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

[gerebgraus]

As the year and thread closes, let's see how I did:



I'm giving myself 6.5 out of 10, which I think is pretty decent. Happy to see the 'Musk doing something stupid' going un-crossed.

I missed:
-Next major GF1 build out. I think we see this in 2020 now.
-Production Semi specs.
-Customer comms to third-grade level. Since people are still arriving to deliveries to be told their car isn't there, Energy reps take weeks to reply, etc, this is definitely still a work in progress.

I'm counting superchargers in ND as correct since they're under active construction.

My 2020 list:
-Production Semi specs
-GF1 expansion (exterior)
-500k+ vehicles sold
-Model Y deliveries
-Model S/X interior refresh to align with 3/Y/Cyber
-GF4 nears completion (I don't think it'll be producing in 2020, but I'm more optimistic than most on its timeline and think it'll be close.)
-FSD may hit feature complete in 2020, but we will not get 'real' hands-off FSD in 2020.

Happy New Year, all. 2019 was good. I think 2020 could be great.

A different angle:
In 2019
-Tesla managed for the first time to manufacture and sell cars with less cost than "comparable" German premium carmakers.
- A substantial minority of car buyers have accepted that these Teslas are better cars and deal than the German premium cars.
In 2020
- Tesla will cut costs /car about 10% while dramatically improving quality, functionality, e.g. autopilot, FSD and infrastructure.
- A substantially higher minority of premium car buyers and also car/tech/environment will accept that buying any other car than Tesla is a mistake.
- many high mile (or km ) car users will realize that Teslas are not only much better for the drivers but their TCO is cheaper than an econobox. e.g. using a Tesla 2 shifts/day for uber is much cheaper than using any other car.
-Tesla further reduces the capital cost and time to radically increase manufacturing capacity.
-Improvement of cost and quality of energy products will make that segment for the first time significant and profitable.
-----------
The missing info: How and how much will Tesla reduce the battery cost and increase production to the TWh level. I am looking forward for the battery day, but i doubt that it will happen in Q1.

 

[gerebgraus]

The largest number of unsold in Q4 Teslas will be in the Fremont Factory Delivery Event Parking Lot. We will be able to count *exactly* how many there were... Stay tuned. (10 minutes left it's uploading to YouTube now.)

Wall $treet "analysts" focus on quarter-by-quarter deliveries and profits. What they do just increases price volatility which helps machine trading to profit from the swings. Personally, as a long-term buy-and-hold investor I don't care about these numbers. Whatever was not booked on 12/31/2019 will appear in 2020 Q1. I care about year-over-year growth % in deliveries and am very happy with that ever since 2011 when I started investing. Of course, now that cash flow is self-sustaining that is awesome for longs. I also care about timely new product introductions like Model Y in 2020 which will be a huge units driver; the Chinese Giga ramp, and whenever the Berlin Giga comes online. Finally, I expect TSLA to be added to the S&P 500 in 2020 which will force all those EFTs and mutual funds that track it to buy TSLA.

We could guesstimate how many units TSLA will produce / deliver in 2020?

Russ

The most unsold Teslas are Performance Model 3-s in Netherland. They have been showing 50 new white performance Model 3-s for the last couple of weeks. Since they never show more than 50 inventory cars for one query we should assume that the number of cars is much higher. The fact that the listing is still there indicates that the rumor that all these unsold inventory cars would be picked up by leasing company was false.

 

[engle]

Thanks for this data, @gerebgraus! Looks like they overestimated Model 3 Perf demand in the Netherlands. Perf Model 3's have the highest Model 3 margins of course. However, if you count the exact number of leftover cars just in the Fremont Factory Staging parking lot shown in my video it is definitely way more than 100:

There were also at least 100+ in the Fremont Factory Outbound Logistics Lot that never went anywhere. I will post my driveby of that later today PST.

Does TSLA lease vehicles directly to customers in the Netherlands like they do in U.S.?

-russ

The most unsold Teslas are Performance Model 3-s in Netherland. They have been showing 50 new white performance Model 3-s for the last couple of weeks. Since they never show more than 50 inventory cars for one query we should assume that the number of cars is much higher. The fact that the listing is still there indicates that the rumor that all these unsold inventory cars would be picked up by leasing company was false.

 

[DrKenneth]

I sold recently at 349, which in hindsight was a bit early but it was my plan when I got in at 220 and 240. I'll stay out until we are well into Q1 again. I think the tail winds of Q4 will have turned by then along with the less favorable seasonality and sentiment will probably go down with them.

 

[EVMeister]

I sold recently at 349, which in hindsight was a bit early but it was my plan when I got in at 220 and 240. I'll stay out until we are well into Q1 again. I think the tail winds of Q4 will have turned by then along with the less favorable seasonality and sentiment will probably go down with them.

What's your plan B, if you're wrong and things continue on the upwards trajectory? Hoping TSLA goes down right around Battery Investor Day seems overly optimistic (pessimistic?) to me.

 

[DrKenneth]

What's your plan B, if you're wrong and things continue on the upwards trajectory? Hoping TSLA goes down right around Battery Investor Day seems overly optimistic (pessimistic?) to me.

No plan B. Tesla did not rally before (and certainly not after) autonomy day so battery day doesn't worry me. I'll just have to live with seeing you all get rich . I think the current valuation is too high to justify holding. Of course if Tesla grew into it's price then Ill reconsider but that is more of a medium term thing.

TSLA is quite a manic-depressive stock so I try to make my money holding 1-6 months at a time. Has worked ok so far.

 

[engle]

It's impossible to "time" a volatile name like TSLA accurately IMHO.

Thanks to the Wall $treet "analysts" and our TSLAQ friends, TSLA historically has tons of volatility. IMHO @DrKenneth will be able to get back in below $400 sometime during Q1. Tesla will be hard-pressed to match or exceed Q4's sales since in the USA everyone was going absolutely nuts to get their $1,875 Federal IRS Tax Credit which is no more here. They may match or exceed units depending upon continued Euro uptake and the Model 3 ramp at GF4 in China. Personally, I would not wait to try to get back in once Model Y starts ramping. I think that will be too late since #(Model Y) > #(Model 3). I toured Tesla Fremont Factory for about the 7th or 8th time since October 2011 Model S Factory Ride Event last night under NDA. There was a very large area chainlink fenced-off. You can guess what's going on inside it. I was told to return in 2020 to see it in operation. ;-) [it's public knowledge]

What's your plan B, if you're wrong and things continue on the upwards trajectory? Hoping TSLA goes down right around Battery Investor Day seems overly optimistic (pessimistic?) to me.

 

[elasalle]

If Tesla meets it's yearly guidance (or comes slightly below) of 360K, the drop in deliveries in 2020 Q1 will be ignored as seasonality. What will matter more is the guidance it gives in Jan C/C for 2020. ... (as well as GF3, MY, Battery day)

So I would not count on Q1 dip in a big way. Cheers!!

 

[sparcs]

If Tesla meets it's yearly guidance (or comes slightly below) of 360K, the drop in deliveries in 2020 Q1 will be ignored as seasonality. What will matter more is the guidance it gives in Jan C/C for 2020. ... (as well as GF3, MY, Battery day)

So I would not count on Q1 dip in a big way. Cheers!!

If there is positive guidance for Q1 2020, stock could find much stronger support at current prices. We will have to see in three weeks what they say in the earnings report/call.

 

[Unpilot]

Good Morning and happy New year to all TMC people.

Prediction's of TSLA being added to SP 500 seem almost like asking the Fox to guard the hen house.

This is from the qz.com article referenced up stream.

"They meet once a month to discuss the potential revisions to the S&P 500 and other indexes. Unlike Murphy, and Blitzer before him, other committee members’ identities are kept secret (paywall)."

What are the odd's those secret member's are not Wall street insider's?
It is no secret Musk does not want to give money to wall street any more through Capitol raises using the regular channel's (GS,MS)

Maybe I am just a paranoid conspiracy theory nut job.....but I don't trust those rent seeker's one bit.

 

[The Accountant]

I love that little spreadsheet/chart. Can you post a link, or is this your own creation from the raw data? I would love to have a way to keep up with these numbers in the future. Without working too hard, of course.

That's a chart I created. I will update it each quarter.

 

[smalltownguy]

Tesla will be hard-pressed to match or exceed Q4's sales since in the USA everyone was going absolutely nuts to get their $1,875 Federal IRS Tax Credit which is no more here.

Really? I saw no one going nuts about the 1875. When the 7500 was ending, yes, that was nuts.

 

[engle]

@smalltownguy, Here in Silicon Valley, people at the Fremont Delivery Center and the Factory waited many hours to get their vehicles. For example, one guy started waiting at 8:30 am he told me at 9 pm at the factory - he still didn't have his car. Other people had cars with "in production" status literally being built while they waited. I captured several livestream Twitch videos at the factory.

This is the aftermath at 12:25 am you will see many people still waiting for their 2020 Q1 deliveries:

Twitch

Please follow my new TeslaRuss twitch channel if you find the videos of interest.

Thanks!

Russ

Really? I saw no one going nuts about the 1875. When the 7500 was ending, yes, that was nuts.

 

[Right_Said_Fred]

If there is positive guidance for Q1 2020, stock could find much stronger support at current prices. We will have to see in three weeks what they say in the earnings report/call.

Elon tweeted that during the Q1 call he will talk about where Tesla is going in the next 5 years. Although the market takes his time lines with a grain of salt, his predictions regarding production have become more accurate. So maybe the market will react positively to where Elon thinks Tesla will be in 2024.

Twitter

 

[Jack6591]

Every time someone Googles a question, Google’s AI improves. Every time someone uses Tesla’s NOA Tesla’s AI improves. They get better and better.

More and more renewable energy sources are being added to the grid — the grid is becoming cleaner and cleaner. The longer you drive an EV the cleaner it becomes. They get better and better.

Over time the rings, gaskets and seals of an internal combustion engine wear. That’s why old cars smoke. They pollute more and more; they get dirtier and dirtier.

Tesla shorts ignore science at everyone’s peril. They become more and more culpable.

Happy New Years to all my Tesla long friends. Science deniers...wishing you all you have earned.

 

[Driver Dave]

https://www.nytimes.com/2020/01/01/business/future-electric-car

10 Electric Vehicles to Watch

Except Tesla Y

NY Times auto section.

Really showing the control local dealer ad dollars have over their journalism.

In this article the driver or investor has no idea the Y is coming and the updates the S and X get.

 

[lklundin]

For Denmark during December 2019 Tesla S/3/X sales were: 67/587/30,
making the Model 3 the most sold car there that month (w. VW Passat & Nissan Qashqai 2nd & 3rd):
Bilimp.dk - Vis nyhed

PS. I can't find the thread dedicated to tracking delivery numbers, sorry...

 

[VValleyEV]

It's true that Tesla records R&D in Operating Costs instead of COGS (Auto makers include them in COGS).
In Q3, Tesla had margins of 19% (see below). If you included R&D in COGS, Tesla's margins would have been about 14%. Still very competitive when compared to Fiat/Chrysler and Ford (both at 13% in the lasted quarter). VW shows 19% but they have huge scale.

View attachment 494862

Here are some of my thoughts:

• Regardless of where you put R&D, they fall to the Operating Income for all companies. So OpInc is apples to apples and with Tesla showing 4% OpInc % in Q3, they beat FCAU (1%) and Ford (3%) and lag VW (7$) - see table above.
• Most companies outside of Auto do not include R&D in COGS - seems to be unique to Auto industry.
• I believe that the Auto companies put R&D into COGS because most of their R&D is related to autos that are in market. Their R&D is to enhance the sales of existing cars. Whereas Tesla spends much of their R&D on cars that have not yet come to market and have no sales (e.g. MY, CT, Semi)
• It is quite amazing that Tesla can drive margins of 19% and OpInc of 4% with only $6B in quarterly sales. Once Tesla gets to $20B or even $10B in Quarterly sales, they will gain huge economies of scale and will outperform all of the competition.

EDIT: Need to add this: Should we be comparing Tesla to companies in the Auto industry? I don't think so. Tesla is much more than an Auto company.

Thanks!! Question:

I easily verified the Tesla Q3 margin numbers of 1.2B/19% in the included chart from the 10-Q.

I can’t seem to do the same for the Ford numbers shown as 4.7B/14% in your chart. Here is my source for 2019 Q3 10-Q Ford filing:
https://s22.q4cdn.com/857684434/files/doc_financials/2019/q3/Ford-Q3-2019-10-Q-Report.pdf

In the Ford 10-Q, I see “EBIT Margin for Automotive Segment” as 3.9% Globally, and 8.6% for North America. How do I get 14%? Is this a difference keyed by “EBIT”, or “GAAP”, or something else?

Thanks for you help. Trying to make sure I know how to compare financial statements between Tesla and OEMs.

 

[Christine69420]

For Norway during December S/3/X sales were: 31/1240/117,
ref Tesla Registration Stats making the Model 3 the most sold EV
of a total of 3810 sold that month ref Registreringer av nye elbiler i Norge


Official stats for December in Norway is not yet out on OFV – Opplysningsrådet for veitrafikken

 

[Remus]

Good Morning and happy New year to all TMC people.

Prediction's of TSLA being added to SP 500 seem almost like asking the Fox to guard the hen house.

This is from the qz.com article referenced up stream.

"They meet once a month to discuss the potential revisions to the S&P 500 and other indexes. Unlike Murphy, and Blitzer before him, other committee members’ identities are kept secret (paywall)."

What are the odd's those secret member's are not Wall street insider's?
It is no secret Musk does not want to give money to wall street any more through Capitol raises using the regular channel's (GS,MS)

Maybe I am just a paranoid conspiracy theory nut job.....but I don't trust those rent seeker's one bit.

I am not sure about that. Usually index funds buy stock of the company in anticipation of this event. Unpredictable decision from them would disturb the performance of the the index funds. If they decide against including TSLA this time they would have to do that in some later time that is very unpredictable. With Tesla at even higher market cap, the index funds would have even less preparation for the disturbance. Some people important would be pissed