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

[kengchang]

this all happened today?

i remember the increase to 40% happened weeks ago at IB, members reported

i haven’t seen any reports of other brokers increase to 50% yet besides these two posts about etrade

IB was 5/29 to 6/7 phased in 1% a day from 30% to 40%.

 

[kengchang]

Financially? The SAME capex / depreciation and the SAME labor hours costs ends up producing 7000/week rather than the 10,000/week it was supposed to. That's obviously a failure. It substantially worsens any financial models.

If you need to use $XXX million in capex to produce 7000/year, you are in a worse financial position than if you need to use $XXX million in capex to produce 10000/year.

If you need to use $YYY million in labor hourly costs to produce 7000/year, you are in a worse financial position than if you need to use $YYY million in labor hourly costs to produce 10000/year.

I thought this was too obvious to mention. This is an investor forum, I assumed people understood that.

Pretty sure it was 2 body lines at 5K each vs 1 body line at 7K right now

 

[livinginspace]

this all happened today?

i remember the increase to 40% happened weeks ago at IB, members reported

i haven’t seen any reports of other brokers increase to 50% yet besides these two posts about etrade

Yes, happened just today, within the last hour.

Margin reduction "because of concentrated TSLA position" happened to me around 18 Oct 2018. Shortly after, SP started to climb. Luckily, I was only slightly in margin, sold my other shares, a small number of TSLA and transferred some money to the account. Avoided to be on margin since.
Could they seek shares for some of their clients with short position? Timing was / is suspicious. I also remember that I saw similar posts when TSLA hit 180 end of May. This helped me in my decision to buy more back then...

I could throw a bit more and manage the margin, but would prefer to just settle this an easier way.

 

[PaulusdB]

Has Elon returned to the states? Does he want to be back when the announcement is made? Inquiring minds want to know.

He returned last friday, on his birthday. Flight details here. Interesting way to make your birthday last longer...

 

[Stars aligned]

While waiting for P&D numbers release .... SEC filings for last years showed July 2, 2018, July 3, 2017, July 3, 2017 (a Sunday) and July 2, 2015.

 

[neroden]

OT

Again we had a bear attack and TMC went down at that time or was that just for me ?

Cloudflare went down, affected half the Internet.

 

[CorneliusXX]

So it could be a private company?

I'd expect him to do the same thing as the boring company. My understanding is that their new TBMs will use Tesla motors in them. I believe Tesla are building the pods too. Some SpaceX engineers also helped start boring co.

My guess is that Elon will never take another company public again- he clearly hates the hassle. The only caveat to that is if he needs the financial firepower Tesla provides.

 

[Cherry Wine]

While waiting for P&D numbers release .... SEC filings for last years showed July 2, 2018, July 3, 2017, July 3, 2017 (a Sunday) and July 2, 2015.

Happen to catch if those were pre- or post-market?

 

[wipster]

Not entirely true. Market makers, selling short, can and do.

Picky, picky, picky... go short some Nissan Leafs.

 

[Doggydogworld]

Question about 2019 full year guidance of 360,000 to 400,000. And please don't just click the disagree button because you don't like the question.

Back when Elon tweeted that Tesla would sell 500,000 cars this year, prompting the SEC mess, I recall reading on this forum that this was NOT material information since Tesla had actually guided for 500,000 on the conference - everyone was saying that the 360,000-400,000 was Model 3 only, and then the S/X was 100k. Someone even challenged this and a poster provided a link to the transcript which proved this was indeed true.

But now, it seems like it's flipped BACK to full year guidance for all cars being 360,000 to 400,000. Is this correct or is my memory playing tricks on me?

Company guidance for 360-400k deliveries is and always was for all vehicles. It was never Model 3 only.

Elon Musk gave completely different numbers for 2019 production (not deliveries). At one point he tweeted 500k cars. SEC fun and games ensued. He later doubled down, saying they'd produce 350-500k Model 3s and 70-100k S/X in 2019. The investing world disregarded these numbers as "Elon being Elon", just as they disregarded his nutty claim that they'd make 100-200k Model 3s in 2H17 (they actually made 2.5k).

Tesla reiterated 360-400k deliveries in the Q1 earnings letter and added some weasel words which said production and deliveries can differ. This was a feeble attempt to pretend company guidance of 360-400k deliveries was not wildly inconsistent with Musk's claims of 420-600k production (sorry, but it is).

Musk is an extreme optimist. He sometimes shares his optimism using numbers that make no sense and which differ from official company guidance. Instead of tying yourself in knots trying to rationalize his crazy statements (e.g. "he really meant run rate"), just accept it as Elon being Elon and move on.

 

[mongo]

Financially? The SAME capex / depreciation and the SAME labor hours costs ends up producing 7000/week rather than the 10,000/week it was supposed to. That's obviously a failure. It substantially worsens any financial models.

You are assuming they decided to not make the equipment capable of 10k/per week when they ordered it (technically feasibility). You are also assuming equipment that can do 10k costs the same as equipment that can do 7k. 10k would not be the SAME as 7k unless it was all a fixed number of robots.

I thought this was too obvious to mention. This is an investor forum, I assumed people understood that.

It is not obvious that higher capacity equipment has the same capEx and operating labor costs as lower capacity machines, which is what you are supposing:

If you need to use $XXX million in capex to produce 7000/week, you are in a worse financial position than if you need to use $XXX million in capex to produce 10000/week.

If you need to use $YYY million in labor hourly costs to produce 7000/week, you are in a worse financial position than if you need to use $YYY million in labor hourly costs to produce 10000/week.

If this was possible, they would already be doing it. They were always going to add machinery/ people.

The goal was to hit 10000/week with essentially the same equipment they actually installed, remember.

No, I remember they were going to start with one set of equipment, see what its rate was, then add equipmemt to hit 10k. If the original sections that were planned to not be paralleled could not hit 10k, that throws out the whole plan.

Q3 2017 update letter

With respect to the timing for producing 10,000 units per week, it has always been our intention to implement that capacity addition after we have achieved a 5,000 per week run rate. That will enable us to make the next generation of automation even better while making our capex spend significantly more efficient.

 

[HG Wells]

What is the inference to be had from spurred sales due to incentives, I wonder?

a) People buy more because they feel like they're getting a good deal, or
b) People buy more because the product is very desirable, but just a little out of reach

Mix of column a / column b?

Your missing the most important one.
c) People buy more because they feel they are getting a better deal than any one else.

 

[Mike Smith]

I have dry powder at this point. Debating on holding off on buying the shares until Friday in case there's a bear attack. If the number surprise though I would miss out on the 220-230 range.....decisions.....decisions

I'm certainly expecting a bear attack, especially if they announce today or tomorrow morning - July 3rd is a half day and shorts can do maximum damage on shortened days. Bears attack all news to make it seem bad, and there's a ton of extra reasons for them to attack these delivery numbers:

- Can make it seem like a 'sell the news' event
- Can claim Tesla pulled all punches to make deliveries in Q2
- Can claim high sales are due to price cuts and pull forward from Q3 due to tax credit expiry
- Can claim margins will be terrible due to lower S/X sales and price cuts
- Media will focus on recent executive departures

 

[ggies07]

No numbers today please, I'm going to a Grateful Dead show tonight and have to "find myself" again. Tomorrow works as I'm all caught up, so the day is yours numbers!!

 

[Stars aligned]

Happen to catch if those were pre- or post-market?

Nope, SEC filings didn't show

 

[SGordB]

Financially? The SAME capex / depreciation and the SAME labor hours costs ends up producing 7000/week rather than the 10,000/week it was supposed to. That's obviously a failure. It substantially worsens any financial models.

If you need to use $XXX million in capex to produce 7000/week, you are in a worse financial position than if you need to use $XXX million in capex to produce 10000/week.

If you need to use $YYY million in labor hourly costs to produce 7000/week, you are in a worse financial position than if you need to use $YYY million in labor hourly costs to produce 10000/week.

I thought this was too obvious to mention. This is an investor forum, I assumed people understood that.

The goal was to hit 10000/week with essentially the same equipment they actually installed, remember.

But doesn't the "default plan" to produce the Model Y at Fremont take up the slack?

 

[StarFoxisDown!]

I'm certainly expecting a bear attack, especially if they announce today or tomorrow morning - July 3rd is a half day and shorts can do maximum damage on shortened days. Bears attack all news to make it seem bad, and there's a ton of extra reasons for them to attack these delivery numbers:

- Can make it seem like a 'sell the news' event
- Can claim Tesla pulled all punches to make deliveries in Q2
- Can claim high sales are due to price cuts and pull forward from Q3 due to tax credit expiry
- Can claim margins will be terrible due to lower S/X sales and price cuts
- Media will focus on recent executive departures

Tesla usually doesn't give guidance for future production/deliveries when they do their quarterly production/delivery numbers(I think the one exception was they gave guidance for Q3 2018 numbers when they announced Q2 numbers....I could be wrong though).

But if Tesla announced something like 93-94k deliveries and then said something like 110-120 deliveries for Q3, I could see it trouncing any attempt for a bear attack. I always wish/hope that they can get to a point in their production of both the cars and the batteries to give production/delivery numbers at the beginning of the new quarter when the previous quarters numbers are announced. Would help the narrative I feel. We all know that when they announce numbers tomorrow or Friday, that bears will shout to the heavens that this is the peak and that it's all downhill from here.

 

[EVNow]

While waiting for P&D numbers release .... SEC filings for last years showed July 2, 2018, July 3, 2017, July 3, 2017 (a Sunday) and July 2, 2015.

I'd expect P&D either after hours today or before market tomorrow morning.

 

[wipster]

I have this weird feeling that P&D will be announced after closing today...

(I have a LOT of weird feelings though so take it with a grinder of salt)

 

[CorneliusXX]

Is that the new euphemism for fossil fuels? "All-natural organic natural resources, both imported and locally sourced". Exxon rebranded as Whole Foods, haha.

No, it's to define the difference between that and supernatural resources.