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

[Stars aligned]

My very off-the-hip prediction for today is we will test 238s and possibly 240

Well possible. And then, there's this 25 July gap, all the way up to 258 waiting to be jumped or filled. But maybe for another day in the near future.
Looks like a cup is developing. Needs some good upwards volume to be confirmed. But could see as well a temporary setback to 228-230.

 

[CorneliusXX]

Well, it's better than nothing. And a good low-cost way to juice sales at the end of the quarter so they can get as many freshly produced cars into customers hands.

Ironically, the reason you're not supposed to look a gift horse in the mouth is because they will likely be old and have bad teeth. This one has a full set of pearly whites.

 

[CorneliusXX]

I don't know if they'll be good at building EVs, but they're sure good at collecting cash.

I think it's clear that they are collecting experience along with money. Amazon for automation and software, Ford for manufacturing, Fox for sales and service. It's a very clever strategy to bolster their capabilities without having to go through the grind Tesla went through as they scaled.

I wouldn't be surprised if their next investor was a cell manufacturer.

 

[lascavarian]

And to reach the magic 10000 Model 3 per week, it's sufficient to start production at GF3, no further ramp up in Fremont required. So the arguments against an early start of Model Y production are very weak.

Disagree. Goal is to approach 500k vehicles production rate in 2019. That production rate will be all Model 3 or earlier models. Any improvements in Fremont are in pursuit of that production rate goal.

Battery pack constraints are easing allowing Fremont production to push forward.

Youtubers pitching Model Y smoke & BS at quarters end need to stop.

 

[mongo]

It's not at 7k/wk. 7k/wk would be 91k Model 3s per quarter, which they were nowhere close to hitting in Q2.

If you're telling me that in Q3 they're going to have produced 91k Model 3s at Fremont without GA5, then by all means pop the champagne cork, because the SP is going to love that.

FWIW, I didn't I say they were at/ above 7k/wk (though they may very well be at this point). What I wrote:

So the capEx heavy first round was only intended to hit 5k, and it is now near 7k on its way higher. Instead of investing more in the 10k/wk Fremont goal, they expedited GF3.

What Tesla wrote in the Q2 2019 letter (note 10k/wk for all vehicle types so >7.5k/wk Model 3 at a best case 120k/yr S/X, 8k/wk at 100k S/X)

The production rate of Model 3 continued to improve gradually throughout the quarter, breaking a monthly record in May and then again in June. All manufacturing equipment in Fremont has demonstrated capability of a 7,000 Model 3 vehicles per week run rate, which we continue to work to increase. We aim to produce 10,000 total vehicles of all models per week by the end of 2019.

So, maybe they are cranking up 3 production, and their supply chain can handle that. Otherwise they would be adding a GA line for 500/wk gain. If they were reconfiguring by moving an existing line, maybe. However, I'll hypothesize the existing lines are in close enough to optimum position to not justify shuffling.

Further, your 91k number implys a 7wk average rate for 13 weeks. Given the Q2 letter comes out a month into the quarter, that seems a hard to hit upper bound.

7k/wk at the end of quarter would not imply 7k/wk rate for the entire quarter. Rather, it would be a somewhat tapering ramp (since they are out of the vertical part of the exponential).
Q2 was 72,548 3s for a 12wk average of 6k. It should be higher than 6k at the end, let's say 5,750 entering, 6,250 exiting.
If they hit 7k/wk in the last week of Q3, (7,000+6,250)/2×12=79.5k vehicles.
Or
(6,750+7,250)/2×12=84k
Even
(7,000+7,500)/2×12=87k

If they managed to avoid a down week, that woukd deffinatly boost output. Otherwise, likely in the 80k range for Q3.

If Q4 were great with 7k/wk entering, 8k/wk exit for 12 weeks that could be 90k.

(In case it was misinterpreted, the antsy comment was a good natured joke which forgot its emojiI'm waiting on pickup which hasn't even launched yet...)

 

[ReflexFunds]

Slightly OT, but lots of details provided on Starlink yesterday.

Elon's brand, success and wealth often impact the Tesla stock price, and I think progress with Starlink can help to turn the anti-elon narrative.
Successful deployment and testing of Starlink's first 60 satellites over the next few days should significantly increase Starlink's probability of building a viable business.

Key updates:

• Recent Spacex funding rounds have been oversubscribed (disproving TSLAQ's SpaceXQ FUD). Elon thinks Spacex now has enough capital to get Starlink operational.
• Targeting 3-5% of the $1trn worldwide telecommunications revenue. So $30-50bn revenue.
• 60 satellites in first launch. 12 launches will cover the US. 24 will provide decent global coverage. Can begin selling services with c.400 satellites. Need c.1000 to be economically viable. Will continue to add satellites to meet demand.
• Falcons can potentially launch 1-2k per year.
• Targeting sub-20ms latency
• Each launch has "about a terabit of useful connectivity".
• Each Starlink costs more to launch than it does to make, even with the reused Falcon 9.

Assuming a launch cost of $20m for a reused Falcon, these updates suggest a c.$333k launch cost per satellite and below $333k production cost. I don't see how Oneweb competes with this when it looks like they are paying $50m per launch of c.30 satellites (so $1.7m per satellite, which are also much smaller), with an initial production cost of $1m (targeting $0.5m) and what looks like only 60% of Starlink's bandwidth per satellite (implied by numbers here Musk says Starlink “economically viable” with around 1,000 satellites - SpaceNews.com). So it looks like SpaceX capex cost per Gigabit/second is at least 6x lower, perhaps 10x.
If this satellite deployment goes well, I expect Elon will be thinking the global satellite broadband race is also "Game, set and match".

We had an interesting update from Gwynne Shotwell on Starlink yesterday.
She says up to 4 more launches of Starlink this year and hoping for 24 Starlink launches next year. This suggests to me that the first 60 satellites launched earlier this year are performing better than expected.
At 60 per launch this could put towards 1,700 Starlink satellites in operation by the end of next year. At this point SpaceX would own roughly half of all satellites in operation globally. This should be enough for decent global coverage and significant profitability.

At the same time, SpaceX appears to be significantly ahead of schedule on Starship development with what appears to be dramatically reduced development costs relative to initial plans.

All very positive developments for Elon's reputation and wealth and consequently very positive for Tesla.

 

[HG Wells]

Ironically, the reason you're not supposed to look a gift horse in the mouth is because they will likely be old and have bad teeth. This one has a full set of pearly whites.

Dentures, definitely dentures.

 

[Fact Checking]

In other news, we just reached comment page 4200.

 

[jerry33]

But the building of new GA line means there are plans to increase capacity (of 3 or Y). If they can make 3s, they can make Ys, no?

The idea of lines that can make either 3 or Y is appealing. If it’s not possible, I need somebody to explain to this thick head why it’s not. TIA.

It's not that it isn't possible, but if you can sell all the 3s that one line can make, why have the downtime to reprogram the line to make both when you need the extra capacity anyway?

 

[KarenRei]

Osborne

Osborne

Osborne!

Any announcements of Model Y production will hurt Model 3 & X ASP and margins immediately. Look at Model 3 effect on Model S.

NFW Elon doesn't try to minimize the Osborne effect. Now imagine what Tesla could possibly do to minimize that.

1. Begin production much earlier than you said you would.

2. Under promote Model Y at unveiling.

3. Be vague about any developments related to Y production.

That does not mean Y production is imminent, but I can imagine that there will be a little surprise whenever it does go into production.

This whole topic reminds me of the endlessly repeated "Model S and X to imminently switch to 2170s" discussions in this thread over the past several years.

You can't hand-wave away the work to launch a new model. Model Y was just unveiled earlier than this year. The thing didn't even have a working rear hatch or functional rear seats. It's not about to imminently launch. I know we'd all love it to, but that's just not going to happen. Wanting something to be true doesn't make it true.

 

[aubreymcfato]

In other news, we just reached comment page 4200.

And we are not counting the previous threads...

 

[jerry33]

Ironically, the reason you're not supposed to look a gift horse in the mouth is because they will likely be old and have bad teeth. This one has a full set of pearly whites.

But the picture shows a horse gift, not a gift horse.

 

[Carl Raymond]

It's not that it isn't possible, but if you can sell all the 3s that one line can make, why have the downtime to reprogram the line to make both when you need the extra capacity anyway?

I guess I was imagining a situation where the lines produced 10,000 cars per week, but the market for model 3 outside of Asia (serviced by GF3) was less than 7,000 per week. Flexible lines would mean they were always maxed, with any spare capacity allocated to model Y.

If there is non Asia demand for 10,000 model 3 per week in a world where model Y is available, then great.

 

[j6Lpi429@3j]

So... pay no attention to the depressing red blurry bits.. *I SAID IGNORE THEM* and rejoice at this miraculous color...can it be...GREEN?
I have faith in the long term but yikes...always buying shares, not CFDs from now on... This has been a long depressing wait to have some of these numbers go even slightly green.

Luckily my proper shares dont cost me overnight holding fees

 

[CorneliusXX]

But the picture shows a horse gift, not a gift horse.

We'll now I'm thoroughly confused.

 

[KarenRei]

OMG, what a shock, the Supercharger network is ranked highest by users among UK fast charging networks, whoda thunk it?

https://www.zap-map.com/zap-map-user-survey-reveals-top-10-ev-charging-networks/

 

[Reinhard]

I think the jump in stock price may have been because of the real time registration data from NNS. Before the website updated today, the Q3 figures were 12% above Q2. Today, it jumped to 18% above Q2 with a large chunk of LR AWD being registered.

An even bigger wave of AWDs were registered yesterday. Q3 is now 30% above Q2. If my theory holds up, today should be an up day.

 

[Xenius]

I CERTAINLY did NOT see this coming as far as the UK charging.

I'd have thought the Frankenstein of various different chargers with no single app gluing them together would easily win.

 

[Unpilot]

Good morning...I have nothing much to say except the SP is going to BAF today!

My 2021 Jan 650 lotto ticket went through the roof for about 5 minutes yesterday before falling back to earth.

 

[j6Lpi429@3j]

Indeed. I think I'd rather push my car to the next supercharger than go through the nonsense of using the ecotricity network...