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

[Papafox]

Regarding oil prices and the economy, keep in mind that the United States is now a net exporter of oil. If the price goes up, there are some advantages for the economy that help balance the greater cost of doing business with higher fuel prices. Back in the 1970s when the U.S. was a net importer of oil and prices soared, we ended up with stagflation- a stagnant economy and inflation that grew out of the massive increases in doing business with higher oil costs. This is no longer the case.

I agree with others here that the quicker the world economy can transition to clean,sustainable energy, the better. We'll no longer be held hostage by the oil producers. In the meantime, becoming a net exporter of oil has put the U.S. in a better position than in the 70s for weathering such economic storms.

 

[Fact Checking]

“We aim to produce 10,000 total vehicles of all models per week by the end of 2019.”

Did you include the 1k-2k/week Model S/X production?

 

[StealthP3D]

The Saudis said oil production will be back to normal by Monday.

This isn't Venezuela. Perhaps they are lying. But not lying by months or years.

I would expect them to minimize the impact regardless of how bad it might be. But, as I emphasized, I just don't know. And if it takes months, then the impact of 5% less oil would be huge. But, yeah, maybe the damage is minor, I just don't know.

Before the U.S. was a dominant oil producer, high oil prices were really bad for the American economy. But now high oil prices fuel more fracking profits and the impact on the economy is more muted. There are plenty of winners. In fact, plenty of wealthy powerful Americans want higher oil prices really badly. Hence the talk of Iranian war. It's all foolishness and greed, but it always is.

It seems war was previously used to protect access to Middle East oil. Now it's used to disrupt the production of oil-producing nations to increase prices. Remember what happened to oil prices when Iraq was disrupted? Same thing would happen if Iran was invaded.

I'm in favor of more expensive fossil fuels but it should be achieved through legislation (carbon tax), not war under false pretenses. We really need to elect a government that better represents a cross-section of the people, not the financial interests of the greedy people who happen to be powerful and wealthy.

 

[kengchang]

I am guessing S/X should be > 15K, maybe 15.5K and 3 should break 80K as well.

caronsight's info saying GF1 is pumping out 7k pack per week.

 

[Paracelsus]

Hoping the rest of the Presidential Candidates will also push back on this very soon! As a Desert Storm vet I am very disappointed and disheartened to see this situation sensationalized with phrases like "locked and loaded".

 

[Fact Checking]

The Saudis said oil production will be back to normal by Monday.

Source?

This article claims that only a third of the damage might be repaired quickly:

Trump: U.S. 'Locked And Loaded' For Response To Attack On Saudi Oil Sites | HuffPost

"Saudi Arabia has promised to fill in the cut in production with its reserves, but has not said how long it will take to repair the damage. The Wall Street Journal cited Saudi officials as saying a third of output would be restored on Monday, but a return to full production may take weeks."

"Images from the European Commission’s Sentinel-2 satellite examined by the AP showed black char marks at the heart of the Abqaiq plant on Sunday, marks not seen over the prior month. Identical marks are visible on the U.S. imagery. The Washington-based Center for Strategic and International Studies in August identified the area with the char marks as the plant’s stabilization area. The center said the area includes “storage tanks and processing and compressor trains — which greatly increases the likelihood of a strike successfully disrupting or destroying its operations.”"​

If true then that's major damage.

 

[Mike Smith]

Fox Business - this afternoon: Teamsters refusing to transport GM vehicles in solidarity with UAW

This is going to be long and ugly - it's perfectly set up for a drawn out fight. The only question is if GM employees will get upset about baring all the cost of the strike while Ford and FCA employees continue to work an 100% wage. I'm guessing they won't. We're at the peak of the economic cycle, so there's no better time for a fight - GM has been making huge profits and paying a 6% dividend, so the union knows GM can afford to give employees a raise. They also know GM has to cave to avoid being at a competitive disadvantage to Ford and FCA, who were given an extension of their old contracts. What the UAW is doing to GM is dirty, but will be effective. It will be worth it for GM to hold out for a month or two to get the best deal possible, but then they'll have to make a deal as their inventory of profitable vehicles runs out. Then Ford and FCA will have to agree to the same deal.

Hopefully this fight will bring to light the issue of European made EV customers getting a bigger tax credit than GM (and Tesla) customers. I think it will - in fact I can't believe this hasn't been fixed yet.

 

[StealthP3D]

Hopefully this fight will bring to light the issue of European made EV customers getting a bigger tax credit than GM (and Tesla) customers. I think it will - in fact I can't believe this hasn't been fixed yet.

For all this talk of free and fair trade, it seems we are going backward.

 

[KarenRei]

Ah, not the case at all if one thinks about it, which, sadly, not too many do . . . and let's not even bring up externalities paid by future generations:

Shocker: Tesla Model 3 vs. Honda Civic — 15 Cost Comparisons Over 5 Years | CleanTechnica

I've on multiple occasions in the past week been frustrated by the fact that nobody ever seems to bother to include resale value in their "is it worth it to go electric?" comparisons. The difference in price between a new ICE vehicle and a new EV is not the sticker price difference, but rather, the sticker price difference minus the residual value difference after your ownership timeframe.

Volkswagen unveils the ID.3, its first ‘electric car for the masses’

VW ID3 looks like a cheaper option that should be available in 2020.

Do be aware that VW has been playing the "up to" game with the ranges on these cars. Which should be obvious when you look at the pack sizes vs. the vehicle shape and size. It doesn't help that most of the media kindly omits the "up to" wording when reporting on it.

Which universe do these people live in ?

KSA has been at war with Yemen for years.

It's already been long clear that the world doesn't care about Yemen and the endless Saudi-Iranian proxy war going on there at the expense of its civilians.

The world does, however, care greatly about major oil producers themselves. If their territories are seen as under threat, or they're seen as at risk of going all out - potentially dragging others into it (US, Israel, Iraq, etc)... the markets will very much care about that.

 

[RobStark]

I would expect them to minimize the impact regardless of how bad it might be. But, as I emphasized, I just don't know. And if it takes months, then the impact of 5% less oil would be huge. But, yeah, maybe the damage is minor, I just don't know.

Before the U.S. was a dominant oil producer, high oil prices were really bad for the American economy. But now high oil prices fuel more fracking profits and the impact on the economy is more muted. There are plenty of winners. In fact, plenty of wealthy powerful Americans want higher oil prices really badly. Hence the talk of Iranian war. It's all foolishness and greed, but it always is.

It seems war was previously used to protect access to Middle East oil. Now it's used to disrupt the production of oil-producing nations to increase prices. Remember what happened to oil prices when Iraq was disrupted? Same thing would happen if Iran was invaded.

I'm in favor of more expensive fossil fuels but it should be achieved through legislation (carbon tax), not war under false pretenses. We really need to elect a government that better represents a cross-section of the people, not the financial interests of the greedy people who happen to be powerful and wealthy.

The market will know if the Saudis are lying and not delivering rather quickly.

 

[KarenRei]

The market will know if the Saudis are lying and not delivering rather quickly.

In theory, the lost capacity doesn't affect anything at all. Beyond stockpiles, Saudi Arabia normally maintains lots of spare production / processing capacity to ramp up and down to keep prices at OPEC targets, and OPEC production has been ramped down signficantly recently to support prices. This attack basically wiped out all of Saudi Arabia's spare capacity temporarily. So in theory there's no problem, but it also means that there's greatly reduced global capacity to handle further shocks.

The main concern is escalation. Yemen is basically a Saudi-Iranian proxy war to begin with, and if these attacks came from Iranian militias in Iraq (or Iran itself) that would be a brand new angle. Saudi Arabia, its allies in the Middle East, the US, and potentially even Israel would be well tempted to respond (the latter mainly because they've been just looking for an excuse to strike at Iran for some time, and have been striking at Iranian militias in Syria for much of the duration of the Syrian conflict). There's escalation potential, which demands a market premium.

 

[CorneliusXX]

Pre-market seems to have a little tail wind from rising oil prices. I wonder what the correlation between Tesla and the oil price will be? Arguably before the 3 came out the correlation didn't matter so much as the vehicle were unaffordable to most regardless of oil prices.

 

[RobStark]

Source?

This article claims that only a third of the damage might be repaired quickly:

Trump: U.S. 'Locked And Loaded' For Response To Attack On Saudi Oil Sites | HuffPost

"Saudi Arabia has promised to fill in the cut in production with its reserves, but has not said how long it will take to repair the damage. The Wall Street Journal cited Saudi officials as saying a third of output would be restored on Monday, but a return to full production may take weeks."

"Images from the European Commission’s Sentinel-2 satellite examined by the AP showed black char marks at the heart of the Abqaiq plant on Sunday, marks not seen over the prior month. Identical marks are visible on the U.S. imagery. The Washington-based Center for Strategic and International Studies in August identified the area with the char marks as the plant’s stabilization area. The center said the area includes “storage tanks and processing and compressor trains — which greatly increases the likelihood of a strike successfully disrupting or destroying its operations.”"​

If true then that's major damage.

That is the corrected information. I was going on their original statement.

The drone strikes on facilities in Abqaiq and Khurais eliminated 5.7 million barrels of production over the weekend. Officials believe that they can restore 2 million barrels by the end of the day Monday, contrary to earlier claims that full production would resume early this week.


Saudi Aramco has 35-40 days of supply to meet contractual obligations, a source close to the matter told CNBC.

Saudi Arabia reportedly aims to restore one-third of lost oil output by Monday

 

[RobStark]

even Israel would be well tempted to respond (the latter mainly because they've been just looking for an excuse to strike at Iran for some time, and have been striking at Iranian militias in Syria for much of the duration of the Syrian conflict). .

Meanwhile, Iran has called for "the elimination of the Zionist regime" for 40 years.

 

[Stars aligned]

Pre-market seems to have a little tail wind from rising oil prices. I wonder what the correlation between Tesla and the oil price will be? Arguably before the 3 came out the correlation didn't matter so much as the vehicle were unaffordable to most regardless of oil prices.

Saudi Aramco has 35-40 days of supply to meet contractual obligations, a source close to the matter told CNBC.
Saudi Arabia reportedly aims to restore one-third of lost oil output by Monday

In terms of markets, it's an almost-Nothingburger. Oil price is normalising and well in between the range of the last months.

Longer term there should be a negative correlation between oil and Tesla, but Tesla SP is influenced by so many other factors that this one can hardly be extracted and identified. It will be miniscule. OTOH and short term, the psychological effect is good in the sense it might push some people over the line to make a buy decision for a Tesla.

 

[KarenRei]

"Wall Street currently expects about 97,000 deliveries for the third quarter, according to FactSet, up slightly from the second"

Tesla Stock Has Risen This Month as Its Third-Quarter Numbers Approach

 

[jerry33]

Sensible world leaders would ask citizens to try to consume 5% less oil. Carpool, catch public transport, holiday locally etc.

Even if they did, you're making big assumptions: Transit actually works in their area (e.g. less than 90 minutes to go less than ten miles, and the schedules are maintained), the job has fixed hours, and co-workers with the same fixed hours are nearby (not likely).

 

[Artful Dodger]

Volkswagen unveils the ID.3, its first ‘electric car for the masses’

VW ID3 looks like a cheaper option that should be available in 2020 2023.

FTFY.

Volkswagen's 'Cheap' EV Not Coming Until 2023

 

[Krugerrand]

This is going to be long and ugly - it's perfectly set up for a drawn out fight. The only question is if GM employees will get upset about baring all the cost of the strike while Ford and FCA employees continue to work an 100% wage. I'm guessing they won't. We're at the peak of the economic cycle, so there's no better time for a fight - GM has been making huge profits and paying a 6% dividend, so the union knows GM can afford to give employees a raise. They also know GM has to cave to avoid being at a competitive disadvantage to Ford and FCA, who were given an extension of their old contracts. What the UAW is doing to GM is dirty, but will be effective. It will be worth it for GM to hold out for a month or two to get the best deal possible, but then they'll have to make a deal as their inventory of profitable vehicles runs out. Then Ford and FCA will have to agree to the same deal.

Hopefully this fight will bring to light the issue of European made EV customers getting a bigger tax credit than GM (and Tesla) customers. I think it will - in fact I can't believe this hasn't been fixed yet.

I hope it kills them.

 

[Artful Dodger]

In the meantime, becoming a net exporter of oil has put the U.S. in a better position than in the 70s for weathering such economic storms.

Ironic, wot, when its the increased burning of said fossil fuels thats CAUSING the actual storms to get worse. This is a fool's bargain, and we're sending the bill to our kids.

Storms of My Grandchildren - Wikipedia