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

[Thora]

Irrelevant to the discussion (maybe, maybe not), but possibly worth mentioning.

Firstly, a correction, I misremembered the GAAP profit @luvb2b is estimating for Q4: it's +$295m.
................

.................

He was pretty much the only modeler who expected Q3'2018 to be profitable, and got within 16% of the final profit, which was amazing.

..................

I've been following @luvb2b since 2013, and I happen to remember this post:

 

[Electroman]

Its utterly amazing to me how I am on the TSLAQ block list despite barely ever tweeting. Can't read the tweet. For stuff like this it might make sense for people to post screenshots when they can as many of us appear to be on the block list?

This is what you do: Right click on that link and select "Incognito window" and you can see the tweet.

 

[steve3]

“Chinese new energy-vehicle manufacturer #BYD opens more than 8% higher in HK.
China will not make significant cuts to subsidies NEV this year, said Miao Wei, China's minister for industry and information technology (MIIT), at a forum on Saturday.”

 

[defc0n]

Moderator Sorta-Kinda ON:

Well! We get a new member to get the tip for the Numerology Double Hat Trick! Well done, @Davmal.

(Good thing this absolutely OT occurred during a weekend).....

Spoiler

look at the post's number....

Oh man don’t remind me of that.

 

[FreqFlyer]

We don't know what products make sense for Full-Cyber, Partial-Cyber or Classic (conventional) design.

Fair bet Model S/X, Model 3/Y, Roadster, and perhaps a Gen4 car will remain conventional.

We don't know if Tesla is making if Gen4 car, or if it will be painted.

My best guess is they will make one, and it may or may not be painted, but will be conventional, or Partial-Cyber...

I agree with Karen, Partial-Cyber has lot of interesting design possibilities.

A mix of Full-Cyber, Partial-Cyber and Classic give Tesla a range of products with sufficient variety, while retaining their classic design language. Variety also gives customers more choice, and people want different things..

For Robo-taxis I don't think customers particularly care what the car looks like from the outside, they will not spend much time looking at the outside... Non-painted and hard-wearing exterior makes a lot of sense for Robo-taxis...

Here I am thinking this was a joke, but some of you are taking this seriously.................

Tesla Model S Cybersedan Is What Happens If We Cyber All The Things

 

[FrankSG]

From the article:

"According to Diess’ reckoning, one-third of the vehicle fleet on the road by 2030 would have to be all-electric in order to achieve a 30 percent reduction in fleet CO2 emissions by the same year."

But you're right, while some people may be proposing ambitious targets, I don't see this happening in Germany. Auto lobby too powerful.

Something still seems weird about this. I have a feeling the article is just slightly misquoting Diess or Diess didn't choose the right words to represent what he meant, because I can't imagine governments being able to impose penalties on past vehicle sales. Usually when they talk about "fleet" in the context of emission regulations, it means the fleet produced in a specific year by a specific brand, not the fleet of vehicles of that brand in use today. No car manufacturer has control over how long vehicles they produced in the past stay on the road.

 

[BioSehnsucht]

One of the bad guys in His Dark Materials also pulled up in a Model X.

Similarly the main villain in Cold Pursuit (a not-exactly-Taken Liam Niason movie) has a Model X. When the villain's young son is kidnapped part way through the movie by someone claiming to be sent by his father, he asks "What happened to the Tesla?"

 

[Artful Dodger]

(Jan 09 2020) Winter rain cannot stop Tesla's progress | Jason Yang

 

[generalenthu]

You could be right but the hundreds of millions comes from an April 7 article. April 6-7 is the first mentions of this deal in media. It was evidently registered with EU in late February but no one seemed to notice until April.

The article with the 2 billion headline is from May 3. It's from a different reporter and there's a corresponding twitter thread from him (Peter Campbell) that seems to come out of a Fiat Chrysler earnings call.

Here's some quotes

"Mike Manley makes some comments on CO2 pool with Tesla in Europe - says it's the lowest cost way of meeting the European CO2 rules in 2020/21, but doesn't replace FCA's plans to roll out hybrids/EVs."

"Total cost of credits across both Europe and Nafta is euro1.8bn, CFO Richard Palmer says"

"2020
20% conventional ICE tech rollout
80% credit pooling

2021
40% ICE tech
45% from EV/hybrid rollout
15% credits

2022
50-60% EV/hybrid
40% ICE tech

Manley: "if there is need for pooling [in '22], it will be v v small""

There is a follow up on a question on the twitter thread the next day, question is "you make it sound like this is almost all going to Tesla, but can't draw the same conclusion from the transcript myself. Do you have another source for that?

Peter Campbell answers "The two contracts are with Tesla in EU (open pool) and with Tesla in US. So yes, all goes to Tesla."

I don't have twitter so had to google this and can't find any later references where he comments on the numbers.

I'm frankly not sure what this actually means anymore. I don't think I've ever seen that the deal with FCA is also regarding the US anywhere else but he seems very specific on this. That could indicate that Tesla not being able to deliver enough in the EU is a much lower risk than believed. It might not be for 1.8 billions but I don't really see anything that confirms it's not.

If it's the total liability for FCA that is 1.8 billion, instead of the value for Tesla, that would still be 900x0.80+900x0.15=720+135=845 million and then whatever value of that Tesla would get payed.

So I assume that your 360 million number comes from Tesla being payed 50% of that 720 million for 2020?

Also who is FCA kidding? Only needing 15% credits in 2021 and none in 2022 is not happening.

So here's me putting 2 and 2 together. Manley says in the 2019 Q1 conference call, the total cost of compliance is EUR 1.8B spread over the next 3 years, which implies 2019, 2020, and 2021.

Elsewhere in the call, FCA also indicates the payments for 2019 are estimated to come in modestly higher than EUR 600M for 2018. Lets say 700 Million. Of the remaining EUR 1.1 Billion, looking at the 2020 and 2021 expectations, we can see that the vast majority (over 80%) is expected to be paid out in 2020. I do not believe they're out of the woods for 2021, but this forms the basis for understanding what the payment in 2020 will be.

Again, as FCA talks about these credits, I believe they're mixing GHG credits, CARB credits and EU penalties which makes it hard to say what the differential impact in 2020 will be. One thing that is certain is - the PSA FCA merger will be very beneficial to Tesla.

Edit: Changed 2020 -> 2019 & 2019 -> 2018 at the beginning of second paragraph.

 

[Jack6591]

BYD Shares Surge as Subsidies for New-Energy Vehicles Expected to Stabilize


BYD Co. Ltd. (002594.SZ) shares jumped in morning trade after a Chinese official said the government will not significantly cut electric-vehicle subsidies this year.

Shares of China's largest new-energy car maker surged as much as 10% on the Shenzhen Stock Exchange, while its Hong Kong-listed shares rose as much as 11% within an hour of trading.

On Saturday, Miao Wei, China's minister for industry and information technology, said at a trade conference that state subsidies for new-energy car purchases will stabilize this year.

 

[pz1975]

BYD Shares Surge as Subsidies for New-Energy Vehicles Expected to Stabilize


BYD Co. Ltd. (002594.SZ) shares jumped in morning trade after a Chinese official said the government will not significantly cut electric-vehicle subsidies this year.

Shares of China's largest new-energy car maker surged as much as 10% on the Shenzhen Stock Exchange, while its Hong Kong-listed shares rose as much as 11% within an hour of trading.

On Saturday, Miao Wei, China's minister for industry and information technology, said at a trade conference that state subsidies for new-energy car purchases will stabilize this year.

I wonder how China's Tesla will do tomorrow based on this news?

 

[StealthP3D]

BYD Shares Surge as Subsidies for New-Energy Vehicles Expected to Stabilize


BYD Co. Ltd. (002594.SZ) shares jumped in morning trade after a Chinese official said the government will not significantly cut electric-vehicle subsidies this year.

Shares of China's largest new-energy car maker surged as much as 10% on the Shenzhen Stock Exchange, while its Hong Kong-listed shares rose as much as 11% within an hour of trading.

On Saturday, Miao Wei, China's minister for industry and information technology, said at a trade conference that state subsidies for new-energy car purchases will stabilize this year.

While I was shoveling snow off my deck I had a mini-realization about the share price action tomorrow.

I don't put a lot of weight to government subsidies, however, they are definitely a nice tailwind.
But:
1) They eventually go away (I'm evaluating Tesla mostly on growth and far-future profits).
2) Tesla's already making as many cars as they can build.

So, yes, subsidies give Tesla some pricing leeway (but competing EV's get it too). It helps but it's not a big deal because they will still make the same number of cars. Perhaps the extra profit could allow them to expand faster but I sense the rate of Tesla's expansion is less about their access to capital and more about how fast they can physically expand (it takes a lot of internal expertise for every expansion they make happen).

The shorts, on the other hand, seem to have convinced themselves that subsidies are critical for the success of any EV (because EV's are too expensive for what you get compared to an ICE car and no smart person would buy them without a subsidy). So, for short-sellers this news is a very scary thing. I expect a lot of them might feel a lot of pressure to cover, not only before Q4 report but before all this good news causes the share price to run away to the upside. The best day to do that is tomorrow.

In addition to that, many investors place high importance on near-term profits unlike the more forward-thinking people we mostly have here. So this will be a big deal for investors leaning more towards near-term profit growth also.

Unless there's something I'm totally over-looking (or couldn't know about), I think we've got ourselves a rally tomorrow.

 

[JustAaronnoraA]

Will this FUD weight on $TSLA tomorrow??
https://www.thetimes.co.uk/article/...e-gifford-to-consider-selling-stake-6hd378qls

Apology if already discussed.

 

[Fact Checking]

You could be right but the hundreds of millions comes from an April 7 article. April 6-7 is the first mentions of this deal in media. It was evidently registered with EU in late February but no one seemed to notice until April.

The article with the 2 billion headline is from May 3. It's from a different reporter and there's a corresponding twitter thread from him (Peter Campbell) that seems to come out of a Fiat Chrysler earnings call.

Here's some quotes

"Mike Manley makes some comments on CO2 pool with Tesla in Europe - says it's the lowest cost way of meeting the European CO2 rules in 2020/21, but doesn't replace FCA's plans to roll out hybrids/EVs."

"Total cost of credits across both Europe and Nafta is euro1.8bn, CFO Richard Palmer says"

"2020
20% conventional ICE tech rollout
80% credit pooling

2021
40% ICE tech
45% from EV/hybrid rollout
15% credits

2022
50-60% EV/hybrid
40% ICE tech

Manley: "if there is need for pooling [in '22], it will be v v small""

There is a follow up on a question on the twitter thread the next day, question is "you make it sound like this is almost all going to Tesla, but can't draw the same conclusion from the transcript myself. Do you have another source for that?

Peter Campbell answers "The two contracts are with Tesla in EU (open pool) and with Tesla in US. So yes, all goes to Tesla."

I don't have twitter so had to google this and can't find any later references where he comments on the numbers.

I'm frankly not sure what this actually means anymore. I don't think I've ever seen that the deal with FCA is also regarding the US anywhere else but he seems very specific on this. That could indicate that Tesla not being able to deliver enough in the EU is a much lower risk than believed. It might not be for 1.8 billions but I don't really see anything that confirms it's not.

If it's the total liability for FCA that is 1.8 billion, instead of the value for Tesla, that would still be 900x0.80+900x0.15=720+135=845 million and then whatever value of that Tesla would get payed.

So I assume that your 360 million number comes from Tesla being payed 50% of that 720 million for 2020?

Also who is FCA kidding? Only needing 15% credits in 2021 and none in 2022 is not happening.

That's a very interesting find, but the earnings transcript I linked to is from November 7, much later in 2019.

FCA execs explicitly refused to answer this analyst question (from Adam Jonas of all people...):

Q: "A couple of questions on -- couple of questions on EVs. Can you possibly be specific on how much you're actually paying Tesla for the pooling credits? There's just so many while I have seen numbers ranging from EUR 200 million to EUR 2 billion. Can you just help us and genuinely to help with that delta from '19 to '20 on that?"

FCA CEO Manley: "Love you to death, but no."​

Since the May number of €1.8b was disclosed by the FCA CFO Palmer, why would they refuse to discuss this in November? Also, did they reduce the 80% figure in May to 40% in November, or do the two figures mean something else?

Edit:

Here's the Q1 (May 3), Q2 (July 31) and Q3 (Oct 31) FCA earnings call transcripts in text:

Edited Transcript of FCA.MI earnings conference call or presentation 3-May-19 12:00pm GMT

Edited Transcript of FCA.MI earnings conference call or presentation 31-Jul-19 12:00pm GMT

Edited Transcript of FCA.MI earnings conference call or presentation 31-Oct-19 1:00pm GMT​

 

[generalenthu]

Will this FUD weight on $TSLA tomorrow??
Elon Musk’s Tesla setbacks led Baillie Gifford to consider selling stake

Apology if already discussed.

No

 

[sundaymorning]

#Gf4 #Gigafactory4
@Gf4Tesla


First resistance stirs


Today on Jan 12th about 40 protesters gathered at the station Fangschleuse to protest against #Gigafactory4.

#Gf4 #Gigafactory4 on Twitter

Did they all arrive in their Hummers with OPEC tattoos disguised as nature loving bat activists?

When Hyundai opened their facility in California there were protestors as well, now they’ve all left and Hyundai remains a symbol of prosperity in CA.

 

[Buckminster]

Already shared:

Has made good money last week. Expects a slow drop this week to 440. Then rise 4 days pre 28th (date he expects ER). He is now predominately in puts.

 

[StealthP3D]

Already shared:

Has made good money last week. Expects a slow drop this week to 440. Then rise 4 days pre 28th (date he expects ER). He is now predominately in puts.

Isn't he long with over 300 TSLA shares worth over $143,000 while his puts are less than that.

 

[Aeon]

Eh. Ok.
1.5% jump 15 minutes after Tradegate exchange opened while bid and ask remained constant until then. Weird.

 

[kengchang]

Already shared:

Has made good money last week. Expects a slow drop this week to 440. Then rise 4 days pre 28th (date he expects ER). He is now predominately in puts.

Wow, he got into timing trade now and that "usually" don't end well. Just saying...I am expecting the stock to cross $500 this week especially with the China subsidy announcement