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

[lklundin]

By the way. I assume the German markets will be open today. Does that mean they will do a premarket as usual or is that cancelled with the US market closed? I know it's very low volume anyway but still, could have been some kind of indication. There's also various certificates traded in various other European markets that I assume will be tradeable as usual.

Yes. In Germany now, TSLA has not really moved from Friday's close, but there was a dip of about 7 Euro earlier today.

 

[kengchang]

So there was this Model S on fire at Pleasanton, it is determined that driver lost control and crashed into pole and cement wall before catching on fire. The driver did not make it out of the vehicle

 

[KarenRei]

So there was this Model S on fire at Pleasanton, it is determined that driver lost control and crashed into pole and cement wall before catching on fire. The driver did not make it out of the vehicle

Yep, and I've already encountered shorts using this speeding-driver-crashed-into-a-cement-wall case as an example of how Teslas are dangerous :Þ

 

[mongo]

So there was this Model S on fire at Pleasanton, it is determined that driver lost control and crashed into pole and cement wall before catching on fire. The driver did not make it out of the vehicle

Police are investigating after officers say a speeding Tesla crashed and burst into flames in Pleasanton Saturday night.
...
The crash was reported around 6 p.m. at the intersection of West Las Positas Boulevard and Hacienda Drive.

The Tesla Model S was driving southbound, lost control at the intersection, and ran into a traffic sign and cement wall at an apartment complex, police said.

https://abc7news.com/5862228

1/2 mv^2
dv/dt

 

[Causalien]

Or maybe it's just not that contagious?

We just got confirmation that the virus has spread to several major cities. Shenzheng, beijin, hong kong. And that it has mutated to become contagious. Means of transmission still unknow

Most likely case is Gov is suppressing the info but WHO, calls their so they are forced to release updated info. Still likely to be a few days delayed.

Some expert's model estimate (forgot who) says that 1200 ppl should be infected by now vs the official numbers.

Stay safe those of you flying.

 

[Lessmog]

Just a thought, but to be fair why don't both of you change your names? You to Lord V ELECTROMAN and him to electroman the wise? You've both been valuable members for a long time, each with a lot of posts. This way no one's feelings get hurt and we can go back to making fun of shorties!

Or one of you take surgery and become ElectroGirl!

Truly AC/DC Transformers!
(Is that on topic?)

 

[Hock1]

Yes. In Germany now, TSLA has not really moved from Friday's close, but there was a dip of about 7 Euro earlier today.

The lack of volume in German markets (and perhaps others), when US markets are closed, might be due to less short selling-friendly rules in those markets vis-a-vis US. Does anyone know the trading rules in Germany wrt short selling? Specifically, can short sales be made on down-ticks, like they can in US?, and are entities with "market-maker" status allowed to short without first locating and borrowing shares? A "no" answer for either, or both, of these questions could explain the lack of volume (i.e., less opportunity for manipulation).

 

[KarenRei]

Shared by Alex Avoigt on Twitter, quoting Diess (from this speech):

 

[jbcarioca]

...95%+ of their R&D is in the U.S. and I'd say at least 70% of their SG&A.

...

That might be true but might not since Tesla has substantial
R&D outside the US. examples:
- much of factory automation done in Germany,
-while motor development is primarily done in Greece, and
-much battery development is done in Canada.
A fair amount of SpaceX technology is downstreamed to Tesla. We don’t know anything about geographical sourcing for them, nor do we know whether the Tesla sourcing was direct or indirect. Even for Inconel, despite the NASA/SpaceX leadership much of it is sourced from non-US sources, so we do not know absolutely whether or not it was US technology R&D.

These are well known, many others could be.
Maybe US R&D is 95%, maybe not.

From an accounting perspective there are almost limitless legitimate ways to geographically locate R&D. The Silicon Valley first have been masterful in that respect. Quite legitimately locating expenses in high tax areas and revenues in low tax areas is normally beneficial.

As @The Accountant can explain better than can I transfer pricing is an arcane art. FWIW, during three decades of living and working in more than a dozen countries my employment was only once based in the same jurisdiction in which I worked. Such is the norm in international business. Thus, Tesla R&D could quite legitimately be booked in quite a few different jurisdictions.

Clues are often found in those mysterious balance sheet categories showing contingent items. As @The Accountant explained these are arcane and are often not exactly what they seem to be. Footnotes help, but often not then.

Long post to explain why we should be very careful with allocation of both R&D and SG&A to specific countries. GAAP is full of gaps.

 

[Tslynk67]

To repeat myself from twitter: Battery swap was not a fraud but it was gaming the California ZEV systems of that time. You could get more ZEV credit if you could have the ability to recharge -refuel (whatever) your car in less than 10 (or 15?) minutes. Tesla demonstrated the ability of the swap. The long term solution of the charging problem was always increased range, charging speed, charging and supercharging density and not the swap.

I know, so Tesla use the system to their advantage. Shock & horror!!

 

[Fact Checking]

Yes. In Germany now, TSLA has not really moved from Friday's close, but there was a dip of about 7 Euro earlier today.

Actually, the "drop" was the EU TSLA price quickly following the Nasdaq after market closing price of $504 on open. (Frankfurt closes earlier, so its last EUR price was still $510, the Friday regular trading price.)

Then Frankfurt rallied +1.5%, to around $512, which is a +$8 rally at the moment.

(On low liquidity, mind you.)

 

[lklundin]

Ha! You could reply that in this form factor the Taycan is indeed perfect: should it run out of charge it can be carried to the nearest charger no problem.

A new example of just how pathetic the German BEV software is (in this case it's the e-tron):
Lara Lavendel on Twitter

PS. "Zündung" is German for "ignition"...

 

[NicoV]

Shared by Alex Avoigt on Twitter, quoting Diess (from this speech):

The mentioned link contains the entire speech of Diess (in German) and is very worthwhile reading entirely.
He states the importance of the ID3 to deliver sufficient volume in 2020 in order to limit Volkswagen CO2 fines in the EU. He explicitly mentions software and electronics challenges as barriers to achieving the required ID3 volume.
He also mentions that they have to become good at software, which kind of implies that they are not where they want to be yet.

 

[The Accountant]

That might be true but might not since Tesla has substantial
R&D outside the US. examples:
- much of factory automation done in Germany,
-while motor development is primarily done in Greece, and
-much battery development is done in Canada.
A fair amount of SpaceX technology is downstreamed to Tesla. We don’t know anything about geographical sourcing for them, nor do we know whether the Tesla sourcing was direct or indirect. Even for Inconel, despite the NASA/SpaceX leadership much of it is sourced from non-US sources, so we do not know absolutely whether or not it was US technology R&D.

These are well known, many others could be.
Maybe US R&D is 95%, maybe not.

From an accounting perspective there are almost limitless legitimate ways to geographically locate R&D. The Silicon Valley first have been masterful in that respect. Quite legitimately locating expenses in high tax areas and revenues in low tax areas is normally beneficial.

As @The Accountant can explain better than can I transfer pricing is an arcane art. FWIW, during three decades of living and working in more than a dozen countries my employment was only once based in the same jurisdiction in which I worked. Such is the norm in international business. Thus, Tesla R&D could quite legitimately be booked in quite a few different jurisdictions.

Clues are often found in those mysterious balance sheet categories showing contingent items. As @The Accountant explained these are arcane and are often not exactly what they seem to be. Footnotes help, but often not then.

Long post to explain why we should be very careful with allocation of both R&D and SG&A to specific countries. GAAP is full of gaps.

Ouch - a lot of accounting lately. I'd rather hear stories about $1,000 call options....

I'll try to keep it short and hopefully informative to others:
Tesla is a collection a separate legal entities around the world. Tesla could and should place it's R&D teams in various countries to gain access to innovation and at times to leverage cost. However, it is very likely that any R&D incurred outside the US is reimbursed by Tesla USA. There are various reasons for this but one of them is tax optimization.

Let's say for example that a new Tesla R&D center in Germany incurs $10m annually. Tesla Germany may invoice Tesla USA $12m (a $2m markup for profit). No consolidated impact to Tesla as German income of $12m is offset by $12m expense in USA.

Tax implications: It moves $12m income to Germany and $12m expense to USA. If this was not done, the German tax authorities would only see expense and could argue that some portion of revenue related to every car sold globally should be recorded as income in Germany. Let's say the German R&D team develops a new innovative headlight which is introduced to all cars. If Tesla did not pay Germany for the R&D work, you could argue that the benefit of this innovation for all cars sold around the world should be taxed as income in Germany. Since Tesla USA reimbursed Tesla Germany, the IP ownership is with Tesla USA.

Summary: Tesla can place its R&D anywhere in the world; it's likely most (if not all) global R&D spend gets expensed in the US.

 

[Christine69420]

A new example of just how pathetic the German BEV software is (in case of the e-tron):
Lara Lavendel on Twitter

In the last video from Bjørn Nyland he drove an e-Tron 50 on his 1000km challenge. On the first charging
stop in Strömstad the Ionity charger was down. No info about this in the car. I thought Audi was one of the co-owners of Ionity. Surely this status info must be available for them?

I have experienced superchargers being down but then it showed in the map and my car changed the route slightly so that I could charge elsewhere.

 

[Freder Reeve]

some of you may want to bookmark this for occasional reference:
https://www.boerse-frankfurt.de/equity/tesla-motors-inc

 

[gerebgraus]

I feel for them, I could imagine when engineers propose a solution which is like completely rewriting something they got from a vendor, and someone from higher up shot down the idea and said “no you have to use them, go figure”. Then what they came up would cost 10x the effort and only would work half as well, just to work around the piece that does not fit in, without removing that piece all together.

In 2012 Tesla came up with the large 17 inch touch screen monitor in the car. At that time that was expensive. Today the cost of automobile grade touch screen at that size is insignificant and of course users love it. Legacy makers, as far as I know, could not replicate it yet. Procuring the monitor and sticking it in is easy. Having an operating system and have all their vendors provide their output data seem to be too difficult mysteriously. It does not seem that difficult. Operating systems can be created by adapting freeware just like Tesla did. Google likely would even pay them to do it in exchange for a small real estate on the screen for ads. The vendors would not need to rewrite their software only modifying the output to go instead to their own separate display. This takes several years. But that is just the software part. Having 50 control systems provided by the separate vendors are more expensive than having one slightly higher performance control system. (Note: This is my impression with 0 expertise. If I am wrong just gently correct it instead of piling up on me.)

 

[Skryll]

[Tesla having collected ZEV incentives for doing battery swap project at harris ranch supercharger area] I know, so Tesla use the system to their advantage. Shock & horror!!

And demonstrated that it can be done technically, and gave people the option to use it, if it made sense to them and the charge speed really would be a major issue that would be worth trading off the other factors. Tesla didnt plan on doing it, since they had determined it was not worth it. The system incentive did what it was supposed to do, entice an actual experiment to double check that determination. And tesla got paid for doing the work.

I dont know where the problem is, honestly.

 

[gerebgraus]

I know, so Tesla use the system to their advantage. Shock & horror!!

Absolutely! no other company has ever done that. I have heard rumors that some companies not only game the system but lobby to change the system in an inappropriate way to change the system to their own advantage. I do not believe this rumor.

 

[jerry33]

In 2012 Tesla came up with the large 17 inch touch screen monitor in the car. At that time that was expensive. Today the cost of automobile grade touch screen at that size is insignificant and of course users love it. Legacy makers, as far as I know, could not replicate it yet. Procuring the monitor and sticking it in is easy. Having an operating system and have all their vendors provide their output data seem to be too difficult mysteriously. It does not seem that difficult. Operating systems can be created by adapting freeware just like Tesla did. Google likely would even pay them to do it in exchange for a small real estate on the screen for ads. The vendors would not need to rewrite their software only modifying the output to go instead to their own separate display. This takes several years. But that is just the software part. Having 50 control systems provided by the separate vendors are more expensive than having one slightly higher performance control system. (Note: This is my impression with 0 expertise. If I am wrong just gently correct it instead of piling up on me.)

It's actually quite difficult to do the software because they have to recreate all the functionality that used to be done in hardware (and it was hardware they just purchased from a vendor, not hardware they developed in-house). In addition, it's more like a couple of hundred control systems, not just fifty. And because automotive manufacturers don't have software development teams, they have to start from scratch. Just look at VW's software fiasco and you'll get the idea.