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

[neroden]

Apparently Tesla Amsterdam is now confirming the 98,300 EUR price for a Model S PErformance ludicrous. To put that in American perspectives, after 20% VAT and 10% import tax this means a comparable US price of $84,000 for a Model S Performance with Ludicrous option. That's pretty much unbelievable. On the US configurator you'll get to $115,000 for exactly the same car. If true, that's a big price cut of nearly 30% off. I have no other explanation than a sever demand issue for the the S and X. Why would Tesla drop the prices that much????

I think demand for overloaded Performance models has finally dropped off. I always wondered why anyone would pay the ludicrous $10K/$20K premiums for practically nothing of value; maybe the "shut up and take my money" market has finally dried up. I don't think that's a big deal as long as the normal-spec models are still selling.

 

[Tslynk67]

Quite a well-balanced article from the BBC on the launch of the M3SR

Tesla cuts Model 3 price and closes stores

 

[jhm]

Let's do some math. Let's say that it costs Tesla $100/kWh for batteries, and the cost for them between the base interior and the "partial premium" interior is $500 (2x power seats vs. manual, LED fog lamps, some cloth instead of alcantara lining, plastic rather than wood-veneer trim, and more speakers). They charge an extra $2k and it goes an extra 20mi at ~250Wh/mi, or $750 worth of extra batteries, so $1250 more. +$750 profit.

Autopilot is $3k, which with a 30-40% take rate is an average of +$1k profit.

Just these two options alone, and taking into account the take rate on AP - no upgraded wheels ($1,5k), no paint options (min. $1,5k), no black-and-white interior ($1k), no FSD ($5k) - raise the margin by around 5% over a base car.

I was thinking that the SR and SR+ have the same physical battery, but SR is just software limited to reduce the warranty cost.

 

[UncaNed]

Many would likely have been speculators who bought on Wednesday and Thursday in anticipation that Elon's tweet of "Some Tesla news" would result in a Friday boost to the share price. That type tends to bail rather quickly when their expectations prove wrong. Others could be weak longs whose stop loss limits were triggered this morning.

They were all just planning for failure right from the start? Seems incredibly dumb.

 

[anthonyj]

Makes no sense. Why would they sell at a low?

To buy lower. Also, a lot of fear, for good reason. The bull/bear divide has never been wider

Bulls:
Tesla is positioned to steal a huge amount of market share, giving a huge middle finger to legacy auto. Other automakers can’t sell cars direct to consumer, not will they have their own battery factory and charging infrastructure. Humongous advantage. All very true

Bears: Sketchy financials, if $35k Model 3 demand isn’t that high it could wreck the company, Q2 profit will surprise to the downside. Legal issues. Possibly true

 

[abasile]

So, it worked out for me to sell "on the news" a modest fraction of my TSLA shares (call them "trading shares" if you like) midday yesterday at 316.8 with the intention of rebuying at a similar or lower price. But the 2019/03/15 312.5 Put that I subsequently sold at 10.0 is now significantly in the money. So I would have been better off not bothering with the option trade, and just rebuying the shares today. But I'll still end up ahead on the whole deal as long as the share price doesn't jump above 326.X in the next two weeks.

Longer term, I remain very bullish. Tesla has made a very aggressive move, not just into EVs, but into the overall auto market. Sacrificing margin to gain market share seems like a great growth strategy!

 

[VValleyEV]

Model S price reduction example using the website today:

My 2018 100D listed at $111.3k last Sep.
New identically-configured long-range MS is now $95.5k, drop of almost $16k, over 14% !!

I consider this great news, because I want the manufacturer of this great car to be a huge success, and I want EV adoption to be massive. And of course want to make sure the MS stays in the product line so I can continue to easily get it services. I have had good experience so far with Tesla service, but sure hope EM follows through with his promise to make it much better this year.

I got a bit lucky because I purchased mine out of inventory and got a $12k price reduction for the 8k miles, so in some sense for me it is a drop of “only” $6k. Now if the FSD I paid for really gets me a HW3 upgrade, maybe later this year, I will be feeling totally good about it all.

UPDATE: forgot to consider 2 items: free supercharging (by referrral), and the $7500 tax credit that is now $3750.

I think $2k is a conservative estimate for present value of lifetime supercharging, so that plus the tax credit difference adds up to maybe $5750 less of a difference, more like $10k/9% reduction since I purchased my car. One way to look at it is that with the discount for my inventory car and these two things in consideration, I am about even out of pocket with a new MS today. Not completely fair because I should be comparing with an inventory car today with 8k miles, but I will stick with my convenient rationalization.

 

[MarcusMaximus]

Let's do some math. Let's say that it costs Tesla $100/kWh for batteries, and the cost for them between the base interior and the "partial premium" interior is $500 (2x power seats vs. manual, LED fog lamps, some cloth instead of alcantara lining, plastic rather than wood-veneer trim, and more speakers). They charge an extra $2k and it goes an extra 20mi at ~250Wh/mi, or $750 worth of extra batteries, so $1250 more. +$750 profit.

Autopilot is $3k, which with a 30-40% take rate is an average of +$1k profit.

Just these two options alone, and taking into account the take rate on AP - no upgraded wheels ($1,5k), no paint options (min. $1,5k), no black-and-white interior ($1k), no FSD ($5k) - raise the margin by around 5% over a base car.

And you’re assuming the battery is literally fewer cells, rather than just software limited.

 

[KarenRei]

demand for everything but the 35k version is dead. Tesla does not earn money and may even lose a lot on the 35k version. Go figure

S&X numbers are perfectly normal for S and X in January and February. They're seasonal low months. Most of these S and X were purchased during the period of either higher prices in general, or after the elimination of the 75D but before new lower-cost variants were made. There's nothing wrong with them at all.

3 has no previous January and February to compare with (last ones were in the middle of scaleup). December is an annual high month, and that was surely amplified by the pre-credit-reduction rush.

Look at past data for seasonal trends before you rush to judgement.

 

[bpjod]

OT, but I'd really like to understand the failure mode here.

The titanium shielding that was added to the S's, and ostensibly present also on the X (or something equivalent), was designed to protect the front forward surface of the pack... the face of the "double stack" where there is only thin pack casing material. This was as a result of the initial Model S fire wherein a tow-hitch piked upwards in the frunk area and pierced that forward section of the pack.

The bottom of the pack is ballistic armor shielding. I've never heard of this being pierced by running over an object.

Almost all of the fires have been from collisions violent enough to catastrophically compromise the structural integrity of the pack... typically deforming it edge-on (like running in to that tree at 90mph a few days ago).

While it's hard to tell with that X being burned to practically nothing, I'd be interested in knowing if that rock was tall enough that it tore through the front undercarriage of the car and impacted the front of the pack head-on, or if it managed to comprise the bottom of the pack...

Speaking as an ice-fisherman, I will say that on some larger lakes, the access point may be a paved boat launch, but by far most of the lakes I drive onto have pretty treacherous access points. They're typically a short, steep hill with badly rutted, bumpy tracks. The shore is a combination of roots, sand and rocks buried in snow. The way down onto the ice is a somewhat scary descent, but the way back off the ice is worse as you often have to take a run at it to ensure enough momentum to make it to the top of the hill. Then there's the navigating backwards downhill when you don't make it. I won't even get into what it's like in the spring when it starts melting along the shoreline...

The rough part of the access is usually quite short: 20-30 metres. However, for that stretch there's a tremendous amount of each wheel going up over rocks, roots and bumps in the snow/ice and dropping back down the other side, it's an incredibly bumpy ride, often with bangs from the underside of the vehicle. When I saw the photo I suspected immediately that the battery pack dropped hard onto a rock while getting onto the lake.

What's new to me is that I thought there was a titanium plate protecting the underside of the battery. It now sounds more like that simply protects the front underside of the battery but not the whole underside. That would offer adequate protection when hitting an object on a paved roadway because the object would hit the front edge and either be crushed or pushed aside, but not when off-roading and the vehicle is frequently dropping down onto rocks in the trail/streambed as the wheels go over uneven terrain. Is this correct?

Mod's in-post answer: Yes, it is correct. Read my "My bulldozer would pop" post: Tesla, TSLA & the Investment World: the 2019 Investors' Roundtable

 

[jhm]

Morning all, afternoon to some (I slept in this snowy cold morning). Haven't seen any discussion on payment of the $920M... when and/or will that occur? Think that will move the sticks much?

Somewhere there is an apocalyptic cult that was expecting the end of the world at noon. But now they have to recalibrates their end time prophecies.

 

[electrichapp]

You are not saying profit because of that $250k deposit, right. That is not a P&L figure.

$250m fresh cash infusion for bond repayment.

Elon said they probably won't have profit q1.
But maybe they can even if a lot of orders come in.

 

[KarenRei]

Upcoming on CNBC: "Say goodbye to the dealer? Is Tesla setting up the future of car sales?"

 

[Remus]

Looks like we're about to head back down to the lows of the day. My resolve in Tesla hasn't change but man the way the stock gets treated is rough. If Amazon did something similar(if they had a electric car) and released a low priced version to get most possible marketshare and essentially drive competition out of business while making up the margin on software.....they'd be viewed as geniuses.

Amazon absolutely did this. They aggressively cut resale price on hot products, cut shipping cost, even cut AWS price when there was no competitors.

 

[KarenRei]

And you’re assuming the battery is literally fewer cells, rather than just software limited.

Yes, I'm assuming that Tesla is not run by idiots.

Limited cells are great for buyers, but generally only used by Tesla for brief transitional periods.

 

[AndyH]

Good thing m3 deliveries hadn't really begun in Sweden. After the pricecuts Tesla are doing this:

• Costumers who ordered without eap get ap upgrade for free.
• Costumers who ordered with eap get fsd upgrade for free.
• Costumers who ordered both eap and fsd are told to cancel their order and make a new one.

This is a good solution since it wont affect margins too much. Some customers feel a bit shafted though since they lose their free supercharging when reordering and have to wait a longer.

 

[kangarookid]

You mean in terms of accuracy? I don't know off the topic of my head, but they're usually pretty accurate. But remember that it's US-only.

I highly doubt InsideEVs has a good read on monthly numbers. They adjust their numbers once Tesla releases quarterly deliveries, which are global. You can basically back out US deliveries using European deliveries (which are reported by govt agencies) and making an assumption for China/RoW. Their methodology section is extremely vague: Revealed: InsideEVs Electric Car Sales Estimates And Methodology

Alpha Hat pointing to higher numbers, for January anyway. Tesla Delivered More Vehicles in January than Reports Suggest

 

[mershaw2001]

I am disappointed in Elon for this:
Elon: “No I was playing a fool on Twitter!”

He chooses to use his twitter account as a mouthpiece to speak to the many of us investors, and for him to be sending out misinformation that way is ...well... disappointing.

Change my mind.

 

[anthonyj]

demand for everything but the 35k version is dead. Tesla does not earn money and may even lose a lot on the 35k version. Go figure

Hi troll. 6k sales a month for expensive Model 3 is pretty good. A lot more than 3 series or C Class. Obviously 25k a month was unsustainable. Tesla is literally sticking a fridge up legacy automakers butts with this move. Market share is more important than profits, which is why the company should go private to stop these trolls

 

[electrichapp]

so elon guided for a loss in q1.
what is consensus estimates now?