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

[Creekstalker]

What do you make of the "break even" part of the email? Aren't the FUDsters going to have a party with that one and say, "see even Elon says Tesla at best breaks even on their sales."

I think the market was expecting a loss. Breaking even would be a win in the eyes of most, since production and deliveries should generally continue to escalate.

Although I'm certain the shorts will react like you predict.

 

[Artful Dodger]

I think that track mode has little to nothing to due with the pack design.

Not for vehicles dynamics, but for superior pack cooling with the Model 3 design.

 

[DaveT]

New email from Elon, via electrek.

https://electrek.co/2019/05/29/tesl...tch-up-record-quarter-elon-musk-leaked-email/

“While our demand is strong, we have a lot of vehicle deliveries to catch up to in order to have a successful quarter.”

“We also need to address the total cost of getting a car from our factory to the customer. Last quarter, there were many expedites fees and routing inefficiencies that led to higher than expected delivery costs. This makes it much harder for to* break even.”


“Per my earlier email, if we execute well, Q2 will be an all-time record for Tesla vehicle deliveries and an awesome victory!!”

Elon sets again a short-term narrative for Tesla. Ie., "If this quarter goes well, we will win."

The short-term narrative is killing Tesla.

Because essentially Tesla is a long-term story.

More focus is needed on spreading/sharing their long-term narrative.

 

[MP3Mike]

Better cooling

Is the cooling in the 3 pack really better than the cooling in the 100kWh S&X pack?

Track mode is mainly made possible by the non-induction rear motor and the Tesla designed and programmed VDC. Neither of which exist in the Model S or X. (Though they may be moving toward the Tesla VDC with the new adaptive suspension.)

The main problem with high-speed/track use in the S&X is the large induction rear motor. It overheats very quickly, and the heat is next to impossible to remove from the rotor. It isn't the battery pack.

 

[RobStark]

One of my biggest near-term concerns now is the Chinese rare Earth issue - I have seen numerous articles reporting that the language in the Chinese press is threatening to cut off supply to the US as a next step in the trade war. This could be very bad for Tesla, especially as they have just switched to permanent magnet motors not only in the 3, but now also the front drive units of the S and X.

1)Tesla doesn't need to buy magnets made in the USA.

2) There is a mine along the CA and NV border with massive reserves of rare earth metals needed for permanent magnets but shut down due to China dumping rare earth metals onto global markets. I am sure this can be remedied in a year or two if need be.

 

[Artful Dodger]

Hey Artful Dodger - I appreciate your contributions to the forum. However, this is not bullshit.

Let me know if you would like to look me up on CPA verify. I can send shoot you a copy of my drivers license to confirm my identify, as well as my CPA license and license number. Or if you prefer to talk to me on the phone and quiz me with a few accounting questions .

Trust me when i tell you though, the CPA exam (and required subsequent audit experience) are not difficult to pass. I know quite a few other CPAs that i would not consider "smart".

Your story lacks credibility. I think I'll trust my nose instead.

 

[EVNow]

Elon does the same thing with profit. So not sure what not giving guidance on delivery numbers will do.

I think he shouldn't be on the quarterly conference calls. And he shouldn't set guidance in the investor shareholder letter either. Leave it to others, please.

Yes, the financial guidance should come from the CFO - like it did this time. Musk should just use that. If Musk is not on a ER call, can you imagine all the FUD that would result ?

Setting some enterprise-wide targets and motivating employees to meet or beat them is part of the CEO job. So, no escaping that.

 

[Creekstalker]

Big fight for $190 here at the close

 

[Artful Dodger]

Is the cooling in the 3 pack really better than the cooling in the 100kWh S&X pack?

Yes. Forum contributor @Ingineer posted these teardowns his Youtube channel:

 

[Huskyf]

Elon sets again a short-term narrative for Tesla. Ie., "If this quarter goes well, we will win."

The short-term narrative is killing Tesla.

Because essentially Tesla is a long-term story.

More focus is needed on spreading/sharing their long-term narrative.

Tanks to Electrek I promise I kill is blog soon because every time they publish everytime $TSLA go down !! TANKS TANKS FRED

 

[KSilver2000]

Willing to wager we get either a Moody’s or Goldman (top shelf financial all stars) to say or come out with something negative between now and end of week on the heels of China news. Any takers??

You can bet that the SP will drop if Tesla China model 3 pricing comes in too low.

 

[Boomer19]

Elon sets again a short-term narrative for Tesla. Ie., "If this quarter goes well, we will win."

The short-term narrative is killing Tesla.

Because essentially Tesla is a long-term story.

More focus is needed on spreading/sharing their long-term narrative.

from the email, it sounds like he’s just trying to incentivize the team to drive hard this next month and beat their previous delivery record.

i mean, it’s grueling. your goal can’t always be, let’s win the war! it sometimes has to be, we must win this battle.

although i generally agree that they’ve got their work cut out for them, as you have mentioned...
the stock, em, and the story are pariah (according to main street). its tough to overcome, for sure.


...one thing, about your earlier comment where he shouldn’t be allowed on qtrly conf calls.

would any of us be saying this if the stock was at 315 right now?

 

[Esme Es Mejor]

Honestly, I'm not sure why that'd make it go up. Sure, demand seems fine(though how investors could have been so clueless that it's been fine for a while now is beyond me), but the email makes it sound like they're back to "the wave", and all the inefficiencies that go with it, again.

That isn’t how I read the email at all.

April numbers show that deliveries worldwide were 10-12k ahead of what they were in January. Also ahead of Q3 & Q4 which, due to North America only deliveries of Model 3, were much less backloaded quarters than Q1.

Certainly, Q2 is still somewhat backloaded, as Tesla has always been, but it’s moving in the right direction. While the email mentions the need to catch up on deliveries, there is no call for “all hands on deck” like there was during Q1. The focus is on catching up on deliveries through greater efficiency rather than the chaos and “expedites fees” of Q1.

Long story short: the wave still exists, but is getting smaller.

 

[EVNow]

Today's whole trading scenario has been a game of whack the mole as shorts scurry to keep TSLA out of the green. Now the game is whack the mole any time he pokes his head above 190. It's ok shorts, the SEC isn't minding the store, you can get away with it.

Edit: A close above 190 would be awesome because it would mean the shortie-machine is failing to control the stock price on a down macro day.

189.86 (+0.61%) vs Nasdaq down 0.79%.

Close enough to 190

 

[Tslynk67]

Quarterly guidance should always be conservative, and they should consistently beat it.

This is how you manage investor confidence in your company.

Ugh, this is basic stuff.

Couldn't agree more. When Elon (or Zack) now says 90-100k for Q2, there's no market reaction at all, just sets up a fall when it's 89k or 91k, whatever.

If they stated 80k, then turn-in 90k, the SP would rise, I'm certain of it.

Under-promise, over-deliver.

 

[bdy0627]

Even though it may not seem like much, it was good to see TSLA with a little mojo today.

 

[Singuy]

What do you make of the "break even" part of the email? Aren't the FUDsters going to have a party with that one and say, "see even Elon says Tesla at best breaks even on their sales."

Not sure what he means by break even here.

Does he mean breaking even on US margins(a lower ASP mix) vs Oversea margins (higher ASP mix)? This is what I gathered and not that deliveries per car is SO expensive that it eats away all 25+% margins on higher ASP mixes. That will just be ridiculous and the most expensive shipment ever.

 

[Todd Burch]

Elon sets again a short-term narrative for Tesla. Ie., "If this quarter goes well, we will win."

The short-term narrative is killing Tesla.

Because essentially Tesla is a long-term story.

More focus is needed on spreading/sharing their long-term narrative.

The letter is supposed to be to employees--so he is focused on motivating them for the quarter, which makes sense. He doesn't need to address long-term goals with employees.

 

[M3Rider]

At 35GWh total production, they can make about 500k Model 3s, assuming an average of 65 kWh. That is 10k/wk.

If Tesla is going to find different suppliers for the battery in China, they will have some cells left over for use in power wall.

ps : Once Model Y comes on board, its a different issue. I don't know where Tesla plans to get cells for Model Y.

pps :

They need a lot of cells. With 35GWh, they can make
- 7k/wk of 3 + Power Wall
- 5k/wk of 3+ 5k/wk of Y
- etc

Basically 35GWh covers current needs - but not future needs from Y, Semi (let alone Pickup).

So the question is - what is the priority for getting S/X on to 2170. Because diverting 2170 cells to S/X has lots of opportunity cost.​

- in 4q 2018 it was stated that Tesla plans to ramp up Fremont m3 capacity to 7k/week by EOY 2019. This was the plan. Now, they are trying to reach 7k at the end of Q2, which is ahead of schedule.
Given the leaked email, cheerleading the employees that we can do 1k/day if we try really hard, it does seem like this might be the Fremont production limit for some observable future...

- it was said in Q1 CC that 2019 will be a year of TE, because they finally figured out that there won't be enough Panasonic cells, so they went and found some extra supply from different suppliers - Sumsung etc. TE cells also don't need to be of as high a quality as automotive cells...

Therefore, it seems that if they go 24->35Gwh in June and if they already have other cells lined up for TE, then this whole extra 11Gwh supply may be above their capacity to use it...for some short amount of time, at least until GF3 starts producing or until Y next year.

Not really sure what's going to happen short term with these cells. Maybe they just catch up on TE backlog.

 

[bdy0627]

There have been strong buyers when TSLA has dropped to $185/186.