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

[Sancho]

Actually, the market didn't digest that outcome, and the Q3 results Tesla posted took them (and us) by complete surprise, and TLSA gapped up about $60 and is now about $100 higher than the day the Q3 results were published.

Small anecdote: when I was reading the Q3 financial report on October 23 as it was released I initially read the "$143M GAAP net income" headline as ($143m), i.e. a smaller than expected loss. I was pleasantly surprised about the narrowing GAAP loss (TMC bulls expected a -$200m-$300m GAAP loss) but thought the after-market price reaction a bit excessive.

Then when I was reading the fine-grained numbers did I realize, several minutes later, that Tesla actually posted a profit.

True. What the market first digested was that a high 90s delivery number was still pretty impressive. The profit picture would not be clear until the earnings release.

This time, because of what happened in Q3, WS may anticipate strong profits if Tesla reports strong deliveries.

 

[willow_hiller]

(1) IN GENERAL.—In the case of any new qualified plug-in electric drive motor vehicle sold after the date of the enactment of the GREEN Act of 2019— ‘(A) if such vehicle is sold during the transition period, the amount determined under subsection (b)(2) shall be reduced by $500

I think it's ambiguous at best at the moment. Since section (A) is indented under section (1), I interpret that to apply to vehicles sold after the enactment of the act, but before the end of the transition period.

 

[FrankSG]

How to become a millionaire shorting TSLA:

MadPolak Sparky on Twitter

Spoiler: Answer

Start with a billion $

 

[Tslynk67]

Nasdaq Futures up 0.40% on positive China growth figures

 

[davecolene0606]

I'll say it again this week....it's gonna be a good week for Tesla.

Just watch.

From your mouth to whoever is manipulating the SP this week!

Fire Away!
“It’s the batteries stupid!”

 

[mongo]

I think it's ambiguous at best at the moment. Since section (A) is indented under section (1), I interpret that to apply to vehicles sold after the enactment of the act, but before the end of the transition period.

If tst where so, then the transition period would start with the latter of the passage of the act or hitting 200k cars, not 2009 (original act).

‘‘(2) TRANSITION PERIOD.—For purposes of this subsection, the transition period is the period subsequent to the first date on which the number of new qualified plug-in electric drive motor vehicles manufactured by the manufacturer of the vehicle referred to in paragraph (1) sold for use in the United States after December 31, 2009, is at least 200,000.

Keep in mind, this is an amendment to the existing act, not an entirely new one. Thus, changes are retroactive to the original passing.

 

[KarenRei]

Yup. Not only is this bill unlikely to increase Teslas sold due to the terms of the proposed extension, it is likely to slow down the ramp up of EVs by other automakers.

As discussed when I introduced this topic, to Tesla it's about:

• Increasing the ASP for the first 400k. People get their cars for $7,5k cheaper. Tesla can postpone any planned price cuts, and people will buy more options, which Tesla can also charge more for if they choose to, or delay deliveries on less profitable vehicles to encourage upsell, or only offer new range/performance improvements over the course of the year to higher-end vehicles, or whatnot.
• The structure of the credit does not incentivize "having production capacity immediately surge up". It incentivizes having production capacity surge starting in the quarter that you hit your +400k limit. So if Tesla holds it at just under 400k US sales by, say, the end of Q1 '20, then Tesla wants production to surge in Q2 '20. That's plenty of time to really ramp up production.

The EV bill presents an interesting delima to someone about to take delivery of a Tesla in the next two weeks. Do they take delivery and guarantee the current credit which expires at the end of the quarter, or cancel delivery in the hope of getting a $7,000 credit in January, knowing that if it doesn't pass, then they just lost the expiring credit.... One in the hand, vs two in the bush....

A person not only has no idea whether it'll pass, but also when even if it does, or in what form, or what Tesla will do with their pricing. Additionally, if a person already has an order, Tesla just increased pricing, so cancelling and reordering would be a price hike.

The way I read the bill, if they buy now and it passes in 2020, they get the $7000 amount. There is no downside to purchasers.

(1) IN GENERAL.—In the case of any new qualified plug-in electric drive motor vehicle sold after the date of the enactment of the GREEN Act of 2019—

.... (A) if such vehicle is sold during the transition period, the amount determined under subsection (b)(2) shall be reduced by $500, and

.... (B) if such vehicle is sold during the phaseout period, only the applicable percentage of the credit otherwise allowable under subsection (a) shall be allowed.

(2) TRANSITION PERIOD.—For purposes of this subsection, the transition period is the period subsequent to the first date on which the number of new qualified plug-in electric drive motor vehicles manufactured by the manufacturer of the vehicle referred to in paragraph (1) sold for use in the United States after December 31, 2009, is at least 200,000.

Let me highlight the part that you didn't:

(1) IN GENERAL.—In the case of any new qualified plug-in electric drive motor vehicle sold after the date of the enactment of the GREEN Act of 2019— ‘(A) if such vehicle is sold during the transition period, the amount determined under subsection (b)(2) shall be reduced by $500

Nothing that follows is relevant unless the vehicle is sold after the date of enactment.

The bill adds the new subsection, (e) to the previous bill, which starts with (1) above. It does not amend the preexisting language; it just adds a new, related credit at the end, which is triggered for vehicles meeting the condition "sold after the date of the enactment of the GREEN Act of 2019". You can't jump down into subsections without meeting the conditions in the parent section.

All other paragraphs begin "For the purposes of this subsection".

It's pure wishful thinking to think that congress would write a bill to "incentivize" something that's already happened.

 

[avoigt]

Started? They have been at it for years and never finished... ;-)

If you check here: BAFA - Elektromobilität you will find the German authorities say that at this point there is nothing to be seen / nothing to be heard and people should go away until January 2nd - there is still no news about the new subsidies...

On the other hand it is not all bad: the German (federal) minister for Economic development Altmaier is offering the state of Brandenburg assistance in getting Tesla accommodated, up and running: Altmaier bietet Hilfe des Bundes für Tesla-Fabrik in Brandenburg an (a few years ago that guy famously had a public outburst when discussing with German car CEOs about when they will finally be able to offer an EV as good as Tesla - so he gets it).

All what is happening is that buyer will wait with their BEV purchase until the incentive is implemented and in the meantime Tesla delivers in countries where the demand is high e.g. NL.

At the end of the day that does not make any difference for Tesla sales in Europe while the situation by country is heterogenous which is the reason why I stepped back from the focus on demand and supply in specific countries in e.g. Germany.

The overall picture remains very much intact and without stability of incentives to name just one factor you don't have a clear picture but if you look at e.g. all of Europe you do.

 

[davepsilon]

The etron with all its inferior tech is $74k? I think the Model Y is going to crush etron, Jaguar and EQC in its first year of debut:

Why You Should Care About the Audi E-Tron

Model Y is $39,900, right? Buyers would have to be crazy to spend $74k on a car with no over the air updates, loaded with bugs, and inferior batteries.

Judging from Audi’s poor start in the EV race, I believe deposits for the Model Y is also the reason contributing to Audi’s poor sales numbers. Model Y may also be the reason Mercedes EQC are delayed in the US, the EQC may be DOA once Model Y hits market next year.

2021 Mercedes-Benz EQC Prices, Reviews, and Pictures | Edmunds

EQC is $68k. Both Audi and Benz are priced way too high in comparison to the proven Tesla brand and the up and coming Model Y, which starts at $39,900.

Here’s the breakdown on range:

Mercedes EQC 200 miles $68k

Mercedes-Benz’s electric SUV will start at $67,900

Audi Etron 204 miles $74k

Audi e-tron | The first purely electric SUV from Audi | Audi USA

Jaguar iPace 234 miles $69,500

2019 Jaguar I-Pace electric car range: Why the short circuit?

All three incumbents use batteries rated as 90kwh or above, falling significantly short of tesla’s 70kwh battery pack rated to be around 230 miles of range.

No wonder buyers aren’t rushing to the dealerships, they’re all waiting on Model Y!

For some luxury goods quantity demanded increases as the price increases ... You are assuming everyone will be smart but I think I'd rather bet that there are a sizable pool of people who would rather look rich than smart.
Veblen good - Wikipedia

 

[jerry33]

The EV bill presents an interesting delima to someone about to take delivery of a Tesla in the next two weeks. Do they take delivery and guarantee the current credit which expires at the end of the quarter, or cancel delivery in the hope of getting a $7,000 credit in January, knowing that if it doesn't pass, then they just lost the expiring credit.... One in the hand, vs two in the bush....

Not an issue. They can purchase a second one if the bill passes.

 

[jerry33]

Plus it should be a cash rebate, not a tax credit, as there are many potential buyers who don't pay enough tax to take advantage of the credit. A rebate would be far more effective and fair as every purchaser could take advantage. Also, while it may have been mentioned, how would it apply to a lease? A lot of new Teslas are leased instead of being purchased outright...

I'd assume it would be the same as now. The purchaser (lease company) gets the credit which they may or may not pass on. (I think most of them do pass it on, but sometimes in the form of nothing down).

 

[KarenRei]

Well, geez, this should help the bill pass:

-----
TITLE II – RENEWABLE FUELS Sec. 201. Biodiesel and renewable diesel (§§ 40A, 6426, and 6427). The provision extends the income and excise tax credits for biodiesel and biodiesel mixtures at $1.00 per gallon through 2021 and phases the credit down to $0.75 in 2022, $0.50 in 2023, and $0.33 in 2024. The credit expires at the end of 2024. The provision also extends the $0.10-per-gallon small agri-biodiesel producer credit through the end of 2024. The provision provides a retroactive extension of these credits for qualified sales occurring between January 1, 2018, and the date of enactment of the provision, and requires the Secretary of the Treasury to issue guidance to provide for a one-time submission of claims related to these credits.
-----

Easy way to buy the support of everyone representing a rural district

 

[KarenRei]

Contrarily, this section is just packed full of trigger words are automatically going to make Republicans hate it:

-----
TITLE VI – ENVIRONMENTAL JUSTICE Sec. 601. Qualified environmental justice program credit (§ 36C). The provision creates a capped refundable competitive credit of $1 billion for each year from 2020 through and including 2024 to institutions of higher education for environmental justice (EJ) programs. The base credit is 20% of costs to be spent within five years by the receiving institution. Programs with material participation from Historically Black Colleges and Universities (HBCUs) and Minority Serving Institutions (MSIs) are eligible for a higher credit of 30%. Qualifying EJ programs shall be designed to address or improve data about environmental stressors for the primary purpose of improving or facilitating the improvement of health and economic outcomes of individuals residing in low-income areas or areas populated disproportionately by racial or ethnic minorities. Institutions receiving allocations shall make publicly available the application submitted to the Secretary and submit annual reports describing the amounts paid for and expected impact of the projects. The Secretary shall publicly disclose the identity of the institutions receiving the allocation and the amount of the allocation.
-----

I can't imagine that surviving the Senate. A billion dollars per year to "environmental justice" at "Historically Black Colleges and Universities and Minority Serving Institutions"? Might as well title it "TITLE VI - Easy Hippie-Punching Clickbait For Fox News"

 

[Chickenlittle]

I think it's time again. The bus driver would have to check each student, and then there's what to do if one or more students unbuckled their seat belts. Also the kind of accidents school busses tend to be in are either very minor (to the bus because of it's mass). Or very fatal (hitting a train, falling over a cliff, hit by a semi, etc.). In most of those really bad accidents seat belts wouldn't do much. My opinion however, is that today it would be easy to have electronically monitored seat belts that would make a rude noise if the student wasn't buckled in eliminating the time factor. So justification is now rather weak. Of course there's always cost of such a system. Cost always trumps safety in organizations unless there is a real push from somewhere.

So we don’t give the option to a child to wear a seat belt because another one refuses? Perfect logic.

 

[MABMAB]

price is above the IBD buy point. Chart monkeys to the rescue!

 

[Todd Burch]

Contrarily, this section is just packed full of trigger words are automatically going to make Republicans hate it:

Clearly you don't understand American politics. You're making two MAJOR incorrect assumptions.

1. You assume Congress reads the bills they pass.

2. You assume they comprehend the words in the bills.

You have much to learn, my young Icelandic Padawan....

 

[Fobble]

How to become a millionaire shorting TSLA:

MadPolak Sparky on Twitter

Spoiler: Answer

Start with a billion $

I don't understand why do these billionaires still gamble so much after having so much money. If I were one, I would sit back and relax, buy a Tesla, install solar roof and power bank for my house, and book a trip to the space with SpaceX

 

[Sancho]

I don't understand why do these billionaires still gamble so much after having so much money. If I were one, I would sit back and relax, buy a Tesla, install solar roof and power bank for my house, and book a trip to the space with SpaceX

I don’t understand the motivation of billionaires either, but if I stay as leveraged as I am now, when TSLA hits $4000, I will let you know.

 

[mongo]

Tl;Dr; glossed over that line, agree with interpretation.

Let me highlight the part that you didn't:

(1) IN GENERAL.—In the case of any new qualified plug-in electric drive motor vehicle sold after the date of the enactment of the GREEN Act of 2019— ‘(A) if such vehicle is sold during the transition period, the amount determined under subsection (b)(2) shall be reduced by $500

Nothing that follows is relevant unless the vehicle is sold after the date of enactment.

The bill adds the new section, (e) to the previous bill, which starts with (1) above. It does not amend the preexisting language; it just adds a new, related credit at the end, which is triggered for vehicles meeting the condition "sold after the date of the enactment of the GREEN Act of 2019". You can't jump down into subsections without meeting the conditions in the parent section.

All other paragraphs begin "For the purposes of this subsection".

It's pure wishful thinking to think that congress would write a bill to "incentivize" something that's already happened.

It's not "wishful thinking" (as much as lack of coffee/ confirmation bias/ discounting 'in general'). There have been retroactive tax breaks before: Three Popular Tax Benefits Retroactively Renewed for 2017; IRS Ready to Accept Returns Claiming These Benefits; e-file for Fastest Refunds | Internal Revenue Service
However, I see your point, that is a critical sentence and creates the dual time reference clause I mentioned. That would also explain the exclusion period as being in the pothole of reduced credit (as opposed to just offsetting impact when there was no full credit incentive) which balances things out a little since Tesla would sell more cars with a credit anyway. Also gives additional meaning to 'exclusion', not just from counting, but also from the credit.

Dated changes are nothing new either, from the IRS site:

Section 30D was also modified by the American Taxpayer Relief Act (ATRA) 2013 for certain 2 or 3 wheeled vehicles acquired after December 31, 2011 and before January 1, 2014.

So green new deal's 30D update may very well result in a dark ages in 2019, based on current wording.

 

[ggies07]

We are only 15 days away from having a new thread for the next year. My OCD is getting excited for a clean slate....anyone? anyone?......