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

[Opus BC fan]

 

[JusRelax]

Sounds like that 280 per day GF3 quote from a few days ago was fairly misleading as some of us suspected. They only have 1000 cars today after seeing all the drone videos and these bullish quotes from employees.

We have all seen these run-rate numbers not translate into big delivery numbers. At this point, i'm hoping for 8k deliveries in Q1 out of GF3.

I definitely don't expect 3k x 12 weeks = 36k MIC M3s. But I think that 12k is a sufficiently conservative number.

But I hope everyone is like you, hoping for 8k -- that way, everyone will be blown away by Q1's actual MIC M3 production number!

 

[StealthP3D]

15,000 Model S&X - Cowen's Osborne projection for Q4
19,450 Model S&X - Actual Deliveries in Q4

I don't know who this guy is buying his research from, but he needs to find someone else.
For someone who does this for a living, that was a horrendous miss.

The missing piece of the puzzle is not who he is paying, it's who is paying for the numbers he publishes!

Congrats to all longs who were smarter than Cowen! I know, the bar is set very low.

These numbers are bullish AF and we have officially entered the second major leg of this bull run!

 

[Mike Smith]

This should set off another round of short covering..

I'm not worried at all about Iran. They're hoping the Democrats will win in November and reinstate the Obama nuclear deal and remove the tariffs. They're obviously not going to do anything major that would jeopardize this possibility. I think the market will realize this fairly quick.

 

[StealthP3D]

Demonstrated production of over 3k / week in China is also nice, but kind of outweighed by the fact that they only produced ~1000 units so far in my opinion. It seemed like they had produced a few thousand already based on drone footage.

I'm thinking they weren't focusing on actually making cars in 2019, they were focusing on the ability to make cars in 2020. It was all preparation to hit the ground running in 2020. The 1000 cars they actually made were the result of this, not the product of their work. It's all part of the new Stealth Mode.

 

[Navin]

Should we start focusing on S&P addition now

Yes. THIS IS THE WAY

 

[Todd Burch]

So very happy to be wrong. These numbers are amazing!

Your betrayal is forgiven. Be forewarned, I only forgive once.

 

[sparcs]

I think you are misinterpreting this: the reason they only made ~1,000 cars in Q4 at GF3 was to reduce cash consumption: at ~$45k ASP they'd have cost of goods of around $30k per unit, so these 1,000 units are already using up ~$30m of cash.

There was very little reason to consume more cash in Q4, with 112k deliveries they probably knew it in early December already that they'll meet 360k guidance without any GF3 contribution, instead they demonstrated burst capacity at GF3, trained their workforce, made the first ~1,000 units and are going to scale up their supply chain and their second shift in Q1 and hit 3k/week and beyond, and deliver most of the cars in Q1.

I wouldn't be surprised to see 20k production out of GF3 in Q1, maybe more.

It's obvious they haven't tested out steady production out of GF3 with only 1000 vehicles produced. No way to tell how this ramp will go based on one hour run-rates like 28 per hour that aren't proven out week after week.

The drone videos made it seem like there were a lot more vehicles produced and far more steady production. The quote from the employee, implied far more steady production out of GF3. At best, that seems unlikely with only 1000 vehicles produced.

i'm skeptical these run-rate quotes translate out to big numbers. I'm expecting a slightly slower ramp.

 

[AudubonB]

No.

That aged.....poorly.

(13 minutes. Probable all-time record.)



On edit: Dang! K-Rand beat me while I was pretending still to be asleep

 

[Artful Dodger]

Reactions on CNBC today are gonna be fun

Cricket chorus. The more interesting reaction will be the MMs who wrote all those $450 Call that are gonna be ITM about 30 mins from now...

 

[Fact Checking]

BTW., others have mentioned this, but it's another highlight of the P&D report:

"We have also demonstrated production run-rate capability of greater than 3,000 units per week, excluding local battery pack production which began in late December."​

This is huge, the "Battery Workshop" was rumored to be finished by March only - instead it's already being ramped up.

This is huge not just for margins in China, but also because it frees up GF1 battery supply for the Model Y in Q1 and Q2 ...

The Model Y order book should be insatiable for all of 2020 I believe, once they start delivering them.

 

[jbcarioca]

"...Fremont M3 production growth wasn't that great; they managed this feat through inventory,"

I think what seems 'not so great' was a fair amount of parts that went to China, battery packs, seats etc all are just ramping up in China so there are probably a few thousand units not produced in Fremont because components were headed to China

"which is a one-time trick)."

Yes, if you mean sales >production. However we have seen consistent improvements in Tesla inventory management, in part from matching product with destination preferences. A couple of quarters ago that was a huge problem. We still have mad quarter end rushes; in part those are be part of the 'Word of Mouth' marketing plays that are so astoundingly effective. However, they do need to plan those better and get the supply in place just a little bit earlier.



..." Now just wait for Plaid next year Sure, it's only for the really high-end consumer, but it should have a knock-on halo effect.

Both S and X have historically had a pretty wildly multi-model demographic, reduced slightly by cessation fo base models, but...I am ready to make book that Plaid. with all that implies, will surprise us all with how broad the appeal will be. The analogy I offer was the P85D appearing in 2014. People went wild, and many who really could not afford them bought them, while many exotic car owners who had Ferraris, Porsche etc ended out with them too. If Plaid works similarly the appeal will surprise almost everyone. Anyway everyone who bought Ludicrous back in 2015 almost certainly will lust after Plaid.

I know I do. For no good reason at all.

Finally I may be one of the few who think GM's will rise in Q1. Decreased costs in Shanghai plus PIK sales late in the Quarter in UK (some show up in March as the leasing companies prepare for April) plus improving results in Germany all will be positive. For P&L TE will begin to count too.

 

[StealthP3D]

Hi all! Did I miss anything while I slept in? Are we bankwupt yet?

Not yet. But obviously, one day closer to it.

 

[Fact Checking]

It's obvious they haven't tested out steady production out of GF3 with only 1000 vehicles produced.

They don't need to, the main difference between "single shift production stress-test extrapolated to 3k/week" and "sustained 3k/week production" is the supply chain - which supply chain is already working for Fremont.

Note that even with 2 shifts they'll have a graveyard shift for maintenance downtime, i.e. they'll be able to scale to beyond 3k/week very smoothly. These GF3 burst rate results are far more indicative of short-term sustained throughput than the early Fremont burst rates were.

 

[mongo]

It's obvious they haven't tested out steady production out of GF3 with only 1000 vehicles produced.

Not true:
A full shift of production is a full shift of production. The only things not fully exercised is the external supply chain to restock parts inventory and outbound logistics.

Standard auto run at rate testing.

Q4 letter will likely tell us how many 280 car shifts they ran in January.

 

[Todd Burch]

Suspect shorts are pushing down as hard as they can right now. We should bust upward soon, maybe?

 

[SpaceCash]

amazing action

 

[Todd Burch]

I literally saw the price go from $441 to $443 in one second

 

[elasalle]

The price of a Model 3 with a standard-range battery pack has been lowered to 323,800 yuan (US$46,500), from 355,800 yuan, according to Tesla’s website, compared with NIO’s electric SUVs at 358,000 yuan, and Xpeng Motor’s P7 at 240,000 yuan.After the Chinese government’s 25,000-yuan subsidy, a Model 3 car starts from 299,050 yuan.

A Tesla with the price tag of lower than 300,000 yuan is believed to be very attractive to Chinese car buyers

Tesla cuts the price of China-made Model 3 cars by 9 per cent to compete with home-grown brands in world’s No. 1 car market

Trading idea for today is to buy some NIO Puts. (just last week it was up 66%)

 

[Artful Dodger]

Upper BB opened at $461.38 at 09:30 today. LOTS of HEADROOM for a good climb.