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

[KarenRei]

Man, in reading that CNBC article, I don't think I've ever seen someone(s) trying as hard as they possibly can to write a negative article. The fact that suppliers are having a difficult time getting over a snowy pass for instance is totally out of Tesla's control. Also, the bit about the amount of fasteners decreasing is common practice among manufacturing firms, mainly because the salesmen for the fastener company try to load up the bins at the end of a quarter to boost their commissions... any stores manager worth their salt would review that and cut back on the stock to smaller balance! I've done it at 2 different companies where I worked.

These bastards are trying as hard as they can to put Tesla in a bad light when in fact the opposite is true.

Their talk about hour cuts and fasteners is trying to imply a factory shutdown while simultaneously mentioning (but glossing over the fact) that there is no shutdown and cars continue rolling as fast as they can make them. The fewer worker hours Tesla has to pay for while keeping the cars rolling out the door and passing inspection, the better Tesla is doing its job.

This isn't a charity. Tesla is undergoing a huge expansion against tough macros. They have to be lean.

 

[lklundin]

This is exactly right. I have demonstrated this with my LR RWD on my numerous trips ...

I must sheepishly admit I am relieved to read this, since I have never actually driven a Model 3. Rather, all I have done is to create a mathematical model of the consumption and while it seemed to check out, I could have made a mistake (apart from the various assumptions made, such as fair weather).

 

[ReflexFunds]

Tesla has signed a RMB3.5bn ($500m) China bank facility paying 3.9% interest (calculated as 90% of the People's Bank of China 1 year rate), and due in March 2020.

It has also increased its US/Europe Credit Facility availability by $500m (to $2.435bn) and increased maturity of the full facility from June 2020 to July 2023. This facility was previously paying interest of 4.1% (based on Libor + 1%), but i expect it has likely now increased due to the longer maturity.

It looks like Tesla has also negotiated flexibility in its bank covenants to allow an additional $200m of revolving credit in the future.

So in total about $1bn of new liquidity and significant extension of debt maturities.

This means Tesla now has only another c.$700m drawn debt maturing before 2021 (this will increase to $1.2bn as the new China debt is drawn down).

 

[SimplyThis]

1000 points of light?

1000 $ SP

 

[jhm]

Actually, rather amazingly this has been surveyed, and the results are shocking:

Harris Poll: Top 10 Reasons Buyers Are Unhappy with Auto Dealerships​

People despise U.S. dealerships for very good reasons:

percentage  | demographics             | car dealership experience
------------------------------------------------------------------------------------------------------------
87%         | of all age groups        | dislike “something” about the process of shopping at auto dealerships
61%         | of all age groups        | hate the auto shopping experience
52%         | of all age groups        | feel anxious or uncomfortable at auto dealerships
50%         | of men                   | felt pressured by a dealership salesperson
62%         | of Millennial women      | felt pressured by a dealership salesperson
33%         | of women                 | report being spoken to disrespectfully at dealerships
37%         | of Millennial women      | report being spoken to disrespectfully at dealerships
56%         | of all age groups        | would rather clean their homes than negotiate with a car dealership salesperson
34%         | of 18-to-24-year-olds    | would rather wait in line at the DMV than negotiate with a car dealership salesperson
24%         | of the 35–44 demographic | would prefer to get a root canal than negotiate with a car dealership salesperson

What do car buyers want instead? 

percentage  |  demographics            | new car purchase wish-list
------------------------------------------------------------------------------------------------------------
54%         | of all age groups        | would love to buy or sell a car without leaving home
42%         | of all age groups        | would feel comfortable buying a car online without a test drive if incentives were included

Source: Reddit.

Very funny comparisons. Imagine the ad opportunities.

Car Shopper: Hey, this is car I'd like to buy.
Car Salesman: Super! We just need you to submit to root canal first, then you can drive away with your new car.
Car Shopper: A root canal, are you serious?
Car Salesman: Ha, ha, just kidding. We just need to back the office and I run a few things by my manager, and...
Car Shopper: No, I think I'd prefer the root canal instead. What do you think, hun?
Shopper Spouse: Yeah, if they're serious. I could totally go for the root canal.
Car Salesperson: Hmm, I think I could make that work. Let me just go chat with my manager.
Car Shopper: Ok, no, you don't have to do that. I'm fine with the root canal.
Car Salesperson: Super. So would you anesthesia with that root canal?
Shopper Spouse: Would you have to go check with your manager for that?
Car Salesperson: Yes, but not if your willing to forego the anesthesia.
Car Shopper: Ok, a root canal without anesthesia, I'm fine with that.

Shopper and Spouse leave with new car.
Shopper Spouse: Hunnie, I think we got a really good deal this time.
Shopper with huge, swollen face: Yup.

 

[S3XY]

1000 is a magical number.
1000 mph Charging
1000 km Roadster 2
1000 Songs in Your Pocket
What other 1000 thing am I missing? Please add.

1000 pennies in the bank.

$1,000 SP

 

[wipster]

<snip>
Good analogy.

I explain quick charging using a water glass as an example. I tell them; you know how when you're really thirsty you pour a glass of water quickly. But you don't want to spill any so you pour the water really fast for about 3/4 full then slow down until the glass is full. Charging your Tesla is similar and by the time your charging rate slows down significantly you have the range to make it to the next SC plus a buffer (road tripping).

That's a good analogy, but what I would like to know is if applies to the SR battery pack. If they can now increase range to 75 miles in 5 minutes, would it be possible to almost fill the pack in 15 or 20 minutes? If so that's earthshaking! I don't think I could go to the restroom and get a pop in that amount of time. Plus, it takes longer to fill up at Costco as you typically have to wait in line.

Any thoughts?

 

[gene]

I challenge anyone that is an EV owner to read this and not laugh out loud: Test drive of a petrol car - Tesla Club Sweden

 

[Fact Checking]

Seriously. CNBC spun good news as bad. I mean, WTH? Alternative headline would be "Tesla averaging near 7000 vehicles per week, with peak rates exceeding that". Q4 was, what, ~4,6k average? And yes, at 7k a week, they better need SR in the mix in the US, or their global market estimates of 10k/wk with SR in the mix everywhere are seriously low. SR is going to be particularly important in China.

This might explain the insane VIN allocations as well.

 

[Navin]

Tesla has signed a RMB3.5bn ($500m) China bank facility paying 3.9% interest (calculated as 90% of the People's Bank of China 1 year rate), and due in March 2020.

It has also increased its US/Europe Credit Facility availability by $500m (to $2.435bn) and increased maturity of the full facility from June 2020 to July 2023. This facility was previously paying interest of 4.1% (based on Libor + 1%), but i expect it has likely now increased due to the longer maturity.

It looks like Tesla has also negotiated flexibility in its bank covenants to allow an additional $200m of revolving credit in the future.

So in total about $1bn of new liquidity and significant extension of debt maturities.

This means Tesla now has only another c.$700m drawn debt maturing before 2021 (this will increase to $1.2bn as the new China debt is drawn down).

It gets better. The China loan is 100% non recourse and unsecured which is bullish. Would love to hear any bear arguments otherwise from any of the troll mafia here.

 

[Krugerrand]

Why are we not in red today?

It can't be SC V3 - that I know. Did some analyst say something?

Really?

 

[traxila]

That would only be of concern to SpaceX, not Tesla. In any event, marijuana use is legal in California where the podcast took place, so there was no illegal drug use to disclose.

Marijuana is still a federally classified Class One narcotic, on par with heroin.

It is still completely illegal on a federal basis.

 

[lascavarian]

Car rentals.

Well yes plus. More like a Lift or Uber service hybrid where the vehicles are supplied but also for sale as used or maybe for lease. If mobility as a service is a billion dollar opportunity there may be a way to make something work.

It could be a grasp too far but perhaps something could work for those difficult states for a start. Plugs right in to an autonomous model couple years coming.

 

[avoigt]

WIth a speed limit of 90 km/h, the difference between 120 kW and 250 kW is actually quite small - at least until you get your tow bar.

For a LR RWD, the effective traveling speed when actually driving 90 km/h and when charging at 120 kW is 83 km/h, and if the charging power is increased to 250 kW, the effective traveling speed goes up to 87 km/h. (The difference up to the 90 km/h is basically cut in half by doubling the charging power).

So while I hope that Iceland (and everyone else) get v3 Supercharging, places with low speed limits would suffer the least from not getting them. This would include Norway, that has rather few stretches with highways.

It follows that Germany would benefit the most from v3.

If the actual driving speed for a LR RWD is 180 km/h, then the effective traveling speed is 123 km/h with 120 kW charging. Increasing the charging power to 250 kW increases the effective traveling speed to 148 km/h, so a significant difference.

For higher driving speeds the difference in charging power has greater effect.

With 120 kW charging a driving speed of 192 km/h minimizes the sum of driving and charging (for an effective traveling speed still at 123 km/h), while with 250 kW charging the LR RWD would have to drive at full speed (around 235 km/h) to minimize the sum of the driving and charging time (for an effective traveling speed of 160 km/h).

Since Tesla seems to itch to give the Tesla smack down to especially the Germans and their ICEs I would not be surprised to see the v3 deployed liberally along the Autobahn. That will really hurt the Germans, to be overtaken by Teslas on the very Autobahn that they have kept speed limit free exactly to provide a market for their expensive German cars.

Interesting though but as he just expressed by increasing the charging speed like he did in combination with the battery warming function to have it at the right level when you arrive he shortened the time you block a stall by half and by doing that simply doubled the amount of charger available. An increase of 100% with likely not a high investment.

You can also call it a free of costs increase of your battery pack as Tesla take the costs but gives you more travel range. At the end he outpace all competition again with accelerating pace of innovation. A shock for every incumbent but I am not sure if they even understand what just happened.

The supercharger network is one of the Tesla Crown Jewels that the incumbents still not fully understand in the effect on consumers.

Pretty amazing.

 

[Heart Land]

You know, I'm pretty close to just giving up on all the traditional OEMs to survive the EV transition. We could be looking at 90% of the auto industry divided among Tesla, 3 or 4 Chinese EV makers, and a couple of new start ups. The rest of the auto industry won't be worth much at all. So Tesla stands to capture 20% to 50% of the entire auto industry. It used to be about spurring automakers to get serious about EVs. Now it's more like, "F'em, we've got to replace these incompetent losers."

I have worked with many companies across many industries. The large auto OEMs are notoriously difficult to work with. In fact, I know some companies refuse to work with them. They will yell that the floor is wet but ignore that the roof is leaking. They are not focused on the correct things. This is what led me to Tesla. I knew if another car company emerged, the traditional OEMs would be in big trouble. And then I drove a Model S. And that is when I started buying stock.

 

[brian45011]

(apologies, i'm behind, trying to catch up...)

but yes, this. To paraphrase Rogan, when you drive the Tesla for a while and then go back to an ICE car, even if you don't care about the environment, you just say to yourself "gas cars are STUPID." but the problem is you can't tell people that. they don't believe you. it's one of those things that has to be experienced first hand, behind the wheel. (and i agree with an earlier poster that being the driver is much more important than merely being a passenger).

so, I do truly hope Tesla is not ending test drives, and works to get the word out where and how one can take one. And I'm also encouraged by the roughly 500,000 new test drive locations and part time salespeople that Tesla is acquiring over the course of this year.

Since the first ride event in October 2011 at Hawthorne, Tesla has been periodically doing drive events all over North America at up scale venues for the last eight years--doubtful they will stop now.

 

[KarenRei]

This might explain the insane VIN allocations as well.

Seriously might break 80k this quarter. Depends on how the curve has fared so far and how much downtime there is. But this is just brilliant.

Also, let's do some math:
Q1: ~6,2k/wk = 80,6k
Q2: ~7,4k/wk = 96,5k
Q3: ~8,4k/wk = 109,6k (Fremont plus some GA in Shanghai)
Q4: ~9,4k/wk = 122,6k (Fremont plus significant Shanghai GA + some production from local lines late in the quarter)

Total: ~410k Model 3
Plus: ~90k Model S+X

Gee, huh, could someone add those two numbers together and tell me "about" how many cars Tesla would be making this year?
#BiteMeSEC.

 

[lklundin]

And I’m the guy that tried to dabble in online stock purchasing using an IB account and managed to unwittingly borrow Canadian dollars and buy a stock completely on margin. And it took me 6 months to realize it. So, yeah, I know my limitations

Are you that guy who decades ago happened to buy stock in a small "fruit company"?
Asking for a film loving friend...

 

[Zaxxon]

Slight down day in Norway today, but still > 100 registrations.

 

[Sean Wagner]

Interesting Feb. stats from the Netherlands.

Hyundai Motor Group combined EV sales the leader by far [736 total].
Also, Tesla Model 3 dominating the compact upscale sedan category:

1 – Tesla Model 3 – 472
2 – Mercedes C-Class – 411
3 – Volvo S/V60 PHEV – 301
4 – BMW 3-Series – 169
5 – Audi A4 – 131

Source EV Sales: Netherlands February 2019
by way of insideevs.com