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

[dc_h]

picked up 2 more at 239, 1 at 238, and will get 2 more if we hit 237. small time, but gotta do my part.

If everyone would please help out, we're taking calls for the TMC fundraiser, or contact your broker directly. All donations will be taken and hopefully will be returned with interest.
I bought a few shares. Lots of small tics help.

 

[Duffer]

MM are going to beat the sugar out of this stock as long as Tesla does not raise capital....from them.

Historically, the Market Makers have made their fortunes from the exact markets that Elon and his companies are poised to disrupt. IF Elon takes a capital raise from Wall Street it would give the SP a short term pop and presumably speed up production.

However, it is in the Market Makers best financial interest (both personal and corporate) to "assist" those same disrupted industries in their efforts, through FUD/manipulation, to lower Tesla's profitability and then use the increased debt as the final nail in Tesla's coffin.

Once Tesla/Elon is out of their way it will be back to business as usual for everyone.

O.T.

@Krugerrand that is the best cat avatar ever. It fits your TMC persona perfectly

 

[Causalien]

So he wants to buy more Tesla at a cheaper price? I hope Elon raises money in China instead.

IPO in chinese market already.

 

[TradingInvest]

I don't know why Tesla won't bundle solar with Model 3 as a package.

They should offer a bundle discount bundling the Model 3, Solar, and the charger.

They might do the bundling, but cutting price should not be the first consideration. By far they should figure out a way to bring awareness. The Model 3 is an incredible car at attractive price. Most people are not aware of the benefits and they keep buying gasoline cars.

 

[Artful Dodger]

If Tesla is targeting 7k/week model 3’s by end of this year, which would include production from China,

Going by memory (esp. when feeling doubtful) is never reliable. Here's what Tesla's wrote in the 2019'Q1 Update Letter:

"OUTLOOK

Although we are driving towards higher internal goals, we reaffirm our prior guidance of 360,000 to 400,000 vehicle deliveries in 2019...

If our Gigafactory Shanghai is able to reach volume production early in Q4 this year, we may be able to produce as many as 500,000 vehicles globally in 2019."​

So the Tesla First Quarter 2019 Update refers back to guidance in the Q4'18 Update Letter:

"OUTLOOK

"Model 3 production volumes in Fremont should gradually continue to grow throughout 2019 and reach a sustained rate of 7,000 units per week by the end of the year. We are planning to continue to produce Model 3 vehicles at maximum production rates throughout 2019. Inclusive of Gigafactory Shanghai, where we are initially aiming for 3,000 Model 3 vehicles per week, our goal is to be able to produce 10,000 vehicles per week on a sustained basis. Barring unexpected challenges with Gigafactory Shanghai, we are targeting annualized Model 3 output in excess of 500,000 units sometime between Q4 of 2019 and Q2 of 2020.​

TL;dr So guidance is for 7K/wk at Fremont by the end of 2019, with aspirations of 3K/wk at Shanghai, by end of 2019 if things go well, if not then by end of 2020Q2.

Cheers!

 

[M3Rider]

I don’t mean to sound like a bear, but I’ve read that line from many here every month/quarter since last year.

If Tesla is targeting 7k/week model 3’s by end of this year, which would include production from China, you can’t expect much difference from month to month. As long as Tesla doesn't regress from one month to next, it should be taken as satisfactory. I mean there hasn’t been much change from monthly numbers going back to last year. And we haven’t heard anything that indicates increased battery production (assuming Musk is telling the truth as that being the bottleneck) this month.

IMO, even a monthly production total that calculates to a weekly average of over 5k would be a gigantic surprise.

7k/w was Fremont only w/o China.
"Model 3 production volumes in Fremont should gradually continue to grow throughout 2019 and reach a sustained rate of 7,000 units per week by the end of the year"

But given the new Q2 estimates of 90-100k total deliveries, assuming 20k S/X(lines still ramping up) that's 70-80k of 3s, plus adding 10-20k to the pipeline, thats 80-100k produced or assuming 12 weeks in a quarter, 6.7k - 8.3k/week.

This does look somewhat... unrealistic. They need sustained 7k/w right now, not at EOY. Maybe that's the case, but I wish he didn't throw these numbers into the letter. Why put pressure on yourself.

This means, they need to cut s+x by 7k and increase 3 by about 10k. The good news is reduction in S+X will pay for increase in 3. This will probably happen over a couple of quarters.

I assume whatever 3 inventory is left is all U.S.-spec-ed, so international pipeline is empty.
They need to build new cars to fill that pipeline. Guessing between 10-20k cars if some are left for Q3. Not sure if reducing U.S. inventory to help pay for this is in the cards or not.

 

[azaz]

there's a conference call for the energy business in 3 minutes

 

[MarcusMaximus]

there's a conference call for the energy business in 3 minutes

Is that available anywhere or press only?

 

[azaz]

via reddit

 

[anthonyj]

Ok Apple you just rose 6% or 1.5x Tesla’s market cap, please buy a stake kthx

 

[elasalle]

all eyes on AAPL

Next macro:
What to expect from the Fed's meeting this week

The Federal ReserveOpens a New Window. is widely expected to leave interest rates unchanged during its two-day meeting this week, as policymakers look to strike a balance between the U.S. better-than-expected GDPOpens a New Window. report last week and overarching fears about global economic growth.

Most economists anticipate the U.S. central bank will keep the benchmark federal funds rate at 2.25 percent to 2.5 percent.

 

[LoveTSLA]

Ok Apple you just rose 6% or 1.5x Tesla’s market cap, please buy a stake kthx

At the beginning of this year. When apple warned that due to one quarter China sales slowness and trade war, the stock dropped to 142. And some bear analysts predicted apple would drop to 135 and worse. Look what apple rebounded for past 4 months! Hope Elon and Tesla will make TSLA do the same thing in next three or 6 months.

 

[MarcusMaximus]

via reddit

Anyone have an update on this or access to some kind of news feed about it? Can't find anything...

 

[AcesDealt]

Has anyone partitioned out exactly where all the one-time costs break out? Does the majority of that 188M$ hit the S/X because it is the only one with actual resale guarantees right? I'd like to try to figure out the exact ASP/COGS of S/X and 3.. no one around here seems the least bit interested in actual analysis but you need it to figure out what is required for profitability going forward.

In Q1, we experienced non-recurring items that negatively impacted our net loss by $188 million.

As a result of Q1 pricing actions taken on Model S and Model X, we incurred net $121 million loss for increases in the assumed forecasted return rates for cars sold under our Residual Value Guarantee and Buy Back Guarantee programs, as well as inventory write downs for used and service loaner inventory.

Does this mean +121M$ to net gross profit hit should all go to S/X (probably not -- the used/service loaner would also be 3)?

There's also a 44M$ restructucting charge in op.ex. That leaves a 23M$ unexplained delta (188 - 121 - 44). What is that and where does it go?

 

[ricohman]

A possible design not from Tesla -
pretty bad ass rendering- I apologize if this has already been posted - hard to keep up with this board.

This Tesla Pickup Concept is ‘driving’ me crazy! | Yanko Design

Good grief.
Well, if they don't want to compete with conventional pickups so be it.

 

[KarenRei]

Good grief.
Well, if they don't want to compete with conventional pickups so be it.

It's not a Tesla drawing, and it won't look like that.

 

[azaz]

is there an embargo on this energy conference call or was I duped by a fake?

or was it an internal call that hasn't leaked yet?

 

[trailhound]

the pick up rendering was pulled for being off topic.
I thought we are now a general and investment board and it is after market.

?

 

[mongo]

But given the new Q2 estimates of 90-100k total deliveries, assuming 20k S/X(lines still ramping up) that's 70-80k of 3s, plus adding 10-20k to the pipeline, thats 80-100k produced or assuming 12 weeks in a quarter, 6.7k - 8.3k/week.

This does look somewhat... unrealistic. They need sustained 7k/w right now, not at EOY. Maybe that's the case, but I wish he didn't throw these numbers into the letter. Why put pressure on yourself.

Fremont has proven they can do 2k S/X per week and >5k 3 per week. So the ability to produce 7k/week is not at all unrealistic.
S/X should not require much of a ramp to bolt in a different drive unit. Even if they run at 1k/week, 3 can likely hit 6k.
Pipeline already had 10k in it, going to 30k (your 20k high end additional pipeline) seems excessive.

 

[ReflexFunds]

Stepping back and looking at the big picture: Tesla lost 700M$. What is Tesla's fundamental problem in getting to profitability?

They had +215M$ in regulatory credits (pure margin) this last quarter. They have 3 extremely well selling vehicles with essentially no apples to apples competitor worth talking about. They have extremely high brand enthusiasm. They have a vertical sales structure where they don't share profits with dealers and also do most service work. They get revenue from the refueling component. They don't spend on advertising. They get thousands of revenue per unit from high-margin SOFTWARE. Most buyers have tax incentives that are worth 4k+$.

They've got so many huge advantages yet 700M$ loss. Tesla has screwed something up along the way here.

It's just operating leverage, as with every start up. Also, the auto industry generally is extremely volatile and profit/working capital swings massively Q to Q, even with the dealership inventory buffer. Plus the massive one off exceptional cost in Q1.

If Tesla's S/X refresh ramp is delayed and they only sell half of their highest margin cars, obviously profit takes a big short term hit. If Model 3 ramp is held back by cell supply constraints they also don't get to use Model 3 to leverage the fixed cost base. Both of these heavily impact gross margin as well as overall profit - depreciation and staff COGs costs are largely fixed in the short term, so lower production = lower gross margin.

Profits will come with higher production volume and continued double digit quarterly Model 3 production cost reduction. Even with profits at Q1 levels though, cash flow is broadly neutral (excluding one time working capital changes) given non cash costs like depreciation & warranty reserve and deferred revenue build.

I'm sure Tesla will get back to profits soon, but I don't get why people are suddenly demanding a rush to profitability anyway. Companies that only care about short term results are not going to win the $3trn EV transition. Uber and its investors are happy to continue losing $4bn per year for the foreseeable future and they are not even building long term IP or valuable assets.