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

[Fred42]

Not sure if posted yet.

Made-in-China Model 3 First Drive: the Miracle 丨 ENGLISH

A positive review. Only 499 views. I wonder how he got the car.

 

[StealthP3D]

Let's conclude this brief discussion of the bty workshop with a reminder of the business case for Tesla to build their own battery cells:

Good to be refreshed on the battery perspectives straight from management. Maybe I'm missing something but isn't it a given that Tesla will be manufacturing their own batteries given comments from management and recent acquisitions? Are there people who doubt that?

As to exactly when and where, I don't find the hard evidence (photos, reinforcements, etc.) convincing one way or the other. I just assume it will be happening and probably in China for reasons of cost and availability of raw materials. I don't care what building it's in. Even if we could identify the building, that doesn't necessarily imply they will start manufacture as soon as the building is buttoned up. It can take time to develop the machine. Yes, there are already machines for this but, knowing Tesla, they may want to design a machine that can process *incredible* volumes rather than just install multiple machines that are the state of art.

It's also possible that new battery designs may require significantly different manufacturing processes. My hope is that Tesla has a battery technology in mind that can be a major step-change in the falling cost curve and simultaneously increase production volumes by a huge factor.

I know Musk has "poo-pooed" major battery breakthroughs in the past. My impression is that he's the cat that just swallowed the bird and is trying to look innocent while inside he's super proud/excited. Because it takes years from inception to bring this kind of thing to market. It will have more impact when it's ready if people aren't saying "Where's that amazing battery you promised us two years ago?"

And to be clear, the new battery might not have a huge advantage in Wh/kg and it might only have double the expected lifespan. Bigger improvements in these metrics would be nice but they are not necessary to make electricity the power of choice. What II think will make the new battery amazing is that they can be churned in super high volumes for a fraction of the price and without major concerns for the supply of raw materials. If they pull something like that off, they will have an unassailable moat for battery cost reasons alone. And since they already have a moat for other reasons, they might choose to license the manufacturing technology to other makers for a royalty. If the batteries are a big enough cost improvement over the status quo, the royalties alone could be worth more than Tesla's current market cap. This would also greatly accelerate the transition to more sustainable transport and energy.

I know a lot of this is highly speculative because we don't have much hard evidence of my theory - it's put together from bits and pieces and clues, comments Musk has made (and subtle parsing of the same), comments Musk has *not* made, acquisitions, a knowledge of how Musk thinks and progresses, etc. For example, the desire to reduce the cobalt content of the Model 3 batteries fits right into the kind of thing Musk tries to optimize. The low cobalt composition doesn't necessarily make the batteries any better in terms of longevity (perhaps the opposite) or improve energy density. But it does reduce costs and reliance on a problematic mineral. And I know from owning a couple of Model 3's that the energy density and degradation profiles of current batteries are not a problem for mass adoption of EV's. The cost is the only major remaining barrier. Cheaper batteries will turn Tesla into a cash printing machine and cause the shorts to run for cover like the bunch of scurrying rats that they are.

If anyone can revolutionize battery production, Musk and his "first principles" thinking can. All of this said, my TSLA investment thesis does not rest on unproven theories, I'm super excited about the current trajectory without major battery breakthroughs. But this, along with FSD, have the potential to make TSLA the story stock of the century.

As Popeye the sailorman might say, "Shiver me timbers!", an exclamation from the days when wood boats were used for global transport and exploration. Under gale force winds the working crew noticed that when the wind built to a dangerous level, the heavily loaded spars and masts could start vibrating rapidly, making eirie sounds while threatening to explode. Basically, what immediately precedes "All hell breaking loose". Currently, we are just starting to sail into the storm, I think all hell is going to break loose in 2021. But don't worry, plenty of fun before then.

 

[Mars ☰mperor]

I think you missed the "worth purchasing" part.

No, many made in China products are as well built as imported one, if not better. And they are cheaper so “more worth buying”.

It’s just simply psychology.

 

[EVNow]

Proceeds from a short sell transaction are segregated from other funds in your account and are labeled as your short balance. The funds in this short balance are not available until after the short position is closed using a buy to cover order and the closing transaction has settled.

Not just funds from short sales of stock - funds from sale of calls as well.

 

[MarcusMaximus]

No, many made in China products are as well built as imported one, if not better. And they are cheaper so “more worth buying”.

It’s just simply psychology.

Honestly, kinda makes sense. You see the same thing in the US with imported clothing from Italy and wine from France.

 

[TradingInvest]

Shorting, by itself, is no more or less exemplary activity than long passive investing.

But many shorts also spew FUD and/or try to manipulate the market, and that is heinous (some longs also do this, but it’s relatively rare).

What to do about the shorts that act heinously? In rare cases a criminal action, or a direct refutation by the company or others, is necessary.

In most cases, ignoring them is by far the best answer. Tesla will succeed by continuing to perform effectively, and by conducting positive PR (which it will get better at doing as it matures).

The amount of handwringing in this forum over a relatively small number of cretins, who collectively have dubious impact and influence, detracts from the otherwise superbly informative and interesting posts I have read here over the years.

"Shorting, by itself, is no more or less exemplary activity than long passive investing."
- Agreed

In Tesla's case, shorts have been doing significant damage to the company in many ways.
- damage the brand
- reduce demand
- reduce margin
- reduce Tesla's growth speed
- reduce government/society support

 

[Singuy]

Newest Karpathy's AI presentation.

 

[EVNow]

Shorting, by itself, is no more or less exemplary activity than long passive investing.

Absolutely not. Shorts benefit when the company does badly (and lays off people etc). Longs benefit when the company does well and hires more people. How can they be same ? We are talking about real people's lives. This is not a game.

In what other way can you "rent" something from someone else and sell it ?

I'd put shorting in the same moral category as private prisons and army for hire.

 

[Artful Dodger]

Maybe I'm missing something but isn't it a given that Tesla will be manufacturing their own batteries given comments from management and recent acquisitions? Are there people who doubt that?

Well many here say Tesla will buy its cells from LG or CATL in China for an indefinate term, with no timeline for Tesla switching to their own production.

It's also possible that new battery designs may require significantly different manufacturing processes. My hope is that Tesla has a battery technology in mind that can be a major step-change in the falling cost curve and simultaneously increase production volumes by a huge factor.

Yes, that's precisely what Elon said is important about batteries:

Elon: (1:00:39)

"what is your plan to scale battery production and get the cost per kilowatt hour lower."​

As investors, we'll do well to pay close attention to those two items. Production is relatively easy to measure (Vehicles * Bty Size). Yet Tesla's exact bty costs are illusive. Perhaps there will be more transparency if/when Panasonic cells or GF3 production numbers are reported separately.

Our resident financial whiz-kids face an awesome task ahead.

Cheers!

 

[Sudre]

It's true enough that the article points only to "difficulties in ramping up sales in Europe and China " and not deliveries made there.

But, the larger question remains on steady-state demand for non-SR Model 3 variants in the US. Given the pull forward of deliveries into Q4 there was bound to be some reduction in Q1, but from over 25K in December to under 7K in Jan (and under 6K in Feb) is, in my view, much larger than that effect. And while lots of people talk about how cars are being shipped to Europe instead, that's not a demand measure. The demand measure would be that cars being shipped to Europe have increased wait times in the US, and/or that people in the US would be complaining that they configured/ordered their cars and are not getting them. We are seeing neither of those. Tesla.com itself has been saying that non-SR models will be delivered in under 2 weeks. Surely, if demand was high and vehicles were being diverted to Europe, we'd be hearing many complaints. I also believe Canadian orders have been relatively high this quarter - but again that doesn't say anything about demand in the US.

So, while it's all well and fine to point out that Tesla has untapped markets outside the US, and that there's big demand for the SR variants, there is still a question in my mind about steady state demand for the non-SR Model 3 variants. Here's the circumstantial evidence that demand for non-SRs has fallen off:

• The aforementioned US delivery numbers, combined with lack of delay in US for receiving ordered cars, and combined with the lack of complaints about US people ordering and not receiving their vehicles in a timely fashion.
• Premature and rushed introduction of the SR version. Just about 2 weeks earlier (Q4 call) Musk had said SR would be mid 2019. In order to do the SR now Tesla had to cut stores and sales people because the Gross Margin on the SR wasn't high enough. And then changing their minds so quickly on store closings after announcing them. Clearly rushed.
• Three price cuts recently.
• Elimination of the low end Model S variants. No more 75s, for instance.
• Re-establishment of the referral program.
• Heck, did anyone even notice/care that the MR variant went away? (My guess is that Tesla is delivering MRs as SR Plus's with range limiters right now. )

Taken separately, any of these are explainable as being driven by other factors, but taken together they provide, to me anyway, a compelling case that Tesla believes that steady state demand for non-SR Model 3s is the US has dramatically fallen.

Curious how this turned out. Yes it's an old post and in reality could have had some truth to it. I marked a few of these to look back and see what tail tell signs were missed (or hit) as Tesla is still all out producing and selling everything yet some saw clear signs of reduced demand. I figured it would be a good case study IF production was still in the 70K or less.

I seems this reduced demand card can be played forever when picking things apart in a dozen different directions.

 

[MP3Mike]

It looks like Tesla is trying something new. Getting people to come in before delivery to learn about the car so that delivery day can be as quick as possible. December could be crazy at the delivery centers.

Got phone call and e-mail from Tesla .... same old stuff ... soft of ...

 

[MarcusMaximus]

Absolutely not. Shorts benefit when the company does badly (and lays off people etc). Longs benefit when the company does well and hires more people. How can they be same ? We are talking about real people's lives. This is not a game.

In what other way can you "rent" something from someone else and sell it ?

I'd put shorting in the same moral category as private prisons and army for hire.

Longs can(and often do) also benefit when a company lays off people.

 

[Mike Smith]

Ihor Dusaniwsky on Twitter

If we look at Ihor's chart of TSLA share price vs short interest, they move in near perfect inverse symmetry. With the share price at $337, it's clear the short interest should be around 25M. This means there are at least 5M shares shorts are looking to cover at this price level.

 

[Mike Smith]

Model X goes airborne for 41 feet, then tumbles 172 feet down an embankment, flipping twice. All five occupants survive.

Charges filed in Maroon Creek crash involving 5 Aspen teens

“The police at the emergency room said they haven’t seen an accident like that when people walked away,” said Elana Royer, mother of 18-year-old Lily Royer. “They’re almost always fatal.”

 

[JusRelax]

Model X goes airborne for 41 feet, then tumbles 172 feet down an embankment, flipping twice. All five occupants survive.

Charges filed in Maroon Creek crash involving 5 Aspen teens

“The police at the emergency room said they haven’t seen an accident like that when people walked away,” said Elana Royer, mother of 18-year-old Lily Royer. “They’re almost always fatal.”

Safety is absolutely the number one reason why we got a Tesla. I have a 4yr old and a 1yr old. This is the message that needs to be spread to parents.

 

[Mike Smith]

 

[Cirrus MS100D]

Am I the only one who does not feel that Elon wrote this?
He had a "I love this" emoji above the letter, and I thought he had simply retweeted this...

This. While a large chunk of my brain says it was really him, it just seems weirdly not quite his style?

 

[Singuy]

Model X goes airborne for 41 feet, then tumbles 172 feet down an embankment, flipping twice. All five occupants survive.

Charges filed in Maroon Creek crash involving 5 Aspen teens

“The police at the emergency room said they haven’t seen an accident like that when people walked away,” said Elana Royer, mother of 18-year-old Lily Royer. “They’re almost always fatal.”

This article is a year old. Thought it was something that just happened. Still pretty interesting.

 

[PhaseWhite]

Newest Karpathy's AI presentation.

This part is new to me: Project Dojo is about building custom NN training chips that will bring similar order of magnitude improvements to training that the HW3 NN chip brought to inference.

 

[EVNow]

Longs can(and often do) also benefit when a company lays off people.

Yes - infact we then get into discussions about offshoring, exploiting workers and Wall St penchant to mainly consider quarterly results etc. Definitely, shorting is not the only problem with the current Wall St system.