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

[RobStark]

Fine if you want to argue on that definition. Then so is every product that hasn't worked down the full price/demand curve.

But it still shows they are price-elastic They wouldn't do this unless they expected demand at this level to drop.

This price drop in the USA plus the price drop in China to eat some of increased tariff rates shows Tesla is not agnostic about WHERE they sell their cars.

Tesla is willing to pay small price for market share in USA and China.

Global demand still exceeds production at 2018 prices.

 

[RubberToe]

Toyota sold 24,545 Camrys in the U.S. in November to make it the best selling car in the U.S.

Tesla just delivered 25,250 Model 3's in the U.S. in December.

There is a possibility (small) that the Model 3 could be the best selling passenger car in the U.S. in December.

RT

 

[Fact Checking]

I think you mean a single week of production.

Yeah, indeed - edited it.

 

[thx1139]

Forbes mentions that M3 production is still below 5K/week


Others report here above 6K.
Which is fact and which is FUD?

Do people ignore holidays during this period? Assuming Tesla has 3 8 hour shifts per day I expect that Christmas cost 5 shifts and Thanksgiving a similar number. Tesla burst rate at end of Q3 was 5K. We knew the following week they slowed. The workers couldnt keep up without line improvements and didnt they shut down lines some to make improvements early in the quarter as well. What is important is the rate in December before Christmas week.

 

[Buckminster]

For production numbers the VIN allocations method worked pretty well in Q4, with 97.7% accuracy:



Just saying.

Here's the updated table:

Model 3 VIN allocation ratios:

 Quarter  Maximum VIN    VIN increase  Production           VIN-to-Production-Ratio
 ==================================================================================
 2018/Q1       20,581         +15,787       9,766                            61.86%
 2018/Q2       53,800         +33,219      28,578                            86.02%
 2018/Q3      116,270         +62,470      53,239                            85.22%
 ==================================================================================
 2018/Q4     ~189,964         +73,694      62,804 (est.)                     85.22% (est.)
 2018/Q4        189,964         +73,694      61,394 (real)                     83.33% (real)

BTW., note that the ratio of VINs allocated to VINs used for production is 1.2003 (!). I.e. there were 20.03% more VINs allocated than Model 3's produced in Q4. Using that 20% as an approximation for Q1'19 might work.

Paging @tsunamiofhurt as well whose model took 'VIN holes' into account as well.

Sorry - I already took your glory. Hope you don't mind...
That will learn you. Next time, make your predictions private like the analysts...

 

[KarenRei]

Can this be translated?

Byggingarleyfið Teslu Sjanghæ, klárt eftir 180 daga.

I could dust off my Japanese if you wanted that too.

 

[Joe F]

Bull bear debate up next on CNBC. Odds are the bear will be full of bull.

 

[qunqun]

Can this be translated?

The deadline for the factory project is 180 days.

 

[Buckminster]

The deadline for the factory project is 180 days.

Go on..

 

[Fact Checking]

CNBC: "Tesla's fourth quarter deliveries 'a big disappointment' to shorts and bearish analysts, because these deliveries virtually guarantee record Q4 profits and cash flow, allowing Tesla to continue without any equity raise or additional debt that Wall Street wanted so much, says Gene Munster"

FTFY.

 

[thx1139]

Toyota sold 24,545 Camrys in the U.S. in November to make it the best selling car in the U.S.

Tesla just delivered 25,250 Model 3's in the U.S. in December.

There is a possibility (small) that the Model 3 could be the best selling passenger car in the U.S. in December.

RT

November 2017 Camry sold 35K units
December 2017 Camry sold 43K units

If similar jump then likely Model 3 didnt over take the Camry. Still wow the Camry took a hit November 2018 compared to previous year.

 

[Curt Renz]

Last week I was told by a Tesla sales agent in Chicagoland that a relatively high level of Model 3 inventory will be maintained even after 2018 has ended. Most orders will result in rather quick delivery from inventory in the most commonly requested configurations. It will be only requests for configurations not in inventory that will lead to a car being made-to-order in Fremont.

This makes sense for high volume cars like the Model 3. The ability to receive almost immediate delivery should incentivize many potential buyers, especially those whose current cars are getting old or have developed problems. Tesla is becoming a mainstream car company.

This could be a new policy we will hear about from Tesla.

By this fall or so, I don't think Tesla will have an issue with finding demand for over 500K Model 3 per year. That is, by the time the SR can be rolled out. Before then I do think it's possible there might be a couple of months where they've tapped demand in US, Europe, and China for the non-SR configurations to the point that for a couple of months supply outpaces demand.

Announcing a new policy of keeping some supply as described to Curt may be a proactive way of minimize the mountain out of molehill efforts of the shorts/media. That is, announce on the next earnings call or so this new plan, focus on improving customer experience (same day test drive and drive home with new car on common configs) and soften focus on very temporary demand shortfall a few months from now when Europe non-SR demand is heavily tapped.

fwiw, if Tesla has SR ready by about April I don't think they'll ever have such a brief Model 3 demand gap. Alternatively, if they have the right-hand drive variation ready to ship to Japan by April, I think they'll avert such a gap.

The first sales agent with whom I spoke last week was quite knowledgeable, but she then admitted that some of my questions were above her pay grade. She had a more senior person call me back. He realized that as a long time shareholder I was quite up to date on the company and its cars.

He is the one who informed me that a relatively large inventory of Model 3's would be maintained even after the end of 2018. This allows for non-first adopters who want a new car right away to test drive a car in the configuration they want and drive it home that day. That should drive demand from the more typical car buyers who are not already in the Tesla camp.

He responded to all of my questions and comments immediately and expertly; except when I predicted that the car prices might be lowered when the tax credit is reduced. He became dead silent. So I suspect he already knew that I would be right.

 

[Artful Dodger]

I have to say that the Troy sheet estimate got me a little uncomfortable in the last days of 2018. I'm happy that he was off but not happy that we lost a reliable source of production numbers.

I don't think we lost much. We have our new 'Production estimate via VIN' method from @Fact Checking

Q4 Model 3 production and deliveries estimate (Dec 30, 2018 from old thread)

"So @Troy asked for people to make their Q4 Model 3 production estimates, and here's my entry for the 2018 Q4 Model 3 production estimates lottery pool:

"So my official estimate for Q4 Model 3 production is 62,800."​

So with Tesla's 61,394 Model 3s produced in Q4, the @Fact Checking method produced an estimate within 2.3% of Tesla's number.

That's well inside the margin of error for any good estimate. It's the new 'Ivory Snow baby'. Well done!

Cheers!

 

[avoigt]

Thats incredible actually I would have called it impossible but why not.

China delivery also to start in February. Looks like they are shipping them over like in Europe.

(...) There remain significant opportunities to continue to grow Model 3 sales by expanding to international markets, introducing lower-priced variants and offering leasing. International deliveries in Europe and China will start in February 2019. Expansion of Model 3 sales to other markets, including with a right-hand drive variant, will occur later in 2019. (...)

Tesla Q4 2018 Vehicle Production & Deliveries, Also Announcing $2,000 Price Reduction in US | Tesla, Inc.

 

[Singer3000]

Seems like a solid quarter about to be announced from my seat. However getting Tesla’s performance to positively impact TSLA performance is a bit like the Terminator, a remorseless and relentless grind against its adversaries.

The 2019 narrative is already too easy to predict and it’s at this stage almost all about sustainability of demand. Q3 18 was a fluke based upon backlog. Q4 demand was artificially high due to pending US tax credit cut. Q1 and Q2 19 will be non repeatable once Rest of World backlog is cleared and USA credit falls again in July. Q3 and Q4 19 is only because of SR backlog. Arnold had to terminate a lot of Sarah Connors from the phone book until there was but one left...

All the while Tesla the company will be building oodles of cashflow for delevaging and new product capex. At some point (likely in 2020?) the world will wake up and notice the number of Tesla’s driving around, see the rapidly maturing product pipleline and finally the vastly improved balance sheet structure. Not much for TSLA investors to do until then but sit tight and top up holdings at nice entry points subject to sensible personal concentration risk levels.

 

[KarenRei]

Thats incredible actually I would have called it impossible but why not.

China delivery also to start in February. Looks like they are shipping them over like in Europe.

(...) There remain significant opportunities to continue to grow Model 3 sales by expanding to international markets, introducing lower-priced variants and offering leasing. International deliveries in Europe and China will start in February 2019. Expansion of Model 3 sales to other markets, including with a right-hand drive variant, will occur later in 2019. (...)

Tesla Q4 2018 Vehicle Production & Deliveries, Also Announcing $2,000 Price Reduction in US | Tesla, Inc.

Production rates really seem to have uncorked in late December. They should have the capacity to do both at once.

(Hit a new daily high while the site was down... now over $312)

 

[tsunamiofhurt]

On a very different note: I like and appreciate the work @Troy is doing. And yet I'm super glad these numbers didn't happen. We would be down even further...

Troy Teslike on Twitter

So I guess for Q1 we need to find new ways to estimate P&D numbers?

EDIT: @loco beat me to it - cheers!

I appreciate Troy’s work on the surveys, I really do. They are a good resource for all of us.

With that said, Troy’s draconian responses to people who disagree with him are not helpful. When people offer reliable data points and make logical arguments they should be considered, not dismissed. When people ask about the assumptions driving your viewpoint … discuss them! Responding with “put your estimates in this spreadsheet and we’ll see who’s right” is pointless.

Disclosure: I was blocked on Twitter for the egregious and unthinkable crime of voting “disagree” on one of his posts on TMC.

 

[Zaxxon]

OT

It is somewhat infuriating that after TD Ameritrade took over Scottrade (my former brokerage), they changed my deposit timelines from 'minutes' to 'probably by the day after you schedule your ACH transaction.' Nothing like intentional service degradation to keep one from taking advantage of the dip. Still can't trade my 2019 IRA funds that were scheduled for today.

Oh, and maybe report on 1/3 next time, eh, Tesla?

 

[tivoboy]

Byggingarleyfið Teslu Sjanghæ, klárt eftir 180 daga.

I could dust off my Japanese if you wanted that too.

I only speak English, German, French, Spanish and a little Danish. Can only guess that it says

Building permit for Tesla Shanghai complete in 180 days. ;-)

 

[KarenRei]

I only speak English, German, French, Spanish and a little Danish. Can only guess that it says

Building permit for Tesla Shanghai complete in 180 days. ;-)

The joke is that the post originated in English, but Nursebee (not understand what was implied by the OP) asked for a translation (without specifying a target language)