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

[Mars ☰mperor]

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

Yeah, I also would like to see money being poured into R&D instead of ads.

The problem is that so many consumers are uninformed or even misinformed. I think we've all seen too many examples in our lives, not just related to Tesla. But when it comes to Tesla, to quote Elon, for most consumers, I think it's "stupidity squared".

Hopefully, the word of mouth effect gets even stronger as Tesla delivers more cars to more owners. We get a lot to do.

 

[Dan Detweiler]

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.

Along this line of thought...is the Lathrope facility considered part of the Fremont factory or is it a separate entity? Just wondering if potential increases in production at Fremont could include the use of Lathrope.

Dan

 

[Ellec]

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.

Will all be revealed in a few hours.

 

[Carl Raymond]

I couldn’t agree more.

Seconded. The rigour in comments by FC, KR, N and their ilk is not just information for us. It lends strong credibility to the bull thesis. This forum has an audience, some regular, some drop in just once. We’re all on show here, ambassadors for the cause. We need to put on a good show and these guys are the stars.

 

[Dan Detweiler]

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

Are there any limitations on using the advertisements created by owners for the contest a while back? I would love to see those plastered all over social media. They were really well done.

Dan

 

[winfield100]

it's exactly this level of detail (from several well-informed and intelligent members/AI's) OK?

Someone else both shares my suspicions and also voices them.
AI’s perhaps low level incipient “MINDS”? already among us.
<gulp>

 

[Nakata]

Yesterday an update on the crowded sourced european order sheet was done.

Finland got updated to 487 orders for model 3.
Tesla Model 3: Europa Bestellungen/Europe Orders

You would think that this is not a big number but just look at these total 2018 sales in finland.
EV Sales: Finland

Total 2018:
NIssan leaf - 241
vw e-golf - 129
tesla model s - 98.

So the orders of the performance and Dual Long Range M3 are higher then all pure EV's sold in 2018.

I think this small datapoint is showing how much demand there is in Europe.

 

[Fact Checking]

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

In Europe there's quite a bit of FUD, but I haven't seen the kind of polarization and visceral hate visible in the U.S. The FUD is usually easy to address.

In Germany there was general arrogance and belittling of Tesla's ability to manufacture cars - not anymore.

I don't think "rolling coal" incidents were ever reported in Europe? Not the least because such trucks are not legal in most places.

 

[cricketman]

"Money" and "time" I think.

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

Right. And it would be very expensive to keep sacking employees and changing the workforce in the Gigafactory the way that they can in the US and China. Employments laws don't let you do it, and everyone would go on strike if you asked them to work a 70 hour week. Most European countries have a maximum of 48 hours in any one given week set by law.

For this reason, it is very difficult to have a high rate of innovation in Europe, you are not allowed to make quick changes that affect employees! This is a big reason for Europe's downfall imo. And if you are just going to copy and paste established current best practice at freemont then better to do that in China.

 

[KarenRei]

Yesterday an update on the crowded sourced european order sheet was done.

Finland got updated to 487 orders for model 3.
Tesla Model 3: Europa Bestellungen/Europe Orders

You would think that this is not a big number but just look at these total 2018 sales in finland.
EV Sales: Finland

Total 2018:
NIssan leaf - 241
vw e-golf - 129
tesla model s - 98.

So the orders of the performance and Dual Long Range M3 are higher then all pure EV's sold in 2018.

I think this small datapoint is showing how much demand there is in Europe.

That spreadsheet, if it's the one I remember seeing before (can't open it here to see) is beyond worthless; it's harmful. Using voluntarily-contributed data to assess sales volume is guaranteed to be off and have not only missing data and biases, but also have them increase over time as delivery patterns shift and people stop caring about it.

But maybe it's a different once or it's changed since I saw it last.

 

[Fact Checking]

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

Note that there were some important weasel words when they said that the Model Y would be made at the GF1, such as describing it as the "default plan".

I think building some sort of Model Y capacity at Fremont was a wildcard plan - today we'll learn whether they are adopting part of that plan or are going for GF1-only Model Y production.

 

[KarenRei]

Re: all of the "Steampunk Tesla" stuff last night: I tried a search to see if anyone had attempted to illustrate a Steampunk Tesla before. No luck. But I did find a pair of Decopunk Tesla images on a Swedish Tesla forum:

Similar but different to the (also decopunk) Model S from an article a couple months ago that envisioned various modern vehicles as if they were from different eras.

But yes... the actual topic is a cyberpunk truck, not steampunk one And the reason is surely function, not aesthetics. It always is with Tesla.

 

[Thora]

You are from Citigroup?

No

 

[Nakata]

That spreadsheet, if it's the one I remember seeing before (can't open it here to see) is beyond worthless; it's harmful. Using voluntarily-contributed data to assess sales volume is guaranteed to be off and have not only missing data and biases, but also have them increase over time as delivery patterns shift and people stop caring about it.

But maybe it's a different once or it's changed since I saw it last.

You might be right.
It is crowd sourced so maybe open to biases and manipulation.

Still, I am keeping an extra eye on model3 sales in finland coming months.

 

[Fact Checking]

That spreadsheet, if it's the one I remember seeing before (can't open it here to see) is beyond worthless; it's harmful. Using voluntarily-contributed data to assess sales volume is guaranteed to be off and have not only missing data and biases, but also have them increase over time as delivery patterns shift and people stop caring about it.

But maybe it's a different once or it's changed since I saw it last.

I think it's the same one, and while I'd normally agree with your assessment, I think this is an important special case that makes the numbers much more valid than the low participation rate and unknown self selection bias would indicate.

This quality is EU invoice law: all sales invoices numbers must start from one and must increase sequentially, in every EU member country.

Just a single credible report from the final 10% of the invoice number range would make the estimate better than 10% accurate. Sampling rate and selection bias doesn't matter much: only how close the highest reported invoice number is to the true max invoice. All the other reports from the country are immaterial to the estimate, it's a simple max() function.

There's one important methodological caveat: orders of 5, 10 or 50 Teslas from corporate clients will only get a single invoice number, which means the the spreadsheet underestimates real sales.

It's still a very robust lower boundary for EU sales.

 

[Carl Raymond]

Elon tweets “S3XY” with a fluffy animal pic. Gets 100 likes per minute. 95K and counting. Suggests there is a measure of interest in tonight’s reveal.

Has a way to go to match his top tweet for the year “I lift a little” (700K likes).

Will anybody go with the headline “Elon makes S3XY cars”? If the media can’t get excited about tonight, they’re anaesthetised.

 

[Toumal]

That spreadsheet, if it's the one I remember seeing before (can't open it here to see) is beyond worthless; it's harmful. Using voluntarily-contributed data to assess sales volume is guaranteed to be off and have not only missing data and biases, but also have them increase over time as delivery patterns shift and people stop caring about it.

But maybe it's a different once or it's changed since I saw it last.

No you're right. The main issue is that people initially put in a lot of data, then over time as deliveries and orders grew fewer and fewer people cared about entereing data. So what you get is this natural effect of "fewer orders".

 

[Fact Checking]

Haven't seen this reported:

BEIJING (Reuters) - China's customs authority has lifted its suspension on imports of Tesla's Model 3, an official in the authority's news department told Reuters on Thursday.

"We can confirm that the warning notice on Tesla has been canceled," said the official, who only gave his surname as Tao.

Tesla declined to comment. Two sources familiar with the matter told Reuters earlier on Thursday that the suspension had been lifted after Tesla made the necessary rectifications.

China's General Administration of Customs stopped clearing Tesla Model 3 imports last week, saying they did not have the required Chinese language warning signs and had missing or incorrect nameplate labels.

Tesla said at the time that the company had reached a solution with the authorities.​

 

[Fact Checking]

Tesla Model Y Pricing Predicted To Start At $45,000, Top Out At $85,000

In regards to market potential, the J.D. Power report states:

Tesla’s latest SUV, the Model Y, presents one of the most compelling opportunities yet for the brand to increase the sales volume. The segment is big: SUVs currently account for 49% of the U.S. market. More than half (52%) of those who bought a vehicle in the $30,000-$50,000 price range purchased an SUV.​

Moving on to pricing, J.D Power predicts the following:

Pricing for the smaller Model Y is unknown, but J.D. Power estimates a starting price of $45,000 before tax rebates, rising to $85,000. In 2018, 1.4 million SUVs were sold in the $40,000-$90,000 range. This means if Tesla captures only a modest portion of this segment, it will deliver significant sales growth.​

$45,000 is a bit above the previously speculated figure of $40,000, but it’s in line with our expectations.

Will the Model Y take sales away from the Model 3? J.D. Power doesn’t really seem to think so, stating:

While some have speculated that the Model Y may cannibalize demand for the Model 3, expanding into the SUV segment opens more sales potential with just one model than sales of all three of Tesla’s models offered in 2018 combined.​

 

[KarenRei]

Negative macro news:

China and U.S. to Push Back Trump-Xi Meeting to at Least April

The cycle of "Trade deal nearly done!" "No, trade deal not nearly done!" continues.