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

[Fact Checking]

@Fact Checking Does Elon get a chance to reply (if needed) to the SEC reply? I don't recall seeing that on the judge's order, but it would seem only fair.

Not normally, AFAIK - the SEC's request already appeared unusual to me, but they might ask for an opportunity to do so, in light of the strength of the SEC's rebuttal brief on March 19.

But they might also add arguments and citations to their motion for the evidentiary hearing: they'll probably be free to outline why they think particular pieces of evidence should be admitted.

My guess: unless the SEC brings up new arguments that requires significantly new case law and arguments from Elon's team, they'll probably not ask for another round but keep those arguments for the contempt hearing.

In principle the SEC's next reply must stay within the scope of defenses raised by Elon's team.

(But keep in mind that I'm not a lawyer, that I'm just guessing, and that there might be procedural and trial-tactical quirks and that I might be misunderstanding the whole process.)

 

[Tslynk67]

For the Model 3 with EAP already, the FSD cost is $2k, not $3k.

€2100 for us existing EAP-ers in EU, which is roughly $2400, although I suppose you need to deduct local VAT, which is average 20% and you get back to $2000 anyway.

What a useless post...

 

[Tslynk67]

Yep same here. Having seen too much government action against TSLA. My default expectation of this is another gov action against tsla. I do support the fight, but sorry. Nothing's been going right for 10 years when it comes to gov actions.

Elon should start a corp in China. Say... Boring can be China based or something, and see how different the treatment is.

I've only really been following the financial side of Tesla since I bought most of my shares in 2016. It's obvious right now that under the Trump regime, there are considerable headwinds against anything seen a "green", but was this the case with the Obama administration too? Is this something that could flip should the dems win the next election?

Not intending this to be a political discussion, just want to know the environment that Tesla has been dealing with.

For sure they'd get a very warm welcome in Europe, I don't understand why they delay GF4 so much.

 

[Fact Checking]

Out of interest, what is your level of experience with the law and legal matters?

I'm not a lawyer, so take this all with a healthy grain of salt, I like to geek out over legal matters and I find U.S. court drama fascinating, it's far more interesting and unpredictable than European ones.

 

[Tslynk67]

2. Your volume and detail of contribution (in general) is not welcome from my point of view. One reason, I don't have time to digest it, please also see #3. I am also sure many people enjoy it, so this is not an ask for a change, just a single reference point, FYI. Most likely it's of no interest to you, and that's ok if you enjoy doing it. If it's useful feedback, great, if it's not, please disregard.

I have to strongly disagree with you here, Zhelko, it's exactly this level of detail (from several well-informed and intelligent members/AI's) that make this thread a must-read for anyone deeply interested in Tesla, not just investments. i'd hasten to add that I don't feel FC makes many frivolous posts either, they're mostly pertinent (unlike mine*)

* I'm working on this, OK?

 

[Antares Nebula]

Was waiting for close of market to post, and was hoping for more than 2% gain today, but if it's green I'll take it!

I have a somewhat unusual perspective on this as I have the unique perspective of literally having had hundreds of strangers ride in my car which is almost always a topic of conversation, many of whom it is their first ride in a Tesla. I started driving with Uber and Lyft as a side gig and on a whim 3 years ago, last July when I sold my trusty 2nd gen Chevy Volt I kept right on doing it with my Model 3, and have now completed hundreds of rides with it. (NOTE: In general, I wouldn't recommend this to most people, but I enjoy the interactions and the area I live in is conducive to it. PM if you want the gory details.)

I'm no bear by any means, but I'm dismayed to report that the FUD is working, to a degree. Probably more with the general public to stifle/slow demand than in the investment world even. Things I hear constantly:

"I wish Tesla was doing better."
"Elon is crazy!"
"Aren't they in financial dire straits?"
"Where do you charge? There aren't any where I live."
and my least favorite, which was the first time I almost got in a heated argument with a passenger:
"They just cut production way back and fired a bunch of people, I know because I know a manager who works there!"

Now, before you all start posting counters to all these things, you don't need to. I read this thread frequently (although it is a struggle to keep up as of late!) and could probably shame most Tesla salespeople with my response. The discouraging thing is HOW OFTEN I'm having to educate/counter FUD, and because of where I drive I have a disproportionate number of higher socioeconomic/education passengers. (Hence, more likely to be near future customers, young people are a different story, they love Tesla. )

Probably the best counter to this is more cars in the hands of more happy customers (key component this) but at some point it will need to be taken on more directly as well. I'm not posting this to sound negative but to give my real world experience with a fairly large sample size is that the FUD does have more of an impact than we in the Tesla owner/investor community sometimes realize. I didn't bat an eye at Dan's story because I experience it every day.

If I take any comfort from it personally, it is that I'm probably having a bigger beneficial impact on the future as an impromptu educator/spokesperson than as a Tesla customer or investor!

Take any opportunity to get out and talk to people, patiently and positively as FC mentioned, as it's a war and the issue is more in doubt than some on this board believe.

I 100% agree with this post. Talk to anybody outside of the Tesla customer or investor community, and most of them will parrot the headlines seen in the media. Two people I personally know were under the impression that the company is going bankrupt, and a third person had asked me whether I wasn't concerned that Musk is a "psychopath". And I consider these people smart. They're well educated and hold professional careers. But like most people, they tend to believe or at least give the benefit of the doubt to the media, and not Musk/Tesla. Unfortunately the shorts/media dis-information campaign has been very successful in having an affect on (not just investors) but potential customers.

This is how Hitler brainwashed citizens in Germany. If you repeat something often enough, it becomes the truth in most people's eyes. Perception is reality. Not just Tesla/Musk or Hitler/Germany, this crap happens all the time. The masses can easily be swayed. Similar phenomena to group thinking, high school clicks, bullying, in/out crowds, etc. And this may be controversial (and I'm a progressive liberal), but many people are anti-Trump or pro-environment because it's cool and popular and not because it's right. Very few people engage in critical thinking. They rather have the media or others or their friends tell them what is right or wrong or cool or uncool.

Bottom line, Tesla needs to either advertise (like Apple) and/or significantly step up its communications game, as was pointed out by Ross Gerber on CNN yesterday:

Investor: Have to take 'good and bad' with Elon Musk - CNN Video

 

[Fact Checking]

It's obvious right now that under the Trump regime, there are considerable headwinds against anything seen a "green"

Yes.

but was this the case with the Obama administration too?

No: Obama's hand picked NASA administrator saved SpaceX via the first CRS contract, and the Obama administration's stimulus loan to Tesla helped too.

Is this something that could flip should the dems win the next election?

It's hard to imagine a U.S. administration more hostile to science and the environment than Trump's, so this outcome is a near certainty, such as the restoration of California's Clean Air rights, which are the legal basis of ZEV credits ...

More is possible too: see the "Green New Deal" which is gaining recognition and momentum.

Breaking the fossil fuel industry's chokehold on U.S. politics alone would benefit Tesla, because it would remove the trillions of dollars of implicit and explicit subsidies the fossil fuel industry is receiving.

 

[FrANce]

I have to strongly disagree with you here, Zhelko, it's exactly this level of detail (from several well-informed and intelligent members/AI's) that make this thread a must-read for anyone deeply interested in Tesla, not just investments. i'd hasten to add that I don't feel FC makes many frivolous posts either, they're mostly pertinent (unlike mine*)

* I'm working on this, OK?

I couldn’t agree more.

 

[Fact Checking]

For sure they'd get a very warm welcome in Europe, I don't understand why they delay GF4 so much.

"Money" and "time" I think.

The Chinese are:

• Probably building the Shanghai Gigafactory and related infrastructure (roads, electricity, etc.) for free and are leasing it back to Tesla under favorable terms, in a similar deal as NIO's (now defunct) Shanghai factory was going to be built.
• Chinese state banks are giving Tesla 3 billion dollars worth of local loans with fantastic conditions:
  • Interest rate is 90% of the central bank rate (!),
  • the loan is only secured by assets purchased from that money, and is no-recourse to Tesla's existing assets and shareholder assets: i.e. it can probably be kept off the balance sheet (shout-out to @brian45011 and @ReflexFunds),
  • The loans also cover initial operational expenses.
• China specifically modified their laws for Tesla, for the GF3 to be 100% owned by Tesla, despite being a mainland factory that is not subject to any import tariffs and which usually has to be 50% owned by a Chinese partner.
• China also accelerated permits: the main building is planned to be usable by May, in just ~2 months (!).

I.e. Tesla can ramp up GF3 with very little capex: China builds the factory building, Tesla buys machines and equipment, while initial ramp-up opex can be financed from the loans as well.

I.e. China rolled out a red carpet for Tesla.

Can any EU country offer such a sweet deal? I don't think so, such favorable treatment would break EU law IMO.

An EU Gigafactory will happen eventually, once Tesla earns enough cash.

 

[Causalien]

I've only really been following the financial side of Tesla since I bought most of my shares in 2016. It's obvious right now that under the Trump regime, there are considerable headwinds against anything seen a "green", but was this the case with the Obama administration too? Is this something that could flip should the dems win the next election?

Not intending this to be a political discussion, just want to know the environment that Tesla has been dealing with.

For sure they'd get a very warm welcome in Europe, I don't understand why they delay GF4 so much.

Obama's administration was more neutral. His whole term was spent fighting the recession so there wasn't any pro business move he can make. The only positive Obama did for Tesla I believe is the fact that he let the Bush's EV incentive stay since I am pretty sure if he really wants to, he can find a way to block it.

The dealership network did start fighting Tsla and trying to ban their sales near the end of his term. But ... well, you don't see this many regulators who have a beef with TSLA. NHTSA, SEC etc investigations gets more frequent during Trump administration. It is probably a good thing that Elon and Tesla is being as transparent as possible as this amount of scrutiny can turn up any dirt.

But one can really get how Obama personally think of Elon and Tesla's importance when they dined together (if I remember, twice?) and not just talk in a meeting of some kind of business board like Trump did.

The auto tariff with China, could be seen as one where Trump directly targets Tsla. As most of the American brands already have established Chinese based plants for China and let's face it, no americans buys Chinese made cars in USA. The only one largely impacted is TSLA. But this is just conspiracy thoory as the steel and aluminium tariffs ended up affecting all automakers. To be honest, I did not forsaw this Tariff war by Trump to escalate to this degree.

 

[Thora]

I have to strongly disagree with you here, Zhelko, it's exactly this level of detail (from several well-informed and intelligent members/AI's) that make this thread a must-read for anyone deeply interested in Tesla, not just investments. i'd hasten to add that I don't feel FC makes many frivolous posts either, they're mostly pertinent (unlike mine*)

* I'm working on this, OK?

I couldn’t agree more.

I couldn't agree more.

Long term institutional investor here.

I screen this forum for FC's posts.

 

[McMountain]

"Money" and "time" I think.
...

I.e. China rolled out a red carpet for Tesla.

Can any EU country offer such a sweet deal? I don't think so, such favorable treatment would break EU law IMO.

An EU Gigafactory will happen eventually, once Tesla earns enough cash.

No EU Country can probably match that. Speed of permit is the problem. A factory that size requires an Environmental Impact Assessment, which can take a year.

 

[Gavyne]

I can't believe today is finally here.

 

[AlexS]

I couldn't agree more.

Long term institutional investor here.

I screen this forum for FC's posts.

You are from Citigroup?

 

[X Fan]

Up early....today is going to be another exciting Tesla day.

The “Y” is here.....

 

[Mars ☰mperor]

17 hrs and 30 minutes to go

 

[EinSV]

Chiming in on the advertising discussion — I’d much rather see any extra funds poured into R&D instead of advertising.

Elon has said “pace of innovation is all that matters in the long run.” Twitter

The speed and quality of Tesla’s innovations have been the key to its long-term success. To build on that success it has to keep investing in innovation and product development. There are enormous opportunities and demands for R&D investment, including:

Battery chemistry, cell and pack design
Design and development of Model Y, pickup, Semi, Roadster, less expensive sedan
Manufacturing robotics, software and AI for auto, batteries, storage and solar products
Inverter technology and manufacturing for auto, solar and storage products
Self driving technology
Solar panels and solar roof technology and materials
Megacharger and SuperCharger technology and manufacturing
Etc

Tesla’s R&D has generated tremendous value and competitive advantages in so many critical areas. If extra opex is to be spent, as a long-term investor I’d MUCH rather see it invested in innovation than advertising.

When Tesla gets its innovative products to market it has no trouble finding customers.

 

[Sunlight]

Further to the recent comments on FUD in the US media, I can point out that here in South Africa where there is very little news about EVs and minimal FUD (although sadly the auto magazines are a bit 'negative'), the average person I speak to about our i3 and EVs in general are VERY positive.

They always end the chat with a cheerful "this is the future for sure"!
Interesting particularly poorer people who may not be able to afford a car but are fascinated by them.

So when the outcome is based on unbiased assessment, intelligence, curiosity and free thinking, EVs seems logical - even beneficial.

Sadly it appears to me that the US is almost self- defeating .

How do other countries respond to FUD? -Europeans are supposed to be more 'sophisticated' in their tastes!!

 

[HG Wells]

Some questions / comments on production of model Y.

First, the model Y is going to be produced at GF1. Have not seen any recent GF1 drone flights.

How many building segments are currently empty and could be used for vehicle production ?
In the suspected model Y building segments are there any roof indications of scrubbers or vapor incinerators so that a paint shop could be installed ?
Any indications of parking lots for finished cars ?
Any building permits for car related items?

Hoping for end of year model Y production. Looking for indicators.

 

[Thekiwi]

Some questions / comments on production of model Y.

First, the model Y is going to be produced at GF1. Have not seen any recent GF1 drone flights.

How many building segments are currently empty and could be used for vehicle production ?
In the suspected model Y building segments are there any roof indications of scrubbers or vapor incinerators so that a paint shop could be installed ?
Any indications of parking lots for finished cars ?
Any building permits for car related items?

Hoping for end of year model Y production. Looking for indicators.

I would guess Tesla wants to have state / local tax incentives etc secured before any official announcement is to be made. Hopefully it’s unveiled today.