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

[MC3OZ]

I'm liking Ivan's videos lately. He's really going the extra mile to interview knowledgeable people in the field of battery material supply chains. He also interviews with a straight bat unlike may of the Tesla channels where you need to dial down any comments back to reality. It's surprising he only has 15k subscribers with content this relevant to Tesla/EVs.

Yes, I'm going to subscribe to Ivan's channel, this kind of deep dive uncovers new information, lots of YouTube channels simply comment on well known information.

Both have a place, some channels are a better introduction, or suit people with only a casual interest.
But there is little point in watching multiple channels all commentating on the same points.

 

[MC3OZ]

This is a short video, well worth watching:-

 

[Jack6591]

Much has been made of S&P 500 inclusion. Certainly, it will be a significant moment in Tesla’s history. However, an Electric Vehicle manufacturer posting a growth-driven profit, backdropped by the automotive industry posting billions in losses, will see S&P 500 relevance wither.

Tesla is at a moment of historical import.

 

[wipster]

Much has been made of S&P 500 inclusion. Certainly, it will be a significant moment in Tesla’s history. However, an Electric Vehicle manufacturer posting a growth-driven profit, backdropped by the automotive industry posting billions in losses, will see S&P 500 relevance wither.

Tesla is at a moment of historical import.

Indeed

 

[Sanny]

I disagree. If anything it feels like the avg age has dropped quite a bit over the last few years. We had very little dbag-toned posting in 2014 and I attribute it to more a day-trader-wannabe type posters coming on board since 2016ish when Tesla officially became "cool".

I totally disagree that I bought something "uncool" back in 2012.

 

[RobStark]

Relax, no one attacked you. There is a difference between attacking the person and attacking the idea that was presented.

Tesla has constantly updated and refreshed the Model S and they will redesign the interior (again) when it makes sense. At some point you need to realize Tesla no longer lives or dies by Model S sales. They are simply not that important.

Model S is very important. As it is the company Flagship.

Model S beating Taycan et al on Youtube videos is the beginning of many Model 3 and Model Y sales.

And Model S sales would be more relevant to GAAP if it was refreshed and selling at 50k Plus units per year instead of ~25k units per year.

 

[Bet TSLA]

Much has been made of S&P 500 inclusion. Certainly, it will be a significant moment in Tesla’s history. However, an Electric Vehicle manufacturer posting a growth-driven profit, backdropped by the automotive industry posting billions in losses, will see S&P 500 relevance wither.

Tesla is at a moment of historical import.

You're talking about perception, which is fickle. S&P 500 inclusion is a mechanical forcing function. Far more certain.

 

[Dwdnjck]

Sold 5 Jan 2021 $1500 calls and 5 Jan 2021 1600 calls on Friday. Bot Y perf, w/w today with proceeds. Still hold 2000 so it’s ok if they get called.

 

[Krugerrand]

I'm not so sure. The recent stuff certainly sounds like him and is of the same quality. However, his earlier tweets seem to be mostly retweeting. Mostly good stuff though I guess. I would have expected him to have found his twitter voice earlier. This doesn't fit:
https://twitter.com/ThiagosActionTV/status/1263983642403131396
Also, I don't see anything political - I would have expected a bit from him also.

Here’s an idea: somebody just tweet and ask.

 

[Artful Dodger]

Indeed. @Troy runs a survey which indicates the 'take-rate' for FSD on Model Y is ~50%.

This is big. It implies a net addition to gross margins for Model Y around $3.5K per unit sold, or approx +5% added to already fat margins for the Model Y:

• So far, only premium trims available
• only available in N.A reducing transport and working capital costs
• same build cost as Model 3 but with a higher base price

Model Y is shaping up to be a surprise contributor to a surprising quarter. Only unknow is volume, but even there anecdotal 'VINology' reports bode well.

Cheers!

I don't think this has been discussed, but its worth discussing:

By my 'back-of-the-envelope' calculations, the gross margin for Model Y could exceed 30% (let's use 30%).

With an ASP of $60K and deliveries of ~18K in Q2, that's a gross profit for Model Y of ~$324M

Indeed, let's check that twice:

• ASP for Q2 mix of LR, w. AWD/P +50% FSD 'take-rate'
  
• Let's go with 18K 'Y' deliveries (prod. est. via @Troy)
• Est'd gross margin includes a 'Y' premium of $5k + FSD

That yields an est. of three hundred, twenty-four million US dollars just from Model Y.

Paging @FrankSG

 

[srius]

I'll take the over on these numbers. Especially 2021 should be much higher than 790k.

Actually, out of these 6 numbers, I'm least confident about Tesla hitting the 527k in 2020. I think 2021-2023 are almost certainly going to be higher, and 2024 and 2025 are a bit hard to predict at this point.

Tesla's production capacity today:
Fremont S+X: 80k (90k, but demand might not be there, so let's say 80k)
Fremont 3+Y: 400k
Shanghai 3: 200k
Total: 680k

Tesla's production capacity end of 2020:
Fremont S+X: 80k
Fremont 3+Y: 500k
Shanghai 3: 250k
Total: 830k

Tesla's production capacity end of 2021:
Fremont: 580k
Shanghai 3: 250k
Shanghai Y: 250k at least, quite possibly more.
Berlin: Just starting to ramp
Texas: Cybertruck should be starting?
Nevada: Semi?
Total: 1,080k+

Tesla's production capacity end of 2022:
Fremont: 580k
Shanghai 3+Y: 500k+
Berlin: 250k+, hard to predict exactly at this point.
Texas: Hard to predict, but should be at least 100-200k Cyber, and perhaps Y production too.
Nevada: There should be semi production, but hard to say how many. Maybe 50k/year?
Total: 2M-ish?

There's not enough visibility beyond the next 2-3 years to make any accurate guesses, but I'll be surprised if Tesla's production capacity and deliveries don't grow in excess of 50% for the next couple of years.

Yes, following the productions and watching the demands!
You've only counted ~1.5M in 2022 for the 2 M-ish total. It seems 1.7M is more realistic by adding ~200k Y from Texas. There was a rumor that Texas will start with a general assembly line for Y. It does make sense that Texas also produces Y as Fremont space is quite limited.
It will get very difficult, if not impossible, to grow production at 50% rate when the numbers get big. "Just" growing from 4M to 6M requires 4 new GFs in full production, with each GF takes 4+ years from the announcement to the full production. There are just too many risks in the macro, demands, etc. with such a long ramp-up time required.

 

[ggies07]

Elon always said if you work 80 hours a week, you get twice as much done. So deliveries 24/7 seem like a possibility to make up for shutdown?

Ordered a model 3 yesterday and it’s ready tomorrow at 2am : teslamotors

2AM delivery time..lol. Probably an error.

Ha! He'll no, I would have taken mine at that time. You're too damn excited

 

[mongo]

It will get very difficult, if not impossible, to grow production at 50% rate when the numbers get big. "Just" growing from 4M to 6M requires 4 new GFs in full production, with each GF takes 4+ years from the announcement to the full production. There are just too many risks in the macro, demands, etc. with such a long ramp-up time required.

You're underestimating the output of each GF. Each new factory site is getting bigger than the last.
Berlin's building map shows 2 factory units on one site https://www.teslarati.com/tesla-gigafactory-4-layout-train-station-report/ (older ones showed 4). Phase 1 alone is planned for 500k cars. Gigafactory Berlin-Brandenburg So it could do 1 million vehicles when both are done.

Q1 call: Tesla, Inc. (TSLA) Q1 2020 Earnings Call Transcript | The Motley Fool

Martin Viecha -- Senior Director for Investor Relations

Okay. The next question from retail investors. When will you announce the next Giga? How many Gigas, you have planned for the next five years?

Elon Musk -- Co-Founder and Chief Executive Officer

I think we will announce the next Giga possibly as soon as a month. We may not -- as soon as next month. This is not a prediction, just saying. That's -- that could happen. It will certainly be within three months and possibly one month. And that would be in the US. So as for how many will be in five years, I'm not -- I don't know right now what that number would be. I guess, several more than there are today. But I'm not sure, what exactly it would be in five years, but some number more than today.

Zachary J. Kirkhorn -- Chief Financial Officer

I'll also add that our Gigas have gotten bigger.

Elon Musk -- Co-Founder and Chief Executive Officer

Yes.

Zachary J. Kirkhorn -- Chief Financial Officer

And...

Elon Musk -- Co-Founder and Chief Executive Officer

It could arguably -- it could start being called Tera.

Zachary J. Kirkhorn -- Chief Financial Officer

Yes, with multiple products as well. And so the absolute number of Giga factories, we may ultimately build might be less, but each one is larger. And that's under our belief that just significant efficiencies by having as much as possible, and similar product lines under the same roof, and as much vertical integration as possible all in one facility.

I also think your 4+ year number is pessimistic...

 

[Artful Dodger]

Thank you for talking down to me. Anyone else want to take a shot?

I truly hope you didn't take it personally. Your contributions to this community are important. I particularly want to single out your fantastic forecasting tool for the expected 'progress' of future TSLA share price. I think of it exactly in the way in which you lay it out, in a convenient easy-to-digest chart form. Kudos, and thank-you! Brava!

Regarding rumors of the Model S refresh a year ago, try thinking of it using this analogy*:

• Your 18-yr old daughter wants your advice. She has a new boyfriend, and:
  • they are deeply, madly in love with each other
    
  • they can't wait to get married and have a baby
• She's wondering which she should announce to the family first:
  • the Wedding Date, or
  • the Baby Shower?
• Now before submitting your answer, remember: you are the FATHER, not the GROOM!

Sometimes, a year plus or minus can make a big difference...

Cheers!

*DISCLAIMER: Dear Reader, If this analogy upsets you, please consider it in jest (not to be taken too seriously)

 

[Mo City]

You're underestimating the output of each GF. Each new factory site is getting bigger than the last.
Berlin's building map shows 2 factory units on one site https://www.teslarati.com/tesla-gigafactory-4-layout-train-station-report/ (older ones showed 4). Phase 1 alone is planned for 500k cars. Gigafactory Berlin-Brandenburg So it could do 1 million vehicles when both are done.

Q1 call: Tesla, Inc. (TSLA) Q1 2020 Earnings Call Transcript | The Motley Fool


I also think your 4+ year number is pessimistic...

Elon specifically addressed the expected 5-10 year growth target for Tesla. Below is his most definitive statement:

Martin Viecha -- Senior Director for Investor Relations

Thank you. And now let's go through the questions from retail investors. Question number one, Elon has mentioned a 50% compound annual growth target for Tesla in the past. Is this still in line with Tesla's ambitions for the next five to 10 years? This would be 4 million vehicles in 2025 and more than 20 million vehicles in 2030. Is 40% or more realistic target?

Elon Musk -- Co-Founder and Chief Executive Officer

Well, it's always difficult to predict what the macro situation is going to be. I think very few people would have predicted the unexpected roundhouse that COVID came up with -- it sort of came out of nowhere. So I think in the absence of something, some massive force majeure event, but quite massive, I think, 40% is the likely number. It's possible that is 40%. I would be very shocked, if it's less than 40%, even with force majeure, short of World War III.

 

[AlMc]

Is this Factchecking on Twitter? I forgot it‘s his birthday too today...

https://twitter.com/truth_tesla/status/1277321864101138433?s=21

Yes. 'nuf discussed

 

[Singuy]

Did any of you guys know that Russel Index did a rebalance June 26th prior to market close which cause many of my stocks to drop sharply 15 mins before close? People on my AMD forum talking about it.

 

[Tim S]

Elon specifically addressed the expected 5-10 year growth target for Tesla. Below is his most definitive statement:

Martin Viecha -- Senior Director for Investor Relations

Thank you. And now let's go through the questions from retail investors. Question number one, Elon has mentioned a 50% compound annual growth target for Tesla in the past. Is this still in line with Tesla's ambitions for the next five to 10 years? This would be 4 million vehicles in 2025 and more than 20 million vehicles in 2030. Is 40% or more realistic target?

Elon Musk -- Co-Founder and Chief Executive Officer

Well, it's always difficult to predict what the macro situation is going to be. I think very few people would have predicted the unexpected roundhouse that COVID came up with -- it sort of came out of nowhere. So I think in the absence of something, some massive force majeure event, but quite massive, I think, 40% is the likely number. It's possible that is 40%. I would be very shocked, if it's less than 40%, even with force majeure, short of World War III.

I believe there is mistake in the transcript. I listened to it live and I thought the first "40%“ in Elon's reply was actually "50%", as in "50% is the likely number".

His response makes more sense to me that way.

 

[FrankSG]

Yes, following the productions and watching the demands!
You've only counted ~1.5M in 2022 for the 2 M-ish total. It seems 1.7M is more realistic by adding ~200k Y from Texas. There was a rumor that Texas will start with a general assembly line for Y. It does make sense that Texas also produces Y as Fremont space is quite limited.
It will get very difficult, if not impossible, to grow production at 50% rate when the numbers get big. "Just" growing from 4M to 6M requires 4 new GFs in full production, with each GF takes 4+ years from the announcement to the full production. There are just too many risks in the macro, demands, etc. with such a long ramp-up time required.

You're right. I really messed up the math there somehow. Thanks for correcting. Can't believe nobody else spotted that yet.

And yes, some of those numbers are on the conservative side. So 1.7 or 1.8 seems likely.

You're right that it becomes harder to sustain growth as Tesla grows bigger and bigger, but I wouldn't rule it out completely that Elon can continue to pull off 50%+ YoY growth through higher volume models and bigger Terafactories. Time will tell.

 

[willow_hiller]

Does it tell you something about the difference between Tesla Bulls and Tesla Bears when the most traded call as measured by open interest for July 2nd has a strike price of 1100, and the most traded put has a strike price of... 200?