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

[Doggydogworld]

Q: How will InsideEVs deal with leases? Will they show up as sales?

Yes, they count leases as sales (emphasis theirs, key phrase is "buy or lease it"):

"Keep in mind, the words sales and deliveries are synonymous. For example, in order for a car to count as SOLD, an owner must buy or lease it, take DELIVERY, and have it in his/her possession."
Monthly Plug-In EV Sales Scorecard

 

[schonelucht]

So? What's your point? I really don't see what your point is.

As I said, it straight up annoys me that one of the two is clearly lying.

(Btw, Tesla is never going to take that much cells in storage, they'll just negotiate down their purchase obligations like they did in 2018 already. As a consequence Panasonic will likely ask for something in return, maybe a higher price)

 

[Tslynk67]

Elon podcast on AP with Fridman

Hmmm, is that a two black M3's and maybe a white MX I see parked in the background...?

I suppose it was filmed at Tesla offices...

 

[StarFoxisDown!]

If you think Tesla is offering leasing when demand is NOT an issue, you are kidding yourself. This idea that anyone that posts thoughts that are other than bullish is a shill, troll or ignorant is in fact ignorant. No, I did not expect Tesla to push out nothing but AWD and P variants to cash buyers. But none of us here expected Tesla to slash prices every couple of months. None of us expected to exit Q1 2019 at a M3 production rate BELOW 5000 units per week. I don't believe many of us believe that margins are going to be terrific while producing vehicles at these rates.

Got it, you don't understand their business nor the auto industry. You have crazy unrealistic expectations for only the high end variants, you apparently think only Tesla customers should be forced to buy instead of lease even though 70-80% of BMW owners lease, you ignore the fact that Telsa has been selling 2 quarters now of only high end versions and some of the M-Range in Q4, you ignore that Model 3 margins didn't contract with mid-range introduction or the fact that Tesla has always met their long term goals for margin on S and X, you ignore any signs of production issues and instead replace them with demand worries....anything else?

 

[Doggydogworld]

The SEC made Tesla disclose it's purchase obligations towards it main suppliers and specifically Panasonic. For 2019 it's over $3B. Do the math with a $75/kWh price and you get >40GWh.

Do the math at Musk's $100/kWh and it's 30 GWh. Do it again with a more realistic $120/kWh and it's 25 GWh.

PS. Though I agree GF1 obligation is near $3b/year, did you see it specifically disclosed? I only see $4.8b in 2019 and $3.2b+ from 2020-22 (p67 of 10-K). That's for all vendors, though. Panasonic is by far the largest with firm commitments, but there are others.

 

[Nocturnal]

For a company that touts the superiority of online buying, moving to store/phone only for the 35k is a pretty blatant attempt to avoid selling it. That pretty much shouts loudly that Tesla can't sell the $35k at enough margin to make it viable.

Not terribly different from dealers where you essentially can't buy a base model car except by special order. They might get a tiny, tiny number of them, which the advertise, but usually don't exist ("already sold") if you actually go into the dealer.

As a 2012 S owner, I really want Tesla to do well, but it's disheartening, Tesla playing a variation of the traditional dealer loss-leader shell game. Necessary, I'm sure, but all these rapid pricing changes look like confusion and panic.

If I weren't so heavily underwater, doubling down back at the "420 buyout" text, I'd probably divest of TSLA until their sales strategy looked less reactionary and panicked. But, it can't get much worse for me so I might as well hope this works out.

The price difference vs what you get for the SR+ compared to SR was already enough to make me think they really didn't want anyone buying the SR. But yeah, not dissimilar from a "stripper" for other makers. Sometimes you can special order extremely base models.

 

[Remus]

So, there is currently a serious threat to my investment thesis for Tesla. (And that for anyone else with a similar model.)

It doesn't depend on any of this autonomy stuff. It doesn't depend on high-trim sales. It doesn't depend on good customer service. It doesn't depend on competent communications. And I am definitely not worried about demand.

It depends on one thing: they have to get to 10k/week production with minimal capex. Having to build the Chinese factory to get to 10k/week was already a setback. Having Fremont stuck at 5k/week is a *serious* setback.

We need to get questions asked at the conference call about production rates and bottlenecks.

I doubt you can get clear answer on that, the usual peak rate answer they give is not what you want, you want answers like how difficult for switching variances, and maintenance shutdowns.

 

[neroden]

I'd like to remind people that Tesla's people on the phone are currently telling people that the wait time for a Powerwall "in most regions" is 6 to 12 months, and they appear to be *understating* the wait time. Powerpack *contracts announced* amount to gigawatt-hours. Last news from Musk is that TE was cell-starved.

I realize that "guidance" was merely to double last year's production, but if that's the case, it's due to production limitations at the cell, module, or pack level, (or possibly the installation level, but they do sell to third-party installers), and not demand limitations. I wish we could get more insight; if they can ramp up the other aspects of Powerwall/Powerpack production, they can absorb every cell they can get, easily.

Suppose that they do need to stockpile 7.5 GWh of cells for a few months. At $100/kWh (plausible), that's $750 million. This sounds like a lot of cash but it's absolutely manageable if there's a clear pathway to using them up later in the year (Shanghai, more TE pack production lines, better production rates at Fremont, whatever)

 

[ClownMouth]

To say that I am acting as though Tesla is making decisions out of desperation feels a little exaggerated, but perhaps it isn't far from the truth. None of their decisions appear to be coming from a position of strength. I am sorry if you don't like my posts. But I am not fear mongering. I am genuinely afraid. I'm afraid for my investment, my lost dollars and for a company that I truly love. Sorry if that is a problem for you.

It might be an impossible task right now given how highly correlated your sentiment is to your paper loss BUT perhaps try to evaluate how you feel about Tesla and its progress in relation to its goals and the industries it competes in. If you are proud of the company and its progress then maybe it is the market you have an issue with. If so, you will never be able to choose the stock price. Even if Tesla dominates auto/solar/storage/add-in-some-future-stuff the market can still depress the price. In this case, maybe sell off a portion of your position.

If you aren't proud of the progress then sell more/all and invest elsewhere. My position is much smaller than yours but you never know what portion of a person's net worth is tied up in a stock by units alone. Figure out where you're comfortable because you clearly aren't right now. You can add back when the picture becomes clearer or when Wall Street changes their tune. (If you do that, you don't get to complain about gains you missed out on in the interim).

Maybe spend 30 minutes today on the MIT interview others have posted. Best of luck.

 

[neroden]

I will say that my greatest disappointment in Tesla right this minute is their apparent inability to handle a lot of options on the production line. We've seen signs of this from day one of Model S production. I realize that it's an issue for all car manufacturers, but I hoped they'd be able to use information technology to more smoothly integrate different variants. Apparently not really.

 

[Anstandswauwau]

Huh? Compared to Apple Tesla is in the virtually infinite market of EV growth that will some day, in many many years reach 2,000-3,000 billion dollars revenue but which market is currently maybe at 50 billion dollars annualized revenue if we add up all the EV makers.

I.e. Tesla has only barely scratched the surface of EV demand, they have captured only around 1% of total addressable market so far. Their pricing actions, even if we assume that they are an EV monopolist who has pricing power (which is true to a fair extent), cannot be compared to Apple's ideal pricing actions in low growth markets.

While I fully agree with what you've said above, I think it's highly irrelevant in the context of our discussion.

Yes, yes, Tesla does indeed have a potentially "virtually infinite market of EV growth" to address – otherwise I wouldn't have invested ridiculous amount of $$$ in TSLA stock – but Tesla, the company, has to sell to the market that exists right now. In 2019. We're talking status quo here, no what-ifs. And as we all know, the EV market is capped by various factors: Loading infrastructure, availability, cost, mindset or lack thereof etc.

So is the current EV market quasi-infinite right now? Haha, no.

Is the 2019 EV market temporarily saturated? I really don't know. I doubt anybody knows for sure. I sincerely hope it's not the case.

But it's the the one they're addressing right now, hence why I think it's legitimate to compare it to other markets of similar dynamics.

 

[Tenable]

Got it, you don't understand their business nor the auto industry. You have crazy unrealistic expectations for only the high end variants, you apparently think only Tesla customers should be forced to buy instead of lease even though 70-80% of BMW owners lease, you ignore the fact that Telsa has only been selling 2 quarters now of high end versions and some of the M-Range in Q4, you ignore that Model 3 margins didn't contract with mid-range introduction or the fact that Tesla has always met their long term goals for margin on S and X, you ignore any signs of production issues and instead replace them with demand worries....anything else?

Alright, I'm tired of your insulting tone. I get it, you discovered Tesla recently, you've invested a few dollars and you seem to think that gives you the right to be an A******. Well little fella, calling every investor here that has concerns a short, shill and troll isn't why we are here. I've likely spent more money on AP/FSD software than you have invested in this company. I almost certainly have more invested than you, I've been around longer than you and I'm quite happy to extend my ignore list. Welcome, you will be in good company.

 

[Chickenlittle]

I'd like to remind people that Tesla's people on the phone are currently telling people that the wait time for a Powerwall "in most regions" is 6 to 12 months, and they appear to be *understating* the wait time. Powerpack *contracts announced* amount to gigawatt-hours. Last news from Musk is that TE was cell-starved.

I realize that "guidance" was merely to double last year's production, but if that's the case, it's due to production limitations at the cell, module, or pack level, (or possibly the installation level, but they do sell to third-party installers), and not demand limitations. I wish we could get more insight; if they can ramp up the other aspects of Powerwall/Powerpack production, they can absorb every cell they can get, easily.

Suppose that they do need to stockpile 7.5 GWh of cells for a few months. At $100/kWh (plausible), that's $750 million. This sounds like a lot of cash but it's absolutely manageable if there's a clear pathway to using them up later in the year (Shanghai, more TE pack production lines, better production rates at Fremont, whatever)

Confused. Panasonic makes the cells so whose cash is stockpiled in extra production?

 

[ggies07]

Elon podcast on AP with Fridman

I'm going to interject some emotion here, but that was ****ing awesome! So much better than the Joe podcast.

So essentially buying a car today is an investment in the future. I think the most profound thing is that if you buy a Tesla today, I think you are buying an appreciating asset, not a depreciating asset.

Q: And you get to ask Her one question, what would that question be?

A: What's outside the simulation.

 

[EVMeister]

For anybody like me who didn't know what mythical podcast people were talking about, as nobody linked to it or mentioned it by name that I can see.

It's the Lex Fridman one on YouTube entitled: "Elon Musk: Tesla Autopilot | Artificial Intelligence (AI) Podcast"

 

[canoemore]

A brief synopsis of the sentiment on this thread today

 

[ZeApelido]

$tsla doing leases for model 3 starting Now is a HUGE deal and will greatly increase its demand
SP ready to shoot up sticking it to the shorts-well deserved
I have zero sympathy for shorts and corrupt media/CNBC

$tsla SP already up premarket on news that Tsla is now leasing M3

Oh no the Kiss of Death is back...

 

[RobStark]

Thanks. I think the logistics could be vexing, not sure we want a ship load of batteries in transit at quarter end. So better to get a local producer.

No different than shipping 18650's from Japan to Fremont.

It is always better to get a local producer.

You may not get best pricing until you prove you don't need local producer.

 

[TheGrimSweeper]

Alright, I'm tired of your insulting tone. I get it, you discovered Tesla recently, you've invested a few dollars and you seem to think that gives you the right to be an A******. Well little fella, calling every investor here that has concerns a short, shill and troll isn't why we are here. I've likely spent more money on AP/FSD software than you have invested in this company. I almost certainly have more invested than you, I've been around longer than you and I'm quite happy to extend my ignore list. Welcome, you will be in good company.

My advice too you,

stop following the day to day activity of Tesla.

Anyone invested knows it a long term hold anyway. Check in every quarter or so and see how it's doing.

By following the day to day all your going to get is noise and dissecting of every single minor detail, article, or blog post anyway, which really isn't helpful in anyway.

So either

1.) Sell your TSLA
2.) Step away and and check back in 3-4 months.

 

[StarFoxisDown!]

Alright, I'm tired of your insulting tone. I get it, you discovered Tesla recently, you've invested a few dollars and you seem to think that gives you the right to be an A******. Well little fella, calling every investor here that has concerns a short, shill and troll isn't why we are here. I've likely spent more money on AP/FSD software than you have invested in this company. I almost certainly have more invested than you, I've been around longer than you and I'm quite happy to extend my ignore list. Welcome, you will be in good company.

Lol ok. You resort to petty insults and call me a small time investor......real mature of you there I love how you make it sound like I attack anyone that has a concern...….which I don't and my post history speaks for itself. You don't post a concern.....you repeatedly make the same posts and fear mongering, week in and week out. You ignore variables which makes your "concerns" that much more ignorant and/or misleading. You still don't respond to the fact that I called you out for having a completely unrealistic expectation that the high end variants of the Model 3 will sell 250-300k/ years. You don't understand the market....the demand for different price ranges, nor do you seem to care about the variables that Tesla has to tackle when expanding to 2 new markets. As a couple people have mentioned now, maybe you should take your money and invest in something else. You very much seem to have a doom and gloom scenario laid out for Tesla in your head despite the many upcoming catalyst.....so please take your money elsewhere.