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

[EinSV]

This article from Reuters probably killed the after market recovery. For anyone above reuters-level knowledge about Tesla this is just pointing out the obvious, but it's still a bad headline.

New Tesla registrations in California nearly halves in fourth quarter: data

Need a yawn emoji.

Dominion Cross-Sell’s Tesla California registration data is useless. CA Tesla registrations typically lag deliveries so many deliveries at the end of the year won’t be registered until 2020. Given how backloaded CA deliveries were in Q4 this is meaningless data.

Also, comparisons of US deliveries from 2018 to 2019 are meaningless since 2018 was US only and Tesla was working through a large backlog of orders.

I doubt the market is fooled by this.

 

[tinm]

I'm curious about this. Bear in mind I'm Canadian and I might be misunderstanding your taxes.

What is the purpose of doubling the tax credit for low-income purchasers? The optics look good, but if the low-income purchasers don't earn enough to take full advantage of the tax credit, isn't it rather disingenuous of government? I guess it somewhat depends on the definition of "low-income purchaser".

I too have lots of questions about this bill. I briefly met one of the bill’s sponsors this evening and he suggested I meet with him and the other sponsor soon so I’ll be contacting their offices tomorrow to set something up asap. (I run the Tesla Owners Club of NM and we have nearly 400 members and are growing fast and this bill is of great interest to current—and countless future—Tesla owners as you can imagine.)

[Side tidbit: learned recently that Tesla’s in-state lobbyist has, like me, made a reservation for a Cybertruck. We are everywhere. Well, ok maybe not yet but we will be eventually! ]

 

[TradingInvest]

Today Reuters had a report "New Tesla registrations in California nearly halves in fourth quarter: data".
Shorts immediately got excited.

In 2019 Q4, Tesla spent the first half working on OUS cars, then they addressed US demand outside CA, only near the quarter end they delivered more to the CA customers. There is a delay for registration, so lots of these CA cars will be registered in early 2020.

Edit: Saw the same post from EinSV.

 

[kengchang]

This article from Reuters probably killed the after market recovery. For anyone above reuters-level knowledge about Tesla this is just pointing out the obvious, but it's still a bad headline.

New Tesla registrations in California nearly halves in fourth quarter: data

Looks pretty normal this year vs Model 3 in the US only last year, number will probably go up as registration catches up

 

[RobStark]

On the manufacturers ranking, the race was pretty close, with BMW (11%) finally winning the trophy, with a 102 units advantage over Tesla (11%), while Nissan (10%) won the Bronze medal.
Outside the podium, Hyundai (9%) ended in 4th, with Smart (8%) and Mini (8%) following close.


EV Sales: Spain December 2019

 

[TradingInvest]

MIT, David Koch, and Jeffrey Epstein

"In an obituary for Koch published Friday MIT appreciatively recounted the conservative activist’s many donations to the institution in support of cancer research, child care and even basketball. Like his brother Charles, David Koch was an MIT alumnus. He was a life member of the MIT Corp., the institution’s board of directors. His donations exceeded $100 million, making him, in the university’s words, “one of the most important benefactors in MIT’s modern history…. At any given moment around MIT, beneficiaries of Koch’s gifts included faculty with endowed professorships, students with fellowships he supported — and toddlers in the childcare center he helped found.”

However, even though MIT has played an important role in researching climate change and disseminating the truth about it, there was no mention at all of Koch’s anti-scientific and destructive role in that area. That silence struck Los Angeles Times columnist Michael Hiltzik as, well, more than a bit problematic..."

Some university professors are under tremendous pressure to get research grants, especially for those who don't have tenure yet. Even tenured professors need research money to support their students. Oil industry has money. That's why I am not surprised Universities sometimes publish pro oil research reports.

 

[jhm]

And that's where Grumpy old guy likes it. Over $540 is trouble. Trouble, I tell you! But $520 is just right.

Let me drop the silliness and explain what I'm poking at.

Why is over $540 trouble? Two issues arise as market cap goes above $100B.

1. Elon Musk hits a compensation milestone triggering vesting of a certain number of shares. Shorts will attack Musk on this level of compensation. They will also raise the spectre of stock dilution.

2. Tesla surpasses VW to become the second most valuable automaker by market cap. Shorts will launch also sorts of spurious comparisons with VW to talk down the value of Tesla.

So as the share price rise above $540 to $550 range, shorts go ape with a fresh pile of FUD to fling. I suspect they are waiting for this which could explain such little resistance in the recent run up. The need to let the price get high enough that they can talk it down as overhyped.

On the other hand, if we can hang out around $520 for another quarter or two. Shanghai production will come online and firmly established $520 as a floor value. Then we can safely sail to $600 later in the year.

But what the shorts will want to do is to hype Tesla into a circus so that they can drive the price down to $370 and below. This will mean a few years of massive price swings to frighten away fainthearted investors. The will lock in long lasting bearish sentiment.

So I would just as soon forego the volatility. I see no reason why longs should root for the share price to go any higher for a while. Keep in mind how the company is growing strongly in value and how much we don't really want the market to sour on the stock and fail to track that value growth over the next few years.

Your mama should have taught you, Nothing good happens after 2AM. So be patient for value to accumulate.

 

[PeterJA]

9. Another thing is that if ~600K cars requires 39GWh batteries, then 20M cars (33x) requires 1.3TWh of batteries. So right now I’m in a bit of disbelief about these ridiculous numbers from these back of the napkin calculations. Looking forward to Battery Investor day to see what the path is to that level of production.

Not sure if you're aware that Tesla already said they plan to increase battery consumption to 2 TWh per year.
Elon Musk Talks Tesla Terawatt-Hours. We Run Some Numbers. | CleanTechnica

So your "ridiculous numbers" are in the correct ballpark. And yes, Battery Investor Day is when we should hear how Tesla plans to get there.

8. And then I said: oh, I forgot about Tesla Energy, the FSD revenues in each car, the revenues from Tesla’s share of the robotaxis network, Supercharger revenues, insurance, and any Services Revenue...and then my brain melted.

At the risk of vaporizing your melted brain, check out @FrankSG 's detailed and conservative model that includes those sources of revenue.
My Tesla Investment Thesis 2.0: Tesla's Monopoly Potential

Spoiler

Your estimated share price is low by an order of magnitude.

 

[Artful Dodger]

Let me drop the silliness and explain what I'm poking at.

Why is over $540 trouble? Two issues arise as market cap goes above $100B.

1. Elon Musk hits a compensation milestone triggering vesting of a certain number of shares. Shorts will attack Musk on this level of compensation. They will also raise the spectre of stock dilution.

2. Tesla surpasses VW to become the second most valuable automaker by market cap. Shorts will launch also sorts of spurious comparisons with VW to talk down the value of Tesla.

So as the share price rise above $540 to $550 range, shorts go ape with a fresh pile of FUD to fling. I suspect they are waiting for this which could explain such little resistance in the recent run up. The need to let the price get high enough that they can talk it down as overhyped.

On the other hand, if we can hang out around $520 for another quarter or two. Shanghai production will come online and firmly established $520 as a floor value. Then we can safely sail to $600 later in the year.

But what the shorts will want to do is to hype Tesla into a circus so that they can drive the price down to $370 and below. This will mean a few years of massive price swings to frighten away fainthearted investors. The will lock in long lasting bearish sentiment.

So I would just as soon forego the volatility. I see no reason why longs should root for the share price to go any higher for a while. Keep in mind how the company is growing strongly in value and how much we don't really want the market to sour on the stock and fail to track that value growth over the next few years.

Your mama should have taught you, Nothing good happens after 2AM. So be patient for value to accumulate.

You give the shortzes far too much credit. TSLA will steamroll them as numerous large whales buy in after 2019Q4 earnings come out. Then after a profitable 2020Q1, the S&P 500 addition alone brings in BILLION$ of new mandatory buying from large Index Funds (ie: Vanguard). Don't forget the numerous Moody's Credit Rating upgrades along the way.

Shortzes will be lucky to escape now with their lives, never mind any shreds of undergarments. The lucky ones are the ones that got margin-called and forced to cover over the past 2 mornings.

Did I mention the Gov't Pension Fund (GPF), Japan's sovereign wealth fund? That's $1.7T of assets that are now following Elon on Twitter.

How about Blackrock? That's $7.4T planning to divest from fossil fools. Shortzes == Toasties

Don't be afraid; it's happening, and soon.*

Cheers!

*Advice

 

[anthonyj]

Let me drop the silliness and explain what I'm poking at.

Why is over $540 trouble? Two issues arise as market cap goes above $100B.

1. Elon Musk hits a compensation milestone triggering vesting of a certain number of shares. Shorts will attack Musk on this level of compensation. They will also raise the spectre of stock dilution.

2. Tesla surpasses VW to become the second most valuable automaker by market cap. Shorts will launch also sorts of spurious comparisons with VW to talk down the value of Tesla.

So as the share price rise above $540 to $550 range, shorts go ape with a fresh pile of FUD to fling. I suspect they are waiting for this which could explain such little resistance in the recent run up. The need to let the price get high enough that they can talk it down as overhyped.

On the other hand, if we can hang out around $520 for another quarter or two. Shanghai production will come online and firmly established $520 as a floor value. Then we can safely sail to $600 later in the year.

But what the shorts will want to do is to hype Tesla into a circus so that they can drive the price down to $370 and below. This will mean a few years of massive price swings to frighten away fainthearted investors. The will lock in long lasting bearish sentiment.

So I would just as soon forego the volatility. I see no reason why longs should root for the share price to go any higher for a while. Keep in mind how the company is growing strongly in value and how much we don't really want the market to sour on the stock and fail to track that value growth over the next few years.

Your mama should have taught you, Nothing good happens after 2AM. So be patient for value to accumulate.

Meh who cares we're going to $1,000 soon. It's like in Super Mario Bros for the NES, there's a secret passageway in the second level that lets you skip half the game, same concept

 

[TradingInvest]

This is very similar to how I'm feeling about the next two years.

570k-to 650k for 2020, maybe as much as 700k.

900k to 1.25M for 2021.

I have 550k for 2020, 1.03m for 2021. Close to 2m in 2022. Significant growth in the next few years.

I start to have more confidence about Elon's guidance. Their engineering team is more capable than ever. Also they now have a lot of real world experience to give better estimates. Gross margin is going to rise sharply. The higher production combined with higher margin could support the stock price even without FSD breakthrough. Though I think FSD will be achieved.

 

[Ameliorate]

Let me drop the silliness and explain what I'm poking at.

Why is over $540 trouble? Two issues arise as market cap goes above $100B.

1. Elon Musk hits a compensation milestone triggering vesting of a certain number of shares. Shorts will attack Musk on this level of compensation. They will also raise the spectre of stock dilution.

2. Tesla surpasses VW to become the second most valuable automaker by market cap. Shorts will launch also sorts of spurious comparisons with VW to talk down the value of Tesla.

So as the share price rise above $540 to $550 range, shorts go ape with a fresh pile of FUD to fling. I suspect they are waiting for this which could explain such little resistance in the recent run up. The need to let the price get high enough that they can talk it down as overhyped.

On the other hand, if we can hang out around $520 for another quarter or two. Shanghai production will come online and firmly established $520 as a floor value. Then we can safely sail to $600 later in the year.

But what the shorts will want to do is to hype Tesla into a circus so that they can drive the price down to $370 and below. This will mean a few years of massive price swings to frighten away fainthearted investors. The will lock in long lasting bearish sentiment.

So I would just as soon forego the volatility. I see no reason why longs should root for the share price to go any higher for a while. Keep in mind how the company is growing strongly in value and how much we don't really want the market to sour on the stock and fail to track that value growth over the next few years.

Your mama should have taught you, Nothing good happens after 2AM. So be patient for value to accumulate.

Elons payday is far away. Somebody can chime in on the number but the stock price has to be at or over 100B for a lengthy amount of time, 2 months? Am away from the computer currently :S so no worries about hitting 550.

 

[Thekiwi]

Since @ReflexFunds did an excellent post yesterday talking about near/medium term production levels, I think It's time to update the "common sense easy to explain near/medium term bull case" for Tesla. (to be revised again following earnings). Note that the below is not news to anyone reading this forum (hopefully), but is intended for people who are new to looking at Tesla as an investment to go and do some more due diligence of their own ("not an advice").

The common sense easy to explain near term bull case for Tesla Auto:

1. Tesla sells cars that have high gross margin (that is to say they sell them for a decent amount more than it costs to build them), and so generates a large amount of gross profit each quarter.

2. Tesla is increasing production each year, with growth continuing in 2020 driven by GF3 in Shanghai and Model Y in California. As such, gross profit is increasing substantially along with production and deliveries. In 2021 growth will continue from Shanghai & California factories, as well as from the German factory starting production. (Tesla Energy is also growing quickly which only adds to this)

3. Tesla has a large amount of relatively fixed costs not related to car manufacturing, comprised mainly of Operation expenses (R&D and SG&A) and interest on debt. For the most part, these expenses are increasing much slower than Gross profit is increasing.

4. During the 2nd half of 2019, Tesla gross profit, driven by increasing production & deliveries, rose above the level of its Operational Expenses (OpEX) & debt interest, and thereby started generating positive net income.

5. During 2020, Gross profit will increase inline with increasing production & deliveries, leading to the difference between gross profit & OpEx/Debt interest to widen considerably, and the result is a large rise in Net income - a rise that will be considerably larger percentage wise than what is indicated by the rise in deliveries. This trend will continue in 2021 and beyond.

Simple example of how net income & EPS will rise much faster than top line revenue and gross profit:

(estimates)
2019: Gross Profit: $4.2 Billion, OpEx + Interest: $4.6 Billion, difference: -$400 million* income
2020: Gross Profit: $8.0 Billion, OpEx + Interest: $4.75 Billion, difference: +$3.25 Billion income
2021: Gross Profit: $14 Billion, OpEx + Interest: $5.25 Billion, difference: +$8.75 Billion income

(*=excluded one off restructuring costs)

==========

I think what the above demonstrates is that we are currently entering the most extreme, MaxQ, steepest part of the net income growth slope over the next 12-24 months, after which the growth in net income should start to more closely resemble the growth in deliveries. I think its probably a fair guess that during this steepest part of the net income ascent that the share price revaluation will be the most ferocious.

 

[Artful Dodger]

Elons payday is far away. Somebody can chime in on the number but the stock price has to be at or over 100B for a lengthy amount of time, 2 months? Am away from the computer currently :S so no worries about hitting 550.

Its even longer than that before Elon could receive ANY income from his CEO compensation plan:

• Market Cap avg > $100B > 6 mths, including the previous 30 days
• once stock options are vested and executed, he must wait 5 yrs to sell (except to pay income tax on those options)
• even once vested, there is a 'claw-back' clause if any financial statement are restated in a way that a tranche would not have otherwise vested

See Rob Mauer's slide at the 10:45 mark:

So again, Shortzes are clutching their pearls, crying crocodile tears, and wetting their beds, all at the same time. And we say they have no talents...

Cheers!

 

[hacer]

...
This whole conversation is pointless, though. We need to have a term to distinguish the two classes of vehicle, which are very different from each other, particularly with respect to efficiency. Attempting to shoehorn them together is at the very least not useful.

* If you say "hatchback", people don't generally picture a liftback
* If you show a picture of a liftback to someone, they'll generally refer to it as a coupe or a sedan
* We need to be able to distinguish between the two

 

[dakh]

Enevate Announces Commercialization Of A Superb Battery Anode
2024-25 projected first cars out. Samsung, LG Chem, etc. as partners. Sounds like something that actually be a market mover.

Edit: some tech info for comparison: energy density of the [non-existent yet] cells with the new anode is listed to be 340 Wh/kg or 800 Wh/L, for Model 3 it is ~250Wh/kg and ~710Wh/L. So very good numbers if they're true and are apples to apples (pack vs pack). I'm suspecting this would make for a cheaper battery because of both much cheaper anode and higher density.

 

[Singuy]

Enevate Announces Commercialization Of A Superb Battery Anode
2024-25 projected first cars out. Samsung, LG Chem, etc. as partners. Sounds like something that actually be a market mover.

Edit: some tech info for comparison: energy density of the [non-existent yet] cells with the new anode is listed to be 340 Wh/kg or 800 Wh/L, for Model 3 it is ~250Wh/kg and ~710Wh/L. So very good numbers if they're true and are apples to apples (pack vs pack). I'm suspecting this would make for a cheaper battery because of both much cheaper anode and higher density.

That 1000 discharge cycle doesn't pair very well with a million mile motor.

 

[printf42]

Enevate Announces Commercialization Of A Superb Battery Anode
2024-25 projected first cars out. Samsung, LG Chem, etc. as partners. Sounds like something that actually be a market mover.

Edit: some tech info for comparison: energy density of the [non-existent yet] cells with the new anode is listed to be 340 Wh/kg or 800 Wh/L, for Model 3 it is ~250Wh/kg and ~710Wh/L. So very good numbers if they're true and are apples to apples (pack vs pack). I'm suspecting this would make for a cheaper battery because of both much cheaper anode and higher density.

...for high volume gigafactory production...at gigafactory scale...

Am I reading too much into it, or they are trying to hint something?

 

[2Pearls]

Would like to comment that I have been reading this forum since early 2012 and joined in 2013 and have posted sporadically. The information has always been good and continues to get better daily. I could name many of the people that have been excellent contributors but I would be missing key people to give props to so I would just like to say THANKS to ALL of you who have made reading this forum so pleasurable over the last 8 years. Your thoughtful analysis and contributions are very much appreciated...you all know who you are. Your information and analysis make my stock buying that much easier. My buy and hold strategy while picking up shares during dips has made my future better than my wildest dreams. When I say, I am living the dream, I mean it. I look forward to the day when most cars on the road will be electric. We are living in a better, cleaner, more sustainable world as we continue to enjoy the Tesla cars we own and the fruits from our investments in TSLA. THANK YOU!

 

[MC3OZ]

Its even longer than that before Elon could receive ANY income from his CEO compensation plan:

• Market Cap avg > $100B > 6 mths, including the previous 30 days
• once stock options are vested and executed, he must wait 5 yrs to sell (except to pay income tax on those options)
• even once vested, there is a 'claw-back' clause if any financial statement are restated in a way that a tranche would not have otherwise vested

See Rob Mauer's slide at the 10:45 mark:

So again, Shortzes are clutching their pearls, crying crocodile tears, and wetting their beds, all at the same time. And we say they have no talents...

Cheers!

There is another excellent way for Elon to make some money, make a profit.... as he owns a large number of shares it only needs to be a small profit per share...

It is very likely we are in a situation where Tesla can continue to grow rapidly and still make a small (or perhaps even larger) profit most quarters...

This seems like the ideal scenario to me......

Then just to cheer up the shorts they can do this:-

And who knows what other products they may do?

Considering they can sell a tee shirt featuring a picture of broken glass.