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

[Singuy]

You may disagree with Fred's take on the reason behind Tesla's inclusion of the Model Y to the referral program, but your suggestion also doesn't really add up with the news from yesterday -- the leaked email from Elon.

So we have a situation where:
1. Elon informs his manufacturing team that the Model Y production needs to ramp up and the number of rectifications needs to be minimised, which indicates they're not where they want to be in terms of production rate, and
2. The Model Y is added to the referral program, indicating that the current rate of demand -- at least on the West Coast, given we're currently quite late in the quarter -- is below the production rate.

Weak demand is a reasonable conclusion. It may not be the correct one, but it is reasonable based on what we know. Again, it may simply be weak demand for the specific Model Y version (incl. wheels, body color) they're producing now, in the geography in which they have a good chance of delivering this quarter, but it's not completely unreasonable. People are just now starting to get back to work in many cases, some people may still need to figure out if there is a job waiting for them at the end of the lockdown, and so financial concerns are a major factor for many families; as such, it's possible some reservations are not transformed into orders right away.

Having a hard time computing.

1. Production ramp is not where they want to be (to meet demand).
2. Demand is too weak hence referral

So which is it? Is demand too much to the point that you have to rally up your troops to build faster or demand is not enough that you have to give them away?

My speculation, Elon wants to know how Oprah feels so you get a Model Y, you get a Model Y, EVERYONE GETS A MODEL Y!

 

[Zaxxon]

thousands of managers

I found VW's problem.

 

[Paracelsus]

Some lunatic was arguing with me about stationary storage on LinkedIn. Totally incoherent emotional nonsense. Turned out was Trevor Milton, the founder/chairman at Nikola. Dude is just a complete nutjob.

Love this post...........particularly because I have had similar discussions there. Thought it might be worth sharing should you or anyone else want to get under Trevor's thin skin a bit that the discussions around the fact that 95% of hydrogen sources for transport in the US still come from Natural Gas and non-renewable processes also tend to make him look for a fresh set of Depends Undergarments fairly quickly. Nikola doesn't look too Green to investors when that conversation is elevated to a level that we really need to have if we are going to take Climate Change and platforms like the Green New Deal seriously. I have sometimes wondered if Nikola and other hydrogen transport fuel cell proponents weren't simply advocates for new markets to delay the inevitable for the US Natural Gas industry (their growing number of stranded assets). Keep up the great work @TheTalkingMule !

 

[Mo City]

I absolutely detest when the things we post here get turned into clickbait...

At 8 AM this morning I post the news about the Model Y being available for referral rewards, and now at Noon, Fred from Electrek publishes an article titled "Tesla adds Model Y to referral program, surprising move indicating weak demand."

How hard is it for a journalist to avoid putting opinion in the headline? "Tesla adds Model Y to referral program" is factual; "surprising move indicating weak demand" is speculative BS. And then Fred has the gumption to add his referral link at the bottom of the page.

I think Fred does this to deflect criticism of being a Tesla homer.

Remember when TSLA was posted on the home page of Electrek and the only criticism Fred received was being biased in favor of Tesla? I believe he deliberately attempted to remake his image. In the process, he alienated many Tesla bulls who turned on him.

My main problem now with Fred's opinions is they are often so obviously wrong he impales himself. Sometimes he knows just enough to display ignorance. IMO, he should keep to the facts (or educate himself enough to offer more informed opinions) and only deviate when given inside scoops from Tesla insiders.

For a period of time, Electrek was a good "one stop" for all Tesla news. Those days are long gone.

 

[powertoold]

With Tesla, overall demand has not and will not be an issue for the next several years. We've been through worse scares.

 

[StarFoxisDown!]

You may disagree with Fred's take on the reason behind Tesla's inclusion of the Model Y to the referral program, but your suggestion also doesn't really add up with the news from yesterday -- the leaked email from Elon.

So we have a situation where:
1. Elon informs his manufacturing team that the Model Y production needs to ramp up and the number of rectifications needs to be minimised, which indicates they're not where they want to be in terms of production rate, and
2. The Model Y is added to the referral program, indicating that the current rate of demand -- at least on the West Coast, given we're currently quite late in the quarter -- is below the production rate.

Weak demand is a reasonable conclusion. It may not be the correct one, but it is reasonable based on what we know. Again, it may simply be weak demand for the specific Model Y version (incl. wheels, body color) they're producing now, in the geography in which they have a good chance of delivering this quarter, but it's not completely unreasonable. People are just now starting to get back to work in many cases, some people may still need to figure out if there is a job waiting for them at the end of the lockdown, and so financial concerns are a major factor for many families; as such, it's possible some reservations are not transformed into orders right away.

I actually don't agree with that take on the email at all. It sounds to me like Tesla is preparing and ready for the next stage up in terms of weekly production rates and Elon wants to make sure it's done as efficiently as possible to minimize scrap and rework. In fact it actually sounds like some parts of the production line has fully come on line and they expect a large increase in the weekly production ramp. Usually when something like that happens, if it's not done efficiently, it leads to lots of scrap and trial and error on the other parts of the production line.

This actually fits in pretty well with the idea of now unlocking the referral program and expanding locations of Model Y deliveries(in Canada) while reducing the expected wait time to 4-8 weeks. Tesla is already preparing for Q3 production rates they think they're going to achieve. If you think production is going to greatly expand in 1-2 months, you typically should start preparing sooner than when you achieve those production rates. This is all part of ramping a product. I thought we went through this with Model 3 and people should know what to expect.

To touch on it a bit more. It's June 9th now. Adding the Model Y to referral program would do nothing for Tesla in terms of deliveries for June and Q2. Pretty much production is spoken for at this point. So Tesla is doing the referral update in preparation of Q3. If Tesla wasn't expanding or on the verge of expanding Model Y production greatly, why wouldn't Tesla just wait and see if demand for the high end Model Y's naturally increases in the first month or two of Q3? There's zero incentive to do this unless they are preparing for a big expansion of Model Y production rates.

 

[Zaxxon]

So which is it? Is demand too much to the point that you have to rally up your troops to build faster or demand is not enough that you have to give them away?

Also, this isn't the referral program of old. You can now get 1,000 Supercharger miles with a Y. In Tesla-speak, that's 400 kWh, times $0.28/kWh = $112. So a total benefit ceiling of $224, if both the referrer and referee utilize all 1,000 miles within the 6-month validity period. If Tesla's charging at least a bit more than they pay, then about $200 max cost for the referral benefit, which not everyone does. (I'd wager that the majority of folks don't use the entire 1k miles on both ends of the transaction, but I have no data to back that up.)

It's just not a significant additional cost. Remember that the 3 had a significant period (about a year) from first production until they were ramped enough to provide vehicles en masse without a ~monthlong wait after finalizing an order. The Y has ramped significantly faster. It makes sense to make it a 'normal' Tesla vehicle at this stage.

 

[Don TLR]

CNBC just interviewed Colin Rusch from Oppenheimer who IIRC is usually negative on Tesla, and fits their narrative of interviewing contrarian characters after Ron Baron hyperbole.

But this time, as far as I could tell, he was finding it difficult to be negative. He really made it sound to me like Tesla is in a strong position.

CNBC has a habit of getting someone negative on after a Ron segment, the last time Ron was on Craig Irwin did a segment debunking everything Ron said and also why it’s foolish to believe anything Craig says..

 

[StealthP3D]

Lol, if Elon's plan vests, by 2028 TSLA will be closing in on a trillion in market cap and $5k/share. I think you're over-thinking this 'problem'.

FOMO!

 

[Curt Renz]

Electrek - this morning: Tesla UK factory rumor gains some traction as Elon Musk gets involved - Electrek

 

[Mo City]

I don't have a twitter account but when Q2 numbers get announced, if Tesla surprises everyone with the amount of Model Y's they made in Q2, I'll gladly make a twitter account to troll Fred as much as I can to call him out on his BS. Sure Fred will block me within hours because he's insecure but I'll be content with those couple of hours

Just unbelievable unprofessional journalism. He should just call Electrek a blog because it's really just one guys opinion most of the time.

OT: I despise social media for the most part but Twitter is the one "must have" of them all. Just curate your feed accordingly. It is also lightening quick. I do NOT follow any friends; just subject matter that interests me and sources of information. I also very rarely post (my son calls me a "stalker").

IMO, a Twitter account is mandatory for those of us following the stock market.

 

[StealthP3D]

It is quite obvious that Musk loves to start new companies. Some would argue that he has always been more interested in SpaceX. As Tesla scales up, it could prove boring to him, and not "Boring" in a good way. How energized will Musk be leading Tesla from build 11.7 million vehicles in one year to 13.4 million the next year? Plenty of other CEOs would be happy to jump at that chance for a tenth of the money, and it does not really require an Elon to make it happen.

I think you are under-estimating the skill required to run a fledgling auto company. I'm not worried in the slightest about Musk losing interest in his baby.

Next FUD please!

 

[Chocochip]

You don't 'know' anything about demand for Model Y in Q2. Blog posts full of inuendo and misleading headlines not constitute knowledge. You've consumed a bunch of targeted hit jobs (uncritically it seems) which are purposefuly engineered in an attempt create a media narrative. Now you think you 'know' something. You do not. No one does, outside of Tesla.

Do you have some sort of reading comprehension issues? Go over my post again and see if you get it this time.

Here's what we know:

1. Elon sent an email to his team saying that they need to improve the production rates of the Model Y -- unless you somehow believe that's a fake leak, but I haven't seen any evidence of that.

2. The Model Y has been added to the referral program, which has always been used as a demand incentive -- unless you believe Tesla has suddenly turned into a charity and gives stuff away for nothing.

What I said is that based on these two facts, one reasonable conclusion -- but not necessarily the correct one -- is that there's weak demand for the specific versions in production now in the geographical area they're targeting for deliveries now. If you disagree on reasonable grounds, please present your reasons. So far, your comment sounds like "oh, you just believe what others tell you, so gullible!", but you don't offer any reasonable alternative. And no, you "trusting" that this assumption is wrong is not a reasonable alternative.

I get that you feel all superior when you police the forum and "set people straight", but assume you're not the only true seer of the TSLA truth and everyone else is a dum-dum. Check your attitude, because frankly it's grating.

 

[Ameliorate]

Nasdaq making a run for 10,000

 

[ggr]

I was further researching Tesla's impact report, since people seemed to be thinking it was new, and since we're all bashing edFray (which, were I a moderator, I would be deleting) I found this helpful reference from last year, when it first came out. Now, how did edFray suddenly find it and claim that it just came out? By repackaging TMC, that's how. (April 17, 2019, if anyone cares.)

Another crap piece from Niedermeyer, trying to attack Tesla's impact report, mostly debunked in the comments.
Fact Checking Tesla's "Impact Report"

 

[j6Lpi429@3j]

From a customer POV, the new referral rewards are like biscuit crumbs compared to the old scheme. I have arachnid wheels, a spare toy tesla car in my office, and another tesla toy car I gave to charity, and I only give people my ref code when they ask.
Wake me when the referral cost to tesla per car sold is more than 1% of the advertising cost per car sold for every other car manufacturer on the planet.

 

[Zaxxon]

I was further researching Tesla's impact report, since people seemed to be thinking it was new, and since we're all bashing edFray (which, were I a moderator, I would be deleting) I found this helpful reference from last year, when it first came out. Now, how did edFray suddenly find it and claim that it just came out? By repackaging TMC, that's how. (April 17, 2019, if anyone cares.)

I'm confused. Tesla just blogged it last night. It's new. This is the 2019 report, not the old 2018. It's even listed on the IR site with a publication date of yesterday.

Edit: and the 2018 report that you are referring to came out on 4/15/19, not 4/17.

 

[ggr]

Do you have some sort of reading comprehension issues? Go over my post again and see if you get it this time.

Here's what we know:

1. Elon sent an email to his team saying that they need to improve the production rates of the Model Y -- unless you somehow believe that's a fake leak, but I haven't seen any evidence of that.

2. The Model Y has been added to the referral program, which has always been used as a demand incentive -- unless you believe Tesla has suddenly turned into a charity and gives stuff away for nothing.

What I said is that based on these two facts, one reasonable conclusion -- but not necessarily the correct one -- is that there's weak demand for the specific versions in production now in the geographical area they're targeting for deliveries now. If you disagree on reasonable grounds, please present your reasons. So far, your comment sounds like "oh, you just believe what others tell you, so gullible!", but you don't offer any reasonable alternative. And no, you "trusting" that this assumption is wrong is not a reasonable alternative.

I get that you feel all superior when you police the forum and "set people straight", but assume you're not the only true seer of the TSLA truth and everyone else is a dum-dum. Check your attitude, because frankly it's grating.

Demand Management != Demand Problem.

 

[ggr]

I'm confused. Tesla just blogged it last night. It's new. This is the 2019 report, not the old 2018. It's even listed on the IR site with a publication date of yesterday.

Edit: and the 2018 report that you are referring to came out on 4/15/19, not 4/17.

OK, it's a fair cop; it appears to be a total coincidence that it came out just a couple of hours after I quoted the old one. At least that explains my confusion. Apologies to anyone I appear to have been bashing. Except maybe edFray.

 

[hershey101]

Wow.... I can't believe I'm agreeing with Citron Research..

"$NKLA back to $40 in a month. The anti-Tesla If you buy here you deserve to lose your $$ considering Milton sold just a week ago at $10. When $TSLA had this mkt cap the Model S was scaled and X was produced. There is no real IP at $NKLA and PR's have been overly promo"
https://twitter.com/CitronResearch/status/1270412003345981440