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

[vigleik]

It seems many people are expecting a loss this quarter which I do not understand. They made a profit in Q3 and Q4 with Elon promising profits into the future. I understand the loss in Q1 as the international deliveries had more hiccups than expected and they had a $920M bond repayment. But by all indicators deliveries should at least equal Q3 and hopefully be better than Q4. Why are many so worried do we think profit is that dependent on product mix?

1. Why bring up the Q1 bond payment when discussing profit/loss? (You're far from the first to do so, although I still don't understand why anyone would think it's relevant. Are you perhaps confusing profit and cashflow?)
2. I believe they guided to a slight loss in Q2. (I could be wrong on this, and I'm sure someone will correct me if I'm wrong. )
3. Last Q3 and Q4 Tesla had healthy sales of S and X, we're expecting low sales of S and X again this quarter for reasons that have been discussed many times here.
4. Price cuts.

You should hear over to the near-future quarterly financial projections thread and study some of the estimates that have been provided.

Edit: You have to read a few pages back in that thread. The last several pages are devoted to discussing the number of cars shipped to Europe/China.

 

[Foghat]

You have to give him credit. It’s hard to blow smoke uo your own ass.

I think Gerber is very wrong on his take on social media and current corporate media operations.

He really seemed to advocated for more censorship which is the complete opposite way to combat “fake news” and the vested interests that are attacking Tesla thru media.

Curated content on social media platforms and the public internet is censorship that prevents best ideas/competition to status quo from reaching he marketplace efficiently. It is a monopolistic practice that prevents people from obtaining valuable information from any source to make informed decisions and to become knowledged on investment opportunities.

When information access is decided by the competition, I.e. ICE manufactures and fossil fuel conglomerates, its severely restricts natural competitive forces within the marketplace to occur.

It’s not about isis propaganda, Ross. It’s not about eliminating “extremism.” They censor content because it’s good for their business and creates a barrier to entry for innovative upstarts that threaten the fiefdom. These monopolistic tendencies *are* the actual self inflicting downfall we are facing as you said in the podcast.

We must “curate” through through allowing great ideas to win the day, not by using destructive protective propaganda walls to snuff them out. We must eliminate the “extremism” of monopolistic tendencies that destroy the natural optimization of allowing “neutral ground” to flourish for the best ideas to reach all of us.

The stagnant tyrannical protective media blockade is how the most sinister dictatorships were allowed to fester and grow throughout history. And it is no different with those who seek to stop Tesla through the same tactics.

With greater neutral ground in media, Tesla will further be able to accelerate the transition to sustainable consumption and production. We must not advocate or fall for the tropes of “protecting against the bad guys” when it comes to media access. We all found (and helped make a reality as customers and investors) Tesla and Elon through access to his ideas. That information access to the next Elon and Tesla is gravely threatened with “curated” algorithms that seek to toss them in the book burning pit of our future.

 

[sparcs]

It seems many people are expecting a loss this quarter which I do not understand. They made a profit in Q3 and Q4 with Elon promising profits into the future. I understand the loss in Q1 as the international deliveries had more hiccups than expected and they had a $920M bond repayment. But by all indicators deliveries should at least equal Q3 and hopefully be better than Q4. Why are many so worried do we think profit is that dependent on product mix?

They have dropped prices. Standard range Model 3 may not have the same margins and its' impact is much higher in Q2. They are still unwinding the Model 3 wave. S/X is still in a ramp up phase for raven. There seem to be some delivery delays for S/X raven at some point during this quarter.

We don't know how all that factors into Q2. Or at least I haven't seen a great explanation yet to be that optimistic.

 

[dc_h]

It seems many people are expecting a loss this quarter which I do not understand. They made a profit in Q3 and Q4 with Elon promising profits into the future. I understand the loss in Q1 as the international deliveries had more hiccups than expected and they had a $920M bond repayment. But by all indicators deliveries should at least equal Q3 and hopefully be better than Q4. Why are many so worried do we think profit is that dependent on product mix?

They guided for free cash flow and no profit ion the Q1 earnings call. If deliveries are above low end of guidance it makes a profit more likely. They’ve driven to pricing and costs so levers of costs and cash flow are pretty complex to predict.
Profits would be great, but long term they should be selling the growth story, like Amazon has done. I prefer a marginally profitable Tesla growing 60% plus the next 5 and 10 years, then a few quarters of profit followed by bigger automakers slowly grinding Tesla down. As soon as GF3 is building car 1, I want GF4 land being cleared in western Poland. I’d prefer free cash flow in China to fund rapid in country growth and see GF3 build out complete in 2021 making a million plus cars a year and preparation for another China GF on its heels. Scaling up past 2 million cars in the next 3-4 years gets them past the scale of all but VW group, FCA, Toyota and GM. VW has an EV plan, but no scale before 2021 is likely and Toyota suddenly found a magic lantern and have been granted solid state battery technology (1st wish) and the means of production (2nd wish)and the software expertise to make it all work(3rd wish). No one else outside of China has a viable path to scale EV production before 2023 at this point. No one will be able to build 5 million EVs by 2023 except Tesla.
Tesla has several advantages over legacy: battery chemistry IP and people. Motor and transmission engineering does not transfer. Battery production: Tesla and Panasonic are finally getting the GF1 system running on all cylinders (haha). Now they can repeat this, but with next gen Maxwell solid state tech. Tesla also has the software holding all the stuff together: Battery pack management; AP and FSD, OTA to optimize the driving experience such as improving breaking, range and handling; lithium and mineral acquisition where Elon and team acquired long term contracts before the rest of the industry thought EV’s would scale before 2030; risk acceptance is higher then industry average and allows for faster innovation cycles; material sciences team is a shared Spacex tesla cost center, these guys are crazy engineer physics people making Holbach tech and other stuff no one gets; and lastly no legacy systems support or hold them back.
Tesla’s cost of growth will be much lower than market protection moves by legacy auto. The financial sum of these advantages is that legacy auto has to spend more to protect market share then Tesla spends to acquire market share and that is not generally understood by Wall Street yet. The technical sum of these advantages is better and more desirable cars.
Bottom line, FU legacy. All you have is dirty tricks media manipulation to try to slow the tide and get an extra year or two to respond or just squeeze every last drop out their stranded capital base.

 

[iFinance]

Hi folks. I just released a video where I talk about Tesla, stock market macroeconomics, and a few other things.

The Tesla portion of the video starts at the 7:30 mark.

I really hope that this week's bounce for the stock holds. But we'll see.

 

[jbcarioca]

Re Leaf/Prius vs M3...
There's maybe something that US people don't really get. Especially in Europe, sedans are viewed as luxury cars.
Now, there is a *huge* market for luxury cars, and millions of people like to signal their status with a nice looking car...
but other millions are not used to it. I know it's counterintuitive, but for me the M3 is a bit *too much*.
I'd love to have one simply because *it's the best EV car out there*: best range, best battery, best security, best tecnology, OTA, upgradable, etc.
I'm a cheap guy, and I don't care about 0-60 in 3 seconds or amazing interiors. I just want a good car that doesn't pollute for a price I can afford. Tesla has the best product (SR+), at the moment.
For me it's all about price, the Model 3 could be uglier and I wouldn't care. I could even like it more if it was less "look-at-me!!!1!" ;-)

PS: full disclosure: I drive and love one of the ugliest car ever produced.

I disagree with your labelling of the Multipla because I have always considered it quirky, immensely practical and convenient which combine to make it beautiful in my eyes. Besides it was in one of those that I first heard Eros Ramazatti while a beautiful woman was at my side. OK, OT, but...

For much of Europe I think the Model 3 has similar advantages. Interior space is huge compared to exterior dimensions, it drives better than it looks, is easier to negotiate small spaces than it seems to be and is more economical than. it seems to be. That is true of both.

Unlike the Multipla the Model 3 appearance is less radical so may be easier to accept. Unlike the Multipla the Model 3 was designed for ease of manufacturing. On the other hand, the Multipla shared nearly all mechanical pieces with larger volume Bravo/Brava models, while teh Model 3 serves as the technological base for Model Y, with Semi and perhaps Pickup and Roadsters using some components.

 

[EVNow]

It seems many people are expecting a loss this quarter which I do not understand. They made a profit in Q3 and Q4 with Elon promising profits into the future. I understand the loss in Q1 as the international deliveries had more hiccups than expected and they had a $920M bond repayment. But by all indicators deliveries should at least equal Q3 and hopefully be better than Q4. Why are many so worried do we think profit is that dependent on product mix?

In Q3/Q4 they had better margin - 25%. And higher ASP. In Q1 they still had high ASP, but lower margins, 20%, along with 50% less deliveries caused big losses. Nothing to do with bond repayment.

If they keep the 20% margin, with expected lower ASP (because of lower prices and higher mix of lower trim models), they won't make GAAP profit even if they deliver higher end of their guidance (100k). But they can break even on non-GAAP.

 

[goinfraftw]

Would it make sense to have a climate change update forum topic on the Investor forum? I'm finding a lot of these on twitter recently:

Rick Thoman on Twitter
Bill McKibben on Twitter

...and I think it'd be healthy to track climate change events and worldwide disaster recovery efforts alongside prioritization opportunities in the "market" for Tesla, if possible.

 

[RobStark]

Speaking of Prius, etc. hyundai's new all electric car just had pricing released. $30,000.

2019 Ioniq Electric | Hyundai USA


.... with a range of 124 miles. And I assume in real life it's going to be under 100 miles. I can't imagine trying to travel in this thing.

For only 14% more money, you could get double the range with the SR.

Edit: Looks like Hyundai still gets the 7.5k tax credit, so they're working with an advantage on Tesla with pricing. I really don't like that companies like volvo have sub companies like Polestar. VW has Porsche, Lambo, Bentley, etc. And each of the sub companies gets their own tax credit to burn independently.

I think each company that has a separate Tax ID get 200k credits each.

Not each brand. Don't know how advantageous it is to have to file separate tax returns.

 

[RobStark]

Aaaaand on the other side of the equation, their marketing team should know incredibly precise, detailed demographics on who purchases each specific model, option, how profitable each item is, and exactly where and how to cheaply target more of the most desirable customers without throwing million$ out the window on the kind of "advertising" the old folks on this forum keep blabbering about.

With that customer data Tesla can preach to choir.

It doesn't have microdata on the pagans.

Pagans are likely much harder to reach using "free advertising" the toddlers keep blabbering about. The choir doesn't really need preaching to.

 

[EinSV]

Would it make sense to have a climate change update forum topic on the Investor forum? I'm finding a lot of these on twitter recently:

Rick Thoman on Twitter
Bill McKibben on Twitter

...and I think it'd be healthy to track climate change events and worldwide disaster recovery efforts alongside prioritization opportunities in the "market" for Tesla, if possible.

It might be worth a shot.

Currently every climate change thread on TMC is overrun with climate science denial trolls which IMO makes them fairly useless but maybe the investor thread moderators can keep it from getting out of hand.

Mod: gee, thanks. If we do create such a thing (any one of you can do it), I assure you the moderators will be absolutely draconian in enforcing only postings related to finance/economy. --ggr

 

[capster]

Would it make sense to have a climate change update forum topic on the Investor forum? I'm finding a lot of these on twitter recently:

Rick Thoman on Twitter
Bill McKibben on Twitter

...and I think it'd be healthy to track climate change events and worldwide disaster recovery efforts alongside prioritization opportunities in the "market" for Tesla, if possible.

I keep an eye on the sea ice extent here: Arctic Sea Ice News and Analysis | Sea ice data updated daily with one-day lag

 

[RobStark]

The next largest car market is the Chinese middle class, whose size is greater than the entire US population. US automakers should really be concerned about what overseas regulations are, including transition to EV sales. This recent walking back on mileage standards will basically ensure US automakers will not be competitive in the near future of the global auto marketplace...

Allowing Detroit to sell more gas guzzlers in the USA without penalty doesn't force them to not make EVs.

GM is being forced to make EVs for the Chinese market.

Ford and FCA must either sell EVs in Europe or pool with some automaker that is below their grams of C02/km allotment.

 

[RFernatt]

Toyota exec probably sounds like a Nokia/Blackberry exec in early 2008...

Prius falls on hard times | Business | Journal Gazette

"But sales peaked in the U.S. in 2012, and its descent roughly follows the rise of Tesla Inc.'s sleek fully electric cars including the more mass-market Model 3 sedan. “It's a competitive business,” said Bob Carter, Toyota Motor Corp.'s executive vice president for U.S. sales. “There are some people who trade in their Prius for a Model 3 – I'm well aware of that. But it's still a very small part of the market.”

 

[Mike Smith]

 

[hobbes]

Nice visualization of the Model 3 "demand problem" (data from goodcarBadcar, link at bottom right of plot):
U.S. Sales of Premium Midsize Sedans

One can see nicely how sales rate dropped at year end (likely due to tax incentive being cut in half) but started to accelerate again afterwards. It is always a matter of perspective - there was a drop with respect to the stellar performance at the end of 2018, but compared to competitiors no way the term "demand problem" makes sense.

 

[ghsnick!]

I'm pumped that I finally got in last week and my average share price is $185. TSLA is the future...I know they may be having some difficulties stock wise...hell, AAPL almost went bankrupt. I'm holding onto this long term and hoping for the best.

I also invested in LAC (Lithium Americas) as I hope they're a player in providing Tesla with Lithium for their batteries in 2021/2022.

 

[neroden]

So out of curiosity I checked again this eventing, and those "new pre-Raven Model S inventory" numbers are down to 139 Europe, 41 Asia-Pacific, 56 Canada, and 316 US.

Now 123, 41 (mostly Dubai), 51, and 258. The 7 "post-Raven" Model S inventory in the US seem to be oddballs and may be hard to move. The Dubai inventory probably ought to be physically relocated to Europe. I'm guessing by early next week the rest of the pre-Raven inventory will be gone. (The Dubai inventory isn't moving.)

I don't think tracking inventory through EV-CPO is meaningful for Model 3, given the way Tesla works. I also don't think it's meaningful for the current model of S and X; but I think it's meaningful for seeing whether they're able to clear out the pre-refresh models. They're going fast.

 

[JRP3]

It might be worth a shot.

Currently every climate change thread on TMC is overrun with climate science denial trolls which IMO makes them fairly useless but maybe the investor thread moderators can keep it from getting out of hand.

Not at all, sometimes the trolls show up but they get spanked every time and scurry back to their holes.
Climate Change / Global Warming Discussion

 

[urarthur]

I haven't seen many estimates for Q2 deliveries above 100k, but the way I see it we're going to hit ~ 104k.

- NA 33k for April/May and let's assume 33k June. That's 66k.
- European sales figures for March/April is at least 9k already. If June is going to be anything like March (except for Norway, probably less than 3k), my estimates are 23k for Q2.
- China probably >15k.

NA 66 + Europe 23 + China 15 = 104k.

I think it's plausible given the production estimates:

- S/X = 25k / quarter
- Model 3 = 800/day on average x 90 days ~ 72k. there are more working days in Q2!
Estimated total production for Q2 = 97k

Vehicles in transit in Q1: 10.600

Production + transit Q1 = 25k + 72k + 11k = 108k
deduct vehicles in transit for Q2 of ~ 4k = 108k - 4k = 104k

So deliveries should be above and beyond Q4, if and it's a big if, is that June = March delivers for Europe/China and NA = 33k.

I can only see demand taking of from here, given that Tesla is yet to open sales in 2/3 of European countries, Latin America and rest of the world.

European Sales Q2'19 Estimate