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

[tinm]

This Aston Martin Rapide E is James Bond's new car. Let's hope the baddies don't have Teslas otherwise Bond is toast.

It's James Bond who should drive a Tesla, a Roadster 2 with Spacex package. No other car would suit him better.

Tesla probably didn’t want to pay an exhorbitant product placement fee.

 

[jhm]

It's about $500/kWh, so roughly $1 billion. Very low gross margin.

Ok, you pushed me to look at the 10-K and think about this more. Here's what I found.

In 2018, the biggest storage project as South Australia, $81.2M for 100MW/129MWh. So that works out to be $629/kWh; however, MWh/MW was pretty low which would mean higher spending on inverter capacity (MW) per battery capacity (MWh). A 4-hour installation may well have a lower price per kWh. On the other hand, PowerWalls are about $1000/kWh. So maybe something approach $600/kWh would be relevant to the mix of business coming up. This would mean perhaps $1.2B in revenue is possible.

Additionally, gross margin for all of Tesla Energy was 12% in 2018 and 22% in 2017. With Tesla's pack cost under $200/kWh, I would think an average selling prince over $500/kWh could sport a very attractive gross margin. The South Australia project needed speed and a low price as it was to be a demonstration project. It provided to the utility world that batteries are far more valuable to grid than they had been given credit for. So that was the breakthrough project to turn on the utility demand spigot. The battery supply needed to grow rapidly to catch up with demand growth. Going forward I am optimistic that gross margins can be pretty healthy. So I think 20% to 25% may be possible for 2019.

Top and middle line, I think 2GWh of storage can generate around $1.2B revenue and contribute about $240M gross profit. This would be in addition to solar sales and energy leases.

While this can be an exciting story on it own, total revenue would need to grow to $32.2B in 2019 just to keep pace with 50%/y growth expectations. So the growth in TE revenue will easily be dwarfed by the automotive growth.

 

[Swampgator]

...and ways of cost effectively reabsorbing excess CO2 from the atmosphere or the horse that's out of the barn will just keep running.

Just curious: What is the ideal CO2 level you would shoot for?

 

[Artful Dodger]

Meager 4.4M shares traded so far to day. Misery 1 buck drop over the last hour. Shortz on spring break 2day?

 

[Artful Dodger]

Just curious: What is the ideal CO2 level you would shoot for?

350 ppm

 

[generalenthu]

carsonight * 2 hours ago

"GF1 was banging away on all cylinders. This is a mystery. I have been told repeatedly 6k plus battery packs per week. We were told before Christmas if production did not hit 7k per week they would not get Christmas off, though that was later rescinded. GF1 has not shut down at any point. I do not know the reason for the discrepancy."​

Carsonight has been counting cells, not packs.

Cells are going to TE, for powerwalls, but mostly for poweracks. No info, but based on reading the leaves.

 

[RobStark]

Especially considering Tesla still continues to sell every car they make.

Why is the first thing you and others assume (yes, you’re making an assumption and we all know about those) is that there is a demand issue requiring an advertising campaign?

Every automaker sells every car they make.

Like every other automaker, Tesla is discounting to sell every car they make.

It is a legitimate question to ask if advertising is more cost effective at moving Tesla than the rather large price cuts.

Elon seems ideologically opposed to advertising. So it is a legitimate question to ask if this is one of his blind spots. Instead of discounting $60k on Model S P100DL and pissing off (some) current owners would it have been more cost effective to advertise a $15k discount?

 

[Lessmog]

For anyone who's not understanding the "Raven" reference:

Tesla, TSLA & the Investment World: the 2019 Investors' Roundtable
Tesla, TSLA & the Investment World: the 2019 Investors' Roundtable

As a completely unrelated side topic, something just occurred to me. GM just hit their tax credit cliff - but said that they have no plans to compensate for it with a drop in price on the Bolt. They moved 4,316 Bolts this quarter. I'm sure that number is going to drop heavily next quarter. I wonder if that might shift another thousand or so sales Tesla's way in the US...

Actually I don't think that is what they said. They said they wouldn't lower the MSRP. But they could increase the dealer incentives... (Which I thought I saw someone said they have done.)

They may well do that, but if so that will come at significant cost as they are already ~$9k in the hole per bolt sold. At some point does it make any sense to continue? The dealerships aren't going to lose the money.

Someone might point out that the $9k figure is over two years out of date and that GM may have improved efficiencies since then. True, but a large part of the price tag comes from the drive train. Which is sourced from LG. Given their predatory pricing, if anything the figure may be higher.

1) GM stands to lose $9,000 per car on Chevy Bolt
2) Audi Hit With 10% Price Increase On LG Batteries Due To High Demand | CleanTechnica

@humbaba: If they are already negative in the hole for every bolt sold, Chewy are so screwed it's nuts. No matter how you twist it, it's as if someone threw a wrench in their COGS. (Or is that clogs, as in Sabot? Pardon my French)

 

[Nocturnal]

Every automaker sells every car they make.

Like every other automaker, Tesla is discounting to sell every car they make.

It is a legitimate question to ask if advertising is more cost effective at moving Tesla than the rather large price cuts.

Elon seems ideologically opposed to advertising. So it is a legitimate question to ask if this is one of his blind spots. Instead of discounting $60k on Model S P100DL and pissing off (some) current owners would it have been more cost effective to advertise a $15k discount?

I'm on team pro-advertising. I have not talked to a single person that was not already a huge Tesla fan that has a clue about these cars, their price points, features etc. That includes fans of performance cars and people who drive things like Priuses.

 

[HG Wells]

carsonight * 2 hours ago

"GF1 was banging away on all cylinders. This is a mystery. I have been told repeatedly 6k plus battery packs per week. We were told before Christmas if production did not hit 7k per week they would not get Christmas off, though that was later rescinded. GF1 has not shut down at any point. I do not know the reason for the discrepancy."​

Well it takes six battery packs for each one of these.

 

[KarenRei]

Anyone know when the next batch of cars hits Norway?

Not from the Glovis Sonic, and no new ships since then. But Norway seems to be doing pretty well on residual inventory. Nearly up to 500 vehicles already (record for April is 772).

Meager 4.4M shares traded so far to day. Misery 1 buck drop over the last hour. Shortz on spring break 2day?

Stock today is a mirror of macros.

 

[jerry33]

Well it takes six battery packs for each one of these.

Where can I get a used one?

 

[elliott82]

Indeed, just search the symbol ARKK in your broker software and trade it like any common share:

View attachment 395284

Ha! Thanks @Curt and @Lycanthrope!

I tried my other broker (flatex) and I can buy there. On comdirect I can't though.

 

[Beaver]

I'm on team pro-advertising. I have not talked to a single person that was not already a huge Tesla fan that has a clue about these cars, their price points, features etc. That includes fans of performance cars and people who drive things like Priuses.

I would love to know why the 3 doesn't say Model 3 on the back. Also, every car should say TESLA. A lot of people don't know what the T stands for. It is "free" advertising that they could be doing.

 

[EVNow]

They may well do that, but if so that will come at significant cost as they are already ~$9k in the hole per bolt sold. At some point does it make any sense to continue? The dealerships aren't going to lose the money.

Someone might point out that the $9k figure is over two years out of date and that GM may have improved efficiencies since then. True, but a large part of the price tag comes from the drive train. Which is sourced from LG. Given their predatory pricing, if anything the figure may be higher.

1) GM stands to lose $9,000 per car on Chevy Bolt
2) Audi Hit With 10% Price Increase On LG Batteries Due To High Demand | CleanTechnica

Let us be careful with those articles.

"A personal familiar with the matter" told Bloomberg report (that the 1st linked report is based on). The Bloomberg article is an anti-EV FUD article meant to say how bad California ZEV mandates are. We'd completely discount such on article on Tesla.

 

[humbaba]

@humbaba: If they are already negative in the hole for every bolt sold, Chewy are so screwed it's nuts. No matter how you twist it, it's as if someone threw a wrench in their COGS. (Or is that clogs, as in Sabot? Pardon my French)

I'd wager they're in the hole at least $10k per Bolt -- but as someone pointed out their value is in the ZEVs accrued. While it might be cheaper to buy them from Tesla, I think GM would rather go bankrupt (and have the government bail them out... again). At $10k loss per Bolt they would about break even due to ZEV so there isn't any real point, but it isn't an obvious loss to the company and so they do what large corporations do: they keep plugging away.

It makes me sad: GM could have developed the EV1 into a better car instead of crushing them as soon as their political usefulness ended and selling the relevant patents for someone else to block further EV development. I have relatives who work for GM -- and they don't deserve for GM to die. But the executives? They can burn for all I care.

 

[VValleyEV]

Only Tesla, with an over 100% year to year growth, is considered to have failed policies.

... while the global ICE car sales peaked in 2017 and are likely to continue their decline into oblivion.

 

[humbaba]

Let us be careful with those articles.

"A personal familiar with the matter" told Bloomberg report (that the 1st linked report is based on). The Bloomberg article is an anti-EV FUD article meant to say how bad California ZEV mandates are. We'd completely discount such on article on Tesla.

A good point, and maybe the "fact" is only well known due to EV FUD. However, I will note GMs relative inflexibility with pricing supports the notion that it is a very low margin vehicle, which in the grand scheme would include ZEV value. I would (and have) assume that any "loss" is not considering other value to the company (such as ZEV).

 

[seldon]

Carsonight has been counting cells, not packs.

Cells are going to TE, for powerwalls, but mostly for poweracks. No info, but based on reading the leaves.

I agree with you. Tesla is definitely not stockpiling batteries or packs for GF3 as others here are suggesting. That is practically FUD. If Tesla was facing a potential shortage of packs or batteries at the end of the year they would build more production lines because thats how they roll. The evidence points to a massive ramp in TE production in Q1. Tesla has even given guidance that TE production will double in 2019. I'm surprised there is not more analysis and projections focused on exponential growth in TE coming in Q1 instead of obsessing about TM production that was temporarily constrained by logistics issues. The potential for a few hundred million in unexpected quarterly profit from TE in Q1 combined with exponential growth could make for an interesting discussion on the earnings call.

 

[lklundin]

I can't see advertising from the demand POV (which debate has been well covered) but the brand? That's another story. I think the biggest issue with Tesla and brand advertising is that if you wait until demand is an issue and your brand is in the toilet (presumably thanks to FUD) then its late and you're just hoping it isn't too late.

So, yeah, for brand perception management purposes I could see doing some advertising. If what they are currently doing (twitter, arrangements with press, etc.) is the extent of it I think it is risky to assume that it is enough. Not that I think there is anything critical about Tesla's brand identity, but I think it clearly could use some help even if it isn't strictly needed.

I think that brand advertisement is also not called for.

As a brand Tesla has had some shortcomings, e.g. the lacking service in Norway.
But the answer to such problems is not advertisement, but simply to actually solve them.

Other than that, Tesla as a brand is the Apple of the smartphones (as least as Apple was, say five years ago). There may be some older people (with money to spend) who haven't yet realized that Tesla is cool, but their numbers are dwindling.

As for the rest, they take note of every Tesla they see and wonder when there will be one they can afford.

I think that advertisement that in any way is traditional could detract from the coolness of Tesla, while something like
Tesla’s ‘Project Loveday’
works.