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

[PhaseWhite]

Reservations are not increasing revenue, profit or free cash flow - they do increase Tesla's cash and capital position though.

I think the timing of the latest demand lever pulls is no coincidence with the bond repayment. They seem to be strategic moves to ensure Tesla's cash position remains healthy after the bond repayment.

1. All those new Model 3s orders all start with a $2500 deposit.
2. Tesla announced availability of FSD (Including HW3 upgrade) to existing EAP purchasers for $2000.
3. Now we see Model Y reveal coming. I know some speculated Tesla won't take deposits. I think they will.

I know the consensus here is that Tesla has plenty of cash as evidenced by their Q4 update letter: There they stated they had $3.685B in cash. (http://ir.tesla.com/static-files/0b913415-467d-4c0d-be4c-9225c2cb0ae0)

But consider that the Q4 earnings represent a snapshot taken at a time when inventories are as optimized as possible. Shortly after Q4 they started producing cars for Europe and China. If they had 25k Model 3s in transit/inventory between those on ships/and in the US waiting to be delivered then at a 40k cost per unit that would be 1B dollars in working capital.

So 3.685 - 920 - 1000 means Tesla could be down to 1.765 B in working capital right now. That's a little less than half what the Q4 report snapshot showed.

I'm also still smarting from the store closure announcement and I think it's related to the capital issue. I'm probably sounding like a broken record now but I feel like Tesla should have raised capital earlier when they had the chance instead. That would he given them the leeway for instance to offer the 35k Model 3 without such draconian cuts that I think will be a drag in their efforts to reach a new customer base.

Edit: ok my math is overly simplistic. My point was that Tesla needs working capital and that the Q4 snapshot is just that.

Thanks @Fact Checking for your thoughtful reply

 

[DFibRL8R]

Ditto.

Can't wait for the Y reveal. Performing finger calisthenics so I can get my reservation in before all you hosers.

I'm hopeful that they are clear this time that the car will start with high end configs. We know that's the case, but I really don't want yet another series of articles bemoaning Tesla's inability to get a base model out quickly.

Also hopeful that the reservation fee is a bit higher this time.

That could help the 1st quarter cash flow methinks.

 

[JustAaronnoraA]

The pickup isn’t aiming to directly compete with Rivian. It’s going to be a crazy truck. He did say they are planning a more conventional pickup truck for further in the future

I think he just trying to dampen the expectations. I think the media and short will definitely compare it to Riviant.

On a side note, Elon need to slow down on Twits.

 

[dgodfrey]

This will be 2 Thursdays in a row that I will have wet myself. I think my kids will have me moved to a home now. Thanks Elon.

 

[printf42]

I am seriously thinking about Tesla induces panic in the whole auto industry, then a new round of write-off, closure, lay-off, then trigger a full on global recession.

This might become the short thesis next week, because they are really running out thesis now.

 

[Zaxxon]

Just running with the 10% bigger comment. We don't know to which dimensions Musk refers, but just for comparison on width/length:

Model 3: 72.8"W x 184.8"L
Model Y at 10% bigger: 80.1" x 203.3"L
Model X: 89.4"W x 198.3"L

Toyota Highlander: 76"W x 193"L
Honda Pilot: 79"W x 197"L
Audi Q7: 78"x200"

Those are all 3-row SUVs. I doubt the Y will be as long as the X, but there's clearly room for a 3rd row at 10% larger than the 3.

 

[Antares Nebula]

This is what I mean that both Tesla and TSLA are unpredictable. If you're long term believer, trading your core position is highly risky as today's news shows. I sold my short term calls on Thursday (which I suspected maybe a sell the news event). On Friday, I did consider whether to reduce my core position of shares and leaps, but ultimately I held and in fact added a few more leaps. My only small regret is that (after today's news) I did not buy some more short term calls. But I was being conservative given the current news then. Really curious how much this will gap up tomorrow.

 

[1101011]

...Compare this experience, against the last one you've had at a ICE dealership. No hurry. Take your time...

THIS - is what disruption looks like! Nicely done, Elon.

The last time I bought an ICE, I brought three magazines in with me. Said they could do all that 'consult my manager' stuff until I'd read the three, then I was leaving. They followed me out the door when I'd had enough, and the deal was concluded in the parking lot.

 

[ls7corvete]

I think the timing of the latest demand lever pulls is no coincidence with the bond repayment. They seem to be strategic moves to ensure Tesla's cash position remains healthy after the bond repayment.

1. All those new Model 3s orders all start with a $2500 deposit.
2. Tesla announced availability of FSD (Including HW3 upgrade) to existing EAP purchasers for $2000.
3. Now we see Model Y reveal coming. I know some speculated Tesla won't take deposits. I think they will.

I know the consensus here is that Tesla has plenty of cash as evidenced by their Q4 update letter: There they stated they had $3.685B in cash. (http://ir.tesla.com/static-files/0b913415-467d-4c0d-be4c-9225c2cb0ae0)

But consider that the Q4 earnings represent a snapshot taken at a time when inventories are as optimized as possible. Shortly after Q4 they started producing cars for Europe and China. If they had 25k Model 3s in transit/inventory between those on ships/and in the US waiting to be delivered then at a 40k cost per unit that would be 1B dollars in working capital.

So 3.685 - 920 - 1000 means Tesla could be down to 1.765 B in working capital right now. That's a little less than half what the Q4 report snapshot showed.

I'm also still smarting from the store closure announcement and I think it's related to the capital issue. I'm probably sounding like a broken record now but I feel like Tesla should have raised capital earlier when they had the chance instead. That would he given them the leeway for instance to offer the 35k Model 3 without such draconian cuts that I think will be a drag in their efforts to reach a new customer base.

Methinks your accounting is a little off there....

 

[Fact Checking]

Considering M Y shares 75% components with M3, and very likely even higher if counting in terms of value.

Indeed, that's an excellent point: biggest difference would be chassis and internal plastic elements - relatively low cost parts that are perhaps $5k of a $39k car.

All the high value, high complexity parts are likely close to 100% shared between the Model 3 and Model Y:

• cells, battery pack,
• drive train,
• electronics, sensors,
• Autopilot computer,
• heat pump, cooling system,
• (perhaps seats too)

Elon said 76% of the 10,000 parts are shared - I'd not be surprised if ~90% of the CoGs value was shared. (Maybe @ReflexFunds wants to chime in.)

 

[ZachF]

The trolls are going crazy on Electrek.... It's almost like they sense how much of their money they are going to lose on Monday....

 

[Antares Nebula]

So I guess this MY news contradicts that bogus reddit user last night who posted that Tesla closing the stores was because they were near bankruptcy and that Model Y plans and reveal were put on hold. I swear, the amount of FUD in the media, on twitter, and on reddit is ridiculous. Thank god for TMC!

 

[Sudre]

I guess the only point the shorts are going to have now is there will be no more vehicles for Tesla to announce after this year. If Elon can't get the fan boys to hype/buy the stock up after a reveal every now and then Tesla is surely going to go bankwupt.

and here comes the Tesla minivan.... LOL

 

[mongo]

One unit is about 6.5kwh, meaning the difference between the Short Range battery and Long Range equals to 4 Powerwalls.

Powerwall has 13.5 kWh of usable capacity.

If I reserve a Y, can that deposit be switched to an X if I change my mind? Asking here since some of you folks have gone through this process.

In the recent past, you needed to cancel one reservation and make a new one. In the long past people switch from S to X (I think, it's been a while since I read that)

Wait a minute... he’s doing the unveiling on Pi day!!! Something is definitely up... this thing may go on forever

Don't be irrational

 

[Alphacrux]

MODLE Y UNVEIL EVENT ON MARCH 14TH!

hallelujah!!!

 

[ZachF]

Indeed, that's an excellent point: biggest difference would be chassis and internal plastic elements - relatively low cost parts that are perhaps $5k of a $39k car.

All the high value, high complexity parts are likely close to 100% shared between the Model 3 and Model Y:

• cells, battery pack,
• drive train,
• electronics, sensors,
• Autopilot computer,
• heat pump, cooling system,
• (perhaps seats too)

Elon said 76% of the 10,000 parts are shared - I'd not be surprised if ~90% of the CoGs value was shared. (Maybe @ReflexFunds wants to chime in.)

The biggest difference will be the frame/etc.

The Model Y is also rumored to use a new, simplified wiring harness that is supposed to save a lot of money, so manufacturing costs may not be that different.

I suspect margins for the Model Y will easily exceed the 3.

 

[Gavyne]

The man can drop these bombs then chill to Bob Marley, respect.

Elon Musk on Twitter

Elon Musk‏Verified account @elonmusk
Having toast & jam in kitchen while playing Jamming by Bob Marley

 

[KarenRei]

What are the specs on V3?

Let me know when you find out!

 

[MartinAustin]

3. Now we see Model Y reveal coming. I know some speculated Tesla won't take deposits. I think they will.

Tesla's mission is to accelerate the advent of sustainable energy and transport.

One of the ways to do that is to drag all the legacy manufacturers, kicking & screaming, along with you.

One of the ways to do that is to indicate how many people are interested in Tesla's new car and not their cars.

Taking free reservations is a lightweight way to do that.

A very concrete way to do that is to charge $1,000 for a reservation (even if it is refundable). Customers who put down real money are serious, so your reservation numbers will be real. (versus "free reservations" which you could get millions of people doing), and they won't go to a legacy dealer to look for a car there... because they will have put down money for a new Tesla.

The 373,000 number back in 2016 scared a lot of manufacturers into action.

As far as Tesla's ability to goad legacy manufacturers into action is concerned... Elon is NOT going to leave that on the table.

 

[PhaseWhite]

Methinks your accounting is a little off there....

Ok what’s your estimate and why?