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

[Thekiwi]

I would say buy the dip unless macros completely nosedive. US factory was already expected to be offline in near future with China factory taking majority of production workload. This just decreases costs in the meantime. I don’t see any permanent losses unless the furloughed workers find jobs elsewhere or are unwilling to come back May 4, and those are not too probable at the moment.

Reading between the lines, they are extending these cost cuts thru 2Q even though covid shutdown will end before then. That plus the reference to long term plan, I assume Elon is trying to hit a profit target still for 2Q with S&P inclusion in mind...

No one at tesla should be managing operations “with S&P inclusion in mind”. They should be managing operations for what is in the best interests of the company first and foremost (the share price will take care of itself as long as the company is taken care of appropriately).

 

[Artful Dodger]

So a full 6 weeks of shutdown, with gradual restart of a few weeks at best... does someone a has model to estimate impact on production for 2020? Looks in the ballpark of -80k...

Market likes it: $566.00 (07:17:33 AM)

This is EXACTLY as expected:

• Furlow begins 14 days after the shutdown, which is the time limit for carrying employee payroll on Paid Time Off (PTO) which is optimal for cost accounting
  
• Federal programs will pay nearly the full salary for those not working from home or onsite, thus are to be furlowed
• Senior Execs take a bigger hit to their salary, as it should be to show leadership
• all salary reductions will be in effect until the end of Q2, which the Market will love because:
  • it shows a continued focus on cost control and bottom-line business results
  • it provides a hard-target end-date for return to normal operations in Q3
• The restart date is EXACTLY inline with the Alameda County / SFO projected date to lift the 'shelter-in-place' order, giving further confidence that ALL of Tesla's suppliers will be able to rampup on time and in an orderly fashion, thus ensuring uninterupted restart of production

May the Forth be with you!

CH33RS!

 

[Prunesquallor]

Market likes it: $566.00 (07:17:33 AM)

This is EXACTLY as expected:

• Furlow begins 14 days after the shutdown, which is the time limit for carrying employee payroll on Paid Time Off (PTO) which is optimal for cost accounting
  
• Federal programs will pay nearly the full salary for those not working from home or onsite, thus are to be furlowed
• Senior Execs take a bigger hit to their salary, as it should be to show leadership
• all salary reductions will be in effect until the end of Q2, which the Market will love because:
  • it shows a continued focus on cost control and bottom-line business results
  • it provides a hard-target end-date for return to normal operations in Q3
• The restart date is EXACTLY inline with the Alameda County / SFO projected date to lift the 'shelter-in-place' order, giving further confidence that ALL of Tesla's suppliers will be able to rampup on time and in an orderly fashion, thus ensuring uninterupted restart of production

May the Forth be with you!

CH33RS!

Tesla to furlough workers, cut salaries amid coronavirus shutdowns: report

Negative headline spin from Marketwatch:
Tesla to furlough workers, cut salaries amid coronavirus shutdowns: report

 

[Prunesquallor]

Latest IHME projections for peak death rates:

CA 15 April
NY 9 April
NV 19 April
US 12 April

The latest data looks pretty ratty, so things can still shift around, but these look guardedly hopeful regarding rebooting in early May.

 

[dgodfrey]

I expect Fremont changes will allow more Model Y Production.
Chinese demand is hopefully still OK but overseas shutdowns may now slow the Chinese economy with the fewer orders.

Overtime they can maybe pivot as follows to higher demand products.

• Model Y (Q2)
• 35K Model 3 on menu (Q2?)
• Plaid Model S (Q3/Q4?)
• Semi (Q3/Q4?)

I don't think anyone can give a guarantee either way at this stage, you are right we might learn more in earnings.

So far no price cuts and incentives, but Q2 is perhaps likelier than Q1.

I've always thought a cheaper 35K Model 3 is a good option, if the can afford to do it on menu, even if they need to strip out basic autopilot.

How does focusing on the lowest margin product help the rebound? In normal times, the $35k M3 was not nearly as popular as all the whiners would have led us to believe before it went live. I doubt any of the bitches that claimed it was only a shell game by Tesla to keep buyers on the sidelines for as long as possible, never bought one nor had any intention to.
Instead, due to reduced production and dwindling inventory, the fact that Tesla is still the BEV leader in every measurable category will ensure the demand will be even stronger once the economy unclutches the pearls. I see us back to a 400,000 backlog.
Lastly, stripping out OTA software doesn't save Tesla a dime. It works just the opposite. After the development costs have been amortized, it prints money. They would need to reduce real, physical car parts to save money.

 

[LN1_Casey]

ok, may the forth be with you! I was originally hoping for 4/20

Boo, you beat me to this comment.

But I'm 90% certain that's why Tesla is scheduled to reopen rather than May 1. Though I am surprised it's not on Taco Tuesday/Cinco de Mayo the day following, considering Overlord Musk's penchant for mariachi bands.

 

[Singuy]

Tesla to furlough workers, cut salaries amid coronavirus shutdowns: report

Negative headline spin from Marketwatch:
Tesla to furlough workers, cut salaries amid coronavirus shutdowns: report

This sounds pretty neutral to me.

 

[Artful Dodger]

Shipping MYs to Europe Q2 was a possible solution if short term demand problems arise, on reflection Q3 is a much better chance.

I do NOT expect short term demand problems. In this pandemic, the well-paid white-collar worker who is the target market of a $50K Model 3 or a $55K Model Y is now likely working from home, but did NOT lose their job. This is the same demographic from which Tesla attracts Camry buyers, because they know that total cost of ownership (TCO) is the appropriate price to compare when new car shopping.

Further, if there is any SUPPLY constraints (which seems inevitable with 43 fewer days of production at Fremont in Q2), then Tesla will have the luxury of filling orders first that include FSD. There is already anecdotal evidence that Tesla was prioritizing FSD orders in the final days of 2020Q1, after the Fremont shutdown on Mar 24.

Let me restate that because it's important: Priority delivery going forward will be for orders with the highest margin software products: the $7K FSD option.

Elon recently said to expect a price increase for FSD on July 1st, so that very likely means deferred revenue for 'Stop-on-Traffic-Lights' FSD features will increase GAAP revenue in 2020Q2.

So while I agree that 2020Q2 revenue will be down vs expectations before the pandemic, it is by no means clear that Q2 will be unprofitable. Profitability depends upon:

• how disciplined Tesla is with cost control (where they have taken steps already)
• new FSD features being released in Q2, and
• FSD take rate during vehicle supply constraints

Test case: Let's say Tesla produces 43K fewer Model 3s in Q2. That's about $430M in forgone profit, which will have to be made up against Tesla's (sure to be reduced) fixed costs. If Tesla increase the take rate fro FSD to about half of all vehicles, then spread over ~70K cars produced in Q2 that's about $215M in extra revenue (with literally zero extra expense). That's half way there to making up for the forgone sales. Then if Tesla books GAAP revenue for past FSD sales (previously quarters), it becomes realistic that Tesla could STILL be slightly profitable in Q2.

Remember, S&P 500 inclusion requires only that the 1-yr trailing average be profitable, and the final quarter be profitable (ie: >$1.00 profit). So as long as Tesla loses less than $246M in 2020Q1 (highly likely given Deutsche Bank's recent note), and Q2 can remain profitable on reduced costs, increased software margin and deferred revenue, we'll be able to exit 2020H1 in good shape, and primed for renewed growth in H2.

Cheers!

 

[Prunesquallor]

This sounds pretty neutral to me.

A mention of factory reopening plans would have been nice. When news bots see “Tesla”, “furlough” and “shutdown”, I doubt they interpret it as neutral.

 

[juanmedina]

Quicker than a Taycan and is not even the Plaid Model S

 

[Singuy]

A mention of factory reopening plans would have been nice. When news bots see “Tesla”, “furlough” and “shutdown”, I doubt they interpret it as neutral.

Well everything in the title is of certainty. The opening date is not. So it can go either way.

 

[Pezpunk]

Quicker than a Taycan and is not even the Plaid Model S

holy cow, that is a serious performance improvement from an OTA. 614 peak kW is monstrous. 10.5's on the street. whoa. these are going to be doing 10.3's on the track now.

 

[ReflexFunds]

Does anyone know anywhere or anyone that is keeping track of Tesla's sales by quarter by country outside Europe?
This thread is great for collecting Europe monthly Tesla car sales reports: Tesla Europe Registration Stats

But I haven't seen anything for other markets such as Korea, Japan, Taiwan, Hong Kong, Australia, New Zealand, UAE etc some of which i believe is available in local language reports.
In China there are various reports for Made in China production, wholesale sales, final sales etc, which are sometimes conflicting. THere is also normally an overall sales number including imports estimated from some insurance data.
I don't think any comprehensive/accurate data exists for US or Canada.

 

[ProfTournesol]

Let the manipulation games begin.....yaaawn, so predictable.

 

[Artful Dodger]

"Model Y E14: Rear Mega Castings and Structure, Trunk Tub, Potential Tow Location" | Munro Live | 1 hr ago

 

[larmor]

A mention of factory reopening plans would have been nice. When news bots see “Tesla”, “furlough” and “shutdown”, I doubt they interpret it as neutral.

Other articles' headlines include the word "slash." As if Tesla is the only factory out there dealing with this worldwide epoch defining moment.

Here is a new headline which i'm pretty sure that we won't be reading, "Incalculable global warming is making the world rethink going outside again-- who knew this was going to come?"

 

[LJS22]

Other articles' headlines include the word "slash." As if Tesla is the only factory out there dealing with this worldwide epoch defining moment.

Here is a new headline which i'm pretty sure that we won't be reading, "Incalculable global warming is making the world rethink going outside again-- who knew this was going to come?"

CNBC was mentioning companies laying people off and said “then you have Tesla furloughing people left and right (everywhere)” I thought that was a bit harsh. The email gives a path to bring their employees back and like most companies the best option is unemployment right now. It’s good for everyone in the long run. Nobody wants to go through this, but nobody thought they’d ever shut down America

 

[ggr]

Let the manipulation games begin.....yaaawn, so predictable.

Yes, very blatant. Relatively low overall volume, but big sales orders dropping the stock price. If you really wanted to sell and maximize your return, this is not how you'd do it. But if you want to push the price down and you're a short seller, this is exactly how you'd do it. I just bought 2 $545 calls for next week expiry. I don't trade options expiring on short trading weeks (market closed Friday).

Edit: This is what @Papafox refers to as "icicles". Sudden drop, drift horizontal or up for a few minutes, another sudden drop.

 

[Khamul]

Sandy Munro has a new video up: Rear Mega Castings and Structure, Trunk Tub, Potential Tow Location

 

[Thumper]

Polestar Precept: close look at the sleek new electric sedan - Electrek

The Volvo concept has a lot of neat ideas. Would be great to see in many manufacturers cars.