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

[KarenRei]

Obviously, InsideEVs is a FUD website, too, then.
/s

Not InsideEVs. Just Ruffo. The rest of InsideEVs's staff is fine. Ruffo however is yet another Dana Hull / Lora Kolodny / etc. Occasionally writing positives about Tesla or writing negatives about other brands, but overall focusing predominantly on trying to scare people off of Tesla with transparently-bad FUD.

 

[EVNow]

M3 cannibalization is not sufficient to explain this much of a drop off IMO, given that S,X sales should, all things being equal, continue its upward trajectory as EV market penetration grows YoY.

I disagree. We have time and again heard that people spent way more than they normally do to buy Model S/X. Availability of cheaper options where people don't have to pay 2x or 3x they want to in order to get a good EV is a sufficient explanation.

I think Q2 S/X sales increased because of pre-Raven deep discounts (and Raven purchases towards the end).

 

[StarFoxisDown!]

Don't tell that to the uberbulls here.

Also from InsideEVs report:

"For September, we estimate the following for U.S. sales of these two Teslas:

Tesla Model S - 1,100
Tesla Model X - 1,675

"At 1,100, the Model S is up just a bit from our estimated 1,050 in August. Meanwhile, at 1,675, the Model X is down compared to our estimated 1,825 in August. The September figures for both of these Teslas are much lower than expected. In September 2018, the S had an estimated 3,750 deliveries in the U.S., while the X saw 3,975 estimated U.S. deliveries."

Assuming InsideEVs (and Troy's 15k S,X) estimate is accurate, not only are S,X sales down YoY (from 27k Q3 2018), but also QoQ, after having increased from 12k to 17k from Q1 to Q2 this year. M3 cannibalization is not sufficient to explain this much of a drop off IMO, given that S,X sales should, all things being equal, continue its upward trajectory as EV market penetration grows YoY. At the least, S,X sales should be 20k, given that it was averaging 27k in Q3 and Q4 2018. A sub 15k print would indicate a serious dislocation in sales. (Again, we can reserve final judgement when the deliveries report comes out.)

A large part of this IMO is due to the lack of a full refresh, bringing S,X to the level of the 3 in all respects (particularly battery tech). Raven, while indeed a major upgrade, apparently may not be sufficient to motivate enough customers (I know many disagree, so I'm not here to engage in another round of arguments on this point).

But also a large part of the problem may have been all the rumors of a major refresh percolating in the past year, causing customers to delay their purchases. The Raven release combined with Elon/Tesla downplaying all the S,X refresh rumors appeared to have mitigated this significantly, as Q2 results and early Q3 orders have shown.

But now it seems the momentum is lost again, and we may have a sudden drop off in September sales. What explains this? Could it be due to the S,X plaid powertrain tweet in early September by Elon? At the time, I pointed out (to much disagreement here) that this may have been an impulsive reaction to the Taycan Nurburgring lap time and a marketing misstep, undoing months of repair by Elon and Tesla in downplaying all the S,X refresh rumors that have been percolating in the past year. Now, once again, a major refresh (powertrain, chasis, and interior) may be playing in the minds of customers and adversely affecting S,X sales in the interim.

Maybe, maybe not. After a heated debate here at TMC, I concluded that further argument is pointless and that the only true arbiter would be near future S,X sales. This arbitration may now be coming to pass and much sooner than expected.

In summary, I believe S,X sales are hurting due to the lack of a full upgrade, making S,X true flagships in all respects, and also possibly due to the revitalized awareness among customers of an impending S,X refresh, resulting from Elon's early September tweet on the plaid powertrains.

I'm not here to rehash the same arguments, but only to place them within the context of these new Q3 S,X sales estimates. If today's delivery report proves Troy's and InsideEVs estimates wrong, and sales come closer to 20k, I will issue a mea culpa. And for the record I'm an uberbull too (isn't everybody here?), just more critical than others I suppose.

Why bother posting this when official numbers are coming out in a day or so, if not a matter of hours? Not trying to harp on someone posting but you're basing this entire long post off of numbers from InsideEV who just recently even acknowledge they're making a guess at this point because a lot of their sources have dried up.

 

[kengchang]

Don't tell that to the uberbulls here.
I'm not here to rehash the same arguments, but only to place them within the context of these new Q3 S,X sales estimates. If today's delivery report proves Troy's and InsideEVs estimates wrong, and sales come closer to 20k, I will issue a mea culpa. And for the record I'm an uberbull too (isn't everybody here?), just more critical than others I suppose.

Are we forgetting S/X doesn't have Standard Range anymore, which were bulk of the sales?

 

[KarenRei]

Any particular article you are referring to? Gustavo Henrique Ruffo Profile | InsideEVs

Article #2 on that list:

Tesla Smart Summon Demands You Be Precisely That: Smart

"We reported the first Tesla Smart Summon accident a few days ago. Abhishek Goswami, the Vice President of Global Technical Services at New Relic, made a tweet telling Tesla and Elon Musk “Enhanced Summon isn’t safe or production-ready.” ... Beta tests may imply “data loss” when you are talking about computers. What about a 2-ton “computer on wheels,” as Elon Musk defines Tesla vehicles? Data loss should be the least of the owners’ concerns. You can lose or damage many more things when testing, some of which are beyond recovery. Lives, for example. ... But how can Tesla ensure people will do as they are told? That they will not put their vehicles in a busy public parking lot to test their new toys? Beta testing with a computer poses small dangers compared to the ones a car can represent – even if it is a computer on wheels. What would Justice call it in case it hits a person, a computer, or a car? Check Goswami’s case. We have tried to contact him, but he has not replied so far..." [Ed: Russo's been harassing this guy on Twitter to try to get him to make an anti-Tesla statement he can use] "Anyway, we can tell that he has tested the Smart Summon on his driveway, as Tesla advised. Even so, his car “ran into the side of the garage.” He trusted it would perform much better than it actually did. ... it takes no responsibility if you choose to use them. You do, but Tesla benefits from your testing. In the future, other clients will also have a more reliable software. At whose expense? If you think it through, Tesla is asking you to take responsibility for tests it should perform before putting these features into “production.”"

Article #3 on that list:

Truck Trailer Carrying Five Tesla Cars Burns In Nevada

"What is there in a trailer to make it burn completely? Apart from its tires, probably only the content. That is what makes this fire involving a trailer with five Teslas and a Subaru very strange. ... The Elko Daily first reported the fire and said a Tesla spokesperson has denied it started because of its cars. It would have been a problem with the carrier truck. We are having a hard time to understand how is that possible. ... We have no idea if the carrier truck had any damages since it is not in the Elko Daily article. Assuming it had not, what sort of issue affects the rear trailer and not the carrier truck that theoretically caused it? Nor the front trailer that was between them? Were these vehicles new or pre-owned ones?...."

Article #5 on that list:

Tesla Includes Rust Prevention In Updated Model 3 Owner's Manual

"When you go to the Cleaning section, there is a new paragraph there as well. And this one is even more explicit regarding what Tesla will do in case your Model 3 presents any sort of paint damage: “Caution: To avoid corrosive damage that may not be covered by the warranty, rinse away any road salt from the underside of the vehicle, wheel wells, and brakes. After cleaning the vehicle, dry the brakes by going on a short drive and applying the brakes multiple times.” There is no mention of bird droppings, leaves or anything similar on page 145, probably because it would be redundant. But it makes us wonder anyway. Why has Tesla modified the manual about one month after the complaints about the paint issues started?" [Ed: Ruffo has been droning on at end for months trying to push Joni's "rust and paint" FUD] "Coincidence? The company has done the same by releasing software updates 2019.16.1 or 2019.16.2 for the Model S and X in May. In April, a Tesla Model S caught fire in Shanghai, apparently in a spontaneous way. Also on the subsequent month after the fact. "

Here, let's grab some more:

First Report Of Accident With Tesla Smart Summon Emerges
"
It was enough for a lot of people to start talking about the incident. Some defending Tesla, some attacking it and at least one of them saying he also had an issue with Tesla Summon. Chris Felton got it on September 6, before V10, which he still does not have in his Model S. He tried it on the same day. And it did not go well, as his tweets show:" [ED: Ruffo at this point links to an old video of what's clearly regular summon and tries to pretend that it's the same thing as Smart Summon] "I’m sitting in the tractor on the right. The Tesla steers into the column. You can see the mirror pop back at the very end of the video,” Fenton told InsideEVs. "Just missed the front fenders. The chrome delete on the mirror gets a white scuff from the wall rub." Fenton had an early version of the Summon Mode. AB names specifically Enhanced Summon, which is now called Smart Summon, but we are not sure if it was already the one with V10. We have tried to contact him to get more details on what happened. While we do not manage to reach him, we have checked the answers that criticize him. It is sad just some of them stick to the facts, such as this one."

New Evidence Seems To Show A Tesla Model 3 Fender/Frame Rust Issue

Was This Rust Issue On A Model 3 Tesla's Fault?

UPDATE: Tesla Model 3 Presents A New And Different Case Of Rust

If you ever see any FUD on InsideEVs, it's surely got Ruffo's name under the headline. Goes double if it includes the words "paint", "rust", or mentions the name "Joni".

 

[X Fan]

InsideEVs.com is the largest independent electric vehicle content website in the US and was acquired by Motorsport Network in February 2017. [according to first google hit Motorsport Network - Wikipediahttps://en.wikipedia.org › wiki › Motorsport_Network]

Motorsport Network has a convoluted (dicey I'd say) ownership structure (to say the least) with a good chunk of it owned by entities from a couple of old Soviet Union republics.

 

[CorneliusXX]

It does not seem like it would be as simple as superimposing them at a pixel level. The cameras have different viewpoints, possibly different focal lengths etc. I would think it would have to be more complex than that.

I wonder if they could also superimpose across frames?

That's probably why Tesla paid millions for them.

 

[Antares Nebula]

I disagree. We have time and again heard that people spent way more than they normally do to buy Model S/X. Availability of cheaper options where people don't have to pay 2x or 3x they want to in order to get a good EV is a sufficient explanation.

I think Q2 S/X sales increased because of pre-Raven deep discounts (and Raven purchases towards the end).

S,X sales in Q3 and Q4 2018 were 27k average. Assume some YoY increase due to EV market penetration trends, say at least 30k. If Q3 comes in at ~15k, do you believe that an approx 50 percent drop can be explained by M3 cannibalization? I think it is unlikely, but without more hard granular data on customers purchase intentions, I suppose it is hard to say.

 

[FreqFlyer]

Don't tell that to the uberbulls here.

Also from InsideEVs report:

"For September, we estimate the following for U.S. sales of these two Teslas:

Tesla Model S - 1,100
Tesla Model X - 1,675

"At 1,100, the Model S is up just a bit from our estimated 1,050 in August. Meanwhile, at 1,675, the Model X is down compared to our estimated 1,825 in August. The September figures for both of these Teslas are much lower than expected. In September 2018, the S had an estimated 3,750 deliveries in the U.S., while the X saw 3,975 estimated U.S. deliveries."

Assuming InsideEVs (and Troy's 15k S,X) estimate is accurate, not only are S,X sales down YoY (from 27k Q3 2018), but also QoQ, after having increased from 12k to 17k from Q1 to Q2 this year. M3 cannibalization is not sufficient to explain this much of a drop off IMO, given that S,X sales should, all things being equal, continue its upward trajectory as EV market penetration grows YoY. At the least, S,X sales should be 20k, given that it was averaging 27k in Q3 and Q4 2018. A sub 15k print would indicate a serious dislocation in sales. (Again, we can reserve final judgement when the deliveries report comes out.)

A large part of this IMO is due to the lack of a full refresh, bringing S,X to the level of the 3 in all respects (particularly battery tech). Raven, while indeed a major upgrade, apparently may not be sufficient to motivate enough customers (I know many disagree, so I'm not here to engage in another round of arguments on this point).

But also a large part of the problem may have been all the rumors of a major refresh percolating in the past year, causing customers to delay their purchases. The Raven release combined with Elon/Tesla downplaying all the S,X refresh rumors appeared to have mitigated this significantly, as Q2 results and early Q3 orders have shown.

But now it seems the momentum is lost again, and we may have a sudden drop off in September sales. What explains this? Could it be due to the S,X plaid powertrain tweet in early September by Elon? At the time, I pointed out (to much disagreement here) that this may have been an impulsive reaction to the Taycan Nurburgring lap time and a marketing misstep, undoing months of repair by Elon and Tesla in downplaying all the S,X refresh rumors that have been percolating in the past year. Now, once again, a major refresh (powertrain, chasis, and interior) may be playing in the minds of customers and adversely affecting S,X sales in the interim.

Maybe, maybe not. After a heated debate here at TMC, I concluded that further argument is pointless and that the only true arbiter would be near future S,X sales. This arbitration may now be coming to pass and much sooner than expected.

In summary, I believe S,X sales are hurting due to the lack of a full upgrade, making S,X true flagships in all respects, and also possibly due to the revitalized awareness among customers of an impending S,X refresh, resulting from Elon's early September tweet on the plaid powertrains.

I'm not here to rehash the same arguments, but only to place them within the context of these new Q3 S,X sales estimates. If today's delivery report proves Troy's and InsideEVs estimates wrong, and sales come closer to 20k, I will issue a mea culpa. And for the record I'm an uberbull too (isn't everybody here?), just more critical than others I suppose.

Great post, if I may add-

1. The Model S design has been around for 7 years, its been the face of Tesla for four of those seven years, In car years, that's old (even the Euro makers have seven year design time frames). Could it be the "market" wants something new? Buying a car is mostly an emotional one, not rational, start looking stale and there goes the emotion.

2. Are the rumors of a new gen Model S based on the 3 platform real? Would definitely yield higher efficiencies in production, higher profit margin per unit. However, that is a lot of cash to spend on a shrinking segment or niche segment. From the looks of the "plaid", it will be the seven........errrrrr......eight year old Model S platform with new motors and interior. But may be the smarter move money wise. But will it be enough to garner the market's attention?

 

[CorneliusXX]

The fact that anyone is listening to a ranting 16 year old is silly. Hey, are we still talking about TSLA?

I wouldn't want to be your postman.

 

[Antares Nebula]

Why bother posting this when official numbers are coming out in a day or so, if not a matter of hours? Not trying to harp on someone posting but you're basing this entire long post off of numbers from InsideEV who just recently even acknowledge they're making a guess at this point because a lot of their sources have dried up.

Not just InsideEVs, but also Troy's estimates. So two sources now. But yes, maybe I should have waited for the numbers from Tesla. Put it this way, if it comes in much higher, I will be pleasantly surprised. I have call options for the week and would love an upside surprise.

 

[Doggydogworld]

I'll repeat - It's completely meaningless to consider one market (the U.S.) in isolation because Tesla has been production constrained with the Model 3 since it's inception.

I know you keep repeating it. Kind of like a mantra. But Tesla pulled demand levers all year. Price cuts, SR+, price cuts, leasing, price cuts, free Autopilot and... oh yeah, price cuts. Despite that sales are down in the US and there are no waiting lists. You may believe US Model 3 sales would be the same as last year if Tesla simply produced more cars, but the evidence shows otherwise.

This is not "declining demand", however, as the bears love to claim. Last year's Model 3 sales were mostly based on Tesla filling pent-up US demand. This quarter was almost entirely ongoing demand. It makes no sense to compare the two numbers.

With a few minor exceptions, all Model 3 variants are now available in all markets. We'll soon have data for ongoing global demand.

Shipping time is roughly 30 days to China, so with a bit of production and logistics delay that would make mid-to-late November - not December.

Average RoRo time from SFO to China is ~18 days. But I imagine they are shifting back to a build-to-order type of approach for the final China-bound SR+. They don't want to get stuck with unsold US-built SR+ inventory once GF3 gets going. Orders placed on October 13 which can't be matched to existing inventory might not even be manufactured until November.

 

[MP3Mike]

Why bother posting this when official numbers are coming out in a day or so, if not a matter of hours? Not trying to harp on someone posting but you're basing this entire long post off of numbers from InsideEV who just recently even acknowledge they're making a guess at this point because a lot of their sources have dried up.

Where are these official numbers going to come from? Tesla doesn't release them. (The US break-down that InsideEVs posts.)

 

[acoste]

Article #2 on that list:

Tesla Smart Summon Demands You Be Precisely That: Smart

"We reported the first Tesla Smart Summon accident a few days ago. Abhishek Goswami, the Vice President of Global Technical Services at New Relic, made a tweet telling Tesla and Elon Musk “Enhanced Summon isn’t safe or production-ready.” ... Beta tests may imply “data loss” when you are talking about computers. What about a 2-ton “computer on wheels,” as Elon Musk defines Tesla vehicles? Data loss should be the least of the owners’ concerns. You can lose or damage many more things when testing, some of which are beyond recovery. Lives, for example. ... But how can Tesla ensure people will do as they are told? That they will not put their vehicles in a busy public parking lot to test their new toys? Beta testing with a computer poses small dangers compared to the ones a car can represent – even if it is a computer on wheels. What would Justice call it in case it hits a person, a computer, or a car? Check Goswami’s case. We have tried to contact him, but he has not replied so far..." [Ed: Russo's been harassing this guy on Twitter to try to get him to make an anti-Tesla statement he can use] "Anyway, we can tell that he has tested the Smart Summon on his driveway, as Tesla advised. Even so, his car “ran into the side of the garage.” He trusted it would perform much better than it actually did. ... it takes no responsibility if you choose to use them. You do, but Tesla benefits from your testing. In the future, other clients will also have a more reliable software. At whose expense? If you think it through, Tesla is asking you to take responsibility for tests it should perform before putting these features into “production.”"

Article #3 on that list:

Truck Trailer Carrying Five Tesla Cars Burns In Nevada

"What is there in a trailer to make it burn completely? Apart from its tires, probably only the content. That is what makes this fire involving a trailer with five Teslas and a Subaru very strange. ... The Elko Daily first reported the fire and said a Tesla spokesperson has denied it started because of its cars. It would have been a problem with the carrier truck. We are having a hard time to understand how is that possible. ... We have no idea if the carrier truck had any damages since it is not in the Elko Daily article. Assuming it had not, what sort of issue affects the rear trailer and not the carrier truck that theoretically caused it? Nor the front trailer that was between them? Were these vehicles new or pre-owned ones?...."

Article #5 on that list:

Tesla Includes Rust Prevention In Updated Model 3 Owner's Manual

"When you go to the Cleaning section, there is a new paragraph there as well. And this one is even more explicit regarding what Tesla will do in case your Model 3 presents any sort of paint damage: “Caution: To avoid corrosive damage that may not be covered by the warranty, rinse away any road salt from the underside of the vehicle, wheel wells, and brakes. After cleaning the vehicle, dry the brakes by going on a short drive and applying the brakes multiple times.” There is no mention of bird droppings, leaves or anything similar on page 145, probably because it would be redundant. But it makes us wonder anyway. Why has Tesla modified the manual about one month after the complaints about the paint issues started?" [Ed: Ruffo has been droning on at end for months trying to push Joni's "rust and paint" FUD] "Coincidence? The company has done the same by releasing software updates 2019.16.1 or 2019.16.2 for the Model S and X in May. In April, a Tesla Model S caught fire in Shanghai, apparently in a spontaneous way. Also on the subsequent month after the fact. "

Here, let's grab some more:

First Report Of Accident With Tesla Smart Summon Emerges

News regarding summon is not FUD, this is reality.

Smart Summon Fails
Smart Summon Fails

There are many issues with paint quality and rusting as well. No FUD there either.

 

[StarFoxisDown!]

Where are these official numbers going to come from? Tesla doesn't release them. (The US break-down that InsideEVs posts.)

Considering we have a good majority of registration data from overseas countries, it shouldn't be that hard to deduct a ballpark figured for US S/X sales when Tesla releases official Q3 numbers.

 

[StarFoxisDown!]

At this point, I'm not sure if I'm looking forward to the Q3 numbers more for a upside surprise to cause a bit of a squeeze or an upside surprise so that we can stop using InsideEV to make assumptions with.

 

[CorneliusXX]

News regarding summon is not FUD, this is reality.

Smart Summon Fails
Smart Summon Fails

There are many issues with paint quality and rusting as well. No FUD there either.

Anecdotal comments are worthless.

 

[Pezpunk]

I'll repeat - It's completely meaningless to consider one market (the U.S.) in isolation because Tesla has been production constrained with the Model 3 since it's inception.

i straight up do not buy this. If it were true, they'd 1) be delivering primarily Performance models, 2) not pulling demand levers all the time and 3) selling way more S/X cars.

 

[GaryW]

Not just InsideEVs, but also Troy's estimates. So two sources now. But yes, maybe I should have waited for the numbers from Tesla. Put it this way, if it comes in much higher, I will be pleasantly surprised. I have call options for the week and would love an upside surprise.

I thought we weren’t going to rehash this?

Tesla chose to withdraw the 75D. It was ~60-75% of S sales.

They will have lower Model S sales.

 

[SW2Fiddler]

News regarding summon is not FUD, this is reality.

Smart Summon Fails
Smart Summon Fails

There are many issues with paint quality and rusting as well. No FUD there either.

All of @KarenRei ’s references were FUD.
The F does not stand for Fake or False. Just sayin’