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

[NicoV]

So any old timer still in TSLA? How many did we lose on this round?

No change in ownership here. If I ever sell my TSLA, it will be to fund an early retirement. If TSLA goes to zero it will not change my current lifestyle (i.e. every euro I put in TSLA is a euro I mentally considered lost). If Tesla goes x10 (even a lot less than that) it will change my life.

 

[carterm2]

Lots of traffic in the Tesla store tonight.

Store in Santana Row, showing SX and 3, energy, and that wonderful chassis + motor

 

[adiggs]

No change in ownership here. If I ever sell my TSLA, it will be to fund an early retirement. If TSLA goes to zero it will not change my current lifestyle (i.e. every euro I put in TSLA is a euro I mentally considered lost). If Tesla goes x10 (even a lot less than that) it will change my life.

Except for it being USD for me, sounds about right

 

[Alphacrux]

New demand for the Power Wall?

PG&E’s Radical Plan to Prevent Wildfires: Shut Down the Power Grid - WSJ

PG&E’s Radical Plan to Prevent Wildfires: Shut Down the Power Grid

 

[NicoV]

The tax credit cliff tested


Pent up US demand ? Already lots of inventory SR+ available in Chicago.

Model 3 will sell relatively more in Europe than in the USA, due to it’s size and a good fit with current government incentives (e.g. the Netherlands may become a second Norway due to the fiscal treatment of company cars).

 

[Fact Checking]

The idea that solar technology/pricing wouldn't improve markedly during the twenty years of phases 2 and 3 to the extent most property owners, rather than renewing for an additional ten years, would tell SCTY (now Tesla) to "get that antiquated mess off my roof" always seemed like an inevitable outcome --yet lease/PPA extensions between years 20 an 30 were a major component of the financial "no brainer" justification for buying out SCTY. If removals rather than renewals ensue, phase 4 will not be monthly cash flow receipts but a profit/cash drain.

Wait what? I'm with @RobStark here and don't share your and @Doggydogworld's concerns about solar lease renewal rates after 20 years.

Here's the facts:

• Average solar system installation size is almost 8 kW in California, current value ~$31k.
• Current historic cell degradation rates are about 0.7%/year, which over 20 years gives about 15% degradation.
• System will still have ~6.8 kW useful capacity after 20 years, 85% of the original. Typical warranties are 80% capacity.
• Technology improvements constantly reduced average household electricity use as well, relative to overall economic growth:
  • 
• Technological improvements do not just reduce the value of existing installations, they cut both ways: wet appliances, heating and cooling systems improve their energy efficiency. LEDs use much less power and smart homes will idle unused appliances better. (With the exception of EV charging, but see below.)
• Current per household electricity use is actually shrinking in the U.S. and in Europe.

So the outcome at 20 years renewals seems pretty clear to me:

• 6.7 kW system will still be perfectly good and cover much if not all the then current electricity use levels.
• Newly installed storage systems (Powerwalls, etc.) might further improve the effective generation capacity of old solar installations, without having to touch the roof.
• Many (I'd argue most) home owners would rather not mess with old roofs, which creates an additional disincentive to remove an existing, working solar installation.
• Even under your adversarial "old panels are obsolete" scenario a lot of the installation cost is going to be in installing the new panels on the roof and removing the old panels. If the new system is smaller then the roof that was shadowed by the panels for 20 years is going to have a different color, and will look ugly - re-roofing is much more expensive. If the new system has the same area then it either includes dummy panels which might look ugly or the supporting electric network will need rewiring due to higher capacity, etc.
• I.e. the cost of installing an equivalent 6.7 kW system using the latest solar cells will still be relatively high, and the renewal rates could price in that value of the system and installation cost and the convenience of not having to touch a working system. This is true even if new panel costs go down dramatically: installation costs, roofing costs and electric wiring costs wont go down, as they are mostly labor costs.
• So in reality, after 20 years Tesla will most likely be in a good position to offer the solar customer a renewal, and most customers who don't want to reroof will accept it.

The big risk to solar lease renewals after 20 years isn't people wanting all the hassle of removing older, perfectly working 6.7 kW installations just because there's newer ones available. The big risk is EV use exploding and people wanting to charge 4-5 family EVs, each 100 kWh or larger.

Can we also agree that this outcome will be a happy problem, that if EV use explodes fast then profits from Tesla's Storage, growing Solar and EV division will be more than adequate to cover higher than expected non-renewal rates of old solar installations, which could easily be upgraded by Tesla after 20 years?

 

[Causalien]

The problem is that had they implemented that "automated review process" and had the lawyer made any mistake, even a minor one, regarding the extensive list of topics the original settlement required approval for, the SEC could still have sued Tesla for approving "inaccurate" information that "reasonably could contain information material to the Company". They could also have sued Elon for a wide range of topics that are only tangentially related to material information.

(It would also have been unconstitutional to restrict or even filter all of Elon's tweets, even if Elon agrees.)

The real problem was not Elon, but the ambiguous and broad "reasonably could contain information material to the Company" language of the settlement which favored the SEC and gave them a tool to spuriously attack either Elon or Tesla.

The "reasonably could contain information material to the Company" language is now gone from the settlement, and this is a major win, as it significantly restricts the SEC's ability to file frivolous motions. The 20 tweets the SEC listed as "problematic" in their motions? None require pre-approval now under the new rules AFAICS.

This provides a lot of clarity and restricts the range of topics Elon has to seek approval for, and I'd not be surprised if the judge also added a mandatory conflict resolution process before the SEC can file another contempt motion, to avoid the kind of weekend ambush they performed in February.

This modified settlement is exactly what Elon and Tesla needed and wanted.

I am just glad it got settled a few days ahead of the deadline. I think that is the final item on the list to take care of in Q1. Now we can look forward to Q2 and everything that needs to be done.

 

[Cobbler]

Model 3 will sell relatively more in Europe than in the USA, due to it’s size and a good fit with current government incentives (e.g. the Netherlands may become a second Norway due to the fiscal treatment of company cars).

I've read too many BS in the media lately that will certainly have an impact (at least here in Belgium). Following headlines caught lots of attention on social media:
- professors who suddenly claims that it takes 700000km before EV's emits less CO2
- German study that shows new diesel engines are cleaner than polluting EV's
- German studies on how new generation diesel engines have no NOx output, are better than EV's ("clean coal"). They spoke of a revival..
- every EV fire was reported.

Studies have been revoked a few days later, but without any meaningfull media attention.

And those headlines stick. People are repeating headlines that fit their narrative without any further background knowledge. You'll always find someone who shouts: ''hydrogen! Hydrogen cars are the future! Think about the children in the cobalt mines! EV's can suddenly explode!"

There is a real sickening campaign against EV's going on and it's slowing down adaption. It has an impact.

 

[Revhappy2]

Coming back here after a long time and nothing much has changed, haha.

 

[Fact Checking]

There is a real sickening campaign against EV's going on and it's slowing down adaption. It has an impact.

Yet surveys are showing that regardless of the FUD ~75% of car buyers consider EVs the future, and ~90% of EV owners will buy an EV again.

Critical mass of ~700,000 Tesla owners is already there, ~20% of whom are buying a new Tesla this year, and next year, etc. Soon the Tesla ecosystem will become significantly self-sustaining due to the large installed base, making new vehicle sales virtually immune to FUD.

This is what legacy automotive does: it lives off an existing mature fleet to generate service income and new car sales income. Customer retention rates are relatively high in the premium segment, BMW owners tend to buy BMW again, Volvo owners buy Volvo again, etc.

FUD can slow but not stop adaption. Note that this is extremely positive, considering the danger of FUD: FUD campaigns very much have the ability to entirely kill products and industries, and did so in the past. This won't happen with EVs.

The rest of the Tesla adaption story is about pricing, range, ability to charge, form factors and personal preferences.

 

[Tslynk67]

Elon Musk on Twitter

 

[PANN]

I've read too many BS in the media lately that will certainly have an impact (at least here in Belgium). ...
There is a real sickening campaign against EV's going on and it's slowing down adaption. It has an impact.

Here in China, FUD is at the peakest level ever. When I open my market newsfeed (in Chinese) in the morning, of the 30-50 news worldwide I got 6-10 negative Tesla pieces, that's 20-30% of all market news, just insane, most hit pieces on US media and SeekingAlpha got translated into Chinese and pushed to me.

But luckily nobody dare to publish anything against EV industry in general, since our communist government is so pro-EV and control all media very tightly.

 

[Tslynk67]

Also, the agreement doesn’t say that each individual instance requires preapproval. Elon can just ask his lawyer to pre-approve everything and then if he gets in trouble again, he can just say his lawyer preapproved it. Cause screw the SEC in this case

This is a valid point - get Karpathy to code one of their AI chips to write meaningful Tweets, once you get to around a million, get them all "lawyer approved".

Actually, what's to stop the Tesla oversight committee just saying "we pre-approved it" to any Tweet query from SEC? Do they need to provide documentary evidence?

Seriously though, some wrapper around Twitter so that every single Elon tweet is filtered and anything that contains a selection of keywords or numbers get diverted first to an on-duty lawyer. Given the software expertise in Tesla, this should be pretty simple to achieve and 99.9% of the stuff he writes would pass-through without the need for scrutiny.

 

[Causalien]

Here in China, FUD is at the peakest level ever. When I open my market newsfeed (in Chinese) in the morning, of the 30-50 news worldwide I got 6-10 negative Tesla pieces, that's 20-30% of all market news, just insane, most hit pieces on US media and SeekingAlpha got translated into Chinese and pushed to me.

But luckily nobody dare to publish anything against EV industry in general, since our communist government is so pro-EV and control all media very tightly.

Wow. I was dreaming of a more hopeful future where the oil industry doesn't have any power to supress greentech because oil became irrelevant.

Never would've imagined China.

 

[Tslynk67]

Agree with what you said. But the idea that the original 420 case was weak and now that Elon and his team would have another chance at the settlement they wouldn’t budge as much as played out as completely false. The new Twitter policy is just as if not a little more restrictive than the old one. And the tweet the SEC went to court over is basically exactly the type that now needs to be approved. Not hard to realize here that Elon’s side was not willing to throw away the settlement because even if the contempt motion was denied the settlement it self was in peril and they were not willing to go through the fraud case again.

I suspect they decided that the didn't want to go through all that right now and I suppose in hindsight it's for the best.

Surely, though, this list should be applied to all CEO communications for all US companies going forwards, no? Why should it apply just to Elon?

 

[Tslynk67]

So any old timer still in TSLA? How many did we lose on this round?

I'm 53 in June, does that count?

 

[Tslynk67]

Ross Gerber on Twitter

So this guy pumps 24/7 how great of an investment TSLA is and because it hits some arbitrary number he is forced to sell lol. No wonder shorts constantly make fun of him.

If you read the Tweet, my bold:

Unfortunately Tesla blew through resistance today and capitulation selling happened. We were forced to reduce risk throughout the month in the stock for certain investors. We have sell rules at the firm that were triggered for certain clients. $TSLA

Plus ARK sell Tesla regularly when they follow their own rules. They're managed funds, no, that's what they do.

 

[Tslynk67]

Lightweights.

I'll add that I'm all-in $TSLA, I'm just not that affluent

 

[PANN]

So any old timer still in TSLA? How many did we lose on this round?

Can someone influential on Twitter to start a Buy 1 Tesla Share campaign and we retweet to all Tesla owners? The shorts want to destroy Tesla in this round, let the Cult give them a real war.

 

[Singer3000]

Wait what? I'm with @RobStark here and don't share your and @Doggydogworld's concerns about solar lease renewal rates after 20 years.

Here's the facts:

• Average solar system installation size is almost 8 kW in California, current value ~$31k.
• Current historic cell degradation rates are about 0.7%/year, which over 20 years gives about 15% degradation.
• System will still have ~6.8 kW useful capacity after 20 years, 85% of the original. Typical warranties are 80% capacity.
• Technology improvements constantly reduced average household electricity use as well, relative to overall economic growth:
  • 
• Technological improvements do not just reduce the value of existing installations, they cut both ways: wet appliances, heating and cooling systems improve their energy efficiency. LEDs use much less power and smart homes will idle unused appliances better. (With the exception of EV charging, but see below.)
• Current per household electricity use is actually shrinking in the U.S. and in Europe.

So the outcome at 20 years renewals seems pretty clear to me:

• 6.7 kW system will still be perfectly good and cover much if not all the then current electricity use levels.
• Newly installed storage systems (Powerwalls, etc.) might further improve the effective generation capacity of old solar installations, without having to touch the roof.
• Many (I'd argue most) home owners would rather not mess with old roofs, which creates an additional disincentive to remove an existing, working solar installation.
• Even under your adversarial "old panels are obsolete" scenario a lot of the installation cost is going to be in installing the new panels on the roof and removing the old panels. If the new system is smaller then the roof that was shadowed by the panels for 20 years is going to have a different color, and will look ugly - re-roofing is much more expensive. If the new system has the same area then it either includes dummy panels which might look ugly or the supporting electric network will need rewiring due to higher capacity, etc.
• I.e. the cost of installing an equivalent 6.7 kW system using the latest solar cells will still be relatively high, and the renewal rates could price in that value of the system and installation cost and the convenience of not having to touch a working system. This is true even if new panel costs go down dramatically: installation costs, roofing costs and electric wiring costs wont go down, as they are mostly labor costs.
• So in reality, after 20 years Tesla will most likely be in a good position to offer the solar customer a renewal, and most customers who don't want to reroof will accept it.

The big risk to solar lease renewals after 20 years isn't people wanting all the hassle of removing older, perfectly working 6.7 kW installations just because there's newer ones available. The big risk is EV use exploding and people wanting to charge 4-5 family EVs, each 100 kWh or larger.

Can we also agree that this outcome will be a happy problem, that if EV use explodes fast then profits from Tesla's Storage, growing Solar and EV division will be more than adequate to cover higher than expected non-renewal rates of old solar installations, which could easily be upgraded by Tesla after 20 years?

I try and take as long term a view as anyone but worrying about the lease renewal rate in 20 years seems academic even to me! Even the earliest SolarCity leases aren’t going to mature for another decade.