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

StealthP3D

Well-Known Member
Dec 12, 2018
9,758
77,934
Maple Falls, WA
I think Tesla will still be losing money on this at $10/mo.

That's doubtful. A regular wireless provider has to account for a lot of expenses that Tesla can ignore (or consider a normal part of business):

Advertising
Customer Acquisition
Customer Retention
Billing

By buying wholesale and doling it out to individual cars I expect it to be somewhere between revenue-neutral and slightly profitable. And it's something that Tesla is free to change the price on in the future.

Wall Street would normally go gaga over a company that had the kind of customer growth Tesla has when every customer has a Tesla account for recurring billing, a direct portal to their phone and a large touch-screen in their car that can be used as a point of sale terminal. Tesla is currently choosing to not monetize this in any significant manner at this point in time but I suspect it is what will drive revenues to be able to rapidly expand production capacity (batteries, cars, trucks and solar) and enter new markets in the future. The disruption that is upon us will be shocking in terms of how quickly things change. Having revenue levers that are easy to pull will be a key component in leading the disruption. Demand will be essentially unlimited so being able to quickly build new production and delivery facilities will be key.

I don't expect huge profits for years, I do expect unbelievably fast growth.
 

Lycanthrope

S3XY old dude
Supporting Member
Nov 15, 2013
9,866
76,695
At home
I don't see any mirrors here:
ELOdJMWVUAAOtdX.jpg


I'm fully expecting the Trimotor Cybertruck I take deliver of ASAP will have mirrors (and they will look angular and badass) and it will also have appropriate cameras so I can remove the mirrors when they are no longer mandated!

Are there ANY other car manufacturers that take their prototypes out into the wild, never mind to a restaurant? I can imagine most prototypes don't even drive.
 

PeterJA

Active Member
Sep 26, 2013
1,038
10,454
San Diego

For whatever it's worth, I too don't like to see members here accused of being shorts or FUDsters because they predict the short-term stock movement will be down or flat. If you disagree, fine; you don't need to malign anyone's motives, despite the temptation to lump all TSLA concerns with the Spiegels and Antons.

Unlike TSLAQ, I welcome all opinions and info about Tesla, including from shorts like the very polite gentleman who posted here months ago. Divergent (even ignorant) opinions can stimulate discussion that makes me more informed and confident about my investment.
 

kengchang

Active Member
Jul 17, 2017
2,440
14,618
California
@PBRStreetGang7
I didn't know about the intermodal in Birmingham. Can anyone provide more information about that. Are cars being transported by rail to that location? In the past three weeks I seen trucks loaded with Teslas on I-85 going north from Atlanta. That didn't make sense to me then, but now it does if east coast deliveries go through Alabama.

Tesla started using rail again in Q3 2019 I believe

Zachary Kirkhorn -- Chief Financial Officer Q3 2019
We realized improvements in labor hours per vehicle as well as other costs such as warehousing, logistics, delivery and import related items. We are also making continued progress reducing material costs, including commercial negotiations with suppliers.
 

ggies07

Supporting Member
Supporting Member
Nov 8, 2012
3,880
7,446
DFW
Got to say this is one of the weaker Kathy interviews. You can't try to explain your bear case that Tesla will only sell cars but then end with Tesla has other moats like energy and AI. She should have explained more about vertical integration, high margins, no dealers, etc etc to show them why Tesla can have a market cap higher than Toyota EVEN though Tesla will move less cars than Toyota. Hell the fact that Tesla will own all the "gas stations" that Toyota doesn't is another revenue generator(even though Tesla said it's not going to be but whatever, they can change their minds).
She was doing just fine until that jackass decided to basically bully her...but she did a great job with a smile on. I guess she needs to go on this type of platform for her business and funds, because I would have looked at them a long time ago and said "Cut the bullshit out Todd"..... :)
 
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M3Rider

Supporting Member
Supporting Member
Oct 3, 2018
1,484
7,503
CO

ZsoZso

sleeping cat
Supporting Member
Apr 24, 2014
1,840
11,408
Mount-island
EVs having a 15% marketshare in 2025?

Interesting. By my math Tesla’s marketshare in 2025, taking the midpoint of their 50%-100% growth target:

= 400,000 cars / year * 1.75^6 = 11.5M cars / year.
11.5M / 80M = 14.4%, so he’s predicting a 0.6% marketshare for all other manufacturer’s EVs combined:)

Of course that’s assuming Tesla’s Robo-Taxi efforts have completely failed and not started to displace gasoline car sales on a 5 to 1 basis!

The part I highlighted sounds about right.
The Spiegel-like thesis about incumbents waiting for the market to be ripe, then sweeping in by producing EVs in 1-2 year time frame that out-compete Tesla has been proven dead wrong over-and-over again with every single attempt the incumbents have made and reached actual production to market: Chevy Bolt, Jaguar Ipace, Audi étron, Mercedes EQC (did I leave out any other that actually made to market -- not counting limited compliance plays?).

Everyone agrees auto market's future is electric (time-frame opinions differ), yet no analyst or MM-talking head makes the extrapolation that those who have 0% market-share in EVs have no future, period! (looking at you Toyota)

They can't just wake up and leapfrog the companies that put in the R&D and battery manufacturing investment needed for decades already.
 

StealthP3D

Well-Known Member
Dec 12, 2018
9,758
77,934
Maple Falls, WA
For whatever it's worth, I too don't like to see members here accused of being shorts or FUDsters because they predict the short-term stock movement will be down or flat.

Three points to that:

1) It wasn't the perspective that made me call it FUD, it was that he repeatedly defended that news of a single car crash was going to prevent a significant rally. It became FUD when he tried to move an insignificant event into front and center stage with over 10 posts insisting this was a big deal. It's not.

2) I will always call it out when I see fear, uncertainty and doubt being spread.

3) I didn't accuse anyone of being short.
 

pnungesser

BarNun
Dec 9, 2015
284
1,327
Mill Spring, NC
Tesla started using rail again in Q3 2019 I believe

Zachary Kirkhorn -- Chief Financial Officer Q3 2019
We realized improvements in labor hours per vehicle as well as other costs such as warehousing, logistics, delivery and import related items. We are also making continued progress reducing material costs, including commercial negotiations with suppliers.

I guess I didn't read anything in that statement that would indicate using rail to supply the east coast. Rail was discussed on this forum in the past and the consensus was that it was too slow and unreliable. That was maybe in the context of shipping to the east coast to load ships and avoid the time (and expense?) necessary to go through the canal.
 

kbM3

Active Member
May 22, 2017
1,927
10,189
Orlando
That's doubtful. A regular wireless provider has to account for a lot of expenses that Tesla can ignore (or consider a normal part of business):

Advertising
Customer Acquisition
Customer Retention
Billing

By buying wholesale and doling it out to individual cars I expect it to be somewhere between revenue-neutral and slightly profitable. And it's something that Tesla is free to change the price on in the future.

Wall Street would normally go gaga over a company that had the kind of customer growth Tesla has when every customer has a Tesla account for recurring billing, a direct portal to their phone and a large touch-screen in their car that can be used as a point of sale terminal. Tesla is currently choosing to not monetize this in any significant manner at this point in time but I suspect it is what will drive revenues to be able to rapidly expand production capacity (batteries, cars, trucks and solar) and enter new markets in the future. The disruption that is upon us will be shocking in terms of how quickly things change. Having revenue levers that are easy to pull will be a key component in leading the disruption. Demand will be essentially unlimited so being able to quickly build new production and delivery facilities will be key.

I don't expect huge profits for years, I do expect unbelievably fast growth.

Plus the fact that customers are only in their vehicles 2 hours a day, and unable to stream video while driving, so data usage would be far less.
 
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Reactions: pnungesser

ReflexFunds

Active Member
Dec 7, 2018
1,152
24,367
-
in Europe, they need to do 20k this month to keep on par with Q3, and perhaps more if they need to get to 105k for this quarter.

Feasible?

Yes I think so. Based on my estimates below Tesla has another 20k Model 3s alone in Europe/on route (vs the 10k Model 3s delivered so far QTD). Given how early they appear to have sold out the production allocation in Europe, I think there is a good chance of getting nearly all these cars to customers before Q end. Unless there are any one off homologation or delivery problems that can't be fixed before year end.

Thanks for this, I decided to have a bit more detailed look at all this data.

China Deliveries Estimate
First of all, I am almost certain EVSales Blog China sales numbers are wrong. For most countries their data is based off official registration data (or easily extrapolated data like for the UK), but where this doesn’t exist they just plug in an estimated number. As far as I can tell there is no analytical basis for their Model 3 China sales numbers.

Tesla does however disclose China revenue. I do not think Tesla have any meaningful business other than Autos business in China, and I also don’t think any of their sales in China are subject to lease accounting. Therefore I think all the China revenue is from car sales.

This is $779m in Q1, $690m in Q2 and $669m in Q3.

Tesla’s average revenue per cash car sale excluding credits and adjusting for the one off lease value adjustment in 1H was: $61.5k in Q1, $57.4k in Q2 and $56.7k in Q1.

I think China ASP is likely a bit higher than group average given Europe S/X mix is lower (likely meaning China is higher). Adjusting for 25% S/X mix in China (vs 18-19% group average) adds $3.3k to these average revenue per car numbers.

This all leads to China deliveries of 12.0k in Q1, 11.4k in Q2 and 11.2k in Q3, of which 75% are Model 3.

Quarterly Deliveries by region breakdown estimate

Using this China estimate together with EV Sales blog European quarterly Model 3 registration data leads to the below quarterly deliveries breakdown for Model 3.

View attachment 484551

I don’t trust the InsideEVs US monthly deliveries numbers - they have never made much sense and they have never explained their methodology (and if it is based on some extrapolation of registration data it will be out of sync with real deliveries). So for 1Q19 North America deliveries are just backed out from the known total deliveries, known European deliveries and estimated China deliveries. For Q2 we had a very specific source at Electrek that implied NA deliveries were a few hundred short of its June goal of 33k and Q2 goal of 61k. So I take this as 60.8k 3/S/X deliveries in NA in Q2 or 49.5k Model 3s taking the 81% group average 3 mix. For Q2 these numbers largely all reconcile but leaves a bridging number of 1.4k in Other (JP, AUZ, NZ, KR, Taiwan, HK) - we know a small shipment was sent to Japan at the start of April so this could make sense, but its also possible my US Model 3 mix is slightly underestimated. For Q3 I plug in 3k JP, AUZ, NZ, KR etc deliveries, which is just a guess. The NA deliveries is then backed out from the rest of the numbers. The decline from Q2 to Q3 makes a lot of sense given the demand pull forward to June tax credit step down.


Loading days estimates

View attachment 484554

I pulled the shipment and loading date data from the shared file but reorganised the numbers slightly to attach the loading days to the quarter the cars were likely produced rather than when the ship actually departed. This moves the first two shipments in Q4 into Q3.

My loading rate is calculated from the known European delivery numbers + estimated change in leftover inventory each quarter. This ending inventory estimate for each Q is taken as the EVSales blog deliveries for the first month of each quarter (cars sold before the new ships arrived). These shows loading rates at a low of 1.01k per day in Q1 to a high of 1.17k in Q2. I’m not sure the exact reason for variation, likely just some fluctuations in delays/holidays while in port etc.

I see no reason why a Chinese car will take longer to load than a European car, however the European ships are all Model 3s (except maybe Norway?) given S/X are sent via a separate route in containers to Tilburg. China ships also contain the S/X, so loading rate of Model 3s per day should be 75% of the European rate (again taking the 75% mix assumption).

This shipment information excludes ships to Japan and Korea sent from SFO and also excludes the 8 small ships sent in Q3 and 8 ships sent in Q4 to Auz/NZ from Oakland which contained Model 3s. I’m also pretty sure some shipments to Korea/Japan/Hong Kong/Taiwan have been missed somewhere in Q3 and Q4.

The Q4 shipments estimates take an average 9m19 loading rate of 1072 per day.​

Of note here is that while the international Model 3s produced in Q4 looks to be up just 14% vs Q3, these were produced in a significantly shorter period of time. In Q3 I estimate International cars were being produced in bulk for the first 10 weeks of the quarter and then the final 5 days for a total of 75 days. For Q4 US deliveries started to ramp 2 weeks earlier and I estimate just 8 weeks of bulk international production or 56 days. So this is an increase from 3.3k to 5.0k in International production per week during these periods. But it leaves a big question mark on exactly how many North America cars were being produced on average in the same weeks international cars were being made. The raw data in Troy’s spreadsheet suggests US delivery numbers were broadly flat QoQ in this period despite likely starting the Q with lower inventory (on my estimates below) - so this suggests to me a similar US production level, and the delta in International production could well be the delta in overall Model 3 production QoQ (so from 6.1k in Q3 to 7.9k in Q4) but with very low confidence in this.

Inventory by region estimates

View attachment 484553

As stated previously, Europe Model 3 inventory is taken as the first month sales from EV Sales Blog.

For China inventory is taken from the delta between shipment estimates and deliveries estimates for each quarter.

My Other (Auz etc) estimate is a complete guess.

The Ship to Europe/Japan is from ships which were loaded very early in the quarter - these cars were likely on their way to SFO or waiting at port at the end of quarter.

Total Model 3 inventory is backed out from reported production and deliveries numbers since production began.

North America inventory is backed out from all the above numbers.​

Overall this gives a maximum possible European sales of 30.1k Model 3 sales in Q4 (shipments + inventory), 13.6k in China and 4.7k in Other.

I think there is a lot of potential for a very significant inventory reduction in Q4 if the final week of production is dedicated to California deliveries (rather than to filling Q1 ships). Europe should largely sell out. China is a larger uncertainty but there should be a demand rush ahead of the Dec-15th tariff increases.

Conclusion

I’m not really sure what the point of all this is, but to me it is suggestive of a large production ramp and potential for large reduction in inventory in Q4, but gives nowhere near the certainty to know for sure.

S&X likely finished Q3 at 7.5k inventory by the way. I think it is potentially harder to reduce inventory to as low levels (in relative terms) as Model 3 given the extended route via Tilburg. However the reduction in options to just 100KWh should make lower S&X inventory much easier too.
 

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