars profitably, they have massive amounts of dead weight holding them back(innovator’s dilemma plus less-than-receptive dealership networks), they have insufficient battery supplies and lack a lot of the software chops and engineering talent that Tesla uses, all while generally facing declining profits.

You keep trying to make the point that they’re big and, therefore, can’t fail, but that doesn’t bear out with what we’re seeing in other industries(bookstores vs Amazon, Sears/JC Penny/Forever 21 vs online retailers, Microsoft/RIM/Palm vs Apple, etc). Their size makes them powerful, but also makes them less agile.

 

[Tim S]

Absolutely. I was only implying concern over climate change isn't a very big motivation for Elon.

Concern over climate change is exactly the motivation for Tesla and SpaceX.

 

[Fact Checking]

I've been of the same view. I think they could get things done faster in Poland, cheaper, with a more enthusiastic government. Germany seems to be bending over backwards to not ingratiate themselves to Tesla. Political stability isn't as good as Germany, but it should be "fine".

But, Tesla seems to really want to have it in Germany. I guess we'll see.

I see five big risks to Tesla Gigafactory in Germany:

• Unions actually work there and are beneficial to workers and are a mostly positive political force, but the main German union that covers automotive workers (IG Metall) is very reactionary against EVs in particular. I fear in Germany Tesla's factory would be immediately unionized and IG Metall would sabotage Tesla from within, because they fear what the EV transition will do in their much larger factories at VW etc. Tesla Grohmann only barely avoided unionization by IG Metall in ~2017, and that's because Grohmann was primarily a white collar engineering firm, while IG Metall has a blue collar core identity ...
  
• Bureaucracy is particularly heavy in Germany, and the real estate and construction industry is overheated, so I'd guess it would take twice as much time to build a Gigafactory and would cost twice as much.
• Tesla might be able to install themselves as a big employer in the Nordrhein-Westfalen state, which only has smaller car factories from Opel, Mercedes and Ford, and might gain some political protection that way - but it's a pretty liberal state that will side with unions in disputes - and in any case a factory with 10-20 thousand jobs won't have much of a political pull within Germany compared to the rest of the automotive industry that is employing millions directly and 2-3 times as many indirectly.
• On the German federal level (Chancellor) and on the European Union level Germany won't be representing Tesla's interests, they'll be representing the German car industry's interest. EV incentives related shenanigans like the 3.2m length limitation might be executed against Tesla just as much...
• The German press will be just as hostile: German carmakers are spending billions in advertisements in Germany alone and are the biggest source of advertising income both at the print media and the broadcast media level.

By going Poland (or Spain) Tesla would gain not just sovereign country level protection, but also EU level protection - Poland has veto power and a lot of political muscle.

But maybe Elon wants the "Made in Germany" sticker badly - if so then it will come at a steep price IMHO.

 

[MarcusMaximus]

Concern over climate change is exactly the motivation for Tesla and SpaceX.

Not so much SpaceX... I believe the motivation for that is just generally not having all our eggs in one basket(ignoring Asimov’s “The Last Question” for a moment). So that if a massive asteroid we can’t stop slams into the Earth, we don’t lose all human civilization.

 

[Driver Dave]

Porsche is finally releasing something that can almost compete with a 2012 Model S

I don't think anyone really gets the crazy data point the Taycan is.

Porsche has the ability to make top of the line cars that cost way more than a normal car. Thus their cars perform way beyond a normal car.

So Porsche indeed is getting way more price for their EV, and yet... they couldn't get it to perform way beyond a normal car (in this case the mass produced Tesla) at all. You be kind and say it is equal, but really, it still is behind in many areas. They totally failed.

Doesn't anyone see how game changing this is?

Porsche should be able to crush Tesla, they are the ultra premium car company, they are getting more for their car, yet they can't make it way better.

Porsche is unable to make a way better car than Tesla.

This is a huge data point.

TSLA long.

 

[StealthP3D]

By going Poland (or Spain) Tesla would gain not just sovereign country level protection, but also EU level protection - Poland has veto power and a lot of political muscle.

But maybe Elon wants the "Made in Germany" sticker badly - if so then it will come at a steep price IMHO.

I want Tesla to put their next factory wherever THEY think it should go. Tesla collectively has a lot of knowledge as to what would benefit them and what the downsides of any particular location are. And Musk is a very good critical thinker. These people are not know-nothings and they don't take such decisions lightly.

 

[hobbes]

Early weekend off topic (Friday night in Europe so technically weekend) - love this too much not to share, caraoke in action:

One of the best fan-made ads IMHO. How do we get this to Elon´s/Tesla´s twitter?

 

[Right_Said_Fred]

I see five big risks to Tesla Gigafactory in Germany:

• Unions actually work there and are beneficial to workers and are a mostly positive political force, but the main German union that covers automotive workers (IG Metall) is very reactionary against EVs in particular. I fear in Germany Tesla's factory would be immediately unionized and IG Metall would sabotage Tesla from within, because they fear what the EV transition will do in their much larger factories at VW etc. Tesla Grohmann only barely avoided unionization by IG Metall in ~2017, and that's because Grohmann was primarily a white collar engineering firm, while IG Metall has a blue collar core identity ...
  
• Bureaucracy is particularly heavy in Germany, and the real estate and construction industry is overheated, so I'd guess it would take twice as much time to build a Gigafactory and would cost twice as much.
• Tesla might be able to install themselves as a big employer in the Nordrhein-Westfalen state, which only has smaller car factories from Opel, Mercedes and Ford, and might gain some political protection that way - but it's a pretty liberal state that will side with unions in disputes - and in any case a factory with 10-20 thousand jobs won't have much of a political pull within Germany compared to the rest of the automotive industry that is employing millions directly and 2-3 times as many indirectly.
• On the German federal level (Chancellor) and on the European Union level Germany won't be representing Tesla's interests, they'll be representing the German car industry's interest. EV incentives related shenanigans like the 3.2m length limitation might be executed against Tesla just as much...
• The German press will be just as hostile: German carmakers are spending billions in advertisements in Germany alone and are the biggest source of advertising income both at the print media and the broadcast media level.

By going Poland (or Spain) Tesla would gain not just sovereign country level protection, but also EU level protection - Poland has veto power and a lot of political muscle.

But maybe Elon wants the "Made in Germany" sticker badly - if so then it will come at a steep price IMHO.

I'm all for Poland. Member of the EU, reasonable wages, good work ethic, a government eager to get Tesla, situated close to important markets in Europe, no baggage in the shape of legacy car makers.