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

[Mokuzai]

Yeah I think I'm done here.

Do a barrel roll!

 

[dl003]

US needs to take it seriously. Free masks need to be shipped via USPS. They need to decrease the barrier of entry when everyone thinks mask are expensive.

Problem is we don't have it. Even hospitals have to fight over each other to get it. Trump is trying to get 3M to suspend mask shipment to Canada which is a dick move. Maybe production output of mask is the indicator for reversal?
And I think employer distributing masks would be ideal. You can't come to work without one. You can't go to Walmart without one. Police gives you a $1,000 ticket without one.
Some numbers: the entire N95 production output of the US is 50M per month. It would take 6 months just to equip healthcare professionals, per CDC estimates. We peons probably don't need N95.

 

[Krugerrand]

Cat years or dog years?

Pretend we have a Not Helpful button.

 

[jdw]

Problem being that you don't just need 300 million masks, you need 300 million+ masks *every day* just to cover the US. Or if you prefer, ~9 trillion masks to provide a 30 day supply to the country.

 

[UCF3]

I think after this Tesla will be wise to burn some of its cash on building up several months of 3rd party supplied parts storage for future situations similar to this.
The “Just-in-time” supply chain that has been championed by MBAs and accountants for the last couple of decades to maximise capital efficiency has been shown to have a fatal flaw in this crisis.

Burn cash for an event that happens once a century? Haha no

Problem being that you don't just need 300 million masks, you need 300 million+ masks *every day* just to cover the US. Or if you prefer, ~9 trillion masks to provide a 30 day supply to the country.

how many landfills is that? Reduce, reuse, recycle

 

[jerry33]

Problem being that you don't just need 300 million masks, you need 300 million+ masks *every day* just to cover the US. Or if you prefer, ~9 trillion masks to provide a 30 day supply to the country.

The corona virus is killed at 70C for 20 minutes. Set your oven to 105C for 35 minutes. That will dry the mask, kill the virus, and not harm the elastic. Yes, the mask won't last forever, but you can likely get 40-60 hours use. (Anyone who knows more than I do about this, please chime in).

 

[Thekiwi]

Burn cash for an event that happens once a century? Haha no

how many landfills is that? Reduce, reuse, recycle

If you think this is going to be a “once a century” event, I have some bad news for you.

Entirely possible we could get a resurgence of Covid-19 within 12 months that would require another shutdown of at least some suppliers. Spending some cash to prevent that from shutting down Fremont again is not only a good idea, but I would consider it derelict management if they didn’t do it. Could be a 50/50 arrangement with suppliers where they share the cost of that 3 month inventory build up of parts (and Tesla pays the remainder 50% when they use them).

 

[MC3OZ]

Nobody is more bullish than me on S&P500 inclusion. Two weeks ago, I gave the following odds:

I would now go with the following:
Q1 - 10%
Q2 - 30%

My guess:-

Q1 - 10%
Q2 - 5%
Q3 - 80%

If Tesla can at least keep Q1 and Q2 to small losses it may be apparent early in Q3 that S&P inclusion is a slam dunk.

It will be interesting to see if they use FSD recognition and EV credits in Q1 or try to keep them to help Q2.

S&P inclusion helps the share prices which in turn helps Elon's compensation package, perhaps it also helps set up a positive narrative which helps sell cars... so if it is range Q1 perhaps they shoot for it. But mostly likely it will be hard to hit, in that case they probably keep some revenue recognition up their sleeve to help Q2.. Revenue recognition is a wash in relation to S&P inclusion, but 2 slightly poor quarters are better than a good quarter followed by a bad quarter.

 

[Singuy]

Problem being that you don't just need 300 million masks, you need 300 million+ masks *every day* just to cover the US. Or if you prefer, ~9 trillion masks to provide a 30 day supply to the country.

You don't need 300 million masks every day unless 300 million people all decided to give each other a huge everyday. Most people are still sheltered at home, why would they need to wear a mask?

 

[UCF3]

If you think this is going to be a “once a century” event, I have some bad news for you.

Entirely possible we could get a resurgence of Covid-19 within 12 months that would require another shutdown of at least some suppliers. Spending some cash to prevent that from shutting down Fremont again is not only a good idea, but I would consider it derelict management if they didn’t do it. Could be a 50/50 arrangement with suppliers where they share the cost of that 3 month inventory build up of parts (and Tesla pays the remainder 50% when they use them).

So Tesla is already supply constrained and you want them to catch up on supplies AND create a three month back up supply all in less than 12 months? Not happening

 

[Singuy]

If you think this is going to be a “once a century” event, I have some bad news for you.

Entirely possible we could get a resurgence of Covid-19 within 12 months that would require another shutdown of at least some suppliers. Spending some cash to prevent that from shutting down Fremont again is not only a good idea, but I would consider it derelict management if they didn’t do it. Could be a 50/50 arrangement with suppliers where they share the cost of that 3 month inventory build up of parts (and Tesla pays the remainder 50% when they use them).

Covid will be around until we have a vaccine. And even after having a vaccine, it'll probably still be around for a few more years. People will eventually learn to live with Covid for awhile. Plus lots can happen within the span of a few months time even. They are attacking this virus from all sides with lots of money backing all of them. The entire world is working on solutions.

 

[jdw]

You don't need 300 million masks every day unless 300 million people all decided to give each other a huge everyday. Most people are still sheltered at home, why would they need to wear a mask?

Was referring to everybody going back to work and wearing a (disposable) fabric mask to do so.

 

[MC3OZ]

Simplifying Plaid is interesting for what it means in terms of the availability of Plaid Model S.

I was hoping Plaid Model S may be shipping as early as Q3, this statement could be read either way because simplifying could be a redesign which takes time, or an optimisation which reduces cost, and doesn't impact the timeline.

It looks like some performance is (for now) being traded off for less complexity, an easier build process, and perhaps lower cost.

 

[Singuy]

Was referring to everybody going back to work and wearing a (disposable) fabric mask to do so.

Well then in that case you need even less masks because the workforce is no where near 300 million people unless you count infants being cute on youtube making money.

Also high risk individuals should still shelter at home

 

[BornToFly]

After my post, I watched the news and the CDC is now saying everyone should cover their face when they go outside so they spread less of the virus. According to CDC, DIY cloth masks are better than nothing to stop the spread. I was finally fitted with an N95 at the hospital. I was told to try to make it last a month by covering it with a regular mask to keep it clean....

 

[FrankSG]

I'm pretty sure Ford and GM production will be shut down longer than 30 days. Because they want to be shut down to conserve capital. Their dealers have more inventory than they know what to do with.

Meanwhile, Tesla inventory channels will drain pretty quickly and they WANT to re-open production. If they are taking advantage of this shut-down to make major efficiency upgrades to their line they might be happy with a 30-day shutdown because such changes can take a while to make depending upon how extensive they are.

Imagine Q1 ER call where they casually mention:

"Fremont will reopen tomorrow, and Model Y production capacity is now @ 5k/week."

 

[FrankSG]

If you look at China and S. Korea, EVERYONE is wearing a mask, not to keep from getting the virus (since regular surgical masks don't work that well for that), but to keep an asymptomatic person from spreading it to others. We can't do that here because we don't have 300 Million masks yet to give to citizens. But I don't think we are going back to work until that happens. Someone can have the virus and give it to others for up to 12 days if it takes them that long to get sick (and there lies the problem). Hopefully by the end of April the US will have enough masks that we can restart the economy with the order that nobody can be in public places without one. The stimulus package kept the Markets afloat this week. I'm expecting Macros next week to be red, and maybe the week after as well. I'm hoping to pick up more shares in the second half of the month as case numbers are leveling out. I expect V-shaped recovery once everyone has a mask and regular economic activity starts back up.

Same here in Malaysia. People are not allowed to go out except for shopping, but 90% of those people wear a mask.

 

[Unpilot]

My APT stock purchase looks better and better.

 

[Thekiwi]

Simplifying Plaid is interesting for what it means in terms of the availability of Plaid Model S.

I was hoping Plaid Model S may be shipping as early as Q3, this statement could be read either way because simplifying could be a redesign which takes time, or an optimisation which reduces cost, and doesn't impact the timeline.

It looks like some performance is (for now) being traded off for less complexity, an easier build process, and perhaps lower cost.

Might have something to do with Model S&X sales in Q1 being fairly light - almost the same as the year ago quarter. (not terrible, considering the 1 less week of production, but not great either)

 

[MC3OZ]

If you think this is going to be a “once a century” event, I have some bad news for you.

Entirely possible we could get a resurgence of Covid-19 within 12 months that would require another shutdown of at least some suppliers. Spending some cash to prevent that from shutting down Fremont again is not only a good idea, but I would consider it derelict management if they didn’t do it. Could be a 50/50 arrangement with suppliers where they share the cost of that 3 month inventory build up of parts (and Tesla pays the remainder 50% when they use them).

There is some merit in a 3 month inventory supply of some hard to get parts, particularly parts with a single source.. that are hard to replace, or build in house.
Tesla makes a lot of their own parts, they are working on Chinese part suppliers for the MIC Model 3/Y.
If they can dual source parts, or make then in house, they don't need to stockpile.

The other thing that occurred to me is GF Nevada shutting or remaining shut is a limiting factor ,which will affect Fremont.
They can perhaps import some cells/packs from China/Japan.
I expect Telsa is making their own packs for the Plaid Model S, and perhaps the semi.

We will not know the plan for Q2 until the Q1 earnings call. They may even delay earnings to work all this out, it is a complex and challenging situation, but there are always solutions, or ways of working around problems, as best they can.