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

[Fact Checking]

my thoughts as well - which is why California delivery times are the longest (because they want to wait until the last few weeks before prioritizing west coast deliveries.)

I've never seen 8-10 weeks U.S. waiting list for Model 3 Performance orders since Q3'2018 though - see my other reply.

My hypothesis is that they can more flexibly build-to-order in the Sprung Tent and thus win higher margin U.S. sales. The fact that despite that flexibility they have a 8-10 weeks waiting list suggests that they are truly, utterly supply constrained - there's just too many orders. So they published the 8-10 weeks wait time and increased the price by $1,000.

(Could be wrong though.)

 

[MC3OZ]

That's true but there's an exception, the Model 3 Performance, which is built on a partly manual assembly line (the super famous Sprung Tent), where I think they can and do fast-track orders for U.S. versions with few complications.

Yet Model 3 Performance delivery window increased to 8-10 weeks in the U.S., which suggests that:

1. Model 3 Performance inventory in the U.S. is zero, nil, nada, 100% gone,
2. and ~2 months of Performance production is already 100% spoken for between all of Europe, UK, Asia and the U.S.,
3. they've just increased the price of the Model 3 Performance by +$1,000, which suggests that it's a supply bottleneck.

Which is nice for Q4 margins even if most of those units were sold outside the U.S. as you suggest ....

I think it suggests that they need another tent....

Slow deliveries of Performance has been a problem in the US, and Australia for sometime, and if we dig a bit deeper, we may find more generally.

Wailing wall for Australian Model 3 team VINLess!

It might not be the tent, but there is some evidence production can't keep up with demand..

 

[mongo]

Note that Model Y volume production in Q3 2020 isn't really likely even in the optimistic case of them starting Model Y production in late March 2020. Tesla only guided for a launch of the Model Y to happen "by fall 2020", and the Model 3 was "launched" in July 2017, with the following delivery numbers in the quarters to follow:

• 2017/Q3: 220
• 2017/Q4: 1,550
• 2018/Q1: 8,180

And that was with almost all of Tesla working on scaling up Model 3 production from 2017 to 2018 - while the Model Y will be a happy distraction alongside the primary business of selling Model 3/S/X units.

I don't think the 3 ramp is a good benchmark for the Y. The 3 was Tesla's first high rate line with too much automation and pack supply issues. GF3 set up a new 3 line from scratch in a new building in a year. (Side question, are those blue things in the picture bulk materials hoppers?)

Even with the 3 as the benchmark, if those are Ys coming off the line in Q4 then we'd be at 5k/ wk peak in Q2 (3 quarters inclusive).

(And I keep thinking Q3 was pegged as volume launch, but that might have been on a podcast without a transcript because I can't find the reference).

 

[Fact Checking]

I think it suggests that they need another tent....

Tesla actually applied recently to build two new tents in Fremont:

More tents secured!
View attachment 466062

F19-0049 - Install two temporary tents for Pilot Shop parts staging. Tents to be removed by 3/31/2020

"Pilot Shop" might be the Model Y pilot line:

Tesla enters "Tents Hell".

 

[mrdoubleb]

CNBC analysts are going to be in shock when they get the news this morning.

"...but is there demand for Tesla`s increased production, or is the Shanghai factory just one of Musk`s vanity projects that will be the albatross around the company`s neck?!"

There. They will need about as much time to spin this negatively as I needed to come up with that line.

 

[anthonyj]

Demand enigma

 

[Fact Checking]

Tesla’s China Plant Is Hooked Up to State Grid Power Supply

"(Bloomberg) -- Tesla Inc.’s first Chinese car factory is officially plugged in.

State Grid Corp of China has opened the first transmission line in a power connection project that increases electricity supply to the Tesla plant to a level required for preliminary production, according to a statement from the Chinese company’s Shanghai branch. State Grid said it will eventually increase the power supply eightfold for the factory to run at capacity.

State Grid said the project - involving 55 kilometers of cables and about 17 kilometers of ducts - was among the quickest it has completed, taking only six months."​

And:

UPDATE 1-Tesla gets approval to start manufacturing in China

SHANGHAI, Oct 17 (Reuters) - Tesla Inc was added to a government list of approved automotive manufacturers, China's industry ministry said on Thursday, as it granted the electric-vehicle maker a certificate it needs to start production in the country.

The list was published by the Ministry of Industry and Information Technology.

This means "the green light is fully given to Tesla for production in China," said Yale Zhang, head of the Shanghai-based consultancy Automotive Foresight. Tesla can start production any time, he said.​

 

[Tslynk67]

Even BBC reporting favourably on GF3 permit - they’re usually negative on Tesla, not FUDdy, just downplaying most achievements:

Tesla gets the go-ahead to build cars in China

Really weird that there’s no mention on CNBC - they’re leading with Steve Eisman shorty story... the guy who got rich at the expense of pretty much everyone else...

And waiting for Hull, Lopez and Mitchell to tweet about it...

 

[Artful Dodger]

I've never seen 8-10 weeks U.S. waiting list for Model 3 Performance orders since Q3'2018 though - see my other reply.

My hypothesis is that they can more flexibly build-to-order in the Sprung Tent and thus win higher margin U.S. sales. The fact that despite that flexibility they have a 8-10 weeks waiting list suggests that they are truly, utterly supply constrained - there's just too many orders. So they published the 8-10 weeks wait time and increased the price by $1,000.

(Could be wrong though.)

It's not that they can't build the M3Ps quickly, its the opportunity cost due to production constraints. Every MP3 delivered in CA early in the quarter is a high margin sale they DON'T make in Europe.

After Dec 1st or so, any M3P shipped for sale in Europe likely won't be delivered in time to count toward 2019 Q4 results. Whereas an MP3 made on Dec 27 MIGHT still get delivered at the factory delivery center in Fremont.

Its the tyranny of the 'wave', but were stuck with it while TSLA is a publicly traded company. Hopefully those FCA Eurozone CO2 credits kick in enought to build and equip GF4.

Cheers!

 

[Sean Wagner]

Tesla will have to adopt a French name if so. That's the law in Quebec (unless it's been changed).

Teslambert Gigafactoire will demand the latest battery technology and must be constantly updated. Sounds like a money sink...

A looq inside TéslaQ[uebec]'s ManufactureGiga:

Sacrebleu! Marins d'eau douce! Capitaine de bateau d'lavage!
Who just dumped the experimental electrolyte onto the battery casings?
[Somewhere in the off, Jeff Dahn pulling his remaining hair.]

Could access to cheap hydropower be a factor? NY imports a lot of that schtuff [no, not Poutine].

 

[Fact Checking]

It's not that they can't build the M3Ps quickly, its the opportunity cost due to production constraints. Every MP3 delivered in CA early in the quarter is a high margin sale they DON'T make in Europe.

After Dec 1st or so, any M3P shipped for sale in Europe likely won't be delivered in time to count toward 2019 Q4 results. Whereas an MP3 made on Dec 27 MIGHT still get delivered at the factory delivery center in Fremont.

Its the tyranny of the 'wave', but were stuck with it while TSLA is a publicly traded company. Hopefully those FCA Eurozone CO2 credits kick in enought to build and equip GF4.

Cheers!

Then how do you explain that M3P delivery times for the U.S. didn't increase to 8-10 weeks, 2 weeks into Q2 or Q3?

If the M3P take rate is 10% then there's quarterly demand for about 4,000 non-US units - which can be made in the first 3-4 weeks of Q4 production, 3 of which are over already... (Final ~4 days of October production were for Q4 already.)

I.e. even taking production constraints into account, 8-10 weeks of waiting list suggests that there must be a big increase in M3P demand either in the U.S., or elsewhere, or both.

 

[Tslynk67]

Nasdaq futures up, again. “Positive” Brexit news. GF3 permit. Price increases...

going to be a as tall order for shorty to stop another great day, IMO. Need some quality hit-pieces from the corrupt journos.

Note too that MaxP is now up to $247.50

A question on that - I see a huge loaf of puts at $70 and $50, I don’t think they were there yesterday. Can these be there as a mechanism to try and reduce the MaxP??

 

[traxila]

Great news on the factory launching. Do not be surprised if we see some ‘sell the news’ for the rest of the week. The shorts will also be eager to attack here. Personally I think stock should be at 400 so what the hell do I know?

Obviously only great for the long term but we do have traders here....

 

[KarenRei]

In the U.S., Model 3 delivery time has been updated: P3D 8-10 weeks; SR+ and AWD 6-10 weeks. S/X 4-8 weeks.

They hardly have a choice; there's virtually zero inventory in the EU, and they need to get those ships loaded. Have you seen how low EU deliveries have been thusfar?

Demand currently is way in excess of supply globally.

chances of break even are practically nil. i don't think it's realistic.

James (who got Q1 better than most of the forecasters on this forum) thinks it's going to be about breakeven. That said, most (all?) analysts aren't predicting a profit. It's possible, but requires good performance in several regards, and none of these "one time charges" that have been hitting every quarter recently

I agree with James' numbers in general, although I think his mix prediction may be a bit rich. I'm expecting around consensus.

 

[anthonyj]

Nasdaq futures up, again. “Positive” Brexit news. GF3 permit. Price increases...

going to be a as tall order for shorty to stop another great day, IMO. Need some quality hit-pieces from the corrupt journos.

Note too that MaxP is now up to $247.50

A question on that - I see a huge loaf of puts at $70 and $50, I don’t think they were there yesterday. Can these be there as a mechanism to try and reduce the MaxP??

Those puts were those for a while. I’m pretty sure some hedge fund just writes those bankwuptcy puts to themselves to create a sense of impending bankwuptcy

 

[Artful Dodger]

Then how do you explain that M3P delivery times for the U.S. didn't increase to 8-10 weeks, 2 weeks into Q2 or Q3?

Nobody updating the website. Delivery times were placekeepers at best.

 

[anthonyj]

Let’s play the Wheel of Short

https://bit.ly/2oR1xyL

 

[SpaceCash]

Let’s play the Wheel of Short

https://bit.ly/2oR1xyL

HAHAHA!
I love it

 

[KarenRei]

Let’s play the Wheel of Short

https://bit.ly/2oR1xyL

Hahaha, I forgot that I had made that

 

[mongo]

Those puts were those for a while. I’m pretty sure some hedge fund just writes those bankwuptcy puts to themselves to create a sense of impending bankwuptcy

They reduce margin exposure of a bull stock position by capping (flooring?) losses.
Like insurance.