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

[MarcusMaximus]

If Tesla can sell cars effectively in the US via online web ordering / sales, at least for the next few years, maybe Tesla lets the dealerships and the rest of the car dealers hang with their franchise laws and see how far Tesla can go without spending money or energy on it.

This part is key for me. If Tesla can sidestep even the most restrictive of such laws by going online-only, then I see no reason why other manufacturers can’t do the same.

They may or may not want to(as someone else mentioned, they may be stuck between a rock and a hard place in terms of pricing there), but it seems to me that they can.

 

[MarcusMaximus]

I believe some states block Tesla from opening service centers, and New Mexico is one. That remains a serious barrier to online sales, even if they can deliver a car to your doorstep. Ranger service is available from neighboring states but not a great solution.

Fair.

 

[Thekiwi]

2-4 weeks for Americans and Canadians, many months for everyone else.

I can't believe I have to spell this out.

Let's say that at 10k/wk 50% of all Model 3s need to be SR or SR+. So 5k/wk.
Let's say that of that 5k/wk SR, 30% is for the US/Canada, 40% for China, 25% for Europe, and 5% elsewhere.
SR goes on sale in the US/CA, but not elsewhere.
This is 30% of the SR market, or 1,5k/wk
Versus 5k/wk for if SR was available in the whole world.
30% of SR's peak production.
Do you call 30% of SR's target production "volume production"? I sure don't.

(And honestly, 40% for China is probably a big underestimate. China is a lot more price sensitive than US, EU, etc. The US share of SR demand is probably significantly lower because China's is higher. Remember that Tesla's plan is 3k/wk of "lower spec" Model 3s at Shanghai by the end of the year, only for the "Greater China" market).

I can’t believe you need it spelled out from your own estimates.

here is where we disagree:

1) you don’t consider 1500 cars a week as “volume production” - I would definitely consider it volume production - 1500 cars a week is a 50% higher production rate than S or X currently. Do you not consider S & X to be in volume production?

(We can agree to disagree on point 1 - it is basically semantics over what number constitutes volume production or not. The much more important topic is below in point 2)

2) even if Tesla hypothetically is currently at your 1500 weekly production number - how is that possibly meeting demand for the SR orders in its launch week? At a 2-4 week delivery estimate that Is only 3000-6000 orders so far for SR models (if it was more than that then the delivery estimate time should be increasing.) basically if the website delivery estimate hasn’t moved higher, then that means the current low production number is already meeting USA+Canada demand, which is insane considering the pent up demand that has been waiting for the SR)

So if you truly believe your own example of 1500 a week production rate and you also believe that the 2-4 weeks delivery estimate is accurate, then the SR is a giant flop. I sure as hell hope you are wrong, otherwise Tesla has a serious problem with SR demand.

I don’t believe that’s possible, and like others have said the website JavaScript hasn’t been updated in days, leading to the much more sane explanation that it is wrong - and why Musk is saying orders now should get cars “before end of June”

“before the end of June” is not “2-4 weeks”.

 

[trailhound]

Couldn't a major automaker spin off their EV's into it's own company for on-line sales and contract with their own dealers for service. Saturn was on it's own wasn't it? Maybe there is something in franchise agreement to prevent this.

trailhound not liking this much volatility...

 

[winfield100]

Anecdotal. Now that the 35k car is released I have several people I know here in Kansas and in the MD/DC area that are asking me detailed questions about owning a model 3. People don't know much about them but that's because they don't want a 50k car so never bothered to learn. Now they are perking up.

have them go to Electric Vehicle Association of Greater Washington, DC | Promoting electric vehicles as an environmental and energy alternative and ask. lots of Tesla and other EV folks there

 

[Cherry Wine]

I can’t nelieve you need it spelt out from your own estimates.

here is where we disagree:

1) you don’t consider 1500 cars a week as “volume production” - I would definitely consider it volume production - 1500 cars a week is a 50% higher production rate than S or X currently. Do you not consider S & X to be in volume production?

2) even if Tesla hypothetically is currently at your 1500 weekly production number - how is that possibly meeting demand for the SR orders in its launch week? At a 2-4 week delivery estimate that Is only 3000-6000 orders so far for SR models (if it was more than that then the delivery estimate time should be increasing.)

So if you truly believe your own example of 1500 a week production rate and your belief that the 2-4 weeks delivery estimate is accurate, then the SR is a giant flop. I sure as hell hope you are wrong, otherwise Tesla has a serious problem with SR demand.

I don’t believe that’s possible, and like others have said the website JavaScript hasn’t been updated in days, leading to the much more sane explanation that it is wrong - and why Musk is saying orders now should get cars “before end of June”

“before the end of June” is not “2-4 weeks”.

Sums up my thoughts pretty well. Either the website is incorrect, or I have serious concerns over SR demand at this point in time.

 

[jerry33]

EV drivetrains are so much more reliable than ICE ones that time/age will be a bigger factor on wear or depreciation than mileage.

There are complaints on this forum where people complained that there were 50 miles when the car was delivered.

 

[Khamul]

Update on the missing transcript issue:

"yo @Tesla & @elonmusk why was there a press call about the $35K model 3 that was closed to the public (and shareholders!!) w/ no transcript released. super frustrating for long-term supporters. completely goes against democratization of information and financial markets"

Elon: "Tesla comms is fixing. That was a mistake."

I really hope we'll get to read the whole transscript. I don't like depending on shorts for that..

 

[Driver Dave]

How can you afford not to invest in TSLA?

 

[ntam]

I have only one data point but it seems the premium on the calls are dropping rapidly today. At yesterday's close, Apr 18 300 call was trading at $16. I did not buy until this morning when the stock was at 275 and got it for $12. Then the SP dropped to 272.xx. After that, when it got back to 275, it was about $11 only. When the stock hit 282, it is only $13. Does that mean someone is dumping a lot of calls on the market?

 

[adiggs]

Right, but the key thing I’m talking about is selling directly online, without any dealer involved. That’d be awfully difficult to stop and there’s no such ban(as far as I can see) on the books in any state.

I'm pretty sure the car manufacturers could swing it where they book the sale on their website, and set the delivery at a local dealership - that's something they can do. But in many of the states, the laws are so bad, they've been interpreted and reinterpreted in court cases to "only physical dealers can sell cars".

So several things to be clear on.
- the laws are a patchwork of state level laws, with a variety of wording and restrictions. There isn't "The Law" - there's about 50+ laws.
- enough of them are sufficiently restrictive, that for the car makers that already have a franchise dealership, the functional effect today is that they can only sell through that sales channel
- And there is good reason to think that this won't stand intense constitutional scrutiny when applied to a business such as Tesla. For Ford et. al., it probably does stand scrutiny because it starts out in contract law as an agreed restriction on the part of car makers (you buy my franchise, I agree to not sell the stuff I make in your area by other mechanisms).

As that article quoting Jonas points out, if this works well enough for Tesla, we might see the rest of the car makers going back to law makers and trying to get those laws changed. We might also see the car makers going back to their dealers to try to negotiate new franchise agreements.

An obvious middle ground I can see them all trying to arrive at (whether it actually gets the benefits that Tesla is hoping to achieve or not), is for consumers to be able to order a car on the website, and schedule delivery at a nearby dealership. For the dealer, there's only a delivery experience involved - no sales at all. And of course, the dealer gets a contractually agreed slice of the sale for handling the delivery (and a shot at establishing themselves as the go-to for that new customer for service on the car).

Well - assuming that there are any ICE car sales to be divvied up between dealers and car makers

 

[EVNow]

Woohoo - Superchargers coming to Iceland!!!!

Tesla fundaði með OR um hraðhleðslustöðvar

Short summary: It's been confirmed that Tesla is discussions with a power company, a charging station operator, and various government officials about setting up a Supercharger network.

I take back my comment that India's premium car market is too small for Tesla to bother. There are more millionaires in Mumbai than the population of Iceland

 

[abasile]

Couldn't a major automaker spin off their EV's into it's own company for on-line sales and contract with their own dealers for service. Saturn was on it's own wasn't it? Maybe there is something in franchise agreement to prevent this.

For California and the other states aligned with CARB, the major automakers need "ZEV" credits from the sale of EVs. If they can't generate enough of their own ZEV credits, then they have to buy them from Tesla.

trailhound not liking this much volatility...

"If you don't like volatility you shouldn't own our stock." -- Elon Musk

 

[Tifighter]

It takes about 15 hours to drive around the country nonstop. Low speed limit, but mountainous, snowy for a good chunk of the year, extreme wind storms, and spread out geographically.

I've been to your lovely country once and am thinking about visiting again this summer. Nice to know I'll be able to pack my 3 and bring it with me.

 

[AlexS]

what do you think guys, will tomorrow Supercharger v3 get any press attention?

 

[SOULPEDL]

Woohoo - Superchargers coming to Iceland!!!!

Tesla fundaði með OR um hraðhleðslustöðvar

Short summary: It's been confirmed that Tesla is discussions with a power company, a charging station operator, and various government officials about setting up a Supercharger network.

Wow, you bought without a Supercharger network? That's awesome!
And congrats!

 

[SOULPEDL]

Voluntarily building a new Supercharger network on an island of 338k people is exactly what a company desperate for cash would do.

Jokes aside, that's great news for you! Should be a small but sales dense market for them.

Maybe they only need 3 superchargers?

 

[EVNow]

I have only one data point but it seems the premium on the calls are dropping rapidly today. At yesterday's close, Apr 18 300 call was trading at $16. I did not buy until this morning when the stock was at 275 and got it for $12. Then the SP dropped to 272.xx. After that, when it got back to 275, it was about $11 only. When the stock hit 282, it is only $13. Does that mean someone is dumping a lot of calls on the market?

When the stock price dips quickly, the call price won't dip that much i.e. the IV will be higher because more people expect the SP to come back up. Once the SP comes back up IV starts going down.

Also, generally IV in the morning is higher than later in the day as the SP settles down and people don't expect much movement.

 

[jerry33]

Couldn't a major automaker spin off their EV's into it's own company for on-line sales and contract with their own dealers for service. Saturn was on it's own wasn't it? Maybe there is something in franchise agreement to prevent this.

The laws are such a mess that it would have to be an arm's length company, not a subsidiary, joint ownership, etc. I don't know how you make an arms length company unless you have government intervention the way that Roosevelt (T, not FD) did with Standard Oil. I can't see any company doing this voluntarily.

 

[Cherry Wine]

I have only one data point but it seems the premium on the calls are dropping rapidly today. At yesterday's close, Apr 18 300 call was trading at $16. I did not buy until this morning when the stock was at 275 and got it for $12. Then the SP dropped to 272.xx. After that, when it got back to 275, it was about $11 only. When the stock hit 282, it is only $13. Does that mean someone is dumping a lot of calls on the market?

Volatility was sky high this morning even for TSLA based on the rapid price drop.