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

[Dan Detweiler]

I don't get this response. My post was a simple reporting of facts, followed by basic math, and only minimum analysis.

I'm sorry Karen, I was just kidding. Sarcasm just doesn't translate through written text. I totally agree with your post. Just trying, unsuccessfully, to be funny.

Dan

 

[printf42]

that rendering seems a little improbable to me at first glance ... one tiny road into it, and no parking lot? i mean i know Chinese don't commute to work like Americans, but still...

Most Chinese factory workers ride electric motorcycles to work, and since they’re pretty close to Lin Gang downtown they would probably have buses too. So there goes employee parking.
For new car parking, likely its inside the building based on the first construction license they got, another possibility is they would park directly on the port right next to the factory.

 

[AlexS]

Some one posted yesterday that Robinhood investors were buying the dip this time. I remember pre Q3 ER it was the other way around they were selling, and mostly institutions were buying while individuals selling. If Q4 will come in as expected then there will be more power this time to fight the shorts.

 

[secondstage]

It seems to me obvious that the underlying S and X platform is now more than a decade old. We are all well aware that significant parts of S & X were derived directly from the Daimler-Benz parts bin, including suppliers. Of course many components have nothing to do with that, including FWD and the entire basis for OTA, software/firmware. Still, teh pure manufacturing bits including, maybe, ~50% of manufacturing content, derives from taht era. Almost as a certainty, a good portion of those components are no longer in wide new manufacturing so supliers such as Bosch, etc are unlikely to do S & X parts sourcing on highly attractive terms. Beyond those, a quick look at any Model 3 shows just how far the manufacturing design has come since the early days.

I am confident that we can ignore the 2017-era, Musk/Straubel 'no immediate redesign planned' comments. Franz von Holzhausen and company are exceedingly clever and competent. They can quite easily scale the Model 3 innovations and more in new Models S and X while greatly reducing marginal costs to manufacture. I'd happily bet large sums that they've already done most of that.

Remember Tesla is already doing this. As example the MCU has now the same CPU as the Model 3. There were so many changes to the S/X just to mention a few; new onboard charger, own designed steering system, new mcu, new batterypack design etc.

 

[Fact Checking]

Cool. Netherland has the same amount of Model 3 orders as Switzerland but more than the double of people live their.
So there should be plenty of more orders possible.
Also what is with UAE? I think Tela should start making the right hand model 3 in the first half year of 2019, so the awd+performance mix will be still high.

For raw data geeks, the EU demand metrics to watch over the spring is this community-maintained spreadsheet:

Tesla Model 3: Europa Bestellungen/Europe Orders​

In particular on the "Orders per country" sheet, the last column is very helpfully listing "Market penetration", which shows how much upwards potential there is still for Tesla. For Norway and Switzerland there's 935 and 171 Model 3 orders per 1 million citizens - market penetration is reasonably high.

The two biggest markets: Germany and France have a market penetration of 38 and 18 Model 3 orders per 1 million citizens, which is very low, and which I'm sure will increase over the spring as the weather is getting better and more test-drives are available.

German customers for example do not like to buy new cars in the winter unless they are offered at steep discounts. Winter brings a higher risk of fender-bender accidents with your shiny new car in dense urban traffic, and there's also all the winter slush you'll bring in to the new carpet and the car will be dirty all day as well. When the roads start drying up in March-May is when new car sales are ticking up.

The data is reasonably reliable, because it only depends on the serially increasing invoice number the EU mandates. So the largest invoice number reported (as long as it's not an outlier) should be a good lower limit for number of outstanding orders. (Assuming low order cancellation rates.)

 

[Pezpunk]

Most Chinese factory workers ride electric motorcycles to work, and since they’re pretty close to Lin Gang downtown they would probably have buses too. So there goes employee parking.
For new car parking, likely its inside the building based on the first construction license they got, another possibility is they would park directly on the port right next to the factory.

i am relieved that so many people feel the need to explain to me that Chinese people don't commute to work like Americans after i said "I know Chinese people don't commute to work like Americans".

 

[gora321]

Future secured

James Stephenson on Twitter

 

[secondstage]

For raw data geeks, the EU demand metrics to watch over the spring is this community-maintained spreadsheet:

Tesla Model 3: Europa Bestellungen/Europe Orders​

In particular on the "Orders per country" sheet, the last column is very helpfully listing "Market penetration", which shows how much upwards potential there is still for Tesla. For Norway and Switzerland there's 935 and 171 Model 3 orders per 1 million citizens - market penetration is reasonably high.

The two biggest markets: Germany and France have a market penetration of 38 and 18 Model 3 orders per 1 million citizens, which is very low, and which I'm sure will increase over the spring as the weather is getting better and more test-drives are available.

The data is reasonably reliable, because it only depends on the serially increasing invoice number the EU mandates. So the largest invoice number reported (as long as it's not an outlier) should be a good lower limit for number of outstanding orders. (Assuming low order cancellation rates.)

Yes, thats why suddendly Model 3 appeared in Europe. With Test drives they easy could and must increase high margin cars.

 

[Fact Checking]

Some one posted yesterday that Robinhood investors were buying the dip this time. I remember pre Q3 ER it was the other way around they were selling, and mostly institutions were buying while individuals selling. If Q4 will come in as expected then there will be more power this time to fight the shorts.

From the price action I think it's pretty clear that institutions are buying TSLA this time as well, and there's probably also some short seller deleveraging: many of the 'new shorts' since the Q3 ER can now close their short positions at these price levels profitably and short into the next rise, after seeing how good or bad the Q4 ER is, and how effective the FUD is afterwards.

That's much less risky than going into the ER with a big short position.

But there's apparently still at least ~20 million shares worth of shorts waiting for $200-$250 price levels?

 

[Sean Wagner]

It is one possible alternative to a repetition of the Model 3 introduction, that Tesla will likely not want to relive. Talk about underestimating demand.

So Model Y production to start somewhere between the super optimistic Q3 (e.g. 1/2 year after Q1 reveal) and the not-to-be-redone two years after reveal (since two years is what it took go get the Model 3 into what could be called real production, after the reveal on the eve of 2016Q1).

Maximizing commonality between the Model 3 and Y will be crucial, as I can't see how the latter's near-certain success won't come in some parts at the sedan's expense. Europe has seen a massive move towards SUV and crossover bodystyles too.

Thus far, I think we can expect the battery pack, motors, computing hardware and sensors, and parts of the interior to carry over.

The Y will be another seminal electric vehicle sending shockwaves through the industry. I have a hunch we may eventually see both a five and a longer seven seater.

I also recall him saying there were too many features (like the glass roof) all at once. So expect shorter turn around this time with that lesson learned. Plus it's based on the Model 3 frame to start with as I believe. He really wants the Truck, so Y needs to get out of the way already, but today is pretty aggressive timing, maybe we get a date for the reveal out a few months.

In my opinion, one of the very best things about Elon Musk's fascination with the pickup is that the team around the Y gets to chug along [heh] without too many undue stressors. This is Tesla's next crucial vehicle, and if there are any significant changes, they should ideally be found on the factory floor.

I can't see how the Y won't be beyond popular.

Globally established manufacturers should watch the Y very closely and have their thinking caps handy, while the sadly much reduced and more parochial American firms will be handed a really hot potato when the pickup arrives to suck up the high margin business first.

I think some Chinese company will be the high volume (low price) producer in the future. Just not sure they can break into western markets.

Make that many. There are hundreds of firms angling for their piece of the cake over there right now. In a competitive market [we'll see about that...], the winners will make their global weight felt soon enough.

It's instructive how experienced German engineers [and South Koreans for the battery tech] were attracted to China and helped foster a more [and less] competitive industry. The same impulse has led to investments in the US with a clear view of gaining knowledge.

Elon Musk recently tweeted that the relevant talent is scarce. It's such a pity the US is so intent on revolving around a very limited event horizon right now.

EDIT: I wish Elon would let Deepak Ahuja finish his sentences. I always listen very attentively to what he says.

 

[gringotuanis]

OT but pre open

Trump ally Roger Stone was arrested on Friday morning and charged with one count of obstruction of justice, five counts of false statements, and one count of witness tampering.

Now (since the raid was pre dawn) the questions are.

Pull Passport ?
Flight risk ?

Who's next ?

Stocks go UP or DOWN ?

No one cares about witch Hunt arrests. Just the salivating media. Won't affect markets.

 

[Sean Wagner]

Also, since last summer, the ads from the German brands have started to promote EV’s, probably to prepare the public for the introduction of their Tesla-killers. Audi has been running very frequent ads for the e-tron a year before it became available.

Where do these ads run? I don't watch TV.

 

[KarenRei]

No one cares about witch Hunt arrests. Just the salivating media. Won't affect markets.

Quite a few witches pleading guilty and serving time these days. But yes, I agree that the market won't care about Stone.

 

[Fact Checking]

Let me post this stream of China news again, putting it into full context:

Vincent on Twitter

"2. Chen Jie, Shanghai Lingang Development & Construction Mgt Committee: In order to speed up the #tesla Shanghai GF3 construction, the Shanghai Lingang Gov changed the construction approval. Normal approval takes 15 months & #Tesla project only took 5 months."

Vincent on Twitter

"1. Chinese gov media CCTV reported: Construction company said they speeding up the #tesla Shanghai Gigafactory project and did not receive the Lunar New Year holiday notice."​

The Lunar New Year is a usual annual ~10 days of happy festivities in China, while absolutely nothing gets done by anyone, anywhere. Except the Shanghai Gigafactory construction site, which will keep on building GF3.

Remember, China is not our usual western economy when pushing big, prestigious industrial projects:

• The construction company building GF3 is one of the biggest ones, owned by the Chinese state.
• Most Chinese banks are state owned as well, and Tesla got a $3b loan in record time.
• The Tesla Shanghai Gigafactory got a large industrial power connection to the electrical grid in record time, 3 times faster than the average approval and build-out time.
  
• Can you imagine the U.S. government exempting Tesla construction work from federal holiday rules?

China is in many ways still a dictatorship ruled by technocrats, where 90%+ of the high level Chinese leaders have a stellar educational background in engineering or sciences.

See:

TSLA Market Action: 2018 Investor Roundtable
Tesla, TSLA & the Investment World: the 2019 Investors' Roundtable​

If there's a political leadership anywhere on the planet that "gets" Tesla, then I believe it's the Chinese.

 

[Cherry Wine]

From the price action I think it's pretty clear that institutions are buying TSLA this time as well, and there's probably also some short seller deleveraging: many of the 'new shorts' since the Q3 ER can now close their short positions at these price levels profitably and short into the next rise, after seeing how good or bad the Q4 ER is, and how effective the FUD is afterwards.

That's much less risky than going into the ER with a big short position.

But there's apparently still at least ~20 million shares worth of shorts waiting for $200-$250 price levels?

Someone(s) executed a $62M block trade sell order on yesterday’s action. So the only thing institutions were doing yesterday was selling.

 

[ReflexFunds]

For raw data geeks, the EU demand metrics to watch over the spring is this community-maintained spreadsheet:

Tesla Model 3: Europa Bestellungen/Europe Orders​

The data is reasonably reliable, because it only depends on the serially increasing invoice number the EU mandates. So the largest invoice number reported (as long as it's not an outlier) should be a good lower limit for number of outstanding orders. (Assuming low order cancellation rates.)

The main uncertainty with this data is what is average number of cars per order. Batched company car and lease company (unaffiliated with Tesla at this stage) orders could potentially increase this significantly. Does anyone have any data on what % of EVs are likely to be purchased this way in Europe, given several significant incentives for corporate EV purchases?

Elon stated MR would likely have to be launched in Europe and Asia around May. Assuming c.3k Europe deliveries per week from Feb to April, this could suggest c.40k European orders expected for the high price AWD/P models before May. In fact if Elon means opening RoW MR orders up in May rather than deliveries starting in May, then May Europe deliveries should still be fulfilled with AWD/P cars which could mean closer to 52k AWD/P orders expected before May.

 

[Hock1]

seems like the Taycan is not a great family sedan like the Model S -- doesn't have the range, efficiency, storage space, and costs a lot more for a comparable spec. what it will have on the Model S is 1) the Porsche moniker (which lends legitimacy and prestige to certain people) and 2) probably a lot better track performance for anything other than a straight line (the Model S will still be quicker on the drag strip). People who typically buy Porsches will buy this, love it to smithereens, and go to work preaching to their petrol head friends how revolutionary and immensely better EVs are than gas cars.

It seems Porsche already knows how far behind (Tesla) they will be when they introduce their 95kwh- 240 mile range car in about a year. Their plans to build out their own SC network that can charge at 800V seems like an uneconomical attempt to compensate for their range shortfall. Is 800V charging even feasible?

 

[Fact Checking]

No one cares about witch Hunt arrests. Just the salivating media. Won't affect markets.

Yeah, no-one cares about "witch" hunt arrests over 9 felonies that bring years of prison time, which felonies were committed to try to hide other felonies with decades of prison time.

These are absolutely not the Moscow Trump Tower architectural plans you were looking for:

The Moscow Trump Tower was planned to be among the 10 highest buildings in the world, for which Russian banks were willing to give hundreds of millions of loans, and of which building President Putin would be gifted the the huge apartment on the highest level, absolutely free of charge. There was small practical inconvenience that these Russian banks were under economic sanctions, which would have to be lifted first. What to do, what to do?

See:

https://www.buzzfeednews.com/article/anthonycormier/trump-moscow-micheal-cohen-felix-sater-campaign
​

And there was absolutely no witch overseeing those plans as late as November 2016 ...:

Move on, absolutely nothing to see here, it's all a big nothing-burger of money laundering, treason, criminal conspiracy, witness tampering, witness intimidation and perjury!

Brought to you by former FBI director Robert Mueller, who served in Vietnam voluntarily, while Donald Trump got a "medical exemption" due to mysterious "bone spurs" that not even Stormy Daniels has seen on Donald Trump, a medial diagnosis written by a doctor who happened to be a tenant of KKK supporter Fred Trump. Small world!

 

[shlokavica22]

By extension, what conceivable logic would there be to NOT reengineer S and X now, when nobody expects it, when doing so would decrease maginal costs, improve quality and reduce servicing demands?

The bottom line is this- TSLA has limited resources (capital/workforce). As a result they need to prioritize how they use the capital.
Optimizing Model S/X has limited maximum potential because of it's high price point. There is also no serious competition that will eat from the share they already have.
On the other hand we have Model Y/Semi/PickUp. Any of them have (much) bigger potential than Model S/X.

Legacy auto work on Model S/X competitors, trying to replicate what TSLA did in the past (selling high priced vehicles, while improving the tech, etc). By the time they come up with something decent, TSLA will bring Model Y and $35K Model 3. That will be in fact the actual smackdown for the Big Auto.

 

[Sean Wagner]

The merit of the Taycan née Mission-E lies in staking Porsche's claim to future relevance [they get to live another day], but also in truly "legitimizing" EVs in Germany. Sad but so, I think. Should work for Tesla.