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

[mblakele]

Slight correction. The 1st tranche of Elon's CEO compensation plan is a grant 1% of TSLA stock, of which he'd need to sell some immediately to pay income taxes. At current SP the grant would be valued at about 1.3B so state taxes on that in Cali? Paging @mongo

12.3% above $573k, no break for capital gains. Call it about $160M, or 230k shares. Maybe lower if there are basis considerations?

(Posted with some trepidation because I want to avoid chatter in the Papafox thread: much of its value is the lack of noise, right?)

 

[feigen66]

Electric cars take the spotlight in China's post-coronavirus stimulus plans

Taking air pollution is the one of the influential causes of COVID death and a lot of people in Asia rediscover the cleaniness of air, maybe that will accelerate the EV adoption.

Japan will be slow and China has been fast run-rate due to strong incentive.

While China still being negatively impacted by the macros, this is great chance for China to strengthen its EV manufacture leadership while taking auto manufacture market share from, say, Japan. The incentive also increases the demand of consumption which is needed to return economic to the norm due to the lack of export demand globally from other goods.

 

[ZeApelido]

Where did you get your nominator and denominator?

Currently CDC U0.72 and U0.71 included suspected cases which will take time to adjust.

Sorry, in NYC. That was accidentally left out

 

[feigen66]

微博

The latest Tesla in China ads reached 100,000 unique views in 18 hours. Most of the comments are extremely positive.

 

[larmor]

A truck driver gave me a thumbs-up on my Model Y today instead of coal rolling. Maybe it works?

I also had a Jeep driver give me a thumbs up today as well as I was in my MX— I figured it must be related to pro going back to work ‘rant’ (opinion) by EM.

 

[StealthP3D]

On the demand side I think shareholders need to prepare for at least some temporary softening of demand due to CV. To expect the demand for large discretionary purchases like premium cars not to be significantly impacted is not realistic. For instance here is a Gallup result showing that half of the USA upper middle class have had an impact on employment from CV.

This has been pointed out more than twice but apparently, it bears repeating (based on your comment):

Tesla is the ONLY automaker that has been production constrained for years. Therefore we do not know how much demand there is out there beyond their historical production capacity. We can assume that economic conditions will impact large discretionary purchases like automobiles but that does not necessarily imply Tesla will not be able to sell every car they can make. Certainly, it will hurt the big automakers who were all demand constrained for some time. Also, Tesla has a new model out with huge demand so, even if Model 3 becomes demand constrained they can convert Model 3 production lines to Model Y. Model Y has considerably higher margins than Model 3 so this would actually benefit profitability.

It's overly simplistic to say that since large discretionary purchases will be lower, that Tesla will have a demand problem. Remember, they only comprise a tiny percent of the entire market and that is not because they haven't had enough buyers, it's because they haven't been able to make enough cars for the expanding group of people that want to buy a Tesla. Last Wednesday, Elon let it be known that they finished the quarter out with more order backlog than at any other time. The market for cars in the same price range could be quartered and Tesla, with its little bitty two percent (or whatever the exact number is), might still be able to expand their sales with their production.

 

[FrankSG]

Lol, you need to read what they actually wrote:

"pegged at 2,000 vehicles per week with single shifts per day and overtime on Saturdays. Tesla reportedly plans to activate two shifts in March"​

That does not mean they plan to activate two MORE shifts in March, it means there will be TWO shifts in March.

HINT: 3 x 10 hrs shifts don't fit into a 24 hr day. Neither do 3 x 8 since people take breaks and lunch, and the machines can NOT run 24 hrs day without maintenance...

Maybe the planned production increase in July is not from a 3rd shift and that was posted incorrectly on Twitter by somebody, but here is the full quote:

GIGA SHANGHAI PRODUCTION CAPACITY
During the said meeting, it was disclosed that the current capacity of Giga Shanghai following the temporary shutdown during the peak of the coronavirus public health scare was pegged at 2,000 vehicles per week with single shifts per day and overtime on Saturdays. Tesla reportedly plans to activate two shifts in March to hit 3,500 units per week with a goal of achieving 50,000 to 60,000 vehicles fo the first half of the year.

According to the experts at Giga Shanghai cited by the report, the carmaker expects a significant increase in production starting July following a stress test in June.

“In the first and second half of this year, the combined production capacity is expected to be about 170,000 vehicles. Looking at the whole year next year, if the whole year runs at a production capacity of 5,000 vehicles per week, it can reach a production capacity of nearly 250,000 vehicles per year,” the report by Ran Cai Jing reads.

Based on these reports, it seems unlikely Shanghai will cap out at 4k M3/week.

 

[StealthP3D]

So, kind of a technical / production question. Let’s say Giga 1 in Nevada is able to start cranking out model 3 and model y battery packs. Obviously no cars to put them in the near future so they would have to store them. What kind of maintenance is required to keep these packs healthy. I’m sure there is a systym in place but if this scenario is playing out I wonder what kind of challenges they are having. Storage etc.

That sounds likely. There is no problem with storing them for many months as long as they disconnect the battery monitoring and other vampire drains. All they need to do is charge them to 70% and put them somewhere that is preferably cool. The cooler the storage, the longer they can be stored without needing any maintenance (like a maintenance charge).

 

[Artful Dodger]

SEC Filing | Tesla registers 139,837 shares of TSLA to cover Maxwell 5.5% convertible notes. (April 30, 2020)

SEC Filing | Tesla, Inc.

 

[StealthP3D]

Coronavirus (COVID-19) Data Dashboard - Novel Coronavirus (COVID-19) - County of Santa Clara

The ICU hospitalization is all-time low right now. Hopefully we can continue this trend next two weeks which will be a decisive factor of Phase 2 reopening in Bay Area counties.

What are the chances that the OVERALL death rate during the lockdown actually declines due to the lack of fatal car and other work-related accidents declines more than CV deaths increase?

 

[Jack6591]

As someone who's team has built a rules-based billing engine [software] for electricity in one of the least regulated/most competitive generation markets - I appove this message!
I was surprised that in all the twittuffle this thread did not pick up that TSLA applied to be a utility in UK. It would certainly short-circuit Adam Jones: a sports utility vehicle company!

Disruption Starts with Unhappy Customers, Not Technology

Utilities consistently rank at the bottom of customer satisfaction surveys. Tesla’s evolving battery technologies will amplify the capabilities of renewable energy; they will leverage Tesla’s ability to disrupt utility business models and revenue streams. This opportunity is being underestimated, IMO.

 

[Artful Dodger]

Based on these reports, it seems unlikely Shanghai will cap out at 4k M3/week.

Oh I fully agree. The nameplate capacity for a single new line seems to be 5K/week ever since 2018 when Tesla decided it was more capital efficient to add a tent in Fremont, but build the 2nd 5K/wk line in China.

This happened so long ago people here either forgot about that decision or never knew it happened. Either way, the 5K/wk nameplate capacity of each line is based on 2 x 10 hrs shifts.

Bonus conjecture: The massive Model Y construction now underway in Shanghai will see 2 lines bultt for 5K/wk each, bringing GF3 production capacity to 15K/wk sometime in 2020.

Then that's a generous 25% margin on 5K/wk Models 3 @ $40K each, or $2,5B/yr gross margin from Model 3. Just the Model 3 line alone will buy 1 new Gigafactory / year

Add to that 10K/wk Models Y * 0.25 * $44K each, that's $5.5B gross margin / year coming online fully for FY2021. Yes, that's $8B / yr gross margin being generated at GF3/Shanghai by the start of FY2021.

That buids and pays for the new 'China Design Center', AND the Model 2 'World Car' factory. One year running it, and it pays for 2 more...

Its gonna git big, fast.

CH33RS!

 

[Green Pete]

Honestly I feel like given the relationship Elon has seemed to have built with china even if the american economy tanked for years as long as freemont was open china would buy both Shanghai and freemont production and let him split the difference on the price and call the selling price the average of the two.

Absoulte power has its downsides for a culture, but the lack of red tape can be very useful.

 

[MC3OZ]

Oh I fully agree. The nameplate capacity for a single new line seems to be 5K/week ever since 2018 when Tesla decided it was more capital efficient to add a tent in Fremont, but build the 2nd 5K/wk line in China.

This happened so long ago people here either forgot about that decision or never knew it happened. Either way, the 5K/wk nameplate capacity of each line is based on 2 x 10 hrs shifts.

Bonus conjecture: The massive Model Y construction now underway in Shanghai will see 2 lines bultt for 5K/wk each, bringing GF3 production capacity to 15K/wk sometime in 2020.

Then that's a generous 25% margin on 5K/wk Models 3 @ $40K each, or $2,5B/yr gross margin from Model 3. Just the Model 3 line alone will buy 1 new Gigafactory / year

Add to that 10K/wk Models Y * 0.25 * $44K each, that's $5.5B gross margin / year coming online fully for FY2021. Yes, that's $8B / yr gross margin being generated at GF3/Shanghai by the start of FY2021.

That buids and pays for the new 'China Design Center', AND the Model 2 'World Car' factory. One year running it, and it pays for 2 more...

Its gonna git big, fast.

CH33RS!

Looking at the progress of the GF Shanghai Model Y build so far, it seems roughly where the GF Shanghai Model 3 build was in May 2019, so roughly one year behind or slightly more.

Some Model Y production at Shanghai in Q1 2021 would not surprise me, maybe if shorts ask nicely they can get Santa to make this happen in December 2020

 

[Intl Professor]

Agree. Flu virus can take our lives too. But projecting our value of life on the axis of death might overlook something else. Otherwise people would not risk their lives to go to war.

As a child during WWII, safely ensconced in Illinois. I experienced the unity of purpose in support of the war in all my experiences. There was opposition, I learned as an adult about entry, but not after Pearl Harbor for obvious reasons. I am not at all certain about the troops doing the fighting. Rationally they would want to be somewhere else and we have scientific evidence from returning POWs in the Korean War who succumbed to brain washing that the Turks were most resistant nationality and among the US forces, the Marines were most resistant. Fighting for an ephemeral principle like democracy didn't hack it. Training to fight in order to protect your buddy paid off.

Very cleverly, Nixon took the steam out of the anti-war movement when he decided to drop the draft in favor of an all-volunteer military. It appeared to me the drives for racial and sexual equality were just tacked onto the anti-war movement and not such a primary concern, though my students were primarily white at that time. Many have moved through the military with education, security, health care, and for potential retirement into the range of the middle class which would not have been possible before. Except for the initial success of the Afghan War which would have succeeded in capturing Osama were it not for the Shrub's being snookered into the Iraq war by agents of Iran, our troops have been savaged. In my view it's time for the draft.

The value of life is complicated even though death takes a huge amount of weight.

That weight becomes less burdensome when you approach it, in my experience. A lot of the terminally ill are much more concerned about their loved ones than themselves. Stealing from Rousseau, I always say "People everywhere are born free, yet everywhere they are looking for chains, that is to say, certainty." To give death its due, it is certain and can be a relief. Maybe that's why the young woman Covid-19 doctor killed herself recently—she couldn't bear seeing so many suffer this death alone, yet she remained a physician. This kind of push/pull was a life-death uncertainty becoming unbearable.

Please take this disease seriously.

Edit: added.

 

[Buckminster]

 

[LN1_Casey]

German market has been jumpy this morning. opened at ~$689, went to ~$721, and now has been floating about ~$708. All for about 1.21k shares traded, which is high for this market.

 

[JBRR]

Morgan Stanley upgrade to 680

 

[LN1_Casey]

Morgan Stanley upgrade to 680

Didn't they just reiterate their $440 target last week after the ER? Not that I'm complaining about the upgrade, but why would they adjust now and not then?

 

[HG Wells]

Didn't they just reiterate their $440 target last week after the ER? Not that I'm complaining about the upgrade, but why would they adjust now and not then?

As someone else would say.
It's the batteries !

EDIT: Battery day is coming. If it's even half of what we think it is, its a new trajectory.