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

[Fact Checking]

(...) Alpha Hat’s data for the first couple weeks of the year shows that Tesla continues to deliver a surprisingly healthy number of vehicles in the US. As of 1/13, we believe that Tesla has delivered approximately 6,050 vehicles in the US, with ~5,000 being Model 3s. This compares to 6,800 vehicles (5,500 Model 3s) in the first 13 days of the previous quarter according to our data. While Q1 trails Q4 by 10–11% so far, we are surprised that Tesla has been able to deliver even this level of volume given the big delivery push prior to the new year and the expiry of the full federal EV tax credit. (...)

Here's a summary of the latest quarterly inventory data on Model 3's, based on Tesla's delivery reports alone:

   =========|============|=============|============|===========|=========|======
   quarter  | production |  deliveries | Δinventory | inventory | transit | fleet
   =========|============|=============|============|===========|=========|======
   2017/Q2  |          0 |           0 |          0 |         0 |       0 |     0
   2017/Q3  |        260 |         220 |        +60 |        60 |      40 |    20
   2017/Q4  |      2,425 |       1,550 |       +875 |       935 |     860 |    75
   2018/Q1  |      9,766 |       8,180 |     +1,586 |     2,521 |   2,040 |   480
   2018/Q2  |     28,578 |      18,440 |    +10,138 |    12,659 |  11,166 | 1,493
   2018/Q3  |     53,239 |      55,840 |     -2,601 |    10,058 |   8,048 | 2,010
   2018/Q4  |     61,394 |      63,150 |     -1,756 |     8,302 |   1,010 | 7,292

This suggests that the ~5,200 extra fleet of new Model 3's Tesla kept in inventory at the end of Q4 was possibly able to sustain a good chunk of U.S. demand in January, while Fremont was churning out high margin European and Chinese versions.

Since the time window to get new Model 3's to Europe and China closes sometime in late February, every lower margin unit made for the U.S. market is a lost high-margin sale. This I believe explains the inventory build-up at the end of Q4: it was intentional. (This would be confirmation for what @Curt Renz has indicated previously as well.)

Any backlog on U.S. orders can be caught up with March production.

What's amazing to me about this is that if Tesla is truly making 6k+ cars per week as Carsonight indicates, then that suggests an effective Standard Range Fremont assembly throughput in the 7k-9k/week range: these high spec AWD and Performance versions take a lot more manufacturing effort to make. (Twice the drive train, premium interior, larger battery packs, more complex seats, glass roof, etc.)

So these January numbers, if they verify, are suggesting a further ramp-up in Model 3 manufacturing capacity.

 

[elasalle]

Elon Musk on Twitter
Testing metallic heat shield at 1100C (2000F) @SpaceX
.. short burn coming lol

 

[Buckminster]

...I wonder if not running the heat and running in eco mode may have actually contributed to poor range, by not heating the battery at all.

Okay - I have said this before and it didn't go down well.
1) Tesla are accelerating sustainable transport
and
2) In some cases decelerating sustainable transport

The IPace is too ambitious IMO. They felt like they could and should take on Tesla directly and beat them at their own game without 10 years prior experience. They have done a great job but sometimes getting 90% towards your target means falling into the chasm. A Defender replacement (like Bollinger) would have allowed JLR to experiment without any embarrassment whatsoever. Hyundai and Taycan news today backs this up further. If these guys can't make a profit, I don't see them wholeheartedly going for it. We predicted they would be in a pickle - we were right. If they collectively have a shareholder's backlash that stops them investing - they will all be doomed. They have a long way down before they can start rising from the ashes - best to start now or wait? If Tesla hadn't been as good, they would be making profit and investing further. I realise that this is not what most of you think, but I just have to say it again to get it off my chest.

 

[homer214]

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.

History will prove Tesla is handling Shanghai GF3 construction, etc. process well and timing this project perfectly or nearly so. It’s time to enjoy a GREEN Friday.

 

[TradingInvest]

If I were Apple's CEO, I would negotiate with Tesla to acquire 25% from the open market. Cancel the internal car project, continue the internal AI/Machine Learning projects, but not specific to self-driving. Of course ideally I would want to acquire 100% of Tesla, but that's not going to pass the Tesla shareholders.

 

[juanmedina]

Sorry guys but, why do you vote up Sean's question. Tesla absolutely understands the problem with service capacity why do you want to give shorts real thing to scream about?

Say

I hope Elon will tweet something about service improvement before the ER, so this question will not be asked.

And after you will be getting better service in US, please post and make videos about it. I can see that from RichRebuild comments that people are canceling and are afraid of ordering used Teslas. Youtube is very powerful tool these days.

Maybe someone from US can tell if anything has changed already in January? after they finished quarter end sales push?

That guy only has 400,000 subscribers; we have recent videos from Casey Neistat with 10M subscribers and Engineering Explain praising the model 3 Performance and if you take a look a the comments you can see the how many people want to buy a Tesla.

RichRebuild is polarizing and really mostly cater to Tesla haters or people that can't afford a new Tesla and are looking to buy salvage ones.

ICE dealership issues are terrible as well I had the Subaru dealership steal a transmission from me and the Lexus dealership scratching my paint and over spraying paint all over my car without a good resolution. I would not worried about it since EVs are bound to be more reliable and needing less service. I agree we should post more and make videos about good service experiences but I haven't needed any service .

 

[Nocturnal]

I agree. The smart move would be to come at Tesla off-center in areas like interior with better materials, or like Porsche is doing with faster charging. It doesn't have to be technical spec. IMO, Tesla's biggest long-term exposure is the delivery and support experience, which is a shame because it used to be the opposite.

Definitely. I do think Telsa is seeing money walk out the door at their SCs. When I picked up my BMW years back I had the option to buy all sorts of BMW swag. I don't understand why the SCs don't have a bunch of high profit junk to sell to excited owners and bored people waiting for their car to get fixed.

That guy only has 400,000 subscribers; we have recent videos from Casey Neistat with 10M subscribers and Engineering Explain praising the model 3 Performance and if you take a look a the comments you can see the how many people want to buy a Tesla.

RichRebuild is polarizing and really mostly cater to Tesla haters or people that can't afford a new Tesla and are looking to buy salvage ones.

ICE dealership issues are terrible as well I had the Subaru dealership steal a transmission from me and the Lexus dealership scratching my paint and over spraying paint all over my car without a good resolution. I would not worried about it since EVs are bound to be more reliable and needing less service. I agree we should post more and make videos about good service experiences but I haven't needed any service .

Yeah, I really don't like his attitude. Don't buy a Tesla and then complain about their self service options.

 

[anthonyj]

Sorry guys but, why do you vote up Sean's question. Tesla absolutely understands the problem with service capacity why do you want to give shorts real thing to scream about?

Say

I hope Elon will tweet something about service improvement before the ER, so this question will not be asked.

And after you will be getting better service in US, please post and make videos about it. I can see that from RichRebuild comments that people are canceling and are afraid of ordering used Teslas. Youtube is very powerful tool these days.

Maybe someone from US can tell if anything has changed already in January? after they finished quarter end sales push?

Tesla said that I have to wait 3 months to a year for rear seats that they accidentally ruined, so it’s def an issue that needs to be addressed. Also waiting 9 months for a registration fee refund when they incorrectly charged me

 

[AlexS]

Tesla said that I have to wait 3 months to a year for rear seats that they accidentally ruined, so it’s def an issue that needs to be addressed. Also waiting 9 months for a registration fee refund when they incorrectly charged me

Sure it should be addressed, but earnings call is not the place to do it.

 

[Curt Renz]

Electrek - 16 hours ago: Tesla Model 3 tops resale value ranking, report says

 

[AudubonB]

MODERATOR:

House-cleaning Friday.

As in -

1. If someone posts an egregious "Political Only" post here, that does NOT give you carte blanche to respond, other than via the specific post "Take it to 'Political' where you will see my response". This is regardless of whether you think 95% of readers agree with your sentiments or whether you are on a mission to demonstrate why you've the only sane head in a room full of loonytunes.
2. Too many of you make far too frequent use of acronyms and abbreviations (they're not the same). Even those of us who read every single post here cannot keep up with them: they are industry-, location-, or generation-specific, they are ones you and you alone use, they have different meanings (whyohwhy do abbreviation-loving posters keep referring to General Motors when discussing Tesla's upcoming earnings announcement?, for example). Those who are destined to the 6th Circle of Hell are those who write in a post something on the order of TIMOI (This is my own idea) and then NEVER make use of that abbreviation again! If abuse of readers' eyes were a felony, you'd get 50 to Life.

Carry on.

 

[Remus]

How big a deal is no lunar new year holiday in China? Is this something that is skipped for something moderately important or only high priority projects?

It's THE most important holiday in China. It's huge deal. People gonna be pissed.

 

[UncaNed]

Definitely. I do think Telsa is seeing money walk out the door at their SCs. When I picked up my BMW years back I had the option to buy all sorts of BMW swag. I don't understand why the SCs don't have a bunch of high profit junk to sell to excited owners and bored people waiting for their car to get fixed.

Yeah, I really don't like his attitude. Don't buy a Tesla and then complain about their self service options.

Didn't Tesla put a store at one of it's chargers? What happened to that concept? They could partner with Sheetz but this time backwards- mini Tesla-Sheetz stores at some of their bigger chargers for a little extra revenue.

 

[tinm]

“That? Oh, that’s just the parking garage for employees...”

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...

 

[Right_Said_Fred]

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.

The Google Docs-data show 1312 solid orders for The Netherlands as of 15 January. I can assure you the real number is at least 2 or 3 times higher. Cars in the price bracket of Model 3 are often leased. And all the cars ordered by leasing companies do not show up in these data. One of the bigger leasing companies has recently been placing orders for 50 cars every few days.

 

[Mobius484]

MMD looks a little weak today....

 

[SebastianR]

Okay - I have said this before and it didn't go down well.
1) Tesla are accelerating sustainable transport
and
2) In some cases decelerating sustainable transport

I get what you say. The way I look at this is slightly different: the legacy car makers have shown they will do everything to stall/sabotage progress. The fact that they are now scrambling just validates Tesla's moat even more - and thus encourages the Bollingers, BYDs, FFs etc. of this world to step up the game. I think a few of the legacy club will survive. But I do think that others have a chance at this, too. And that makes sure that the issue is not framed as "Tesla is whipping the rest in shape" but more as "new innovative disrupters are eating the old and fat incumbents". So yes, I get what you say. But in my mind it is required to truly kill the ICE market and do so quickly. Remember almost ALL of Germany is still reeling over Diesel emission thresholds and if there is a chance to revive the Diesel - denial is a strong drug best cured by shock and panic of legacy car makers

 

[Fact Checking]

And all the cars ordered by leasing companies do not show up in these data.

Just curious: why is that? As they order the invoice number should increase for them too - so the next new private customer reporting a new invoice number would show up in the spreadsheet.

Or are bigger purchases invoiced by Tesla in an entirely separate process, with different invoice number sequencing?

 

[Buckminster]

OT

I think Elon is referring to a couple of headwinds in 2019:

• Tariffs will go back to 40% on March 1, trade agreement is not certain yet.
• If trade war is ongoing then China might grow even slower - which could hurt Tesla sales too,
• First Model 3's (and maybe Y's) are going to roll off the lines in Shanghai at the end of this year - those will be the first Teslas that can be sold with 0% tariffs and can take advantage of the full EV incentives Chinese EV buyers enjoy.

Most of these worries should go away if there's a trade agreement between the U.S. and China.

Presumably Tesla can export from China if needed - China presumably have low tariffs with some countries that would be an advantage over Freemont. Plus the reduced costs.

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

Dan - suggest you copy my style. I am nearly always funny - particularly when I don't mean to be.

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

Yup, Deepak doesn't set the world alight but for those ever in doubt that Tesla could go off course because of Elon's crazy side or JB's inexperience then Deepak puts our thoughts to rest. Deepak coming back to work for Tesla was huge. Deepak staying for a good period longer now tells us we are not crazy to invest even at our most fearful. Solid like granite that you could build pyramids with and visit 5000 years later!

Yeah, I know, facts have a liberal bias.

(And, as usual, I'm willing to defend my viewpoints if any discrepancies are outlined in detail, and will adjust them constantly if my logic is flawed or when new data arrives. For now I don't see any big discrepancy between my China views and Trump views.)

Also, polarizing political views notwithstanding I've got plenty of conservative friends and fully accept that it's a valid way to view life. So please forgive the needling over Trump, who's not the ... most stellar demonstration of conservative values I believe.

I am stuck in the middle with my politics wherever I look - rarely having any extreme views. It is a little dull and you can end up disagreeing with everyone if you're not careful. My take on Trump - is it worth it? Lots of energy going in against him makes the world more polarised (like Brexit) and leaves a vacuum behind. There is no bandwidth for solving the real problems in society - theme of Davos from what I can make out. There is almost no mechanism for people to discuss politics now openly or change their opinions such is the way of social media echo chambers.

 

[AWDtsla]

Voted my shares for this question, hopefully Elon actually picks from here: Say