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

[Carl Raymond]

But, let’s not over exaggerate.

Agreed. We should use only the right amount of exaggeration.

 

[MarcusMaximus]

Okay.
Many people have chimed in. I get it. Obviously, it costs more. But, let’s not over exaggerate.

The non-performance AWD model Y in basic config with autopilot is $55K.
The entry model X with similar EPA rating in basic config with autopilot is $83K.

50% more. Not 100% more.

AWD Y is 280 miles vs 250 for SR X... that’s 12% better range. The LR X is 16% higher than AWD Y, so this difference isn’t trivial.

 

[Todd Burch]

After such a terrible report, the fact that the stock is down (as of writing) -3,72% is surprisingly mild.

Did you forget about the, uh, last two months of drops?

 

[brian45011]

...I think Elon is more of an engineer than an operation guy. So he should delegate more planning power to the operation executives. Even a special team should be established to focus on the operational planning...

In conclusion, Q1 flop was not due to demand, but due to supply chain, production, logistics, planning, resource allocation and pricing.

Peter Hochholdinger has maintained a (strangely?) low profile since the big May 2016 splash piece in the Leadership Journal when he was hired for his production/operational expertise. Maybe he learned enough at Audi to not challenge anyone he reports to.

 

[BioSehnsucht]

A 2 billion raise that goes into infrastructure (or other assets) increases the value of the company and thus the stock value would stay the same. If that infrastructure is a revenue generating factory, the value of the stock would go up.

Of course, selling at a discount impacts those numbers...

If the Maxwell tech works, there would be no need to switch to 2170s. Improved 18650s would allow reuse of the current pack/ module design. Including a capacity improvement even if they deleted one or both of the front double stack modules.

Regarding Panasonic building 2170 capacity in Japan, this concerns me because it means they don't see a clear route to optimizing the already installed capacity at GF1. One issue may be finding enough quality workers in Nevada. GF expansion must have soaked up a large portion of the work force already.

RE: Japan...due to declining & aging of their population I don't think the worker situation for Panasonic there is much different.

I suspect that for Panasonic, transitioning their Japan factory from 18650 to 2170 is more about maintaining it's usefulness and keeping those employees employed beyond the next couple of years. At some point Tesla won't want 18650's anymore, which would put that factory out of business and those employees out of a job.

Even though S/X don't "need" to transition to 2170, they will gain from it. And while that means engineering and testing new pack designs (even if they're just adapted from existing 3/Y designs), that would happen anyways if they want to get S/X supercharging rate to 3/Y parity (they need improved cooling to get the rest of the way to 250kW). It may not be this year, it might not be next year (though since they already dropped the ball on Supercharger v3 and PMSR motors and the promise of S/X always getting new tech first, would be lame to also give 3/Y new 1 million mile pack first), but eventually they should move to 2170.

Combine with eventually transitioning to the Maxwell tech, and I suspect what will happen is eventually (after GF1 ramped to 35 GWh or more, and perhaps after starting to transition one line at a time in GF1 to Maxwell tech) they will introduce a 2170 S/X pack, and temporarily use cells from GF1 for it, while they switch over the Japanese factory, then switch back. Alternatively, the switch to GF1 is permanent (assumes capacity is sufficient for ongoing S/3/X/Y/Roadster/Semi/... may be after hitting 35 GWh they finally build out more of GF1 and install maxwell lines, then retrofit the old lines, giving plenty of capacity), then the Japanese factory may supply GF3 (makes more economic sense than Fremont assuming GF1 can grow to supply Fremont on it's own, cheaper/faster shipping).

But at this point I'd say this is firmly a 2020 at earliest thing.

 

[Sean Wagner]

Tesla has been on this capital diet. So I think breaking this capital fast will do a lot of good for the share price.

Heh. Juicy stuff.

Um. These are huge buys from Ark today and suggest inside knowledge. I track their buys everyday and never seen something like this. Elon and Cathie are pretty close and this suggests something...

Massive sales of Nvidia and Xilinx [and others] to go with Ark's Tesla buy.

 

[kengchang]

Yes, the answer was "It's confidential".

Can Tesla really able to hide that payment from FIAT on a 10Q though?

 

[jerry33]

Okay.
Many people have chimed in. I get it. Obviously, it costs more. But, let’s not over exaggerate.

The non-performance AWD model Y in basic config with autopilot is $55K.
The entry model X with similar EPA rating in basic config with autopilot is $83K.

50% more. Not 100% more.

If you get both with all the stuff you want the non-performance Y is $62,500 vs X at $108,000, so it's 73% more. So yeah, it's not quite double.

 

[Icer]

"any mention in either the ER or CC about future revenue from the pooling with Fiat Chrysler?"
"the answer was "It's confidential"."

This has to mean no money has changed hands?
What could this possibly mean?

i suspect it was floated, there is no deal.
promotes awareness of it?
looking for buyer

influenced by:
Elon’s Coffin Corner: Sell Tesla Steve Berman 4-23-19
Elon's Coffin Corner: Sell Tesla - The Resurgent

FTA:

OR…Musk could sell Tesla to a cash-rich buyer. Nothing in this litany of problems can’t be solved by a relatively small (in terms of global finance) cash infusion. Maybe $5 or $10 billion would solve all of Tesla’s problems. The biggest problem Tesla has is that it has no useful way to raise that $5 to $10 billion.

As P.T. Barnum once said, the last dollar is the feather that breaks the camel’s back. If you’re short, you’re short. And Tesla is horrifyingly, painfully short.

If I were Elon Musk, I’d be looking for a buyer, quietly, tweetlessly, behind the scenes. I’d let the inevitable “stall” happen and let the stock price begin to fall, not precipitously, but as gently as possible. I’d continue paying suppliers on time (there’s no evidence Tesla is not paying), conserve cash (they are), and sell as many cars as possible (again, this is what they’re doing).

Then, when the stock settles into strike-price range, the white knight can come in and buy the whole thing. They’d be foolish to drop Musk as part of the deal–he’s the heart and soul of the company. This way, Musk can stay onboard, working for a new, cash-flush, master. I believe this is what he wanted to do when he made those inopportune tweets about “funding secured,” but maybe he’s going about it the right way now.

Personally, I think Tesla is better off remaining public, but that may not be possible if the new buyer takes it off the market.

Then again, maybe against all odds, Tesla will go it alone and survive. But like an airplane flying in the “coffin corner,” some laws of physics and finance just won’t bend.

 

[mongo]

"any mention in either the ER or CC about future revenue from the pooling with Fiat Chrysler?"
"the answer was "It's confidential"."

This has to mean no money has changed hands?
What could this possibly mean?

That it is confidential...
The pooling paperwork has already been filed.

 

[dqd88]

Okay.
Many people have chimed in. I get it. Obviously, it costs more. But, let’s not over exaggerate.

The non-performance AWD model Y in basic config with autopilot is $55K.
The entry model X with similar EPA rating in basic config with autopilot is $83K.

50% more. Not 100% more.

50% more is a helluva lot more

 

[MarcusMaximus]

"any mention in either the ER or CC about future revenue from the pooling with Fiat Chrysler?"
"the answer was "It's confidential"."

This has to mean no money has changed hands?
What could this possibly mean?

i suspect it was floated, there is no deal.
promotes awareness of it?
looking for buyer

influenced by:
Elon’s Coffin Corner: Sell Tesla Steve Berman 4-23-19
Elon's Coffin Corner: Sell Tesla - The Resurgent

FTA:

OR…Musk could sell Tesla to a cash-rich buyer. Nothing in this litany of problems can’t be solved by a relatively small (in terms of global finance) cash infusion. Maybe $5 or $10 billion would solve all of Tesla’s problems. The biggest problem Tesla has is that it has no useful way to raise that $5 to $10 billion.

As P.T. Barnum once said, the last dollar is the feather that breaks the camel’s back. If you’re short, you’re short. And Tesla is horrifyingly, painfully short.

If I were Elon Musk, I’d be looking for a buyer, quietly, tweetlessly, behind the scenes. I’d let the inevitable “stall” happen and let the stock price begin to fall, not precipitously, but as gently as possible. I’d continue paying suppliers on time (there’s no evidence Tesla is not paying), conserve cash (they are), and sell as many cars as possible (again, this is what they’re doing).

Then, when the stock settles into strike-price range, the white knight can come in and buy the whole thing. They’d be foolish to drop Musk as part of the deal–he’s the heart and soul of the company. This way, Musk can stay onboard, working for a new, cash-flush, master. I believe this is what he wanted to do when he made those inopportune tweets about “funding secured,” but maybe he’s going about it the right way now.

Personally, I think Tesla is better off remaining public, but that may not be possible if the new buyer takes it off the market.

Then again, maybe against all odds, Tesla will go it alone and survive. But like an airplane flying in the “coffin corner,” some laws of physics and finance just won’t bend.

Funny how all the things that are signs of wanting to be bought out are also signs of just running a good business. “They’re selling the products they make, so they must be doooooomed and looking for a buyout!”

 

[bdy0627]

Eh, I like the actual Y much better than that one.

I think the biggest problem is that it just doesn't look good in blue... white looks nice though.

That looks good! Where was that taken?

 

[kengchang]

That looks good! Where was that taken?

Model Y unveil at Hawthorne

 

[Carl Raymond]

Something I don’t get. I understand that Tesla are sitting pretty having GF1, the best cell, the cheapest cell, a guaranteed supply for model 3 Fremont lines. They are not forced to bid for cells that are in limited supply like other automakers.

Yet for GF Shanghai, Tesla are content to outsource 2170s. Is this temporary? Do Tesla have superior buying power? Better relationships? Or is cell supply becoming commoditised?

I hope it’s temporary. I’d like to think that transporting loose cells prior to pack making is unnecessary and by eliminating it Tesla gains an important edge.

 

[Big Blue 1011]

I think he changed his mind on $3k when he saw the underwhelming reaction to the autonomy day.
In his mind it is a done deal and a lot of value that you can extract a lot of revenue from, but SP reaction showed that nobody believes it until it is done and working and, therefore, would not be willing to pay more for it just based on some projections.
That was my first reaction to the price hike - why, does he really think someone would want to pay more for something that doesn't exist?

May 1st was for US buyers, but then he realized it's not fair to other markets that didn't have a chance to order it yet, so now May 10.

Yes, seems like some of these numbers he shoots out prematurely without considering all permutations.

Would be helpful if he consulted w/ someone else to polish these communications.

That’s another reason to consider some form of advertising. Tesla could test pricing of various options in certain markets through targeted advertising. Depending upon the response, they could roll out the program regionally or nationally as tested. Or they could adjust pricing as needed until they figured out the right numbers. Avoids looking like they are just throwing stuff against the wall until something sticks.

 

[PhaseWhite]

Alex on Auto: Model 3 Standard Range Review

Compares it to a Hyundai Kona, doesn’t mention fast charging.

Says Autopilot and other lane keep assist are basically the same.

Prefers low regen setting...

I’m not saying he’s dump, but geez non EV owners just don’t understand what’s important. And he really has no idea comparing Autopilot to Hyundai or BMWs lane keep assist.

 

[Icer]

$5-10 billion is cheap money to be a serious player in TSLA, and to share the tech
Every auto company needs this, they will all spend a lot more than that

Fords tiny 500m into tRivian was a signal of that
They need to be there, this is the fast track

License access to FSD/supercharging, they build vehicles on Elons platform
Can be to market Fast.

I would say the issue for elon is control
*

That it is confidential...
The pooling paperwork has already been filed.

How can a serious financial arrangement be "confidential, mongo?
Thx.

 

[Fred42]

Something I don’t get. I understand that Tesla are sitting pretty having GF1, the best cell, the cheapest cell, a guaranteed supply for model 3 Fremont lines. They are not forced to bid for cells that are in limited supply like other automakers.

Yet for GF Shanghai, Tesla are content to outsource 2170s. Is this temporary? Do Tesla have superior buying power? Better relationships? Or is cell supply becoming commoditised?

I hope it’s temporary. I’d like to think that transporting loose cells prior to pack making is unnecessary and by eliminating it Tesla gains an important edge.

My guess is the Chinese government wants Tesla to buy the cells from Chinese suppliers.

 

[shootformoon]

Maybe they run the business thinking in terms of next 5 years and not for 3 month increments? I get that if you are short term/swing trader you hate that, but that's the smart thing for them to do. Play the long game...

Maximizing short term cash flow/margin is for the sake of the mission. In any time frame, their last q strategy was suboptimal.