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

[MC3OZ]

Joking aside, it seems @kishdude has a legitimate question: What exactly are the expectations for Q1-20, and will they be met? That will absolutely influence stock reaction closer to earnings.

Me, I think they will be met if they are kept reasonable, and I am not very worried about those caveats.
BUT please let's not get ahead of ourselves and promise moons out of our reach, like we so often tend to do.

Absolute moderation, guys and birds! (Oops)

Too many variables to make an accurate guess especially on Q1 profit/loss....

Certainly things are going much better than Q1 2019 but that is an easy hurdle to beat...

If GF Shanghai is currently making packs with cells sourced in China then I think production in Fremont + China will exceed Q4....
So deliveries might even get close to Q4.

If GF Shanghai is not making packs with cells sourced in China then I think production in Fremont + China will be about the same as Q4.and deliveries will be less..

For margins swings and roundabouts cancel out, about the same as Q4 overall..

There will be an inventory build up and if the virus impacted component supplies in any way,production will be lower and deliveries will be lower....

This is just two of the unknowns, there are many more... but a good quarter is not impossible..

 

[Singuy]

My expectations for sp post q1 is this.

Bad q1, stocks drops maybe 10% over the next few days. Then recover big time surpassing pre q1 numbers.

Good q1, stock will skyrocket at 2x compared to prior quarter.

Reason imo is that a lot of retail investors see post q1 as the last time to get on the Tesla rocket. A lot are expecting a weak quarter and are sitting on the sideline (accumulating $$$). These people are all waiting to buy the dip more than any time in history because of S&P inclusion plus the amazing 2H musk guided for.

So what happens after a good q1? These same people will FOMO just as hard. Either way they want Tesla shares, just a matter of how they want to gamble.

 

[kishdude]

Keep shorting or perhaps save interest and cut checks to the longs

I'm not shorting. I bought my TSLA shares on the date of the IPO and had a reservation for the Model S 2 years prior to the IPO. My initial investment has paid for both my Model S, my Model 3, and soon the new Roadster. I believe in TSLA long term, but the point I'm trying to entertain is that in the short term (Q1) the numbers may not be great which could be financially dangerous given the run the stock has had.

 

[Singuy]

I'm not shorting. I bought my TSLA shares on the date of the IPO and had a reservation for the Model S 2 years prior to the IPO. My initial investment has paid for both my Model S, my Model 3, and soon the new Roadster. I believe in TSLA long term, but the point I'm trying to entertain is that in the short term (Q1) the numbers may not be great which could be financially dangerous given the run the stock has had.

Read the post I made above yours about why I think q1 results matter very little.

 

[Lessmog]

... ... ...

There's quite a few mitigating factors for Tesla though:

• Tesla has "Biodefense Mode" hospital grade air filter system that can filter out much smaller (military grade) virus strains as well - and should have no problem filtering out the relatively large coronavirus.
• Tesla China is rumored to have an order book larger than 100,000 Model 3's, so they can select customers who are willing to take delivery. I.e. no need for people to go into Tesla Stores - they already sold out several quarters worth of GF3 production.
• Production is the main constraint in Q1 I think, not deliveries.

So I'm cautiously optimistic about GF3 deliveries, with the assumption that there's no big supply chain disruption.

But Biodefense is not in Model3, it takes up too much space. However, it seems even the "normal" filters are quite good. Certainly much better than face masks riding a bus?

 

[MC3OZ]

I'm not shorting. I bought my TSLA shares on the date of the IPO and had a reservation for the Model S 2 years prior to the IPO. My initial investment has paid for both my Model S, my Model 3, and soon the new Roadster. I believe in TSLA long term, but the point I'm trying to entertain is that in the short term (Q1) the numbers may not be great which could be financially dangerous given the run the stock has had.

Q1 could go either way but "financially dangerous" is too strong a term...

A loss might be an opportunity for negative spin, and the merchants of FUD, that may cause a share price drop which could be a buying opportunity, but would not cause many longs here to sell.

Investors need to factor in the risk...

 

[Fact Checking]

But Biodefense is not in Model3, it takes up too much space. However, it seems even the "normal" filters are quite good. Certainly much better than face masks riding a bus?

Good thing Tesla is selling the Model S/X too, for the really concerned Chinese with sufficient financial means!

The coronavirus will transmit via aerosol too, so if an infected person is coughing near the air intake of a car it could get into the interior - but the Model 3 filters should pick up the water droplets carrying the virus.

The Model S/X Biodefense Mode filters are I believe able to catch even airborne viruses (when individual virus cells suspended in air indefinitely), but the coronavirus has not been observed in airborne form, so far.

 

[Prunesquallor]

Actually this might be needed for traditional car companies to sell EVs in volume and compete... I can never work out how the dealership model can survive the transition to EVs...

I suspect that’s the needle this is trying to thread. (The article is firewalled, so I’m speculating).

I’ve been wondering how Texas could do this, and the only thing I can figure out is to designate EVs as a new type of product, distinct from ICE vehicles. The dealership laws remain intact for ICE vehicles, as long as there are ICE vehicles (I would suppose including hybrids), but EVs are free to explore other sales models. You could even somewhat justify this intellectually, as ICE vehicle require more maintenance and repair (not that this would be openly admitted). If auto dealerships think EVs are likely to remain niche products and their sales model can’t spread to ICE, they should feel less threatened.

Texas has sort of headed down this route via the recent Berkshire-Hathaway exemption. BH is able (now) to own automobile dealerships in Texas even though they make automobiles, albeit motor homes. Hence a motor home is legally not an automobile.

 

[Lessmog]

Good thing Tesla is selling the Model S/X too, for the really concerned Chinese with sufficient financial means!

The coronavirus will transmit via aerosol too, so if an infected person is coughing near the air intake of a car it could get into the interior - but the Model 3 filters should pick up the water droplets carrying the virus.

The Model S/X Biodefense Mode filter are I believe able to catch even airborne viruses (individual virus cells suspended in air), but the coronavirus has not been observed in airborne form, so far.

Sure, but those affluents would hardly ride a bus anyway.

 

[Fact Checking]

Sure, but those affluents would hardly ride a bus anyway.

Their kids and other family members might - and such a crisis could easily end up in one more car being bought.

 

[Prunesquallor]

...
Does this mean Ford can sell the mustang direct? I wouldn't like that if I were a Ford dealer.
...

You might, if the Mach-E forces you to install and maintain on-property charging infrastructure, forces you to have low margins because you have to sell them cheap to compete with Tesla and doesn’t bring in much down-stream revenue via repair/maintenance.

 

[KarenRei]

Joking aside, it seems @kishdude has a legitimate question: What exactly are the expectations for Q1-20, and will they be met?

I've not found Factset delivery number averages, but non-GAAP EPS mean is 0,8 / about 40% of Q4 (but still positive). Revenue estimate is 6.72B, down from 7,23B in Q4.

Given expectations of a revenue drop (-7%) - but there's been no pricing changes - it tends to imply an expectation of a 7% deliveries drop (112k - 8k -> 104k).

 

[Fact Checking]

I'm not shorting. I bought my TSLA shares on the date of the IPO and had a reservation for the Model S 2 years prior to the IPO. My initial investment has paid for both my Model S, my Model 3, and soon the new Roadster. I believe in TSLA long term, but the point I'm trying to entertain is that in the short term (Q1) the numbers may not be great which could be financially dangerous given the run the stock has had.

Please ignore the banter - there's a bit of a bull echo chamber here - it cannot be helped and it's mostly harmless.

Your points are valid, but there are some good counterarguments I think.

There's no clear consensus on Q1 deliveries AFAICS, other than it will likely be lower than Q4 (as guided) and hopefully higher or at least close to Q3 deliveries, and significantly higher than Q1'2019.

 

[Singuy]

You might, if the Mach-E forces you to install and maintain on-property charging infrastructure, forces you to have low margins because you have to sell them cheap to compete with Tesla and doesn’t bring in much down-stream revenue via repair/maintenance.

Might be out of necessity. When you have a car with almost no parts like the other cars and also very few are on the road, it makes little sense to have hundreds of dealers trained for a car that they may never see, or see twice a year if even. It's going to be a mess. Ipace owners already have trouble finding technicians who know what they are doing at their local jaguars dealership.

 

[KarenRei]

Please ignore the banter - there's a bit of a bull echo chamber here - it cannot be helped and it's mostly harmless.

Your points are valid, but there are some good counterarguments I think.

There's no clear consensus on Q1 deliveries AFAICS, other than it will likely be lower than Q4 (as guided) and hopefully higher or at least close to Q3.

Agreed. People sometimes pretend to know how things are going to go better than they actually do. I try to always remember to include a phrase like "take this with a giant grain of salt" whenever I run calculations / estimates And if I ever don't, please call me out on it!

Estimates near the end of the quarter are usually much more grounded in facts. At this point though, we're dealing with random scraps of information.

One annoying thing is that we only have three "realtime" data sources - Netherlands, Norway, and Spain. Netherlands was really important last quarter, so it was nice to have that data, but it should be much more of a bit player this quarter. And Spain is always a rather bit player. We have little realtime insight into the UK, Germany, China, South Korea, etc etc. We generally get monthly data, but overseas deliveries will only be just starting to ramp when February numbers come in - and March numbers are often too late to be of use.

(It amazes me how little info we get out of the US in particular. 50 different states, each with their own car registration systems, and none of them provide meaningful realtime data. The closest thing we have is Open New York, but it's a terribly managed, ambiguous, very laggy dataset) )

 

[wheelwhright]

While probably misguided the environmentalists are not dumb. In Germany the courts are quite independent, so what politicians may say is not likely to matter much. In that sense the re-filing at a higher court to protest the plantation harvesting so close to Tesla's deadline is a smart move. If the plantation is not gone by the end of the month, then no further logging can be done until much later in the year.

So the court has about ten days to determine whether the protest-filing has merit - if it takes longer (incl. a finding that it does have merit), then Tesla can't finish the harvesting within the deadline and the overall timeline goes out the window.

On the somewhat brighter side, it is important to understand that the court ordered an immediate ban simply because if they hadn't the harvesting would have been over by the time the court had made its determination. So the temporary stop is just motivated by caution.

On the very bright side, Tesla had excellent timing in its raising of capital, because we seem to have significant volatility ahead...

I struggle to see how anything about this is smart for an environmentalist group. The only people that are cheering are gonna be AFD (lack of economic perspectives is what they feed on) and the traditional automakers. I am from Brandenburg and a green party voter and I am pissed that this group is gambling with a great opportunity for my home state. For the sake of a stupid monoculture pine forest, in an area that has already been designated as an industrial zone long ago.

I know that the courts won't be swayed in their decision by politicians but my hope is that they give the case highest priority to proceed as fast as possible.

 

[kbM3]

Karen and Fact Checking, please don’t kill each other. We need you both, badly.

Please ignore the banter - there's a bit of a bull echo chamber here - it cannot be helped and it's mostly harmless.

Your points are valid, but there are some good counterarguments I think.

There's no clear consensus on Q1 deliveries AFAICS, other than it will likely be lower than Q4 (as guided) and hopefully higher or at least close to Q3 deliveries, and significantly higher than Q1'2019.

Agreed. People sometimes pretend to know how things are going to go better than they actually do. I try to already remember to include a phrase like "take this with a giant grain of salt" whenever I run calculations / estimates And if I ever don't, please call me out on it!

Estimates near the end of the quarter are usually much more grounded in facts. At this point though, we're dealing with random scraps of information.

One annoying thing is that we only have three "realtime" data sources - Netherlands, Norway, and Spain. Netherlands was really important last quarter, so it was nice to have that data, but it should be much more of a bit player this quarter. And Spain is always a rather bit player. We have little realtime insight into the UK, Germany, China, South Korea, etc etc. We generally get monthly data, but overseas deliveries will only be just starting to ramp when February numbers come in - and March numbers are often too late to be of use.

ignore the banter? No way! I learn so much when you two argue. Please keep it up. I am sure almost everyone on here feels the same way.

 

[Fact Checking]

Seen on Twitter:

"Imagine competing with Elon Musk after giving him an 8-year head start."​

 

[lklundin]

Just wanted to point to a recent update over on
supercharge.info
of what I believe to be the first EU 250kW Supercharger under construction.
The 8 stalls are under construction in South Western France, here is the
corresponding Tesla.com page:
Perigueux | Tesla

 

[MP3Mike]

As I predicted here on Jan 29, Tesla Models S/X produced over the last few months use the same updated bty cell chemisty as GF1 2170s (Sep 2019 Rev. C bty pack).

@elonmusk

"All S/X cars made in recent months have actually been above stated EPA range. Will be unlocked soon for free via software update."

9:48 PM · Feb 14, 2020·

Not all Raven LRs but the ones made over the last few month with the new bty cell chemisty. See Elon's tweet and my comment above.

What makes you think that the battery chemistry is the reason for the increased range? What Elon actually said:

Elon Musk
@elonmusk

Replying to
@PPathole
Many small hardware improvements throughout the car that have been introduced gradually over past several months

He also said:

Elon Musk
@elonmusk
​

Replying to @jgrano305 @BLKMDL3 and 2 others
Depends on when car was built, as there are many small hardware improvements, so most will be somewhere in between 373 & 390

So there are a bunch of changes that give the longer range not just a cell chemistry change, if there even is one, and the range bump recent S&Xs will get varies based on how many of the changes they have.