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

[KarenRei]

Meh... he's being a bit snarky, but I don't think it goes into outright trolling. And he's not astroturfing; I think the username is obvious enough for that. And he's pretty brave to jump into the lion's den like this

I don't want us to be like Twitter Shortsville where longs get banned on sight because they want to protect their TSLAQ bubble from intrusion of facts.

 

[sweter]

Welcome to Alphonia, where "How many vehicles Tesla has managed to ship to Germany, early enough to be registered" equals "Popularity"

Erm, that doesn't have anything to do with it? As I understand you can apply for the Umweltbonus just with your purchase agreement, so the car itself doesn't even have to be built at this time.

 

[KarenRei]

Erm, that doesn't have anything to do with it? As I understand you can apply for the Umweltbonus just with your purchase agreement, so the car itself doesn't even have to be built at this time.

How do you get a purchase agreement from Tesla for a car that hasn't arrived yet? Does "I've configured and paid a down payment" count as a purchase agreement?

 

[sweter]

How do you get a purchase agreement from Tesla for a car that hasn't arrived yet? Does "I've configured and paid a down payment" count as a purchase agreement?

Apparently so. 911 Germans must have done it so.

 

[Dan Detweiler]

How do you get a purchase agreement from Tesla for a car that hasn't arrived yet? Does "I've configured and paid a down payment" count as a purchase agreement?

Actually, when I got my car I actually e-signed the purchase agreement with final specs, cost and VIN about a week before I took delivery. Weird thing was they had me sign hard-copies at delivery too.

Dan

 

[Krugerrand]

Meh... he's being a bit snarky, but I don't think it goes into outright trolling. And he's not astroturfing; I think the username is obvious enough for that. And he's pretty brave to jump into the lion's den like this

I don't want us to be like Twitter Shortsville where longs get banned on sight because they want to protect their TSLAQ bubble from intrusion of facts.

Every single post over the last few days has been a passive aggressive one liner. He’s not returned to refute any of the sensible and accurate arguments to his bs. It’s clear what his purpose is and I’d happily shove him off the cliff myself.

 

[brian45011]

(@ReflexFunds and @brian45011 might want to correct me if I'm wrong.)

Not corrections, but since you invited comment, mine below in blue are some of the reasons why I can't reach your level of sanguinity about the continuing challenges in order to maintain the current growth multiples the market is giving the share price.

Basic observations and assumptions:

• Opex is stable and is guided to stay stable in 2019.
• Guidance: "Our operating expenses will grow by less than 10% in 2019"
• Capex is stable and guided to stay stable and discretionary in 2019.
• Guidance: "Our 2019 capex, the vast majority of which will be to grow our capacity and develop new vehicles, is expected to be about $2.5 billion. We believe this amount should be sufficient to continue to develop our main projects, such as Gigafactory Shanghai, Model Y and Tesla Semi, as well as for the further expansion of our Supercharger, service and retail networks. We expect to arrange financing through local banks in China to fund most of the capex for Gigafactory Shanghai."
• Mandatory capex went to a low of $325m in Q4 - this confirms that the Model 3 'capex bump' is over in the cash space: the Model 3 lines are mostly paid for already, what is left is maintenance capex of around $150m and probably $175m of residual mandatory capex of already shipped/ordered equipment.
• CapEx was $510 MM for 3Q18 which is right at the quarterly average for 2018, and slightly less than average quarterly guidance for 2019. By "maintenance" I assume you mean the periodic replacement of worn-out/obsolete Plant and Equipment in contrast to Capital Additions. What about GF1 and GF2? (Not mentioned in guidance). The footprint at GF1 has been widely reported as 30% complete--it will require capital to expand the structure and equip the new space. IIRC, the SUNY Foundation has completed its obligation to fund GF-2's initial equipment, but Tesla has not fully completed development of the solar tiles--"We plan to ramp up the production of Solar Roof with significantly improved manufacturing capabilities during 2019, based on the design iterations and testing underway. In the meantime, we are continuing to install Solar Roofs at a slow pace to gather further learnings from our design changes, as well as about the viability of our installation processes."
• True cash flow from operations (if we exclude the China land purchase artifact) was $1,124m+$141m = $1,265m in Q4, {Tesla, TSLA & the Investment World: the 2019 Investors' Roundtable } only slightly down from $1,391m in Q3 - especially that accounts payable drew about $200m of cash - so the real Q4 cash flow from operations, assuming stable payables levels was probably around $1,465m. There was a similar $206 million offsetting benefit from a reduction in Accounts Receivable, so it might be better not to selectively focus on only some changes in Balance Sheet operating categories. {The net quarterly benefit from all operating categories was plus ~$ 200 million.}
• Q1 and Q2 will likely generate more cash, modulo the in-transit temporary artifact expected in Q1, which we can ignore for valuation purposes.
• Why? As Tesla grows shouldn't it expect a use of cash (increased Inventory) to fill the international delivery channels to avoid the inefficiencies currently resulting from the quarterly geographic product allocations?
• Let's conservatively ignore possible 2019 upsides like 2x-3x storage and higher solar sales, or FSD generated income.
• OK
• Let's assume ~173m non-diluted shares as the average common shares for 2019: this won't increase significantly as the $920m are paid back fully in cash, not shares - so March 1 will effectively be the first step of a stock buyback program.
• Shares outstanding a 2/14/18 was ~169 million; there is a modest accretion annually from option and ESPP exercises. Paying back mature debt with cash can not be construed as "a stock buyback program" ; it merely obviates dilution from using shares to redeem the debt.
• So I believe $1.5b effective cash generated per quarter is a pretty conservative figure, minus $150m of maintenance capex (this is a static, no-growth valuation model): $1.35b per quarter, $5.40b annual.
• There is another SCTY convert of $566 million maturing in Nov. 2019 plus miscellaneous non-recourse debt maturing in 2019. {Non-recourse does not mean those debts do not have to be repaid from existing cash balances--It just means those creditors can only exercise rights with respect to designated assets, not the general assets of the corporation.}
  
• That's cash per share of $31 per share, which with a 15x 'static' multiplier of established zero-growth firms gives a static valuation of $465 per $TSLA share.
• But it gets better: in a zero growth model there's effectively no R&D expense required - and in 2018 alone Tesla invested about $1.4b into R&D. Adding this back improves the static valuation to $590/share.
• Satchel Page offered an aphorism about standing still (looking back).

Of course Tesla is not a zero-growth company and they don't intend to stop growth capex and growth R&D investments - but the growth premium is much harder to estimate and requires big assumptions about future.

My view is that Tesla is now positioned to continue to benefit from operating leverage, but it will require efficient execution and constant management vigilance. A lot has been written about executive turnover as Tesla has grown, but it can be detrimental unless only dead wood is leaving. Finally, as Tesla continues to grow the Law of Large Numbers becomes a factor.

TL;DR "Curb your enthusiasm."

 

[Buckminster]

Wonder if this is going to be one of those rare "no-MMD days".

Does a no-MMD day exist?

 

[elasalle]

Wow I was hoping Model 3 could at least beat Prius in popularity.

A quarter back, there was a SA article that did this same kind of math for Norway with i-pace numbers(I think)

I think results can be expected to be the same (SHAME) ....

 

[mongo]

Who says they're using powerpacks?

An unnecessary DC-DC converter is as expensive as an unnecessary AC/DC converter, requiring high-speed switching and powerful capacitors.

The post I quoted (not yours) referred to powerpacks which I have long held can be used as chargers as-is. Superchargers already have 12 DC-DC converters each, Each power pack has 16. If the source pack is above the max pack voltage, the converter is quite simple and low cost, basically identical to the 3 drive inverter.

Not in the least. ~4V - the worst case - is 1% of the total power you're outputting. Since when is 1% any sort of bad heating figure in terms of charging?

Also, as mentioned, that's totally unnecessary if you deliberately unbalance bricks, because then you can choose an arbitrary combination of whatever bricks whose voltage adds up to your desired voltage.

4 V at 300 Amps is 1.2 kW of wasted energy to dissipate multiplied by every charger for every hour of operation.

No. You simply switch specific bricks between parallel and series. Wherever there's many parallel, they'll drain slowly; wherever there's few in parallel, they'll drain quickly. Thus offbalancing bricks from each other. No new hardware needed, just the exact same low-speed switching circuitry. There's also the option of switching bricks entirely into or out of the series path rather than between parallel and series.

Low-speed high power switching relays are a lot cheaper than DC-DC converters, which require high-speed high-power switches (IGBTs/MOSFETS) and powerful capacitors.

You still need to recharge the bricks, there is also a (small) range in which you can direct connect brick without overloading your contactor. The switch matrix required is not easily extendable. There will need to be a DC-DC somewhere to charge the brick, multiple depending on how many you can charge simultaneously. The output of the charger already requires a switching converter to provide proper voltage and current limiting.

400 Amp contactors are not cheap, nor small, nor as reliable as solid state.

Note that I'm not saying that this is how it "would" be done - rather, how it "might" be done.

And I'm not saying how it won't be done, but rather that a rack of mechanical contactors with a bunch of bricks at various, but controlled charge levels with 4V regulation granularity (8 Amps or 2.4 kW resolution if total path resistance is half an ohm (implies 45kW of waste heat)) is much more lossy and less controllable than the technology that Tesla currently has in their powerpacks and drive units.

 

[EVNow]

Any news that is sending SP up on high volume (or just Nasdaq gong up) ?

 

[shlokavica22]

Every single post over the last few days has been a passive aggressive one liner. He’s not returned to refute any of the sensible and accurate arguments to his bs. It’s clear what his purpose is and I’d happily shove him off the cliff myself.

Man, your fuse is shorter than the cat's hair on your avatar.

 

[adaptabl]

Can you say "range anxiety" for ICE? 25 gas stations in Greater Toronto Area close due to storm.

Gas shortage causes closure of 25 Petro-Canada stations | CBC News

"The first thing that I would say to Ontarians is 'Let's stay cool. Let's stay calm. We're going to get through this together,'" Ontario Premier Dalton McGuinty said Wednesday.

Nice 2007 article. Wow nice fact checking.

 

[SpaceCash]

Ummmmmmm Bullish AF?

 

[AMN]

LOL @ those $25x puts I sold last week for today. Thanks shorts. Buying good ol' shares with that.

 

[shlokavica22]

For anyone wondering about the macro takeoff:

ISM Manufacturing 56.6, Exp. 54.0, Last 54.3

 

[Silent Ludicrosy]

The news is I just transferred my dry powder to my brokerage and am waiting for the mmd.

 

[kyzhk]

LOL @ those $25x puts I sold last week for today. Thanks shorts. Buying good ol' shares with that.

I sold $310 puts for ~$20/share wednesday morning. Bought it back at $1.31/share.

I did intend for the $310 to be exercised should tsla go south...

 

[KarenRei]

Apparently so. 911 Germans must have done it so.

This is not correct. There's already a shipment of Model 3s in Europe. We clearly missed a ship.

 

[Todd Burch]

OK, this is how the stock should have reacted yesterday. So we're only a day behind.