It looks like a case of runaway romance mode on that Model X on the lake. The fire leapt from the screen into the cabin and the rest is history.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
StealthP3D
Well-Known Member
Only Elon knows why he tweeted that. I would not presume to know, that was my point. He is privy to so much more relevent info than any of us are. And he knows more about the effects of such a tweet. Additionally, he has more skin in the game than anyone else.
So I think (as a non-lawyer) I'm not sure this extends to constitutional First Amendment prohibitions: the U.S. Government cannot require, even via voluntarily agreed to contracts and settlements, terms that violate the Constitution.
One prime example are the very restrictive Trump NDAs of White House staffers, which are considered unenforceable by many:
Trump NDAs can’t silence ex-White House officials: legal experts | Reuters
“These NDAs strike me as clearly unconstitutional under the First Amendment,” said Kitrosser.
“A public employee,” added Fenster, “can’t be forced to sign away the right to speak.”
With the obvious national security and privacy exceptions.
While a consent decree is a stronger legal document than an employment contract, and even for the WH employment contracts the legal profession is ... conflicted.
But note what the SEC is trying to do here: they are trying to restrain all of Elon's Tesla related speech, just on the basis that it 'might' contain material non-public information, and the legal challenge they started here uses a case where arguably Elon didn't disclose any material non-public information.
Note how the SEC lost a key First Amendment case in the past:
Securities and Exchange Commission
"In Lowe v. Securities and Exchange Commission (1985), the Supreme Court addressed whether the SEC violated the First Amendment when it sought to prohibit Christopher L. Lowe from distributing his “impersonal” investment advice letters. The SEC sought to regulate Lowe’s newsletters under the Investment Advice Act of 1940. The Court decided the case primarily on statutory, rather than constitutional, grounds in determining that Lowe had the right to publish his letters under a statutory exception for newspapers."
Note that Lowe was a convicted felon, yet he won the case. But the facts of the case are different: he was convicted and ordered, he didn't settle.
While I agree with you on justice morality and protection of the First Amendment I caution you that you can agree not to say something even though you have the right to say it. Here the SEC could say that Tesla and EM agreed not to speak. This was a voluntary agreement. It happens all the time that an agreement contains speech restrictions. And remember the constitution prevents government restrictions on free speech not voluntary agreements.
Vermont style Burning Man
I think he was just adding context to the picture to emphasize the accomplishment of Tesla from inception to date... leave it to the SEC to ruin nostalgia.
Both sides were happy to have this go away and the SEC looked good to whoever complained. It didn't cost EM much in control. Normally Tesla counsel would strongly recommend that EM stop tweeting after the settlement in order to ensure no problem with contempt. I suspect that no one can tell EM what to do. This was IMO a good reason not to settle on these terms. I can say that I have seen a lack of experience and a naive attitude from legal support for EM. Probably his last lawyer was frustrated with a client he could not control or protect from himself.
Having been an engineer and understanding their logic I have often seen their inability to grasp the nuance of social issues (see Dilbert). EM would be a difficult client.
This afternoon CNBC presented a nice fair and balanced debate between two money managers about Tesla - NOT. 
Link to video: Tesla has 'no transparency' and should be avoided, says strategist
And welcome disclosure about the participants' possible short or put positions in Tesla - NOT.
Link to video: Tesla has 'no transparency' and should be avoided, says strategist
And welcome disclosure about the participants' possible short or put positions in Tesla - NOT.
Carl Raymond
Active Member
Spot on. The run rate is the slope of the line. Easy for somebody like Elon to visualise and quantify.
The count of production is much harder. Take two points on the line and calculate the area under the curve below. That’s integration, much harder, especially as mental arithmetic, and especially hard given non linear growth.
Musk is an engineer, a freakishly good one, a gift to this planet. It’s painful that legal nit-pickers at the SEC, far removed from his communication wavelength, think it is their job to run interference on behalf of short sellers. Give the man a Nobel prize, not a flipping lawsuit.
Antares Nebula
Active Member
That makes sense. I was under the impression that it was a back and forth. Like the SEC going to Tesla and saying that we're considering filing a contempt case against Musk and is there any reason that we shouldn't? But if it is how you say, then boy the SEC did not do their homework and they're going to look stupid in court.
Antares Nebula
Active Member
If anybody wants to further compare and contrast the delivery estimates in the CC vs the Q4 letter (which stated 360-400k total deliveries), here are the relevant portions of the CC:
Colin Rusch
Thanks so much. Can you talk a little bit about the geographic dispersion for the guidance for 2019, where you're expecting the Model 3s to sell through as well as the other models?
Elon Musk
Well, I think we did, actually. Yes, it's clear in our letter.
Deepak Ahuja
We indicated in Q1, we will start delivering Model 3s in Europe and China. And we also shared a chart showing the potential market size for midsized premium sedans in North America, Europe and Asia, suggesting those markets could be even bigger. So I think that gives a good sense of where we'll be. And we'll launch the right-hand drive version at some point to go to the other markets.
Elon Musk
Yes. Maybe in the order of 350,000 to 500,000 Model 3s, something like that this year.
.... THEN LATER, WE HAVE:
Emmanuel Rosner
Okay. And, I guess, my follow-up would be on the demand side. So you're talking about 50% increase this year. You said a few times that it could be higher than this. I think you just mentioned in the previous question 350,000 to 500,000, if I understood well. So what is sort of like what drives the cautious outlook that's in your letter? Because it feels like it's the - it's just basically four times the fourth quarter run rate, which would imply sort of 50% for the full year but not really a lot of growth versus what you just accomplished. So, I guess, how do we think about the total demand for 2019, especially if you introduced this - the cheaper version?
Elon Musk
Well, we need to bring the Shanghai factory online. I think that's the biggest driver for getting to 500K plus a year. Our car is just very expensive going into China. We've got import duties. We've got transport costs. We've got higher-cost labor here. And we've never been eligible for any of the EV tax credits. A lot of people sort of dependent on incentives. In fact, we are [indiscernible] EVs, we have the least access to incentives. It's pretty crazy because there's so many companies that - countries that have put price caps on the EV incentive, which affects Tesla. And in China, which is the biggest market for EVs, we've never had any subsidies or tax incentives for vehicles.
So it's - it is eligible for that. But it sounds like that's going to be reducing in China in the coming years. But, really, bottom line is, we need the Shanghai factory to achieve that 10k rate and other cars be affordable.
The demand for - the demand for Model 3 is insanely high. The inhibitor is affordability. It's just like people literally don't have the money to buy the car. It's got nothing to do with desire. They just don't have enough money in their bank account. If the car can be made more affordable, the demand is extraordinary.
-------
So we can clearly see here that in the Q4 letter, Musk and Tesla were being somewhat cautious and conservative. Whereas here, in the CC, Musk opens up a little bit more and says that if things go right in China, with the factory, tarriffs, labor costs, etc. and (in the last paragraph) implying if they can get to the low cost Model 3, then maybe, they can get to much higher Model 3 (and thus total) vehicle deliveries in 2019.
I don't see anything unusual, false, or misleading about this. Company executives often clarify or add further color to the earnings report in the conference call. That's one of the reasons to have the call (otherwise everybody would be just content with the earnings report). And in fact, when I first read the report, I thought that the 360-400k number was on the low side. So I'm glad he clarified further on the CC.
In regards to the SEC and public material information, the relevant point here is that I think most of the analysts and investors (including myself) walked away from the CC with the impression that Tesla will deliver anywhere from 400 to 600k vehicles this year. So, I for one, was not surprised when Musk tweeted 500k production. It was not material news to me. Moreover, I didn't think that he was literally trying to make a production forecast for the year, but rather to say: look how far we've come, from 0 cars in 2011 to half a million in 2019. The SEC is simply on a witch hunt here.
Colin Rusch
Thanks so much. Can you talk a little bit about the geographic dispersion for the guidance for 2019, where you're expecting the Model 3s to sell through as well as the other models?
Elon Musk
Well, I think we did, actually. Yes, it's clear in our letter.
Deepak Ahuja
We indicated in Q1, we will start delivering Model 3s in Europe and China. And we also shared a chart showing the potential market size for midsized premium sedans in North America, Europe and Asia, suggesting those markets could be even bigger. So I think that gives a good sense of where we'll be. And we'll launch the right-hand drive version at some point to go to the other markets.
Elon Musk
Yes. Maybe in the order of 350,000 to 500,000 Model 3s, something like that this year.
.... THEN LATER, WE HAVE:
Emmanuel Rosner
Okay. And, I guess, my follow-up would be on the demand side. So you're talking about 50% increase this year. You said a few times that it could be higher than this. I think you just mentioned in the previous question 350,000 to 500,000, if I understood well. So what is sort of like what drives the cautious outlook that's in your letter? Because it feels like it's the - it's just basically four times the fourth quarter run rate, which would imply sort of 50% for the full year but not really a lot of growth versus what you just accomplished. So, I guess, how do we think about the total demand for 2019, especially if you introduced this - the cheaper version?
Elon Musk
Well, we need to bring the Shanghai factory online. I think that's the biggest driver for getting to 500K plus a year. Our car is just very expensive going into China. We've got import duties. We've got transport costs. We've got higher-cost labor here. And we've never been eligible for any of the EV tax credits. A lot of people sort of dependent on incentives. In fact, we are [indiscernible] EVs, we have the least access to incentives. It's pretty crazy because there's so many companies that - countries that have put price caps on the EV incentive, which affects Tesla. And in China, which is the biggest market for EVs, we've never had any subsidies or tax incentives for vehicles.
So it's - it is eligible for that. But it sounds like that's going to be reducing in China in the coming years. But, really, bottom line is, we need the Shanghai factory to achieve that 10k rate and other cars be affordable.
The demand for - the demand for Model 3 is insanely high. The inhibitor is affordability. It's just like people literally don't have the money to buy the car. It's got nothing to do with desire. They just don't have enough money in their bank account. If the car can be made more affordable, the demand is extraordinary.
-------
So we can clearly see here that in the Q4 letter, Musk and Tesla were being somewhat cautious and conservative. Whereas here, in the CC, Musk opens up a little bit more and says that if things go right in China, with the factory, tarriffs, labor costs, etc. and (in the last paragraph) implying if they can get to the low cost Model 3, then maybe, they can get to much higher Model 3 (and thus total) vehicle deliveries in 2019.
I don't see anything unusual, false, or misleading about this. Company executives often clarify or add further color to the earnings report in the conference call. That's one of the reasons to have the call (otherwise everybody would be just content with the earnings report). And in fact, when I first read the report, I thought that the 360-400k number was on the low side. So I'm glad he clarified further on the CC.
In regards to the SEC and public material information, the relevant point here is that I think most of the analysts and investors (including myself) walked away from the CC with the impression that Tesla will deliver anywhere from 400 to 600k vehicles this year. So, I for one, was not surprised when Musk tweeted 500k production. It was not material news to me. Moreover, I didn't think that he was literally trying to make a production forecast for the year, but rather to say: look how far we've come, from 0 cars in 2011 to half a million in 2019. The SEC is simply on a witch hunt here.
Last edited:
Fact Checking
Well-Known Member
Isn't it a bit too soon? Also, don't they do bigger events with such reveals, with invitations, press presence, etc.?
Yes. Here is one example from CNN - Go to 4:30 minutes into the video to avoid Ross “you’re not being helpful” Gerber droning on and on:
Quest Means Business on Twitter
2pm California time is after market close.
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