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

[ZachShahan]

Wow, I did not know about the NYTimes changes regarding Public Editor & Broder, @SteveG3 — TSLA Market Action: 2018 Investor Roundtable

Thanks for bringing it to my attention.

I was obsessively writing about that issue on CleanTechnica and think it was a top thing that got me into Tesla/EV coverage. Think it was also a key thing that got me on a top 20 "influencer" list with Obama, Elon Musk, Carlos Ghosn, and some others — On A Top 20 List With Obama, Elon Musk, Mayor Bloomberg, Bob Lutz…

Not sure what the timeframe for the analysis was, but Broder was #2 fuel economy influencer, only behind Elon. My responses got picked up quite a bit and I ended up #20.

This is fascinating, and definitely seems worth a story. I can't imagine Broder is still bitter about the backlash and Tesla's blackbox evidence.

 

[X Fan]

This is correct. The most expensive electricity in the US is in Hawaii, the second-most-expensive is in California.

Here in upstate NY, I pay 12 cents/kwh for 100% renewable electricity. Tesla's Supercharger pricing is wildly overpriced by comparison, totally uncompetitive at 24 cents/kwh -- TWICE what you'd pay at home. Stupidly excessive price-gouging levels.

This is because Tesla HQ is populated by very dumb people who are too stupid to realize that upstate NY has different prices from NYC.

But they need that extra revenue to put in that service center you want (plus fix our USB audio stuff)

Ducks.....

 

[gora321]

9/10 days were green...It looks like the chain is cracking

Any fear between FUD centre?

 

[hoang51]

...
Anyway, the consensus range might explain this week's trading and might foreshadow the closing price - all other things equal, which they not be.

In conclusion, TSLA should close at?

 

[BioSehnsucht]

I'll give you one reason: Cargo space -- I can't fit a water heater in Model 3, I can in Model S. I would still buy an S in preference to a 3, though not at the premium for a 100D.

Personally I'd rather rent a truck from Home Depot or borrow my friend's van, than to spend more for a feature (contiguous cargo volume) I won't need often.

Of course not every large package pickup is from a place that conveniently rents vans and not everyone has a friend with a large van.

That said, there's something to be said for hatchbacks.

Back in the day I took home an engine hoist, two engine stands, and an assortment of other stuff with room to go from Harbor Freight in my Nissan 240SX.

Though to be fair, I also managed to recently bring home from Nebraska Furniture Mart 6 flat-packed chairs (had to be removed from packaging) and do nearly all our Christmas shopping in one trip in the Model 3 (didn't even use the sub-trunk or frunk). So depending on the dimensions of what you need to haul the 3 does a good job... so the Model Y should work for nearly anyone, and if it doesn't, you may need a truck/van anyways.

To be fair to the Model 3, I could not have fit all that in my Mazda 3... the trunk is much smaller.

 

[AlexS]

In conclusion, TSLA should close at?

Above 340 and probably below 350

 

[Fact Checking]

In conclusion, TSLA should close at?

So I'm always confident to make predictions, except about the future. I'm 99% sure $TSLA will close somewhere between $024 and $420 today.

 

[Analyst007]

I hope Tesla touches 358$ today and closes at 350. That would be awesome.

I could sell my calls at 358 and all other calls/puts would expire worthless at 350 at close

 

[Fact Checking]

Toyota talks about 10% EVs by 2030 (and they let us know that they include Hydrogen Fuel Cell EVs in that 10%).

Toyota is not alone there: BMW’s chief of product development, Mr. Klaus Frohlich, is talking about only 15% of EVs by 2030.

Total delusion if you ask me, but this is what some of the biggest ICE OEMs are planning their future manufacturing capacity for.

One of the reasons behind that is that I don't think BMW has the free cash flow to finance rapid electrification as an additional project:

Bayerische Motoren Werke AG Free Cash Flow (Quarterly) (BAMXF)​

They can only gain the cash to seriously invest into EVs by scrapping existing ICE plans and re-purposing the funds - but many of those ICE capacity investments are already planned for and underway.

 

[ReflexFunds]

As to the global ICE incumbents (gICEi), don't lose sight of how much of that increase in battery production from the Chinese companies that is earmarked for gICEi is for gICEi hybrids and plug-in hybrids. The global incumbents have told us their plans, and it is far more heavily about hybrids and plug-in hybrids than pure EVs. The announcements are electrification announcements. EVs are a side dish in these announcements. Toyota talks about 10% EVs by 2030 (and they let us know that they include Hydrogen Fuel Cell EVs in that 10%). The very fact that the gICEi generally are too EV allergic to do build up that battery supplies themselves, largely letting the Chinese own this new supply chain, is just another giant road sign that the gICEi are largely still in the kick-the-EV-can down the road as much as possible phase.

Back to Tesla & China... I think it will take at least 5 years from when China enters the radar screen in existing major markets for the majority of consumers to be open to their products.

It is not at all accurate that China EV programs are focussed on hybrid and short range cars. China has massively cut subsidies for short range EVs several times already. Plug-in hybrids are only c.25% of the China market vs 75% full EVs.

China's very aggressive ZEV system gives a maximum 2 credits for plug in hybrids vs up to 6 for EVs, which scales according to range.

The impact that China's rapid transition to EVs will have on the world isn't necessarily that Chinese EV brands will takeover the world. The traditional global Auto OEMs are being forced to transition their largest market to EVs. This means they have no choice but to develop EV R&D and capacity. This will accelerate the global experience curves for batteries, motors and EVs to the point where Auto OEMs can produce EVs globally for lower cost than equivalent ICEs.

The main question is what are the lead times on high specification lithium carbonate/hydroxide, cobalt & Nickel, together with factories for cathodes, cells, packs & motors once Auto OEMs realise they are heading the way of Kodak/Blockbuster and need to switch to EVs immediately to survive. The other question is, at that stage, how much cash flow and capital raising ability will OEMs have left to invest in EV capacity?

 

[Analyst007]

That crap going down like nothing else... damn

 

[Leo9]

Tesla to Cut Workforce by 7%
Tesla Inc. TSLA 0.36% is cutting its full-time workforce by 7% as part of an effort to lower costs so the company can sell the Model 3 sedan at a lower price, the auto maker’s top executive told employees Friday.

“Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months,” Chief Executive Elon Musk told employees in a memo reviewed by The Wall Street Journal. “Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 mile), standard interior Model 3 at $35k and still be a viable company.”



The Silicon Valley auto maker turned a surprise profit in the third quarter and Mr. Musk had said he expected to do so again in the fourth quarter. In his memo, the CEO said unaudited results for the final three months of the year indicate Tesla made a profit less than the third quarter.

 

[Analyst007]

*sugar*

 

[anthonyj]

So how are you doing on those "I think we are going to..." posts? You must be keeping track. My impression is that you are slightly better at this than TT007.

Pretty well, even better if I followed my own advice.

 

[CuriousSunbird]

Another big manpower cut? this is not normal behavior for a company in fast growth mode with lots of customer service needs.

 

[SteveG3]

It is not at all accurate that China EV programs are focussed on hybrid and short range cars. China has massively cut subsidies for short range EVs several times already. Plug-in hybrids are only c.25% of the China market vs 75% full EVs.

(... snip)

Please read my comment again... I didn’t state that at all.

My point was about the global ICE incumbents, not the Chinese automakers. The gICEi have more focus on hybrids and plugin hybrids than BEVs. These gICEi are turning to Chinese battery suppliers. My point that projections of future battery supply increases are to be taken in the context of all the supply that will go to the gICEi stalling with lots of hybrids and plug-in hybrids. As to the Chinese auto mfgs, yes, as I’ve said before, they and Tesla are the ones moving to EVs enthusiastically.

 

[Analyst007]

Profit for Q4 is weaker than Q3... as stated in the announcement.

 

[Anstandswauwau]

Another big manpower cut? this is not normal behavior for a company in fast growth mode with lots of customer service needs.

That's why they all end up bloated, unable to move and eventually die.

 

[Fact Checking]

Tesla to Cut Workforce by 7%
Tesla Inc. TSLA 0.36% is cutting its full-time workforce by 7% as part of an effort to lower costs so the company can sell the Model 3 sedan at a lower price, the auto maker’s top executive told employees Friday.

“Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months,” Chief Executive Elon Musk told employees in a memo reviewed by The Wall Street Journal. “Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 mile), standard interior Model 3 at $35k and still be a viable company.”

For pretty much any other company a cut in the workforce to improve profitability would result in the share price to rise.

$TSLA is dropping in pre-market trading, because the market is apparently misinterpreting this: Elon wants to introduce the $35k Standard Range model in March and tries to further reduce opex for that. I don't think these cuts are representative of Q4 results being a loss.

 

[ReflexFunds]

"
In Q3 last year, we were able to make a 4% profit. While small by most standards, I would still consider this our first meaningful profit in the 15 years since we created Tesla. However, that was in part the result of preferentially selling higher priced Model 3 variants in North America. In Q4, preliminary, unaudited results indicate that we again made a GAAP profit, but less than Q3. This quarter, as with Q3, shipment of higher priced Model 3 variants (this time to Europe and Asia) will hopefully allow us, with great difficulty, effort and some luck, to target a tiny profit.

However, starting around May, we will need to deliver at least the mid-range Model 3 variant in all markets, as we need to reach more customers who can afford our vehicles. Moreover, we need to continue making progress towards lower priced variants of Model 3. Right now, our most affordable offering is the mid-range (264 mile) Model 3 with premium sound and interior at $44k. The need for a lower priced variants of Model 3 becomes even greater on July 1, when the US tax credit again drops in half, making our car $1,875 more expensive, and again at the end of the year when it goes away entirely."

"As a result of the above, we unfortunately have no choice but to reduce full-time employee headcount by approximately 7% (we grew by 30% last year, which is more than we can support) and retain only the most critical temps and contractors. Tesla will need to make these cuts while increasing the Model 3 production rate and making many manufacturing engineering improvements in the coming months. Higher volume and manufacturing design improvements are crucial for Tesla to achieve the economies of scale required to manufacture the standard range (220 mile), standard interior Model 3 at $35k and still be a viable company. There isn't any other way."

Disappointing profit for Q4 and Q1. I wonder how much this was due to trade war, tariffs and China price cuts.

Looks like they finished the year with c.49k employees, so not a great surprise they are redistributing resources again.