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

[mrmage]

Elon does have a timing problem. Has he been early on ANYTHING? He is always late but almost always get's there. That's a huge difference.

Getting there is only half the story.

EM is like an artist from whom you commissioned a pencil sketch, ignored your messages for a year about it being late, then finally delivers a freaking mural sized masterpiece. Like M3 or landing rockets.

But as far as literally early, GF3 and building in China come to mind. And it's going to be a freaking masterpiece.

 

[uselesslogin]

Oh hey, I just found one from the future. Sorry, OT, but who are we kidding anymore no one cares about the stock price (until we are over $300 again?)

 

[kbM3]

Thanks for the glass half empty take. For the glass half full take: there’s a high chance that most of the previously paid-for FSD options will be carried into P&L in the next few quarters as the final NOA features are turned on. I don’t know what milestones the auditor is using but based upon the current sales page for FSD, it’s reasonable to assume they are: Advanced Summon, traffic light and stop sign recognition, and automatic driving on city streets. The company is guiding Q4 this year for these milestones, let’s assume it’s delayed by a quarter or two because, well why not.

As per Reflexfunds analysis, for options already sold, the deferred revenue released to P&L could be in the region of $400m. This does not include FSD options sold between now and the recognition date. Pick a number but based upon the ramping deliveries profile, you’d expect perhaps another $200m odd by the end of the year, based upon the existing take rate?

As guided by the company, there’s a further boost to future P&L and CASHFLOW when the improved feature suite comes online, in the form of a one off upgrade from existing fleet owners and every future vehicle sale hence forth at a higher FSD take-up rate than currently (at almost certainly a higher price too).

Even if the features are switched on in Q4 with all deferred revenue to date recognised in that quarter, we should not be surprised to see FSD contributing >$1bn to operating cashflow and net profit in 2020, with a real shot at completely covering the company wide annual R&D budget of c. $1.2bn. Do your own sums for 2021 when Model Y and Shanghai are likely to have ramped.

Even if we’re a decade away from getting drunk and falling asleep in a steering wheel free car, and even if VW and JLR and everyone else suddenly brings out compelling EVs at the same scale, cost and margins as Tesla can right now... it should be clear that the FSD programme represents a potentially insurmountable moat in allowing Tesla to undercut its competition for the foreseeable future.

One thing to consider is that earlier buyers were promised in much stronger language, what they would receive in FSD. I don’t recall exactly, but I think it was basically fall asleep capability. Tesla has since watered down the promise enough that feature complete should be enough to recognize a large part of the deferred revenue. I actually thought about this when I traded in my 2018 Model 3 for a 2019. As in what if HW4 is truly required, then they would be obligated to install it in 2018 Teslas, but not 2019 ones.

It would seem to me this would carve the deferred FSD revenue recognition into two pies.

 

[StealthP3D]

PLEASE!

Um, now where were we... Ah, yes... perhaps if they construct the Megapack array with all the containers standing on the end, like a city of tall skyscrapers they'll provide mutual shade for better cooling...

While that would look cool, it would increase cost and time of deployment (by requiring a more extensive foundation). I would like to see a solar roof option, panels that would bolt onto existing mounting flanges and create a sloping roof (shed style) which would shade the containers and reducing cooling needs while adding to the electrical generation. This would also reduce future painting of the steel containers by keeping them in the shade and keeping the rain off them.

The land is already being used so why not make it do double-duty? Every electrical sub-station in the world should have a few of these (depending upon available space) to increase flexibility, maximize the utilization of existing generation and transmission and increase grid reliability.

 

[kengchang]

Elon Musk Tweeting on Tesla Production Raises Questions on SEC Deal - Bloomberg · 1 hour ago

 

[Cherry Wine]

Elon Musk Tweeting on Tesla Production Raises Questions on SEC Deal - Bloomberg · 1 hour ago

JFC.

 

[Todd Burch]

Elon Musk Tweeting on Tesla Production Raises Questions on SEC Deal - Bloomberg · 1 hour ago

Nicely timed, Bloomberg. Market ain't buying it though.

 

[Stars aligned]

Picking up lotto puts at the end of the day. God forbid the SEC goes after Musk (they shouldn’t, but that doesn’t mean that they won’t)

Interesting timing....can't follow the logic?

 

[RoadsterPlease]

2:20PM Volume: 5.92M

 

[LJS22]

Based on what happened last time I don’t think the SEC wants to go to court over this again. I think Musk has been more than fair for them and any judge knows it’s opening up a bigger mess than it’s worth if they were to have to prosecute a CEO over tweets.

There’s no precedent for this so it’s best not to make one.

 

[VValleyEV]

Ford,Toyota, BMW CEO's are just pretending that Tesla doesn't exist. Their shareholders are swallowing the bear argument. They will soon choke on it. GM and Nissan are at least trying. I went to a Toyota dealer about 2 years ago and the salesman told me that fuel cells were the way to go. Nobody talks about that now.

But Ford has invested in and partnered with Rivian, announced (although not revealed details) that there will be a fully electric F-150, and even produced a video (or was that produced by someone else) of an electric F-150 prototype towing a train. At least a little encouraging, along with the fact that they survived the “Great Recession” of 2007-2009 without taking federal funds, unlike GM.

I would like to see at least one of these legacy automakers get nimble enough to survive the transition.

 

[StealthP3D]

I went to a Toyota dealer about 2 years ago and the salesman told me that fuel cells were the way to go. Nobody talks about that now.

Not true. My Toyota dealer still only talks about fuel cells.

I bought shares of Canadian-based fuel-cell maker Ballard Power (BLDP) about four years ago at $1.35/share. It has since tripled in price so I'm sitting on some nice profits. I guess most of their revenue comes from buses and forklifts. I've never believed fuel cell cars would gain traction anytime soon - just purchased them because they were cheap, had a lot of IPR and thought they might get bought out. Anyone have an opinion on their business going forward? Sell or hold?


I really don't understand the economics of hydrogen fuel cell forklifts due to the fact that battery-electric seems so much more affordable and range is not a concern. I paid for college by working at a soda-pop bottling/distribution plant where I drove an electric forklift. Lead-acid batteries used in the tail of the lift comprised the bulk of the counter-ballast for lifting full pallets of soda to the warehouse roof without tipping over. This was in the 1970s and the thing was a blast to drive. We would soap the warehouse floor after business hours for its weekly wet-cleaning and would never forget to "scrub" the floors good by doing 20 mph brodies/burnouts all around the soaped floors before squeegeeing them dry. In the dry they had plenty of acceleration and power and the low-tech batteries easily lasted through our entire workday (although in intermittent use).

Thinking of selling BLDP before earnings release today.

 

[StarFoxisDown!]

But Ford has invested in and partnered with Rivian, announced (although not revealed details) that there will be a fully electric F-150, and even produced a video (or was that produced by someone else) of an electric F-150 prototype towing a train. At least a little encouraging, along with the fact that they survived the “Great Recession” of 2007-2009 without taking federal funds, unlike GM.

I would like to see at least one of these legacy automakers get nimble enough to survive the transition.

I actually find the partnership with Rivian and the Ford EV pickup demonstration(which at best was misleading and completely void of any important information) to be total acts of desperation. I don't think Ford has anything in the bank in terms of workable prototypes that would actually be competitive. Seems to be they're pretty worried about the impending Tesla Pickup reveal.....I would be worried too if I was Ford.

 

[Curt Renz]

Elon Musk Tweeting on Tesla Production Raises Questions on SEC Deal - Bloomberg · 1 hour ago

Elon's tweet was in answer to a question about Solar Roof production. Did he get pre-approval from company lawyers? If not, one still must wonder how much of a concern that might be to the SEC?

 

[Nocturnal]

But Ford has invested in and partnered with Rivian, announced (although not revealed details) that there will be a fully electric F-150, and even produced a video (or was that produced by someone else) of an electric F-150 prototype towing a train. At least a little encouraging, along with the fact that they survived the “Great Recession” of 2007-2009 without taking federal funds, unlike GM.

I would like to see at least one of these legacy automakers get nimble enough to survive the transition.

I think Ford is the only one with a decent chance honestly, assuming no more massive bailouts.

 

[Dutchie]

My take: He crushed the first half of the interview and the second half was considerably weaker but he still handled it as well as most seasoned analysts.

During the first half of the interview, he was actually shaking up the CNBC talking heads who were blown away by his answers and had to stumble over their words a bit in order to change the subject by asking an unrelated question.

It was obvious the CNBC heads didn't even know enough about the latest quarterly report to even question him on that without looking ignorant on the subject matter so they kept the questioning to simple overview types of questions like "I've never heard you voice any concerns about Tesla, certainly there MUST be some negatives. In your view what's the most worrisome thing about Tesla" (paraphrased) or general comparisons to Apple without Steve Jobs. None of them wanted to get into the nuts and bolts of the results (which is presumably what the post-earnings interview was intended to cover).

Gali could improve his already excellent performance by walking all over them when they ask dumb overview questions by saying something like "Well Musk certainly is a polarizing figure but lets look at the results he delivered this quarter, particularly in terms of ...." In other words, directing every dumb question back to the nuts and bolts of the numbers which Gali has such good command of and the growth rate from the previous quarter, the year-ago quarter, the direction management is moving, etc. etc.

For such a young dude I think he did extremely well. He has a lot of potential.

 

[elasalle]

Elon's tweet was in answer to a question about Solar Roof production. Did he get pre-approval from company lawyers? If not, one still must wonder how much of a concern that might be to the SEC?


View attachment 435782

Deja Vu'
Something like the most brightest kid in class room, who cannot keep a secret.

It would have been lot better to throw this number in C/C (it was just last Week) or publish it as Tesla news like the Mega Charger news.
Again, we don't know for sure what SEC will do ....

 

[jerry33]

But Ford has invested in and partnered with Rivian, announced (although not revealed details) that there will be a fully electric F-150, and even produced a video (or was that produced by someone else) of an electric F-150 prototype towing a train. At least a little encouraging, along with the fact that they survived the “Great Recession” of 2007-2009 without taking federal funds, unlike GM.

Strictly speaking, Ford had a five or six billion dollar loan from the same program that Tesla borrowed from. Ford is still making payments (I believe it was for over 27 years). That's what kept them afloat because the EV that this money produced couldn't possibly have cost that much to develop.

 

[ReflexFunds]

I think Ford is the only one with a decent chance honestly, assuming no more massive bailouts.

Really? I think Ford is a strong contender to be first to be completely wiped out by Tesla. Over 100% of Ford's valuation is the F-150. Autos have a lot of operating leverage so only a relatively small drop in revenues can quickly kill margins. A strong Pickup release from Tesla could very conceivably bankrupt Ford within 12 months of mass production.

 

[StealthP3D]

Based on what happened last time I don’t think the SEC wants to go to court over this again. I think Musk has been more than fair for them and any judge knows it’s opening up a bigger mess than it’s worth if they were to have to prosecute a CEO over tweets.

There’s no precedent for this so it’s best not to make one.

On the other hand, TSLA share price just keeps going up. The SEC can't just sit there and not take care of this problem! TSLA will be at $250 or more if they don't do something.

Just kidding! I agree with you.