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

[MC3OZ]

The solar roof expansion is interesting - We’re in PA and up until today, we were still just a reservation, but now it looks just like it did when we did our traditional panels + Powerwall install where it’s asking for an electric bill upload.

We’re doing a renovation in conjunction with an entire roof replacement, so I’m curious if they’ll deny us for that. If they say it’s OK, then I’m going to suspect they’ll deny us because our roof is too complicated.

That’s why we’re simultaneously pricing out a standing seam metal roof with thin film solar stick on panels as a sort of alternative solar roof, but obviously we’d prefer to stick with Tesla if it’s available.

Two dads at our preschool claim they are 100% interested, know the projected costs, of Solar Roof and were skeptical it would open up beyond the initial ~7 states for many years. Maybe they’re actually cranking them out at scale?

This is possibly why the investor day is being held at Buffalo, they want to promote the Solar Roof, and not much point in promotion if you can't deliver product and close the deal..
The right time to promote is when you can deliver.. I am expecting the solar part of Investor Day to be interesting.. it is flying under the radar..

 

[MC3OZ]

The first airline bankruptcy was today: Lessons from the Airline Industry’s First Coronavirus Bankruptcy

Then I found this (as of 4Q 2019):
THE DEBT-TO-EQUITY RATIO OF MAJOR U.S. AIRLINES
Airline Debt-To-Equity Ratio
United Airlines 177.35
Allegiant Airlines 166.48
Spirit Airlines 157.34
Hawaiian Airlines 125.92
Delta Airlines 117.17
Alaska Airlines 74.28
JetBlue 65.68
Southwest Airlines 40.70
American Airlines (AAL) is not included as it is currently running a negative debt-to-equity ratio.

Context:
The Debt-To-Equity Ratio in the Airline Industry
The average D/E ratio of major companies in the U.S. airline industry is 115.62, which indicates that for every $1 of shareholders' equity, the average company in the industry has $115.62 in total liabilities. The airline industry is a highly capital intensive sector and is often considered to have some of the highest D/E ratios.

Airlines can be a very tricky business, even in the good times...

If someone wants to disrupt air travel, make a much cheaper plane... the cost of buying, fuelling and maintaining planes and the level of competition in the industry, makes it a tough business.

 

[Mkorpal]

The first airline bankruptcy was today: Lessons from the Airline Industry’s First Coronavirus Bankruptcy

Then I found this (as of 4Q 2019):
THE DEBT-TO-EQUITY RATIO OF MAJOR U.S. AIRLINES
Airline Debt-To-Equity Ratio
United Airlines 177.35
Allegiant Airlines 166.48
Spirit Airlines 157.34
Hawaiian Airlines 125.92
Delta Airlines 117.17
Alaska Airlines 74.28
JetBlue 65.68
Southwest Airlines 40.70
American Airlines (AAL) is not included as it is currently running a negative debt-to-equity ratio.

Context:
The Debt-To-Equity Ratio in the Airline Industry
The average D/E ratio of major companies in the U.S. airline industry is 115.62, which indicates that for every $1 of shareholders' equity, the average company in the industry has $115.62 in total liabilities. The airline industry is a highly capital intensive sector and is often considered to have some of the highest D/E ratios.

To counter it a little, the Gov has a pretty long history of bailing out airlines, even more than automakers. So, I'm concerned about their drag on the economy, but not so much on insolently.

 

[sundaymorning]

IMO, it would have to be a perfect storm of a recession to be bad enough that Tesla became demand constrained in Q3 and Q4. The fact is, demand for Tesla's is growing faster than production, by how much we can only guess. Model Y has just boosted demand into entirely new segments. Demand is so far off the charts relative to production it would have to be a pretty serious recession for this to be a problem.

The world is a big place and Tesla only has two production facilities to supply the whole of it. In this respect alone, Tesla's resistance to recession is many times that of a traditional OEM that has installed production capacity of many millions of units per year. Tesla's products are unique enough and superior enough that they could conceivably force the large OEM's to absorb ALL of the lost sales brought on by a recession. Remember, Tesla is the only one who is production constrained, not sales constrained.

Aside from Model Y opening up demand, there’s also solar roof, powerpack, and powerwall to keep Tesla busy.

 

[StealthP3D]

Exactly my point, rare use case. Most vehicles never see that type of use.

We were discussing the Cybertruck here, a truck with an industry-leading 16" of ground clearance that should put "Ford tough" to shame. Yes, it will be used off-pavement. And with up to 3500 lbs. payload capacity, a full load is going to work the dampers extra hard even on a paved highway that is not glass smooth. I guarantee that can make a standard damper become hot.

I'm not sure why you are insisting dampers don't do enough work to become warm, let alone on a Tesla investor forum. It's silly.

 

[Mkorpal]

I'm going to log off now. Sorry if I ruffled some feathers. But I have to counter any argument even hinting that a single company can be recession proof. I'm quite invested, have been for a long time, and don't intend to sell my stake in TSLA for a while. But I also understand that the short or possibly even medium term might be rough. Investors should also consider this.

 

[JRP3]

We were discussing the Cybertruck here,

No, we were not. Original post to which I replied makes no mention of the Cybertruck.

OT

Has Tesla ever brought up the concept of regen suspension? It could work very much like regenerative breaking in that anyplace where there is movement, it can be exploited into energy and vice versa, the energy could control the movement. On top of the potential energy to be collected, it could also be used to control the movement of the wheels and tires the same way the proposed Bose active suspension did some 10 or more years ago. I remember being blown away by that but it was never implemented to my knowledge.

 

[dl003]

I'm going to log off now. Sorry if I ruffled some feathers. But I have to counter any argument even hinting that a single company can be recession proof. I'm quite invested, have been for a long time, and don't intend to sell my stake in TSLA for a while. But I also understand that the short or possibly even medium term might be rough. Investors should also consider this.

I assure you I think about it day and night. But I don't have an alternative to buy and hold. So why worry?

 

[wipster]

No, we were not. Original post to which I replied makes no mention of the Cybertruck.

Yeah Stealth, you horned in on my OT thought... naughty boy!

LOL

 

[wipster]

Although some of the small animals (e.g. your ancestors) survived. (Mine too, so don't be cross).

Somebody could ask Bernie or Joe...

 

[TheTalkingMule]

Tesla has been operating in recession mode for years. So lean now it's pretty much recession-proof.

Just look at how the Model S/X volume is treated like the extra gravy. Elon only cares about the most recent phase, and today that's Model 3/Y. They'll sell everything they make regardless of the depth of recession, the market is simply growing that fast.

All recession would do is stall expansion. Keep in mind Energy products are cheaper than the legacy, so tighter budgets makes them even more appealing.

 

[goinfraftw]

Q: Why would the United Auto Workers back striking UCSC Teaching Assistants? including an entire UC system blackout?

Breaking: UCSC campus shut down

 

[MC3OZ]

I'm going to log off now. Sorry if I ruffled some feathers. But I have to counter any argument even hinting that a single company can be recession proof. I'm quite invested, have been for a long time, and don't intend to sell my stake in TSLA for a while. But I also understand that the short or possibly even medium term might be rough. Investors should also consider this.

Your point is valid .. but Tesla has a few things going for it, they make it a bit more than just are regular car maker..

Telsa has cash in the bank isn't overly exposed on inventory levels... has FSD in progress,, Tesla energy, Insurance etc...

What matters in a recession is which dominoes fall first... those companies rapidly stop making new product for a while and buyers are in 2 minds about a car when there is a cloud over the company... as a car still needs service and parts...

There is a phase when inventory is sold off at a discount, but it doesn't last...

Tesla isn't overly exposed to market competition, but fewer competitors will help...

Short term it is more a matter of surviving... cash in the bank, good demand and low inventory help..

 

[thait84]

Tomorrow is shaping up to be a "buying opportunity" day based off of futures and Asia markets.

Wonder how coiled that spring will be for the April Q1 call. I certainly got burned last year during Q1(like all of us), but this feels much different.

 

[Todesbuckler]

Interesting article about Giga 3:
Much is riding on Tesla getting its Gigafactory back to production

In my opinion most important parts are:

"The municipal government of Shanghai is pulling out all stops to ensure success at Tesla’s Gigafactory, the US carmaker’s first overseas plant, and the crown jewel of Lingang as the local authorities woo global investors to set up in the free-trade zone. Housing would be offered to Tesla’s assembly workers, installed with infrared thermal sensors to detect any fevers. Arrangements are also being made to accelerate the delivery of components from suppliers to keep production on schedule at the factory."

" Tesla could hit its target of assembling 150,000 vehicles this year, according to a sales manager,..."

"Tesla customers have to wait until May for their Model 3 to be delivered if they were to place models now, according to sales staff."

 

[traxila]

It is the recession that will inevitably arrive that will seal the fate of the laggard OEMs and fossils. From the depths of the recession the new winners and renewable economy will rise, with Tesla leading the way.

 

[Evoforce]

Let's stop with the doomsday and fear mongering. I say this in the nicest tone possible...

 

[StealthP3D]

But I have to counter any argument even hinting that a single company can be recession proof.

To be clear, it wasn't I who said Tesla was "recession-proof" and I think anyone who says that is not saying a big recession wouldn't impact Tesla, but that it wouldn't kill them (and I agree with that).

And make no mistake, Tesla will not be impacted by a recession to anything resembling the degree of impact the major OEM's would see in that scenario. Not even close. They are recession-resistant, not recession-proof.

 

[Thekiwi]

Absolutely agree. It would take a perfect storm to kill sales. Although I feel it’s possible it’s highly unlikely. Tesla will more than likely be fine and if they survived 08 they are more than poised to survive 2020 even in the more dire situation.

Hopefully Corona disappears so we can get back to normal programming

LOL.

In 2008 Tesla delivered just over 100 cars total, not exactly an Apples to Apples comparison.

 

[Thekiwi]

I like it - deliver Model Y's without a delivery event! Totally casual. Nothing for the media to see here. Don't want to drum up more interest, that will just increase the order backlog and increase wait times too far into the future.

If that's not giving the middle finger to the media and naysayers, I don't know what is!

There is some sense in downplaying publicity of Model Y deliveries until April at least, given Tesla wants to sell every model 3 & X it can in the USA over the next 3 weeks.