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

[SebastianR]

OT (but will likely impact on TSLA long-term):

Those are interlinked really. I'm afraid Germany will be hit hard by the TSLA revolution. It will get nasty.

I'm afraid so. The frustrating part is, that I have been trying to warn everyone and their grandmother of this happening in Germany for the past 7 years. All I got was laughter and ridicule. No worries, I can deal with that - no worries. However, I can't deal with massive amounts of frustrated, middle-aged (mainly) men that lost their jobs in the car industry and turn xenophobic as a consequence of German car industry missing a whole armada of boats /rant-off.

One of the most astonishing points? VW seems to at least have understood that EVs are the only option worth pursuing right now. BMW, Mercedes & Co. STILL think that Diesel, CNG, Hydrogen and Plug-Ins is going to save them. And thus refuse to focus on EVs. It truly is mind-boggling...

 

[Fact Checking]

Overall, I think Elon was playing an aggressive negotiating hand with S&X suppliers, particularly Panasonic, to significantly lower pricing. I think he temporarily cut production rate to 50k and told suppliers this is all we can do unless you give us price cuts. I think after he got the price cuts, he lowered the S/X pricing and increased production targets back to 70-100k.

Agreed, this was my guess a couple of weeks ago as well:

None whatsoever that I'm aware of.

There's other, less reliable types of information:

• Unverified hearsay:
  • @luckyruby: "They also recently signed an agreement with Panasonic."
    
  • @dondy: "2) X and S prices. [Elon] mentioned only reduction due to the simplification of the sell process. But it is not the only action they did. Tesla reduced head count on S/X conveyor greatly simultaneously reducing number of batch variants. More of it, if I understand correct Panasonic contract is renewed, with obviously new prices which are ~30% less. I expect new car prices come from recalculating standard profit margins on new operational costs."
  • @dondy: "I suppose you have asked about Panasonic. current commercial prices Panasonic offers are around 30% (>) less then in 2014. I heard about renewing contract with 18650 from acquaintances working in american Panasonic. Consider that a wild rumor."
  • @Cosmacelf: "Rumor is that Tesla has renegotiated Panasonic cell supply at a 30% price cut. Anyone have a solid source for this? Might be disclosed in a 10Q at some point..."
  • (Some of these rumors might be relying on each other. )
• Circumstantial: I'm wondering whether one of the sealed contracts is the new agreement with Panasonic.
• Circumstantial: We do know that the 18,650 cell contract did run out last year. Agreeing on an extension would be expected. We also know that Elon negotiates hard.
  
• Circumstantial: We know it from the Q4 ER CC that Elon had a phone talk with the Panasonic CEO. One topic was Panasonic's JV with Toyota - which might have been Panasonic's entry to the 18,650 contract negotiations.
• Circumstantial: Tesla's 10-K mentioned that they are working with other cell suppliers (I'd say that means Samsung or LG?) to qualify them for automotive use.

To recap, here are Tesla's entries to the 18,650 contract re-negotiation poker game:

• Model S/X Fremont shift reduction from 3 to 2,
• Model S/X removal of the most popular model (75D),
• Model S/X lowered guidance,
• Model S/X supplier reduction leak of 50% order reduction,
• Tesla hinting that they are working with Samsung to qualify cells,
• Tesla dangling the Shanghai GF3 cell contract and not committing to a partner,
• Panasonic has 8 GWh 18,650 cell output per year to sell, and no other carmaker but Tesla is using or is planning to use the 18,650 form factor.
• Tesla probably holds significant 18,650 related IP, such as cathode geometry, but also chemistry.

Speculation: Panasonic understandably blinked first.

So I'd consider it a "solid" rumor supported by a robust body of circumstantial evidence.

(Maybe not 30% but 20% cost savings - although 5 years since the 2014 contract is a lot of time, so 30% cheaper sounds plausible to me.)

 

[KarenRei]

Elon tweeted “
Probably start Australia builds in late May or June & start arriving in winter”
He must mean Northern Hemisphere winter unless he plans deliveries beginning in February 2020 or so.

Since he's talking to an Australian, about Australia, "winter" clearly means the southern-hemisphere winter. Making vehicles half a year before you deliver them makes no sense.

 

[shlokavica22]

Drop in new car sales is often a leading indicator of recessions.

That's why the market is so confusing and volatile "recently". Various indicators rely on "normal" customer behavior, without taking into account ongoing changes. The way I see it, some institutions adjust their models and some don't, thus all the struggle between the bears and the bulls on macro level. Add to that the new US policies, putting US growth first in the expense of other markets and we get indexes graphs looking like a cardiogram.

 

[SebastianR]

To be fair there's a slow motion housing market crash in Australia:

Real Residential Property Prices for Australia​

which could lead to a long and painful recession. Drop in new car sales is often a leading indicator of recessions.

Because of the statement in bold, I think it would be interesting to see how much of car buying behavior change is a) a recession or b) a switch in buyer's preference. Over in the excellent thread Shorting Oil, Hedging Tesla we have discussed many times how in the "bad old days" oil and oil consumption was linked to economic activity and how oil is no longer connected to that. Which in turn means that oil can go down the gutter these days without taking the world economy with it (not 100% but much more so than 20 years ago).

 

[Lessmog]

A communication couch... interesting. So he'd have to go sit on it before tweeting?

We already crowdsourced him a couch a couple of years ago, when he was sleeping on the factory floor. Is that platform no longer sturdy enough?

 

[anthonyj]

No more standard range Model S? Refresh coming soon

 

[PaulRocket]

No more standard range Model S? Refresh coming soon

Soon means beginning of April.

 

[CorneliusXX]

Other possibilities:

• It was taken and/or distributed without the knowledge or permission of the person who was accessing that screen.
• Only a summary screen was distributed, not private VIN data. Can you see private data in that screenshot? I cannot.
  
• This was hacked/leaked by a third party.

You again you are taking the extreme worst-case interpretation and are pretending that that's the only possibility - why?

The best case scenario is that this photo was taken mid January

 

[schonelucht]

Depends on whether they can drill down or not. If they only see cumulative figures, there is no data privacy concern.

Enlarge the image, it's quite faint but the search box indicates that they can drill down to individual VIN.

 

[defc0n]

Enlarge the image, it's quite faint but the search box indicates that they can drill down to individual VIN.

And you seem to apparently know for a fact that doing so will lead to privacy concerns. Can you tell me what shows up on the page after you bring up a VIN?

 

[jerry33]

As a retired pulmonologist I have treated patients with chronic CO exposure. Odorless no symptoms during exposure but concentration problems prevalent. Can measur carboxyhemoglobin concentrations in blood. Once diagnosis made urged patients to investigate home CO concentrations with gas appliances and levels in car. Particularly older car (exhaust systems can develop leaks with age)

Fortunately, no gas cars. A gas tankless water heater in the garage (so little chance of a problem there), and an O2 sensor for the furnace.

 

[Dynastar]

If the system in the screenshot is for currently connected cars then I assume the mileage counter is the sum total of their odometers, and wouldn't include the distance driven by totaled cars that are no longer in existence. This could explain why the total is lower then expected. I have no idea what percentage of Teslas have been totaled.

 

[SW2Fiddler]

Everyone keeps talking about the Gali video but I see no links to it. Either no-one posted a link to it, or, whoever posted a link is someone I ignore.

I’m posting this podcast link instead. Rob Mauer is always even-toned but you can hear him choking down giggles at portions of the SEC motion. Going to be a classic in future history.

 

[jerry33]

One of the most astonishing points? VW seems to at least have understood that EVs are the only option worth pursuing right now. BMW, Mercedes & Co. STILL think that Diesel, CNG, Hydrogen and Plug-Ins is going to save them. And thus refuse to focus on EVs. It truly is mind-boggling...

Because they didn't plan and now have virtually no battery supply, they are pretty much forced to support other technologies. Of course, this is just a finger bandage on a slash to the stomach.

 

[brian45011]

On top of that, they have just repaid 1b in debt which was raised when Tesla had much weaker revenue.

That debt was sold in February 2014 before Tesla pledged it assets under the Credit Agreement in June of 2015.

 

[Zhelko Dimic]

A communication couch... interesting. So he'd have to go sit on it before tweeting?

Yeah sorry, English is my third language

 

[schonelucht]

And you seem to apparently know for a fact that doing so will lead to privacy concerns. Can you tell me what shows up on the page after you bring up a VIN?

If you can first point on where I said that I know for a fact that it does.

 

[Krugerrand]

Someone should send the sec this copy of Cramer’s video.

Someone? Why don’t you? Why don’t we all spam it all over the place? It’s not like it’s not a public You Tube video. Why don’t you tweet it to Elon? Why doesn’t Zach do an article about it and spam that article all over the Internet? Why doesn’t Gali do the same?

These are of course rhetorical. We already know why it’s not being done.

 

[Starno]

Tbh I think leaked informations and fighting FUD just (few days-weeks) before the actual official numbers are released is bad. Because even though the leaked informations and the fight of FUD are not on really mainstream medias, it probably still get to the ears of some of the fund managers and they can adjust before, and so there is less of a surprise effect.

Let the FUD gets really big, let the people say there's no demand, and let the official numbers destroy it and create the real surprise.

By fighting the FUD before the official numbers you're stripping a bit of steam, and less people are surprised.