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

[Buckminster]

VW probably doesn't need to catch Tesla in the near-term to survive. I actually think they have a pretty good chance of hanging in there long enough to be a major player, Telsa's future main competitor. Tesla has a proven ability to scale unbelievably quickly but even that won't be enough to meet the demand for serious EV's.

We need other players putting out desirable EV's.

Agreed. Going back a few years on this board, everyone would mention the most significant moat is the supercharger network. It is still true. No other network (or group of networks) in any country can be compared to the gas station infrastructure that allows you to cross countries and continents free of stress and time loss.

For OEMs the logic is something like:

1. Shareholders don't want us creating a Tesla style Supercharger network on our own
2. We are backing these networks but they're not there yet - Ionity have a total of 3 stations across the entire UK (8000 gas stations)
3. When they get there we can really get serious on building these things (if shareholders let us)

They are right, Tesla won't be able to build nearly enough EVs so they should all be fine for a while building ICE vehicles. PHEVs cleverly avoid the need for Superchargers and have the benefit of forcing slow home & shopping mall charging installation which is a good thing. They are getting slowed boiled like frogs.

Hence I'm sticking with:
Is Tesla accelerating and decelerating transition to renewables?

 

[Cherry Wine]

Shipping update:

* As we know, shipping got off to a somewhat late start this quarter (I believe due to refilling drawn-down store / service fleets and meeting the previously-scheduled deliveries that they failed to deliver in Q4), but it's now going at a much faster clip. Departures thusfar were the 9th, 18th, 18th, and 25th. Glovis Sigma arrives tomorrow, the 26th (leaves 28-29th?), Grand Mark arrives on the 30th, possibly followed immediately by Brooklands, as early as the 1st. Depending on when Grand Mark leaves, there will either be 5 or 6 ships having set sail in January.
* For comparison, the first month of Q4 saw "8" ships, although that's a bit misleading. One actually left on 9/30, so it was fully filled with cars made during the previous quarter, and even the one that left on 10/05 may partly have been filled with cars made in the previous quarter. All other "first months of quarters" had only 4 ships.
* First ship of the year, Morning Catherine, has arrived in Qingdao (did not stop in South Korea like expected)
* First ship to Europe, Glovis Cosmos, is expected to get to Zeebrugge around 2 Feb.
* Two additional ships are at sea. Morning Conductor is near Hawaii, heading to South Korea (expected around 5 Feb). This ship had an unusually-short loading time of 14h. Glovis Challenge just left Pier 80 and is en route to Europe. Glovis Sigma arrives tomorrow to replace it as the 5th ship of Q1.
* Glovis Cosmos or Glovis Challenge could possibly contain my car

Latest ship position maps from Julien K:
Julien K on Twitter

This is a good opportunity to repost the below table from a few days back:

Pier 80 ships arriving by 30 days from quarter start, 2019Q1-2020Q1 (estimated):

Q1'19: 5 (4 EU, 1 CN)
Q2'19: 5 (2 EU, 2 CN, 1 JP)
Q3'19: 4 (2 EU, 2 CN)
Q4'19: 9 (4 EU, 3 CN, 2 KR)
Q1'20E: 6 (2 EU, 1 CN, 1 KR, 2 TBD)

Things continue to look good, especially in light of the fact that Q1'20 is the first full quarter with GF3 at decent volume.

 

[UnknownSoldier]

I guess I'll try to post something relevant regarding the coronavirus and China.

China's Spring Festival basically shuts most of the country down for 2 weeks starting on Chinese New Year, which fell yesterday in the country itself. This is completely unlike how Thanksgiving (US), Christmas, and New Year's works in the West. So assuming that China can actually get the spread of the coronavirus under control, and it seems like they are willing to completely quarantine the whole country if necessary to do it, then they might escape this crisis sooner than anyone thinks because the country is already at the precise time of year when economic activity is at it's lowest level.

It depends a lot now on how the Chinese populace reacts to a complete lockdown of the nation, if they do as they are told and stay put in their houses (which they should be at anyways, since it is the Spring Festival) for a few weeks, that will be enough time to let the outbreak die down. If they do not do this, well...then China has a problem which means the world has a problem.

 

[Fobble]

Rivian expects price to be lower than previously announced

Electric vehicle maker Rivian: expect prices lower than previously announced

 

[erthquake]

I think it's fairly safe to say that the worst case per customer FSD retrofit cost is below $1,000:

• Elon said 20 minutes work time, anecdotes said 30 minutes to 3 hours depending on the VIN and model. A conservative assumption would be 2 hours work with $200 cost (labor+overhead).
• Cost of the board is lower than the nVidia board - which I'd estimate at $500 max.

This makes for about $700, which we can conservatively round up to $1,000.

Number of U.S. customers with HW2 FSD is estimated at around 50,000 - so the total worst-case FCF impact should be $50m - potentially much lower, because the service technicians are already employed and can do upgrades from Q1 "idle time", and the board cost might be lower than $500.

FCF should be stronger than this - maybe significantly stronger, so I don't think FSD retrofits will impact Q1 positive cash flow one way or another, unless Tesla decides to smooth the wave and fill inventory in this exact quarter, or there's force majeure.

(@EVNow and @FrankSG might disagree with these very coarse guesses. )

Software is the biggest bottleneck for HW3 retrofits (at least for HW2.5 cars). If the software doesn’t install correctly, Tesla has held cars for two days before the software loads correctly.

 

[Papafox]

Let's hope that Tesla gives us some kind of information during the ER on revenues from software offers, such as the Model 3 AWD performance boost for $2000. Papafox just purchased the upgrade and offers a one minute video giving you a quick appraisal of the feature here:

Hey, it's a weekend ; )

 

[RobStark]

Of the 9.4 million cars that iSeeCars surveyed on U.S. roads in 2019, more than 87 percent were one of five colors: black, white, gray, silver, and red. The online car site included only vehicles built between 2014 and 2018 to limit the study to more recent purchases.

Americans Aren't Adventurous with Car Colors

Good grief, this is why we have such limited Tesla colors.

States in white have white as #1 color and states in black have black as #1 color.

Eliminating grayscale colors, States that have red as #1 color in red and States that have blue as #1 color in blue.

 

[StealthP3D]

Rudy Pal Lev Parnas Releases Audio of Trump Calling for Ukraine Ambassador’s Firing

From about 56 min they talk about EVs/auto industry... worth listening.

Really sad to hear the ignorance running national policy.

 

[Fact Checking]

Global carmaker and luxury brands hit as coronavirus shuts down Wuhan - CNN​

It is unclear to what extent GF3 is exposed to suppliers in Wuhan.

Edit: Shanghai is shutting down interstate bus traffic:

Shanghai Municipal Transportation Commission announced the suspension of inter-provincial road passenger transport operations (China News / BJ news) - 26 jan 2020 : China_Flu​

 

[FrankSG]

For anybody who missed the discussion on Tesla's $1.8B valuation allowance last weekend, or never really understood much of it, I just wrote a blog post summarizing everything on the topic:

Tesla's $1.8B Valuation Allowance: Could it mean FY 2019 GAAP profits and immediate S&P 500 inclusion?

 

[Lycanthrope]

It has been both interesting and disheartening to observe since the 2013 TSLA stock price run up the slow unveiling & transparency of the Shorts thesis that hanging on to ICE's, diesel, fracking, and even the environmental and human conflict & consequences surrounding the support of those industries is more important than the sustainable Planet vision that Tesla/Elon pursue if it can create short-term profits. And now that Tesla has matured and has finally reached a point in its evolution where it should control its own destiny, the Shorts now seem to be willing to literally 'Hope' for something far worse in their desperation...........that is to literally be hoping for a greater virus outbreak in China.........and all the human and economic consequences that will come with that outbreak upon innocent people if it helps to disrupt Tesla's short term stock price.

To be willing to even post FUD about this in hopes of creating fear over a very real event that innocent people are facing is immoral and unethical......and much more. Let's face it - these are not good people. They deserve the slow and agonizing financial crushing they will receive as TSLA share prices continue to ramp upwards in the weeks and months ahead for their capacity to put money before humanity and Planet. No life preserver needed.

I am sincerely hopeful for a quick and positive closure to this horrific outbreak in China - not because I am a Tesla Long. But because these are our Brothers and Sisters. Perhaps the Shorts spreading virus FUD should take a moment to think about their own brothers and sisters, and their children, and the world they want to leave their children. Would you trade them for money too?

Indeed, took at $TSLAQ this morning, and all they care about in all of this is GF3 production being compromised.

They really are a bunch a ss. Go browse yourselves if you dare, it's pretty revolting though.

 

[Lycanthrope]

I'll expand on this one time, and then leave the shorts to wallow in the muck:

In a nutshell, the 'value' thesis of the shorts against Tesla is that absent regulatory support and due to the industrial cost advantages that ICE manufacturers presently enjoy over EVs, a demand cliff is inevitable. There are no lack on examples across the world that are pretty vivid displays of demand cliffs for *EVs when government support is withdrawn.

It is not a bad argument as these things go even though I disagree with it. The counter arguments (also, I hope rational) are that the shorts have been losing the whack-a-mole regulatory support game: for every political entity that drops support, a different one (or two) pops up, driven by the reality of AGW. Moreover, EVs are riding a tech innovation wave in battery production and cost. The best the short thesis can hope for is that EV cost does not drop below ICE before the regulatory support dries up and a demand cliff results. That was a pretty good position to take when batteries cost $1,000 a kWh; it is not even a tenable argument today at ~ $100/kWh today for Tesla and every indication that $50/kWh is on the near horizon.

The 'value investing' analysis that these shorts say they adhere to works well for static industries with mature tech and processes. It is beyond idiotic to apply it to an industry that is riding the battery development wave and supported (in spurts, but the trend is undeniable) by acknowledgement of AGW.

This bleating about regulation is a red herring. They will point to Norway as "subsidising" EV's, whereas the reality is that they are simply taxing based on emissions. This is a model that should be adopted everywhere, simple as that. Raise the ceiling if you like so that zero-emission cars pay more tax than a present, fine, but raise it correspondingly for the polluters too.

Most of the world isn't aware of the massive subsidies that the fossil-fuel industry enjoys, slowly poisoning us all while taking our money.

Anyone that perpetuates of defends this is culpable. And there's no excuse anymore not to buy an EV if you have the means to do so.

 

[uselesslogin]

If you are short the market due to market, get ready for a possible reversal.

Experimenting with AIDS drug to cure the corona virus. There were rumors of someone getting cured from this a few days ago, but I dismissed it as heresy. But this new one is from a more believable source.

Beijing confirms use of anti-HIV drugs in treatment of novel coronavirus
It looks like they confirmed they are using them but they made no comment yet on the effectiveness.

 

[sundaymorning]

Keep fighting Greta:

Treasury Secretary Steven Mnuchin's actress wife Louise Linton posts and quickly deletes Instagram backing Greta Thunberg over her husband after he told the activist to go to college and study economics before lecturing people on climate change

 

[lklundin]

Indeed, took at $TSLAQ this morning, and all they care about in all of this is GF3 production being compromised.

They really are a bunch a ss. Go browse yourselves if you dare, it's pretty revolting though.

I take comfort in the fact that when these Tesla anti-investors bankrupt themselves, I do not have to pity them in the slightest.

 

[engle]

As we all know, Tesla Motor's 2013 mission was: "to accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market as soon as possible." Now semi and cyber trucks have been added.

As TSLA's market cap stays near its lofty level of $100B or goes higher, there will be old ICE companies that fail to transition to self-driving EVs successfully. Some will go into bankruptcy during the next recession. As part of their reorganization, they will have to sell-off idle factories and shrink. IMHO, It will be faster for TSLA to buy up some of these idle factories for TSLA stock in slow construction places like the USA than build them from scratch (except in China! ).

I don't see any reason for TSLA to acquire any weak and failing ICE companies since they come with too much last century baggage like union contracts (instead of stock options) and dealer networks. However, perhaps the bankruptcy judge can jettison them in court?

VW probably doesn't need to catch Tesla in the near-term to survive. I actually think they have a pretty good chance of hanging in there long enough to be a major player, Telsa's future main competitor. Tesla has a proven ability to scale unbelievably quickly but even that won't be enough to meet the demand for serious EV's.

We need other players putting out desirable EV's.

 

[bhtooefr]

Keep fighting Greta:

Treasury Secretary Steven Mnuchin's actress wife Louise Linton posts and quickly deletes Instagram backing Greta Thunberg over her husband after he told the activist to go to college and study economics before lecturing people on climate change

That's a Daily Mail article, BTW, for those who wish to avoid clicking on that source.

 

[lklundin]

A usually reliable Twitter account has posted a short video in a pine plantation - apparently the GF4 site - where a detonation can be heard with the recorder saying 'Dritte' (third),
Gigafactory4 on Twitter

One would normally not set off (even small) explosives before the whole site has been surveyed for unexploded ordnance, so I take this as a strong indication that by now the whole site has been surveyed for that.

If so, we should soon get reports that the clearing of the pine plantation has commenced.

Edit: Here is a longer video, from another usually reliable Twitter account, where 3 detonations can be heard, followed by an acoustic (all clear ?) signal:
Tobias Lindh on Twitter

 

[Sean Wagner]

We need other players putting out desirable EV's.

Absolutely.

They need to finally enter a positive feedback loop, while battery cell production has to scale for costs to continue to fall. The market is too big, diverse, and changeable for one company to do it all.

Incidentally, I think the recent "revelation" by Mercedes that Tesla buying Grohmann set back their battery pack manufacturing is so much baloney. They've had enough time to scramble - the urgency just wasn't there. You'd think automation was today's porcelain, confined to a small band of Black Forest dwarves.

I see potential parallels between Tesla buying "team Grohmann" in a hurry and Volkswagen's acquisition of "software companies" [I'm lacking info here]. If VAG is not completely daft, they'll keep working teams of savvy developers together, give them clear marching orders [!!!], a lot of leeway, and keep corporate bureaucracy out of their hair.

Ford's very small and diverse team that re-conceived the Mach-E with some urgency is a good example [on a vastly smaller scale] of how to do it, but it only works when everyone understands where to go and what is expected.

Which is why Tesla's mission makes such a difference. It's simple and creates a shared space for communications and decision-read-difference making. Building the Nevada Gigafactory seemed insane if you didn't understand its propulsive properties.

 

[Christine600]

Lots of conjecture that there may be some extra cost to upgrade HW2/MCU1 vehicles (S/X early Feb 2018 or before) to HW3.

Probably because Elon tweeted some time ago that the oldest cars who have waited the longest would get the HW3 upgrade first. But now it looks like we are last in line.

If there are a lot of FSD AP1/AP2.x cars with MCU1 (any way to tell?), could be some extra cost. Any way to tell how many of the 50k are in this category?

The TeslaFi site have lots of statistics. It's based on it's members cars but is large enough to be relevant IMHO.

TeslaFi.com Firmware Tracker