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

[sparcs]

If everyone thinks that way, there wouldn't have been the astonishing rise and it is not stopping yet.

Can't some of this rise be explained by shorts covering before the earnings report?

I doubt many were expecting any delivery growth. The bankruptcy narrative is gone.

 

[Remus]

It’s encouraging that the wait times for US have increased, but, we do not know how much of this has to do with logistics of rotating production to cars intended for international markets (which continue to expand. one example, Japan ramping up from initial very limited Q3 deliveries. even with as poorly as most imported vehicles do in Japan, I wouldn’t be surprised at all if there were 20k pent up Model 3 orders from years of waiting. possibly more. I think the Model 3 could sell 60k/year in Japan... Elon/Tesla/Silicon Valley tech may have an appeal in this market that Detroit, or even Germany do not have).

I wouldn’t be surprised if the logistics of rotating to international deliveries is the lion share of the change in wait time. Remember, in the last week of September Elon’s email said total net orders were something like 110k for the quarter. 6 extra weeks of Model 3 production would be about 40k orders... have we seen anything in the past 2-3 weeks (since that update) suggestive of a massive spike in US orders?

And the price increase?

 

[SOULPEDL]

Yes, Tesla can no longer afford to make cars -- hence the supply problem. So they desperately raised the price to lower demand. But this will cost them more revenue and accelerate the plunge into bankruptcy.

Writing that introduced enough cognitive dissonance that I have a hard time believing smeagol doesn't get it. What are the odds that he's covered (or in the process of trying to cover) his position and is desperately trying to convince others to short as the result of some psychological disorder.

As an aside, I think the "Tesla is a Ponzi scheme" rests on the following:

In a Ponzi scheme the founder does make money via the payments flowing up. Of course, since all money is generated internally there is insufficient supply to pay out to those lower down and the scheme collapses.

In a Tesla "ponzi" scheme the parts to make a car are purchased on credit, an order with $2500 holding fee is taken, the car is manufactured, then sold. In principal this would allow repayment of the parts, but the problem is that Tesla sells all of its cars at a loss. But because some were sold the network effect allows more orders which creates an influx in funds of $2500 per order, which -- because there are more orders than cars already made -- allows paying off the suppliers and ordering more parts. Naturally, this scheme will come crashing down as soon as there are insufficient new orders to cover the losses of manufacturing the last batch of cars.

Of course that scenario relies on a couple of falsehoods. First, that Tesla cars are sold at a loss. This is "proven" by the fact that Tesla as a whole loses money while ignoring that this is due to investing in expansion. The SG&A is a popular "proof" here. Second, that $2.5k reservations represent meaningful revenue. This started with the initial 500k reservations which netted Tesla $1.25b and on its face proves that Tesla is lying about its manufacturing numbers and has huge losses because they have not been able to clear that backlog of reservations. Clearly there is only one answer here: Tesla cannot actually make cars for reservation holders so their claims of selling 90k per quarter is pure fabrication.

One person I know holds that position and refused to accept that I was able to buy a car last year without ever first having reservation. Since they have seen my car and haven't explained their thinking on this I'm not sure about the rationalization. Maybe they think I secretly held a reservation, or that I took over someone else's?

My point is that there is some structural similarity to a ponzi scheme if you can convince yourself that Tesla production numbers and margins are a lie.

Uber is a ponzi scheme by just adding more countries. 90x earnings is crazy. All rigged.

 

[SteveG3]

And the price increase?

Also encouraging, but fairly modest and not across the board.

 

[GOVA]

OT:

M3 vs MY in the wild.
See here: Page 26 - $35,000 Tesla Model III Is Coming In 2017

 

[Curt Renz]

Electrek - this morning:

Tesla gets govt green light to start Model 3 production at Gigafactory 3 - Electrek

Tesla Model Y prototype spotted in Washington - start of long-distance testing? - Electrek

Tesla increases range of base Model 3, bumps price up - Electrek

Tesla officially launches new Model 3 Gray Performance wheels - Electrek

 

[ZsoZso]

Morgan Stanley delivery estimates from 2015/16.....

View attachment 467040

So they were extremely optimistic about Model S/X demand to project it to grow to over 200K/year.
Unfortunately, its not even a demand question beyond 100K, as Tesla never had the cell resources for that. Their deal with Panasonic allowed maximum 100K/year back when they had cars with 60Kwh -> 90Kwh. With the increased battery sizes currently sold, they can't make more than 80K.

So there, Morgan Stanley was an uber-bull with expectations way beyond what is possible.
And now they are disappointed because their S/X projections are not being fulfilled...

(never mind they dropped the ball on model 3, that's peanuts)

 

[thait84]

Hydrogen Fuel Cell cars getting their subsidies taken away in China. It already got reduced for battery cars in the past year or so, but it still seems like China is all in on Tesla providing other subsidies though, so

China to Eliminate Subsidies for Hydrogen Fuel-Cell Cars: Report

 

[LN1_Casey]

Low volume today so far, but still positive. I wonder if all the shorties are waiting until tomorrow to try and push?

 

[Paracelsus]

Hydrogen Fuel Cell cars getting their subsidies taken away in China. It already got reduced for battery cars in the past year or so, but it still seems like China is all in on Tesla providing other subsidies though, so

China to Eliminate Subsidies for Hydrogen Fuel-Cell Cars: Report

Thanks for posting this @thait84 - I continue to see a hard push from the fossil fuel industry and others for adoption of hydrogen vehicles, and can only assume that this is because approximately 95% of the hydrogen in the US is currently produced from natural gas. If that is still true, then hydrogen vehicles can thus emit more GHG than even a gasoline vehicle for the same mileage driven, a metric which has been published in the past. I am guessing from this article that it is more important for China to clean up its air and environment than it is to help the natural gas industry prevent their assets from becoming stranded.

From the article:
"China has one big advantage in that it is already the world’s leading hydrogen producer. Last year it manufactured more than 8 million tons of the gas, almost double the 4.3 million tons that came from the U.S.

But China’s hydrogen production industry is based on steam-methane reforming, which is dependent on fossil fuels. To lead in green hydrogen, China’s industry would need to embrace production based on electrolysis, which for now is more prevalent in other markets."

 

[TradingInvest]

So they were extremely optimistic about Model S/X demand to project it to grow to over 200K/year.
Unfortunately, its not even a demand question beyond 100K, as Tesla never had the cell resources for that. Their deal with Panasonic allowed maximum 100K/year back when they had cars with 60Kwh -> 90Kwh. With the increased battery sizes currently sold, they can't make more than 80K.

So there, Morgan Stanley was an uber-bull with expectations way beyond what is possible.
And now they are disappointed because their S/X projections are not being fulfilled...

(never mind they dropped the ball on model 3, that's peanuts)

I don't trust Morgan Stanley at all. I assume they play games. One day Jonas said Tesla is the only company under his coverage that has a real potential to reach $1900, Tesla's addressable market is 14 trillion dollars plus screen time value.

After two years, Jonas said TSLA realistically could reach $10 within a year, and don't expect Apple/Amazon to buy Tesla. At the same time MS bought more TSLA shares.

Right now Jonas predicts in 2030, Tesla will sell 170k EVs in China. I think Tesla is more likely to do 3 times that number within 3 years in China, and continue to go up 30% per year.

 

[M3Rider]

I've been thinking about this for the past few days, and especially with the new record for consecutive green days for TSLA... does it make sense that this is just shorts covering and accumulating funds for a more-or-less organised share dump one week from now, when the right "analysts" will make sure the "news" look particularly bad (see quote above)?

Not to mention, if spending time (like, waaay too much time!) reading this forum and its previous incarnations over the past 4 years has taught me anything, is that the overall sentiment here is a pretty good contrarian indicator for what the SP will actually do next. I have become particularly good at detecting exit points for batches of my trading shares whenever the frequency of "here comes the squeeze!" mentions increases. Keeping in mind that SP movements rarely have much to do with the actual performance of the company, and overwhelmingly to do with sentiment.

And before I get too much hate: my long-term plan - which worked so far - is to simply accumulate as many shares as I can with the funds available, which involves selling parts of my holdings when the SP is high (relatively) and buying more shares when they're cheaper. It's what in the investing community is referred to as "picking pennies in front of the steamroller", and I practice it with glee!

Possible, but if shorties dump on the news of China and the Y and drive SP to $230, wouldn't that be a good opportunity for us to buy more meanwhile? We see what's coming. It will take China & Y about 2-3 quarters to ramp and contribute to the SP very positively...
A pretty not risky bet to buy more.

Then, with profits the big money comes. Do you believe shorties will be able to manipulate SP with the same effectiveness in 3 quarters?

 

[Dutchie]

Can you please upvote my question on Say there has been a lot of discussion on TMC an I really like to know the answer. Thanks!

 

[Beltsbear]

I don't trust Morgan Stanley at all. I assume they play games. One day Jonas said Tesla is the only company under his coverage that has a real potential to reach $1900, Tesla's addressable market is 14 trillion dollars plus screen time value.

After two years, Jonas said TSLA realistically could reach $10 within a year, and don't expect Apple/Amazon to buy Tesla. At the same time MS bought more TSLA shares.

Right now Jonas predicts in 2030, Tesla will sell 170k EVs in China. I think Tesla is more likely to do 3 times that number within 3 years in China, and continue to go up 30% per year.

It makes no sense to try to figure out what Tesla will do in 11 years. Try to predict 4years. Based on plans they should be at 500k a year in China by then. Easily.

 

[abasile]

Is anyone else having trouble getting say.com to load all of the questions by scrolling to the bottom of the page? I'm reluctant to post new questions until I've examined all of the existing questions.

Among other things, I'd like to ask about plans for further expansion of the Supercharger network in North America. Particularly with the truck and Y coming on the market, more prospective customers are going to be interested in driving into the hinterlands, potentially while towing trailers. Even California's rural areas need more Superchargers - just try driving a couple hours north on US-395 out of Reno, NV. Gems like Jasper National Park in Alberta are still not easy to access, etc., etc.

 

[Dutchie]

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 ....

Or the coming 8 weeks of production is allocated for overseas markets.

 

[kbM3]

It's what in the investing community is referred to as "picking pennies in front of the steamroller", and I practice it with glee!

And that strategy works very well.... until it doesn’t.

 

[Chocochip]

Possible, but if shorties dump on the news of China and the Y and drive SP to $230, wouldn't that be a good opportunity for us to buy more meanwhile? We see what's coming. It will take China & Y about 2-3 quarters to ramp and contribute to the SP very positively...
A pretty not risky bet to buy more.

Then, with profits the big money comes. Do you believe shorties will be able to manipulate SP with the same effectiveness in 3 quarters?

I was discussing strictly the potential for a dump following the earnings report. It's known that the numbers will not look great Q-on-Q or year-on-year, and they will be exploited as a reason for a sharp drop in SP. THAT would be a good buying opportunity. To be clear, I'm only "playing" with a small fraction of my holding, because FOMO is strong. Long-term, the goal is to have as many shares as I can as the company valuation goes up.
However (and not to start a debate), I feel we should avoid stating how many quarters it will take for GF3 and Y production to ramp up. It will take as long as it takes, and we will know it couldn't have taken less.

 

[KSilver2000]

Possible, but if shorties dump on the news of China and the Y and drive SP to $230, wouldn't that be a good opportunity for us to buy more meanwhile?

At this point, with the amount of “opportunities,” recent longs who are convinced of the big picture should be tapped out of funds and averaged in the low $200’s or less by now. Every time the stock drops, we always hear of “buying opportunity.”

 

[Rarity]

It makes no sense to try to figure out what Tesla will do in 11 years. Try to predict 4years. Based on plans they should be at 500k a year in China by then. Easily.

On the contrary, since so much of Tesla's value is in its terminal value, you must have a view of what Tesla will do in 11 years. Predicting four years out is only important inasmuch as that's a way to test your 11-year view in the short term.