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

[HG Wells]

20 years ago someone tells you about a company that will build a electric car company with a world wide charging network.
This company will also build the largest battery factory in the world.
They will grow faster than any other car company.

The head of this company will also build orbital reusable rockets.
That company will design and deploy a world wide satellite high speed network.
They will also be the first commercial private company to fly astronauts to the space station.

You would be laughed out of the room for suggesting any of this.

Watching the latest starlink mission I am reminded how amazing it is I can invest with a company run by such an amazing man.

Yes I am a full on Elon Musk fan boy....how can I not be!

WOW, sounds like a great SciFi movie.

 

[Tslynk67]

Germany initiates a €130 bn stimulus package with €50bn for future investments that include BEVs and charging infrastructure.

VAT reduced by 3% for all vehicles starting July 1st.

Good news for BEVs but as a result almost no cars will be sold in June.

Indeed, always better when these changes are announced "with immediate effect", or even better backdated to the beginning of the year.

 

[Todd Burch]

Indeed, always better when these changes are announced "with immediate effect", or even better backdated to the beginning of the year.

Works out well for Tesla since no more cars will be going to Europe this quarter anyway.

 

[junas]

Tesla still has auto sales as its core revenue generator. Yes in the future that may change, but currently that is fact. There has been anecdotal talk here of no deals on new cars from Ford etc. This is true, but will change as the supply changes. Things shutdown. The supply of new cars dried up. But the supply of used vehicles is increasing. Hence where things are currently reflected in, is the used car market. Prices are dropping. As someone who bought an used X in February, and scoured ev.cpo daily for a long time, I know for fact used tesla prices have already dropped. People are turning their leases in or trying to get out of them contributing to more used supply. Car rental companies, either going bankrupt or on their way, are adding to that supply as well. Some predictions say used car prices might drop another 20 to 30 per cent this year.

Tesla is not insulated from this. In my opinion this is the real reason they dropped prices recently. Trying to stay ahead of somewhat decrease in demand, and the potential for more. Fact of matter is few people are tesla fanatics like us. Few people dig deep into EV driving, and if they have been driving ICE their whole life, and now can scoop up a 2 year old vehicle for historically the price of that same vehicle being 4 or 5 years old, they will be more than happy to do so, especially if gas is cheap. On top of that people are driving way less, and as workplaces transition, this may remain the case permanently, thus decreasing vehicle turnover. in my opinion this situation slows transition to electric driving and does not accelerate it.

Spot on analysis regarding general vehicle market.

In the past I used to work in auto analytics company implementing software for insurance companies & car dealers to calculate residual values of used vehicles. Based on what I learned there the used car market looks currently worse than ever. That's one of the best indicators to estimate future demand for new cars. You are right Tesla is not 100% insulated from this. Sinking used cars market adds some pressure on pricing. I'd be one of those buying used Model X if it was 30% cheaper than currently. However, I doubt the situation has a major effect on Tesla sales because there aren't too many used Teslas around in most markets.

While I fully agree on your point regarding the state of used cars market, I don't see that as a primary reason Tesla dropped prices recently. I still believe it's primarily the production capacity increase what caused (and will cause more) price adjustments. It's worth remembering that Tesla is currently building two new plants and probably starting third one in the near future. They are more than doubling their production capacity in very short period of time. China is now self-sufficient with most M3 trims. Fremont production is no longer bound to China. It's pretty clear that prices must be adjusted to create new demand every time the production capacity increases. If not, prices were too low until now, right? It's a market.

 

[avoigt]

An interesting article from bloomberg on the progress of GigaBerlin.

Bloomberg - Are you a robot?

from the article:

• Tesla Inc. will rework plans for its factory near Berlin to appease environmental critics and ensure its first European outpost can start producing cars in about a year, a senior local government official said.
• new blueprints to be presented this week or next will address some of those concerns by reducing the amount of fresh water required and waste water created, said Joerg Steinbach, the economy minister in the state of Brandenburg, where the facility will be located. Following an eight-week process of public review and response, an open hearing will take place by early September, he added.
  
• BASF SE in the southern part of the state, for example, plans to make cathodes for electric batteries from 2022, employing 2000 workers. Before the end of the year, Steinbach hopes to announce at least two more companies setting up shop, but he declined to specify in which industries.

Comments from Joerg Steinbach, the economy minister in the state of Brandenburg:

• [in dealing with Musk] “It requires a lot of flexibility,” said Steinbach, adding that Tesla’s unconventional business practices sometimes clash with Germans’ propensity for highly structured planning. “I find out-of-the box great, but at some point it becomes exhausting.”

• Even so, nothing should stand in the way of creating a new auto-industry hub just outside of the nation’s capital now, the 64-year old trained chemist says.

• “I think we’re now past the point of no return,” Steinbach said.

This is all old news and has been posted and written about before.

Bloomberg would have been better of to use the current interview with Steinbach for an article. In fact I considered writing one but decided against it not be be sucked into the news business.

The interview is in German but you find a translation in my Twitter feed:

"The interest of Tesla in this Factory has even increased, the argument Elon Musk with the CA Authorities had has led to him explicitly praising how Brandenburg is handling it"

"This is a project of particular strategic importance" "I expect firmly that Elon Musk will come to us to Brandenburg if its for Groundbreaking or another activity for us its important that the process as such continues we take the symbolic gesture but its of 2nd importance"

Tesla Gigafabrik-Ansiedlung in Grünheide. Umfeldentwicklung und aktueller Stand

 

[Tslynk67]

For what it's worth, current inventory in Belgium is much higher than a typical 3rd month of a quarter - which doesn't surprise me at all given the local lockdown, which we're only rolling out of the last couple of weeks.

Model 3 - new 63 / used 0
Model S - new 6 / used 2
Model X - new 12 / used 1

Will track this regularly...

 

[cricketman]

Inventory isn't too high in Spain:
7 Model 3
0 Model X
4 Model S

In mid-May, there were over 50 Model 3s in inventory so it is good to see that they have gone. Impressive given the strict lockdown here which has been easing the last few weeks.

And even more interesting, just 2 days ago, there were 13 Model X in inventory and they all went overnight. I don't know whether a fleet has bought them or whether there is a bug on the Tesla site!

 

[chrsk]

According to a colleague of mine, there were no Model 3 in stock in Norway. August was next possibility. According to the Tesla webpage there is little that's not sold atm.

0 Model 3
9 Model X
0 Model S

 

[Artful Dodger]

TSLA Volume by 8:00 am ET was just 25,642 shares traded (v. low vol). OTH, SP bucking the macros:

TSLA Jun. 4, 8:06 a.m. EDT
Pre-market 886.05 +3.09 (0.35%)

QQQ Jun. 4, 8:19 a.m. EDT
Pre-market 236.26 −0.43 (0.18%)
​

Cheers!

 

[kbM3]

Although the 1st wave of layoffs shouldn’t affect Tesla demand too greatly, this article explains in detail which industries are just beginning to be hit in the 2nd wave of layoffs, and they comprise mostly white collar workers.

https://www.bloomberg.com/graphics/2020-how-many-more-jobs-will-be-lost/

 

[TheTalkingMule]

New German €6k subsidy for EVs only applies to <€40k. Perhaps this is why Elon is in UK this week? Put some pressure on Germany to raise or lift that subsidy limit that cuts out all Tesla vehicles?

I'm mean.....yes they've committed a lot of time and effort to Brandenburg construction. But technically they could still pivot back a UK Gigafactory and scrap Germany.

 

[elasalle]

Macros: Now ECB in on the buying spree (+600B Euros, 1.35 T)
European Central Bank takes its pandemic bond buying to 1.35 trillion euros to try to prop up economy

(another anything it takes to prop the economy)

 

[SpeedGoat]

True. But even more telling is that phase 2 doesn't look anything like previous bear markets either (they just forgot to add the most recent market moves to the illustration). Actually, this graph came from an article published on April 26th and yet it fails to show the S&P climb out of the hole between April 21 and April 24. After that, it continues climbing for the next 5 weeks. That makes this chart stale and shows that it represents a failed theory.

Market Stalls, Is The Bear Market Rally Over?

What exactly are they measuring from? The timeline at the bottom says "number of weeks from start of bear market," but that would mean the "2020 bear market" is already 69 weeks in.

 

[Right_Said_Fred]

New German €6k subsidy for EVs only applies to <€40k. Perhaps this is why Elon is in UK this week? Put some pressure on Germany to raise or lift that subsidy limit that cuts out all Tesla vehicles?

I'm mean.....yes they've committed a lot of time and effort to Brandenburg construction. But technically they could still pivot back a UK Gigafactory and scrap Germany.

The limit of €40.000 does not include the VAT, so the Model 3 SR+ qualifies.

 

[kbM3]

Super, super detailed engineering explanation of the brilliance of Octovalve and Tesla’s entire thermal management system.

 

[SoGA Fan Club]

Value analyst has always been the same. Picks up some idea and runs 10 kilometres down the road with it before stopping to think. He flamed out on this board over some other silly idea a few years back.

Just more noise in the echo chamber.

Yea, I remember he/she constantly claimed that gas prices were sky-rocketing and would be going up to record highs "soon" - despite the contrary being true.

 

[TheTalkingMule]

WARNING! INCOMING DIP!

 

[SpeedGoat]

WARNING! INCOMING DIP!

Probably some upward movements coming as well.

Let's all wait and see if the numbers move up and down today.

 

[Tslynk67]

Well, imagine that, MP now up to $860 and more calls added at $900... if only someone had warned us this would happen...

 

[oldTAVguy]

Germany forces all petrol stations to provide electric car charging
BY Reuters
— 8:22 AM ET 06/04/2020
FRANKFURT (Reuters) - Germany said it will oblige all petrol stations to offer electric car charging as part of a sweeping 130 billion euro ($146.26 billion) economic recovery plan, boosting electric vehicle demand which has been hampered by consumer concerns over refuelling.