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

[kbM3]

Yeah, Tasha and ARK are delusional forecasting 26m EVs/year by 2023. US EV sales will be flat-to-down this year. Europe is better, but Japan is still pushing FCEVs which won't ramp by 2023 (if ever). China is the 800 lb gorilla, but their 2020 EV mandate is less than current sales rates. Sure, they'll ratchet it up after 2020, but it's not like they're going to turn into Norway. 10m in 2023 would be a great result.

ARK also says EVs will cost less than ICE in a few years. Makes it hard to take anything they say seriously.

Some EV’s already cost less than equivalent ICEs in the $40k+ class. I could see them being competitive in the $30k+ class in 3-4 years.

 

[wipster]

Yeah, Tasha and ARK are delusional forecasting 26m EVs/year by 2023. US EV sales will be flat-to-down this year. Europe is better, but Japan is still pushing FCEVs which won't ramp by 2023 (if ever). China is the 800 lb gorilla, but their 2020 EV mandate is less than current sales rates. Sure, they'll ratchet it up after 2020, but it's not like they're going to turn into Norway. 10m in 2023 would be a great result.

ARK also says EVs will cost less than ICE in a few years. Makes it hard to take anything they say seriously.

I don't think it's quite as dire as that. IMO, FCEV's will never be successful... if you think charging batteries is a problem, it won't compare to hydrogen. Just creating the filling stations would be astronomically expensive, plus there's no filling up at home. Plus, anyone remember the Hindenburg? Just one explosion and that's all she wrote.

But I agree with her that BEV's will be comparable with ICE's cost wise in the near future. Pretty close right now if you look at the Leaf and the Korean rigs and with Tesla's reduction of the wiring required in the Y, efficiency and cost reduction in COGS won't just be limited to reducing battery costs (which will also happen regardless), which should help Tesla reduce pricing as well.

So while I don't believe as many BEV's will be made, I do believe Tesla's percentage will be at least 20% and that prices will drop below that of ICE's by the mid 2020's at the latest.

 

[SO16]

I think they are embellishing a little but not much. I would think more time would be needed to build the manufacturing capacity for 26m. Maybe by tail end of 2023 they reach a run rate of something like 20m. idk. China could make it happen. Seems many EV startups are getting started so maybe it will grow exponentially. I'm projecting more of a linear growth rate, but I'm prob wrong.
I think EVs could cost less than ICE in say 4-6 years.
I agree that they should temper their numbers just to make it more believable. Sounds almost too fanciful to be taken seriously.

Not to mention carbon taxes being implemented in many countries causing gas cars to be more expensive to operate.

 

[EVNow]

Yeah, Tasha and ARK are delusional forecasting 26m EVs/year by 2023. US EV sales will be flat-to-down this year. Europe is better, but Japan is still pushing FCEVs which won't ramp by 2023 (if ever). China is the 800 lb gorilla, but their 2020 EV mandate is less than current sales rates. Sure, they'll ratchet it up after 2020, but it's not like they're going to turn into Norway. 10m in 2023 would be a great result.

ARK also says EVs will cost less than ICE in a few years. Makes it hard to take anything they say seriously.

Several countries/cities will start banning ICE sales / driving by 2025. EU mandates will be a huge thing - and hopefully after 2020 election in US the tide will turn here as well.

The growth rate was 64% in 2018 for a total of about 2.2M PEVs. If the world maintains the 64% growth rate, in 2023 the sales will be 26M. May be that's how they came up with 26M ?

 

[dqd88]

In addition to relaxing foreign ownership rules just for Tesla, the Vice President of China sat down with Elon one-on-one, a honour that’s mostly given to heads of state, and offered him permanent residency.

What more do you expect, make Elon a member of the politburo???

Since China is dependent on oil imports, they are incentivized much more than USA to reduce reliance on oil, hence push for EV. It's in the interest of their national security. So makes a lot of sense that they would love Elon's mission of transitioning from oil.

 

[Zero CO2]

Nope. It is simple math.

As long as the average gain over the holding period exceeds the margin interest rate (currently 3.75% for me) and the stock never dips low enough for a margin call, you will come out ahead.

You can say it is psychologically difficult. You can say it adds risk in proportion to the amount borrowed. You cannot is is a bad investment decision.

Yes it is simple math but not probability....
The simple truth my friend is you are a gambler ... TSLA long investors want this company to succeed but a series of unfortunate events "real events" not the FUD going on right could put TSLA at $10 for 5 years... i guess you did not have any investments through the dotcom bubble collapse or the financial crisis ... it can take a really long time 5 + years or more for even great companies to recover

 

[Zero CO2]

Yes it is simple math but not probability....
The simple truth my friend is you are a gambler ... TSLA long investors want this company to succeed but a series of unfortunate events "real events" not the FUD going on right could put TSLA at $10 for 5 years... i guess you did not have any investments through the dotcom bubble collapse or the financial crisis ... it can take a really long time 5 + years or more for even great companies to recover

sorry for using the AJ $10 but you get the point

 

[sparcs]

Some EV’s already cost less than equivalent ICEs in the $40k+ class. I could see them being competitive in the $30k+ class in 3-4 years.

Isn't Model 3 already competitive with BMW/Audi/Mercedes/etc without the tax incentives?

https://www.motortrend.com/cars/tes...3-vs-bmw-330i-vs-genesis-g70-comparison-test/

 

[Zero CO2]

\

Trump doesn't think far enough ahead to look to 2020. He has Narcissistic Personality Disorder, and one of the symptoms is inability to fear any consequences which happen in the future. He is literally just going day by day.

This is why he's ordering the IRS and the Treasury Secretary to break the law and to be in contempt of Congress in order to conceal his fraudulent tax returns from Congress. If he'd had one ounce of anticipation, he would have realized that NY State would just hand the returns over, which they are doing, so the entire lawless coverup at the federal level won't even *work*. Most crooks don't bother to do coverups of things which are going to come out anyway. But Trump is unable to think about future consequences due to his behavioral disorder.

So he will continue to make a complete mess of China business relations. I think most people in the Administration and, of course, Congress, will try to stop him, and China knows this, so things may get resolved. But anyway, my point is that your analysis is wrong: Trump will not solve the issue because he simply doesn't think that far ahead.

You are correct i regret mentioning Trump ... however i stand by my ignoring his antics point .... this is fact

 

[mekberg]

I love Tasha. Interviewed here for a two-part podcast. But watched 10 seconds of this and couldn't go further. I can't stand the nonsense these people push.

It's almost like listening to Trump, or more like Bill Barr.

Seconded. Cool as a cucumber in the face of FUD slingers.

 

[Remus]

Yeah, Tasha and ARK are delusional forecasting 26m EVs/year by 2023. US EV sales will be flat-to-down this year. Europe is better, but Japan is still pushing FCEVs which won't ramp by 2023 (if ever). China is the 800 lb gorilla, but their 2020 EV mandate is less than current sales rates. Sure, they'll ratchet it up after 2020, but it's not like they're going to turn into Norway. 10m in 2023 would be a great result.

ARK also says EVs will cost less than ICE in a few years. Makes it hard to take anything they say seriously.

Fuel cells, really?!

I thought you are a number guy. Which part of the fuel cell makes financial sense?

Or you are getting comfortable and the mask came off?

 

[Cartegena]

How does this work??

"the underwriters have agreed to purchase the number of shares indicated in the following table.

Goldman Sachs & Co. LLC 1,559,819
Citigroup Global Markets Inc. 226,173
Merrill Lynch, Pierce, Fenner & Smith Incorporated 156,140
Deutsche Bank Securities Inc. 156,140
Morgan Stanley & Co. LLC 772,882
Credit Suisse Securities (USA) LLC 71,755
SG Americas Securities, LLC 71,755
Wells Fargo Securities, LLC 71,755
Total 3,086,419"
​

That's before the "Greenshoe" option so the total was ~3.55 million shares (proportionately allocated) at a price of ~$239/share after discount.

For the notes, the take was:

each underwriter has agreed, severally and not jointly, to purchase from us the aggregate principal amount of notes
Goldman Sachs & Co. LLC. $ 332,000,000
Citigroup Global Markets Inc. 315,200,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 217,600,000
Deutsche Bank Securities Inc. 217,600,000
Morgan Stanley & Co. LLC 217,600,000
Credit Suisse Securities (USA) LLC 100,000,000
SG Americas Securities, LLC 100,000,000
Wells Fargo Securities, LLC 100,000,000
Total $ 1,600,000,000
​

After the option the total was $1.84 billion (proportionately allocated).

Both the shares and the notes are trading significantly below what the underwriters bought them for, even after the discount. Were the underwriters able to off load what they bought to the participants in the Autonomy Investor Day event? Or is the syndicate taking a loss on the latest offerings?

The lenders on the ABL Credit Agreement who hold security interests in most of Tesla's valuable assets include some of the same players (or their affiliates), including:
Goldman Sachs Bank USA
BARCLAYS BANK PLC
CITIBANK, N.A.
Morgan Stanley Bank, N.A.
Morgan Stanley Senior Funding, Inc.
ROYAL BANK OF CANADA
Bank of America, N.A
SOCIETE GENERALE
Wells Fargo Bank, N.A.
DEUTSCHE BANK AG NEW YORK BRANCH, as Administrative Agent, Collateral Agent, Swingline Lender and a Lender

Wheels within wheels.

 

[Pras]

OK. Based on TMC model 3 tracker, bloomberg estimate, a leaked email, and carrier data, I have the below estimates for the Q2 deliveries.

Of course the usual disclaimer about uncertainty and taking it with grain of salt.. blah blah.

My estimates are more bullish on US sales than non-US. This could flip depending on carrier deliveries.

Will be very interesting to see how the TMC tracker trends for next few weeks.

 

[wipster]

OT

Won't be authorized everywhere; see "military". Places like the EPA will use it though.


Won't be authorized. Military has stupidly specific paranoia requirements which would prevent anyone else from using the network if they were using it.



All of the above, but the PRIMARY Starlink target market is people who live in rural areas, or smaller or secondary cities, or suburbs.
No company is willing to spend the money to build fiber to the home in rural areas, and even Google backed off of doing so in secondary cities.
Starlink beats ATT/Comcast/Shaw/Spectrum *coaxial cable* by a huge margin. Fiber's faster, but fiber to the home is only being deployed in the biggest metropolises.

If you look at the world population, this is probably half the world's population who live in the rural areas or secondary cities (without fiber to the home). Also, the metropolises are the only places where Starlink has a problem with bandwidth congestion or line-of-sight; there are zero problems in serving the entire rural and secondary-city market.

I'd say about half the world's population will be clamoring to get Starlink service. I know I would sign up immediately. I doubt they can produce the "pizza boxes" fast enough.

I hope for a great success, especially for the rural areas and places like Africa and South America. The one that concerns me though is the proliferation of things in orbit, which could create even more space junk. Starlink's deployment doesn't worry me as much as their future competition which could but 10 times as many satellites in orbit.

Maybe Waste Management will have a new market in the next few years...

 

[wipster]

Another data point is that Tesla hasn’t opened the order page for Australia yet. So it looks like there is enough demand in the rest of the world ( why, you little.. ) to meet supply. It looks like they don’t want to complicate/disrupt production at this time.

Or India, South America, Africa, the Middle East, Korea, South Pacific, Mars... demand has only just begun to grow!

 

[jerry33]

Fuel cells, really?!

I thought you are a number guy. Which part of the fuel cell makes financial sense?

None, but Toyota has great influence with the Japanese government, and they [Toyota] are pushing fuel cells, so the government is going along. If you ignore physics, it's easy to sell "exhaust is only water", "hydrogen is the most common element in the universe", and "quick fills" to the uninformed.

 

[elasalle]

Kelvin Yang on Twitter

 

[Pras]

Below Elon's guidance of 90k+ for the quarter in even the best case scenario...

no. look at the "Total"

 

[neroden]

How does this work??

"the underwriters have agreed to purchase the number of shares indicated in the following table.

Goldman Sachs & Co. LLC 1,559,819
Citigroup Global Markets Inc. 226,173
Merrill Lynch, Pierce, Fenner & Smith Incorporated 156,140
Deutsche Bank Securities Inc. 156,140
Morgan Stanley & Co. LLC 772,882
Credit Suisse Securities (USA) LLC 71,755
SG Americas Securities, LLC 71,755
Wells Fargo Securities, LLC 71,755
Total 3,086,419"
​

That's before the "Greenshoe" option so the total was ~3.55 million shares (proportionately allocated) at a price of ~$239/share after discount.

For the notes, the take was:

each underwriter has agreed, severally and not jointly, to purchase from us the aggregate principal amount of notes
Goldman Sachs & Co. LLC. $ 332,000,000
Citigroup Global Markets Inc. 315,200,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 217,600,000
Deutsche Bank Securities Inc. 217,600,000
Morgan Stanley & Co. LLC 217,600,000
Credit Suisse Securities (USA) LLC 100,000,000
SG Americas Securities, LLC 100,000,000
Wells Fargo Securities, LLC 100,000,000
Total $ 1,600,000,000
​

After the option the total was $1.84 billion (proportionately allocated).

Both the shares and the notes are trading significantly below what the underwriters bought them for, even after the discount. Were the underwriters able to off load what they bought

The underwriters didn't have to expand the offering or take the "greenshoe" options. What happened is that the underwriters got actual, real purchase demand for ALL the shares, which is why they expanded the offering and took all the options; they were left with no position themselves.

They then proceeded, at least in the case of Morgan Stanley, to attempt to hurt the clients who had bought the shares from them by driving the stock price down. Both MS and GS have been documented to do this sort of thing in the past to other stocks. They consider their clients to be marks and targets, not customers. (Which is why I don't work with those banks, and I wish Tesla would work with reputable banks instead.)

I suspect the purchasers mostly are sitting on their shares, quietly, long-term. If anything, the offering means that those purchasers aren't buying shares on the open market now, when they otherwise would have been -- if a customer bought half a million shares from GS during the offering, they won't be buying that half a million shares on the open market now.

 

[elasalle]

OK. Based on TMC model 3 tracker, bloomberg estimate, a leaked email, and carrier data, I have the below estimates for the Q2 deliveries.

Of course the usual disclaimer about uncertainty and taking it with grain of salt.. blah blah.

My estimates are more bullish on US sales than non-US. This could flip depending on carrier deliveries.

View attachment 411751

Will be very interesting to see how the TMC tracker trends for next few weeks.

Max 6K for Canada .. with all the incentives?