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

[FS_FRA]

A taxi driver was telling me the other day that he covers about 200 miles in an eight hour shift. 365 x 200 is 73,000 with an 8 hour shift. So the number is possible.

The big question is: how many of those 200 miles are revenue generating miles, and how many of them are miles transiting between revenue generation?

I think you need to assume a high percentage of daily miles even for Robotaxis will be transit miles which are not paid for!

I do not believe the 81K number...

 

[dqd88]

Tesla is the 6th most popular brand in California!

Brand....CA March YTD..................YTD % Share

1. Toyota........75,730...........,............................16.3
2. Honda........59,859........................................12.9
3. Ford...........39,811.........................................8.6
4. Chevrolet...34,833.........................................7.5
5. Nissan........26,914........................................5.8
6. Tesla...........20,491..................................4.4
7. Subaru........17,803............................,...........3.8
8. Merc Benz...17,776.......................................3.8
9. Kia...............16.073......................................3.5
10. Hyundai......14,790........................................3.2
11. Lexus............14,597......................................3.1
12. Jeep............14.545.......................................3.1
13. BMW.............14,434.....................................3.1
14. Volkswagen..11,447......................................2.5
15. Mazda...........11,155......................................2.4
16. Ram.............8,983........................................1.9
17. Dodge..........8,964........................................1.9
18. Audi..............8,803........................................1.9
19. GMC............7.114 ........................................1.5
20. Acura ...........5,306........................................1.1
21. Land Rover ...4,808.......................................1.0
22. Infiniti............4,588........................................1.0
23. Porsche........3,668........................................0.8
24. Mitsubishi.....3,176.........................................0.7
25. Volvo.............2,750........................................0.6
26. Chrysler........2,712........................................0.6
27. Cadillac.........2,545........................................0.5
28. Buick.............2,043.........................................0.4
29. Mini................2,000........................................0.4
30. Jaguar............1,745........................................0.4
31. Lincoln...........1,439........................................0.3
32. Alfa Romeo.....935..........................................0.2
33. Fiat..................351..........................................0.1
34. Genesis...........149..........................................0.0

Total............... 463,835..................................100


https://www.cncda.org/wp-content/uploads/Cal-Covering-1Q-19.pdf
Info Released today 5/20/2019

That's badass.
And just premium:

1. Tesla...........20,491..................................4.4
2. Merc Benz...17,776.......................................3.8
3. Lexus............14,597......................................3.1
4. BMW.............14,434.....................................3.1
5. Audi..............8,803........................................1.9
6. Acura ...........5,306........................................1.1
7. Land Rover ...4,808.......................................1.0
8. Infiniti............4,588........................................1.0
9. Porsche........3,668........................................0.8
10. Volvo.............2,750........................................0.6
11. Cadillac.........2,545........................................0.5
12. Buick.............2,043.........................................0.4
13. Jaguar............1,745........................................0.4
14. Lincoln...........1,439........................................0.3
15. Alfa Romeo.....935..........................................0.2
16. Genesis...........149..........................................0.0

 

[RobStark]

That's badass.
And just premium:

1. Tesla...........20,491..................................4.4
2. Merc Benz...17,776.......................................3.8
3. Lexus............14,597......................................3.1
4. BMW.............14,434.....................................3.1
5. Audi..............8,803........................................1.9
6. Acura ...........5,306........................................1.1
7. Land Rover ...4,808.......................................1.0
8. Infiniti............4,588........................................1.0
9. Porsche........3,668........................................0.8
10. Volvo.............2,750........................................0.6
11. Cadillac.........2,545........................................0.5
12. Buick.............2,043.........................................0.4
13. Jaguar............1,745........................................0.4
14. Lincoln...........1,439........................................0.3
15. Alfa Romeo.....935..........................................0.2
16. Genesis...........149..........................................0.0

Do you work for Buick? LOL.

 

[dqd88]

That image of the video. Wonder if she woke up that happy today with TSLA sub $200 and the way TSLA has dropped since ARK’s last large purchase of TSLA.

Stop taking up space here with your trolling.
Mods do we really have to tolerate this? It only detracts from the value of the forum.

 

[W84M3]

Another pre-market plunge with green futures.. Any news?

 

[WarpedOne]

NicoV:

You need to be able to address your mass market customers in their own language.

Nonsense, it is purely up to the company in which language they do the business.
What should not be up to them is discriminating customers on the basis of their nationality.

Besides, have you called the nearest Austrian store and asked what they can do for you?

Yes, I've personally visited the store and got 'We cannot take your order, maybe you now some Austrian people that can order it for you".

Hence the need for at least a local service center, and probably also a store.

First, this is absolutely not necessary.
Second, even if it was, the fact was know to Tesla all the time and they've chosen to ignore it.

It is to be expected that a 3 year plan has some delays

It is not about the delays, it is about the lying into the face of your eager customer who lent you money multiple years ago and going apartheid on him - yes, it is the correct word.
Tesla in Europe today is playing nationalism card. You can imagine this to be particularly painful with Europe's history.
Imagine me coming to Austrian store and hearing "you are not good enough to be our customer because you come from a foreign country".
And this is a euro-wide company policy ultimately decided on by Elon.

Saying that Elon is failing at daily operations is like saying that people ending a death march five minutes too late are failures. It lacks the appreciation of what they did achieve.

This is looking at trees and missing the forest.
Tesla achieved multiple great deeds but ultimately it disappointed.
Big funds are exiting (with realizing the losses) because they see bright future ahead?
Think again.

 

[Huskyf]

Another pre-market plunge with green futures.. Any news?

New downgrade I'm think or just pre-market price

 

[Fact Checking]

Another pre-market plunge with green futures.. Any news?

Pre-market volume so far has been pretty thin, compared to yesterday.

I suspect it's still the (predictable) Adam Jones / Morgan Stanley downgrade that kept the 'bull' and 'average' price targets unchanged, but many headlines are highlighting that the 'bear case' was cut to $10. The TSLAQ fear-mongering also continues, and I thought we already saw 'peak FUD' last year.

 

[RoadsterPlease]

Pre-market recovered back above 200, was frustrated we lost all of yesterdays gains again, but I think today will end green!

 

[CyberDutchie]

This is the reason for the $10 bear case according to the note:

The reduction in our bear case to $10 is driven primarily by our concerns around Chinese demand for Tesla products. Our revised bear case assumes Tesla misses our current Chinese volume forecast by roughly half to account for the highly volatile trade situation in the region, particularly around areas of technology, which we believe run a high and increasing risk of government/regulatory attention. We currently forecast Tesla to sell an average of 165k units annually in China from 2020 (56k units) through 2024 (254k units). At an average price of around $55k/unit we forecast Tesla has an average forward year exposure of around $9bn (165k units x $55k/unit). Our new bear case assumes Tesla loses $4.5bn of revenue at a decremental margin of 30%, 20% tax and 15x PE multiple... resulting in lost value of $16.4bn which on a per share basis (188mm shares) is $87, bridging the gap between our old bear case of $97 and our new bear case of $10.

 

[Sancho]

I hate myself for reading this forum every day (but its such a guilty pleasure!) because by scrutinizing things so closely we are bound to lose perspective.

At 30,000 feet, its clear to me that TSLA is a total crap shoot until Q1 2020. That is the first quarter that Tesla is likely to be producing 10,000 cars, the original goal, the baseline sustained rate of production before the Model Y. Of course it could be even later than Q1 2020 if there are unanticipated delays in China or continued battery supply problems, but it is not going to be earlier than Q1 2020.

Anyone making short or long bets with a shorter time frame is pure gambling. Until then, a big SP drop is just as irrelevant as a big SP spike.

It seems highly unlikely to met that TSLA is trading at less than $350 in Q1 2020 if there is sufficient demand for those 10,000 cars. I'm long TSLA now because I believe that demand will be there, and I don't consider that gambling, I consider it an educated guess based on my perception of the competition, and the increasing general interest in electric cars, (I also assign real value to the possibility of robotaxis and Tesla Energy, but I'm not counting on the overall market to assign any value to that until it is closer to fruition).

The only question for me is how much to invest now, or wait for a lower entry point. I really don't have a good answer for that, since the stock really can do anything at this point, but I'm trying to stay flexible and have some cash invested and some dry powder left for an even lower entry point. But its certainly relevant that the SP is at the very low end of a five year trading range.

But enough flying at 30,000 feet, let's dive back to sea level and speculate how many cars they were able to cram onto each boat this quarter!!

 

[uselesslogin]

All, in the US the Model S price dropped $3k to $75k and the X dropped $2k to $81k. I would think this would drop the stock price more than Adam Jonas' $10 bear case.

I can't say I wasn't expecting this part. I just thought there would be more Model 3s being sold by now. Of course, maybe there are. We shouldn't forget that 24Gwh is confirmed and that allows for production of 90,000 3s a quarter. Sure, probably a few of those are going to Energy and there is a good chance there are other bottlenecks but if batteries were the bottleneck last q it seems like 24Gwh is still an improvement over Q1 rates.

Anyway I never related my anecdote from April. I had my car at the Earth Day event and someone who works for a supplier took a look at it. Anyway he told me they were having trouble keeping up with Tesla production. I was kind of surprised because all I've heard lately is doom and gloom here but it certainly sounds like we can expect more 3s produced in Q2. I'm sure S/X will be a balancing act untill we settle into the new normal there.

 

[Tslynk67]

Can you imagine Elon obsessed with state by state regulatory approval and policies for the insurance business? I can't.

He has been meeting with the auto pilot team weekly for at least 3 years how much more can he get involved really?

At work we have a lady who seemingly works 20 hours per day, every day, and at weekends too. She’s heavily involved in driving forward multiple things in parallel. She never seems to run out of energy, arrives at every meeting immaculately prepared, and doesn’t suffer fools gladly. Her productivity, ownership and drive are just on a different level compared to everyone else.

Some people just have the capacity and desire to be able to do this, they are few, but they exist.

 

[JohnDinger]

It seems highly unlikely to met that TSLA is trading at less than $350 in Q1 2020 if there is sufficient demand for those 10,000 cars.

How did you pick $350? Why not $300, or why not $400?

 

[j6Lpi429@3j]

anyone changing their valuation from $90 to $10 without evidence of a nuclear strike destroying uninsured factories is an idiot. Frankly why take any further waffle in such 'downgrades' seriously at all? Its a blatant case of market manipulation to make money from short positions. Desperate and silly.
I thought the $420 valuation was fairly reasonable at the time. if anything I think the valuation should be way higher now. If it takes a while for everyone else to see the obvious then so be it, but I'm not selling.

 

[W84M3]

This is the reason for the $10 bear case according to the note:

The reduction in our bear case to $10 is driven primarily by our concerns around Chinese demand for Tesla products. Our revised bear case assumes Tesla misses our current Chinese volume forecast by roughly half to account for the highly volatile trade situation in the region, particularly around areas of technology, which we believe run a high and increasing risk of government/regulatory attention. We currently forecast Tesla to sell an average of 165k units annually in China from 2020 (56k units) through 2024 (254k units). At an average price of around $55k/unit we forecast Tesla has an average forward year exposure of around $9bn (165k units x $55k/unit). Our new bear case assumes Tesla loses $4.5bn of revenue at a decremental margin of 30%, 20% tax and 15x PE multiple... resulting in lost value of $16.4bn which on a per share basis (188mm shares) is $87, bridging the gap between our old bear case of $97 and our new bear case of $10.

Wow, that makes absolutely no sense from Morgan Stanley/Adam Jonas

Or in their terminology; I rate this analysis a 0.000000000000000000000 - equal weight from 0.000

 

[Fact Checking]

"The reduction in our bear case to $10 is driven primarily by our concerns around Chinese demand for Tesla products."

"The reduction in our bear case to $10 is driven primarily by our concerns around Chinese demand for Tesla products. Our revised bear case assumes Tesla misses our current Chinese volume forecast by roughly half to account for the highly volatile trade situation in the region, particularly around areas of technology, which we believe run a high and increasing risk of government/regulatory attention. We currently forecast Tesla to sell an average of 165k units annually in China from 2020 (56k units) through 2024 (254k units). At an average price of around $55k/unit we forecast Tesla has an average forward year exposure of around $9bn (165k units x $55k/unit). Our new bear case assumes Tesla loses $4.5bn of revenue at a decremental margin of 30%, 20% tax and 15x PE multiple... resulting in lost value of $16.4bn which on a per share basis (188mm shares) is $87, bridging the gap between our old bear case of $97 and our new bear case of $10."

So Adam Jones somehow missed that Tesla is building a wholly owned factory in mainland China:

Tesla Gigafactory 3 starts interior work amid escalating US-China trade war​

With a target capacity of 30,000 cars per week, 1.5 million cars/year.

Also, entry ASP in China will probably be significantly lower than the current $40k in the rest of the world - which further expands the market. If Sandy Munro's estimates of a 20%-30% cost reduction in China are accurate then we are potentially looking at a $29,000 Model 3 SR+ in China with 20% margins - or at a $35k-$40k entry price with 30%+ margins ...

As @neroden said it the demand worries are silly and dishonest considering that Tesla is growing into the ~5 trillion dollars post-ICE EV market - it's about supply, production, execution and timing.

 

[Sancho]

How did you pick $350? Why not $300, or why not $400?

Sorry, I wasn't trying to make a specific price target, I was just trying to give an order or magnitude of the upside potential. The overall market has seemed to assign a value to TSLA of around 320-380 when it believed that Tesla would be producing 10,000 cars and there would be sufficient demand for that.

I haven't done my own valuation based on present value of future cash flow, but ones I have seen suggest at least that high a value for just the automotive business, if it is succeeding on track.

 

[JohnDinger]

The overall market has seemed to assign a value to TSLA of around 320-380 when it believed that Tesla would be producing 10,000 cars and there would be sufficient demand for that.

I think the market gave Tesla that value when Model S+X sales were strong.

For me, the biggest miss for Elon on the Q1 call was the cannibalization question. The Model 3 is clearly taking away market share from the Model S, and the current refresh is unlikely to be enough.

There are Model 3 owners who would have stretched their finances to buy the Model S, but didn't because the Model 3 exists.

I'm worried the Model Y has done the same thing to the Model X, too. There are buyers who would stretch their finances to buy a Model X but are now waiting for a Model Y.

Apple saw this with the iPhone 5C. That's why there isn't a 5C phone anymore.

 

[Tslynk67]

Tesla Model 3 Saloon (2019 - ) review

The 4* rating for safety is rather misleading. I realise it’s because it hasn’t yet been tested by NCAP, but they could have at least referenced the testing from the US.