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

[AlexS]

So I have asked this before and met with ridicule. Will tesla mix batteries of more than one source in a car. If not will you be able to identify whether car you buy haspanasonic or other source batteries?

I think only cars made in china will have different supplier

 

[Cosmacelf]

In addition to the Needham conference I just listened to and read the transcript of the Q3 earnings call for Maxwell Technologies. It was well worth reading/listening to for me!

I want to recommend reading/listening to it completely (52:40 minutes), but specifically the response to questions from Noah Kaye made me confident that Maxwell really managed a breakthrough in dry electrode batteries and is already underway of building a prototype manufacturing line with Tesla (possibly with Tesla and Panasonic).

Transcript (go to single page view to search for Noah Kaye):

https://seekingalpha.com/article/42...fink-q3-2018-results-earnings-call-transcript

Maxwell Investor Relations with link to webcast:

Maxwell Technologies, Inc. - Investors - Overview

Based on the release date I'd expect Q4 results soon? Does the buyout by Tesla change that?

I belive Maxwell recently announced that due to the upcoming acquisition, there won’t be an upcoming quarterly results.

 

[davecolene0606]

BTW., median car prices are growing in the U.S. beyond the rate of inflation - but indeed, $35,000 dollars in 2016 are worth almost $37,000 in 2019:

$35,000 in 2016 → 2019 | Inflation Calculator

"$35,000 in 2016 → $36,706 in 2019"​

But Tesla should continue to drop prices, because that increases the addressable market. As long as they can maintain their 20%-25% gross margin target they should continue their march to lower prices - $30k base price might not be impossible, with EAP bundled into a $35k package.

Definitely a part of the picture but inflation for car prices has been less than the general cpi and for these years it has been -1.09% per the website you were using for the general cpi. So, for autos, $35k in 2016 is $34.7k in 2019.

Fire Away!

 

[Curt Renz]

Today at 11 am EST, CFRA will present a webinar on its stock appreciation ranking system and portfolio performance, followed by a Q&A session in which you can participate. You can register at: STARS Portfolios and Model Portfolios

CFRA analyst Garrett Nelson has a BUY rating on Tesla and raised the price target to $420 in December. He replaced Efraim Levy who was a long time Tesla bear.

In 2016 CFRA acquired S&P Global Market Intelligence’s Equity and Fund Research. That included my friend and regular guest on my old TV show Sam Stovall who is their chief market strategist. His associate strategist Lindsey Bell will participate in today's webinar.

 

[MP3Mike]

That is in opposition to Carsonight’s reports that the SR pack line is being installed at GF1, the size of a football field.

Actually I think Carsonight said that he assumes that the new machine being installed is for the SR battery. He doesn't know for sure. But even so I thought they were going to move all Model 3 packs to the new architecture.

 

[Tslynk67]

Danish Tesla sales fell off a cliff a couple of years back when the government stopped the tax-reduction incentive (which made a Model S a comparable price to a VW Golf).

I asked a DK person on Twitter if the reduced EV taxes had been re-introduced, he said the following:

They have been dropped to 20% vs 85/150% for ICE For 2019 & 2020 there is a tax discount of 5 K € , so most EVs will not be taxed . A model 3 P only has 2,5 K € tax on it VS 15 K for a comparable ICE FDM are saying EVs are taking off in the 1000’s

If any Danes can elaborate on this, would be great, but if it's the case then I expect Tesla sales in DK to boom, especially with M3 now becoming available.:

Registreringsafgift for elbil

 

[AlexS]

Anyone knows when is the next leg of China trade talks?

 

[sparcs]

Did the 10-K sway some investors?

Market is down, but Tesla is up on no apparent news. Plus the threat of EU and Chinese tarrifs hanging over head.

 

[anthonyj]

Did the 10-K sway some investors?

Market is down, but Tesla is up on no apparent news.

Tesla is an inverse ETF

 

[EVNow]

They can potentially pull it off if they make all such cars come from China, but otherwise you are talking about a situation where for the 35k$ to 38k$ price range Tesla is selling 100k units a year and losing a couple hundred million doing so while building something far more utilitarian than usual Tesla brand standards. If they get reservation holders a satisfactory deal I think it is fine.

They won't sell a $35k car until they can get a positive margin on the car. Even with that absolute bare $35k model with no upgrades will be produced in limited volume. So, people have to wait for more time to get them or spend a couple of grand on attractive upgrades to get them faster.

 

[humbaba]

I agree with this, if the MR became the SR, then that blows the competition (is there any) totally into the weeds.

I believe there will be an SR. It isn't that Tesla couldn't just say, "No SR, its the MR". But doing so doesn't seem likely for two reasons. First, Musk would be retracting the SR and, as an essentially honest person, I can't seem him doing this. Second, there's an easier yet equivalent option, just re-badging the MR as SR. That way the SR stays part of the long announced plan.

But I don't think that will happen either. Whether or not you believe the new assembly line has to do with the SR battery pack it is certain that the SR pack has been designed and it makes sense to do so. The MR is a partially filled LR pack which is suboptimal, but acceptable as a stopgap. It really makes no sense for Tesla to throw away all of the design work for a proper SR battery pack.

In my opinion, the MR will most likely be retired because it was just a stopgap so when it is no longer needed there is no reason to keep producing it. Like the 75S it will just be retired. Of course, that's only my opinion, but it fits with the facts and past behaviors. The only way I can see the MR being retained is if Tesla does something with the line to increase differentiation.

For example, what if the SR were released at $30k or even $25k? Ignoring for a moment the margins of such an endeavor, it is obvious that doing so would greatly increase the addressable market and thus support the mission by acceleration EV adoption. I think it is clear that if Tesla could accomplish that they would. And they have already dropped the MR with PUP to within spitting distance of $35k SR + PUP so it is clear that they might be able to keep sufficient margin using an optimized SR pack to go below $35k.

By introducing a $35k SR including PUP they could use the premium margins to make up costs until advancements (*cough* maxwell *cough*) could be brought to bear to bring production costs low enough to maintain margin at a lower price point.

[edit to say: the main argument I can see against a lower priced SR is the potential of osborning sales as people wait for a lower priced model. While possible, I think that the same is true given their recent price drops — I couldn’t advice someone to buy a Tesla right now given the real possibility of further price drops or hardware improvements (e.g., HW3). So while it would be a problem, I’m not sure that it would be that much worse than what they already face]

With the above in mind, this is what I see as the plausible possibilities:

1. SR dropped in favor of keeping MR (as noted above, I don't see this happening)
2. MR renamed SR (requires ditching the SR pack and keeping a hack-pack, don't see this happening either)
3. MR dropped in favor of SR (timing of drop being before, at, or after SR intro as best suits Tesla)
4. SR introduced at a price point below $35k (could be done initially at $35K including PUP)

 

[Unpilot]

Nice way to start the morning....12 new pages on my favorite forum ...a cup of coffee....and OT Tesla is green!

 

[EVNow]

In my opinion, the MR will most likely be retired because it was just a stopgap so when it is no longer needed there is no reason to keep producing it. Like the 75S it will just be retired. Of course, that's only my opinion, but it fits with the facts and past behaviors. The only way I can see the MR being retained is if Tesla does something with the line to increase differentiation.

I think they keep MR to cover the ground from $35 to $55. When SR comes, MR goes up a little in price (or stays the same as tax credit reduces/expires). You don't want to leave any holes in that price range.

BTW, usually the mid trims are the biggest sellers in a lot of high volume models. I can see a lot of people not wanting the base Model 3 - but do not want to spend $20k more.

ps : Is that the MMD we are seeing now ?

 

[jbih]

They probably mean the pickup truck, not the semi truck, but this is nevertheless a big factual error. (Also, shame on 'evspecifications' for fudging their articles to disable copy&pasting of quotes.)

Open the article in Firefox and in Reader View, then you can copy/paste. iOS has something similar, other browsers probably as well.

 

[SebastianR]

If any Danes can elaborate on this, would be great, but if it's the case then I expect Tesla sales in DK to boom, especially with M3 now becoming available.:

Registreringsafgift for elbil

Not a Dane, living in DK. For now, the Model 3 is very nicely priced if you compare to fuel burning cars:

I posted about Model 3 leasing here:
Tesla, TSLA & the Investment World: the 2019 Investors' Roundtable

If you compare the Model 3 costs of the Audi/Mercedes/BMW line-up in DK, you will find that the Model 3 is very(!) cost competitive in Denmark.

If you want to compare yourself, check e.g. the Audi price list here: http://pdf.audi.dk/pdf.aspx?pdf=biler&model=A4&modeltype=Limousine

The cheapest Audi A4 Quattro is 550k DKK whereas the cheapest Model 3 is 454k DKK (AWD, LR, PUP). So yes, the current taxation system is - on top of the Model 3 actually not being overly expensive at all - going to shift things around quite a bite...

 

[HG Wells]

RED

AND BACK TO G R E E N !

 

[CorneliusXX]

EU is still big without UK. But now UK is just another small country. Not sure what will happen to all the finance companies. Anyway, the empire will finally shutdown.

May be they can join NAFTA

My hope, as an Australian living in London, is that the UK gets the band back together and forms CANZUK which is kind of like the Voltron of the remaining English speaking first world commonwealth countries. It won't be a monster union like the US, EU or China but it will still be in a rather formidable position.

 

[Pezpunk]

MMD is such a real and predictable thing ... i just hold TSLA stock long for the most part, but if i were a day trader, it seems like its predictability would just be easy money almost every day.

 

[Huskyf]

My hope, as an Australian living in London is that the UK gets the band back together and form CANZUK which is kind of like the Voltron of the remaining English speaking first world commonwealth countries. It won't be a monster union like the US, EU or China but it will still be in a rather formidable position.

I think it's the fault of this article "Chinese auto sales plummet again" But if you see Tesla reservation is not the same for more information see teslarati.com post.

 

[Unpilot]

Nice Chart from the NPR article.