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

[brian45011]

I made this mistake too! The Tesla lawyer's letter contains far more specifics than the Walmart lawsuit, which looks vague by comparison - I personally found the Tesla response far more convincing, in large part due to being much more specific in citing dates and timelines. I really wasn't expecting that Tesla would have such a convincing response when I first read the Walmart lawsuit.

The opposing positions are lucidly laid out in the Petition and The Norton Law Firm's letter that was attached as an Exhibit. The question is how will large institutional Investment Committees react to merits of each position??? And, what effect the controversy will have on future purchases of solar systems by large industrial/commercial entities?

The Norton Law Firm is a boutique Oakland litigation shop. Its principal is Fred Norton (who signed the letter):

He then joined SolarCity as the company’s Vice President and Deputy General Counsel for Litigation, and continued in that role at Tesla after Tesla acquired SolarCity in 2016. In June 2017, Fred returned to private practice and founded The Norton Law Firm. ​

​

He is apparently backed up by David Bournazian at Kutarock.

Handicapping this controversy is not only about the relative merits of the two positions but also who are the players on each side--kind of like Fantasy Football.

 

[Mike Smith]

Bernie Sanders proposes $16.3 trillion Green New Deal plan - Reuters

'It calls for a transition to 100% electric vehicles, providing $2 trillion in grants to low- and moderate-income families to trade in their fossil fuel-dependent vehicles for new electric vehicles and $85.6 billion to build a national electric vehicle charging infrastructure network.'

'Sanders said his own Green New Deal plan will “pay for itself over 15 years” by raising taxes and fees on fossil fuel companies, through revenue generated by renewable energy produced by federal power authorities, over $1 trillion in scaling back military spending and from income tax collected from the 20 million new jobs it says the plan will create.'

 

[adiggs]

Daimler's brand new just hit the market 550 kWh Semi has a very optimistic 250 miles of range. Ideal conditions no HVAC.

Tesla Semi with large battery will be at least double that.

That is not competition.

I understand the sentiment, but I disagree with the conclusion. Given that the two trucks perform exactly as they've been talked about publicly, the commercial truck market is going to be a "sell everything you build" market for awhile. Today's market is 300k Class 8 semis per year, and I expect that electrification will take it to 600k per year (the doubling being a temporary phenomenon as fleet buyers proactively remove diesel trucks from the fleet, due to them being too expensive to operate).

Nobody is in danger of producing 300k class 8 semis / year. At the smaller size battery, that's 150 GWh/year worth of battery packs - all of Tesla today is in the 30-40 GWh/year range. And Tesla are the serious producers.


The upshot being that even with a weaker product on the headline stats, anybody making an electric semi that "works" (can be used to solve a business problem - runs a particular route, is reliably available, can be reliably recharged, etc..) will sell it.

Both companies, given that their trucks "work", will sell all that they make for years to come.

 

[Chunky Jr.]

How convenient, a faulty battery module with no warnings on the dash, and it works "fine" from 50-100% and not the rest, lol.

The code for their battery meter calculation must have been something like this:

percentRemainingToShowUser = actualPercentRemaining/2 + 50;

 

[Chunky Jr.]

Porsche's high-performance, ridiculously seductive Taycan EV has a clean, minimalist cabin with hella screens.“

It's obvious that Tesla's biggest design problem is they don't have over a hundred buttons on their console. I'm glad Porsche took care of this.

 

[brian45011]

Other German Automaker like Daimler ... do not even know how amazing it is what has been achieved and are still arrogant in that respect.

After investing in 2009 $50 million (1/2 subsequently laid off to Abu Dhabi H2O Dept.) in Tesla, Daimler negotiated a 4 year exclusive (JV) rights deal with Tesla for new technology. Daimler then bought battery packs and drive trains for a variety of vehicles, including the SmartEV 4Two, Models A & B EVs, and Freightliner Trucks.
Daimler had a good look at Tesla's technology at least through 2013, including two different Directors on TSLA's board who presumably were privy to inside information on the economics

 

[anthonyj]

Just reminding everyone that the 4th wealthiest person in the USA is a Tesla board member and owns many many shares

 

[Fred42]

Completely craptastic first attempt.

Commercial trucks should be about cost per mile.

Not cool looking grills.

Tesla has announced short range and long range Semi models and taken deposits for them.

Short range will be at least 300 miles and long range at least 500. Elon has hinted at 600 miles of range.

Tesla has not announced a two-axle delivery/distribution truck similar to the Freightliner eM2 106 shown in the picture in my post. I hope they don't wait too long after the Semi to compete in this market.

 

[brian45011]

Canada says helllo.

Except it's not in the "popular CUV format", which is much more rectangular and, as @KarenRei notes, less aerodynamic. Tesla instead went for the "Accord Crosstour" approach. Their task is to convince buyers it's just like a CUV and to convince investors it's not just a Model 3 Crosstour.

Don't diss the Crosstour--fugly but economical, reliable and functional. RIP

 

[ggies07]

Just reminding everyone that the 4th wealthiest person in the USA is a Tesla board member and owns many many shares

Then take this company private and accelerate the growth!!! What the **** is humanity doing here......just wasting time with all this public stock crap.....we have to stop dicking around here. Ice caps melting, Amazon forests burning down....it's gonna be one hot MF planet by the time I die.....

 

[brian45011]

Telsa Energy Storage for the Power Station. Other words, gas powered or electrical/solar?

The substation is not a generator. Prior videos showed installation of pipe for NG--presumably for heating (and drying electrode slurries).

 

[Dwdnjck]

Walmart currently has 45 semi’s on order. Tesla should cancel them and put Wal-Mart on the “no-sell” list until this dispute is settled.

 

[Bet TSLA]

Walmart currently has 45 semi’s on order. Tesla should cancel them and put Wal-Mart on the “no-sell” list until this dispute is settled.

Agreed. Some customers just aren't worth having.

 

[Cartegena]

Fires without fire department calls? That smacks of, at most, a smoke break fire, not a dangerous conflagration.

How many fires at Fremont that the Fremont Fire Department was not called? There's a difference between fires on property where the public has access versus those where only employees may be at risk.

 

[Navin]

Walmart currently has 45 semi’s on order. Tesla should cancel them and put Wal-Mart on the “no-sell” list until this dispute is settled.

Brilliant. Also think Tesla and Elecktrek should get into a dispute and put Fred’s 2 roadsters on hold till the dispute gets resolved. Have Elon’s atty constantly filing motions to delay so Fred gets his cars when he’s 100.

 

[Antares Nebula]

The VW denial I quoted:

Volkswagen spokesman Pietro Zollino [...] saying in a statement, “It’s completely unfounded. It’s pure speculation.”​

Is a rather standard non-denial denial:

Non-denial denial - Wikipedia

"A non-denial denial is a statement that, at first hearing, seems to be a direct, clearcut and unambiguous denial of some alleged accusation, but after being parsed carefully turns out to not be a denial at all, and is thus not explicitly untruthful if the allegation is in fact correct."​

Both qualifiers that the VW spokesman used, "unfounded" and "speculative", leave the door open to the story still being true. Manager Magazin could only support the story by exposing confidential sources, which they won't. So at this point the report is "unfounded" and "speculative".

Especially the "speculative" characterization is a dead giveaway of non-denial denials, as the VW spokesman only has to ask his boss whether the report is true or not. If it's false he cannot characterize it as "speculative".

The VW spokesman could have said that the report about VW CEO Herbert Diess admiring Tesla tech and being interested in acquiring Tesla is "untrue, categorically false", but he didn't.

So either he hasn't asked his boss about it (why?), or he knows it's true but doesn't want to volunteer it.

There's also this additional color to the story by @avoigt:



Note that VW might still end up issuing a stronger denial, but they haven't so far.

I have no doubt that Diess admires and would like to buy or partner with Tesla. He and other VW execs have been recently praising Tesla more and more. He probably did make such statements to his confidants. But there is vast gulf between admiring and wanting something to actually getting it. There are simply too many obstacles on both sides in this case. Besides questions of control and strategy, on price alone, there is a vast gulf between both parties. So it appears that this was just a case of media sensationalism given some insider comments. As an investor, you have to separate media headlines from realistic business outcomes.

@Fact Checking do you really believe such a deal can happen? Pray tell, at what price? Or how would it be structured? I could see if maybe Apple or some other big tech got involved, then maybe. VW on its own, highly unlikely. To be clear, I'm talking about a buyout. A partnership is a possibility, but that is also fraught with problems, especially given the recent capital raise. How much more of a dilution would current shareholders accept and at what price that would be satisfactory to both sides?

 

[Beltsbear]

View Photos of the 2020 Porsche Taycan Interior

“
View Photos of the 2020 Porsche Taycan Interior
Porsche's high-performance, ridiculously seductive Taycan EV has a clean, minimalist cabin with hella screens.“

Clean and minimalist? Is the author joking? Why so many little screens?

That analog clock made me throw up a little in my mouth.

 

[brian45011]

In a contract there are two parties, and each must perform their part. If you think the other party isn't performing you have to take them to court to force them into compliance. In this case Walmart would have to (in court) point out the precise problems and force Tesla to fix them. A judge then agrees or disagrees. If Tesla then failed to comply Walmart could go back to the judge and claim breach of contract.

What Walmart is trying is very common - one party becomes unhappy with the contract for whatever reason and just stops performing themselves, saying the contract is void because of something the other party did or won't do. That's not how it works as Walmart will soon find out - the fact that Walmart just walked away from their obligations without taking Tesla to court is damning.

Maybe that's how it works in the Dominion but not in the US.

"When a breach of contract occurs, the breaching party can be sued for damages by the other party, and the non-breaching party is no longer held to their previous contractual obligations."

Nonperformance and Breach of Contract: What You Need to Know

The issue is whether or not there was in fact a breach that relieved the other party of its obligations. Time will tell, but the certainty here that Tesla is the aggrieved party should be weighed carefully by those who await further exposition of all the relevant circumstances.

 

[Dwdnjck]

Since Tesla doesn’t need cap raise at the present time, VW can buy all the shares it wants in the open market. I suggest $10bil. might be enough to get them some help from Elon. Might just squeeze a few shorts while they’re at it.

 

[Antares Nebula]

The only possible buyout that I can see (and I"m not advocating it by any means, as I think Tesla is worth much more) is that Apple (and maybe along with other partners, such as VW), buys Tesla for north of 400. That would be the minimum price that would have any chance of satisfying shareholders. Of course many would want higher, but others maybe willing to accept this price to finally get off the roller coaster. Again, this is a bare minimum price, and I'm not advocating such a buyout. VW, by itself, would never pay over 300, let alone 400. Apple maybe, but not VW alone. And if for some reason Musk and Tesla did sell for 300 or less, it goes without saying that we, the investor community, would be shocked.