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

[JusRelax]

So any predictions on cash flows? Do we think we will see a repeat of Q2 when they added almost $1B is cash from operations.

Sales>production which should help cash flow as well.

I don't see an extra $1B FCF this quarter. An increase in the number of leases, plus restructuring of solar panel sales towards the rental model hurt FCF.

 

[Skryll]

So just as an exercise, what would have been increase in Revenue if Tesla had actually sold 100K cars?

Nitpick: They sold 110k cars. They did deliver 97k which recognize as revenue.

 

[SoGA Fan Club]

Just an in-general comment here. It's only my opinion and I know I'll get some disagrees, but disagrees are actually encouraging to me, so it's ok.

It is TOTALLY worthless to read any article or comment that highlights sales information about other electric cars when discussing Tesla, and equally as worthless to compare Tesla sales figures to other EVs (and EV manufacturer's EV overall sales).

Tesla sells cars, and must compete against all cars now. Winning the 2% battle is a done deal and old news. Yes, Tesla won that battle, but there honestly wasn't much competition, and the payoff for that win is essentially nothing. The real battle is no different than any other company - to sell enough product at a high enough margin to sustain and grow the business over the long term.

It is absolutely pointless to talk about BMW or Nissan lowering the prices of their EVs. That is actually a negative on Tesla because it would seem to indicate that EVs are not as popular as some believe.

I know it feels good to continuously bring up these stats and beat our chest over it, but it really is meaningless. Tesla's results are totally unrelated to the other EVs. Beating those cars will not get us anywhere. Tesla has to simply produce more vehicle models, and dominate each new release's segment as the S and 3 have (I have no idea what segment the X is in and how it is doing in that class).

Continuing to boast about beating other EVs would be like an NFL team claiming left hand QBs are better than right hand QBs, and bragging because they are FAR better than the other 3 teams with left handed QBs - though still the 24th best team in the league. Get my point?

 

[Troy]

Hi everybody. Here are the results of my Q3 2019 Tesla Production & Delivery Estimates Survey.

This table shows the top 10 most accurate estimates in all 6 categories. Congrats to @Fender827, @Doggydogworld and @EVNow for the first three places.

If we ignore production and look at just the delivery estimates, the top 10 entries would be as follows:

The accuracy of the community average was pretty good too:

You can see all the results here.

 

[T3slaOwner]

I like your ideas, but deduct 2 wks production for 2020Q1 at GF3 for Chinese New Year. The whole country shuts down for 2 wks. It'll be like -15% qtrly production vs nominal run rate.
Cheers!

We really need something like that in the US where people just walk away from their jobs for a week or two. I worked with a French company once and around Bastille day they were shut down. Not one day, the week! I guess 4th of July is like that for us, but we really only get one day off work.

 

[KSilver2000]

We really need something like that in the US where people just walk away from their jobs for a week or two. I worked with a French company once and around Bastille day they were shut down. Not one day, the week! I guess 4th of July is like that for us, but we really only get one day off work.

Many (not all) Silicon Valley companies, and even non tech companies, get at least a week off for Christmas/New Years time period.

 

[ReflexFunds]

I don’t think any rational or neutral investor can genuinely be disappointed by Tesla’s solid QoQ growth in production and net orders (despite not launching orders in any major new markets in the Q).
I think today’s stock price is driven more by Trump’s new trade war with Europe.
Tesla are vulnerable to this and I think it will be very hard to build the European GF4 as quickly as the China GF3.
If Europe does put extra tariffs on Tesla, I think ramping production faster at GF3 to supply Europe from China could be the best short term solution.
With or without a European trade war though, it is definitely time for Tesla to accelerate GF4.

 

[KSilver2000]

I chose the wrong career. Man I should've been an analyst. Hardly do any research, get paid well, no liability for what I say, and on and on

Sounds like the job of a POTUS.

 

[SO16]

Without "funding secured", "pedo guy", "let's go to youtube" and with a bit more careful setting of expectations (not sandbagging, just more clear messaging of the insanely ambitious goals), we would have hit $400 easily already.

we were close to ATH in December which is well after all of that.

 

[StealthP3D]

The X is a weird looking car that needs a full refresh to become more premium ahead of MY release.

I've always thought the X looked like a fat whale. But it's a sleek, fat whale and it's absolutely huge inside. To say it's a "weird-looking car" is mostly just saying that it looks different from other largish SUV's. And when you see what other cars with comparable interior volume look like, it's a huge compliment to say the X looks "weird". Because you have to be really "special" in a uniquely American way to think any of these look better:

2017 SUV - Google Search

(That's just a Google image search for "2017 SUV")

Designer Franz must have dug deep into his talents to make it appear as slim as possible for its size. It really is a breakthrough large car but a "refresh" isn't going to change its nature.

These are good problems to have IMO. The newer products are too good.

Yeah, the mass-market is key if you want to make an impact and Tesla is almost single-handedly transforming mass market cars from uneconomic junk (gas and oil powered cars) into desireable things of beauty and quality. Tesla is now solidly associated with "premium" and "high-end" so I would argue that refreshing their premium models is pretty low down on the list. It's all about churning out awesome cars in quantity at prices most new car buyers can afford.

That said, it's important to stay ahead of the technology/performance curve and I 100% support the development of the "plaid" platform. But let's not think Tesla needs to get caught up in the traditional games automakers play. A little new alcatera here, a little new chrome accent there, a different crease in the sheet metal or a more menancing looking front grill. It's still the same frickin' car. Tesla is a leader because their cars are superior in profound ways and have clean, timeless styling, not because they keep them "refreshed" and play superficial games with the styling. I find the whole "masculine" styling trend in the last couple of decades to be a sad (but hillarious) reminder of the stage we just went through. The future does not look like that. As Elon Musk might say, "Not cool".

 

[canoemore]

I've always thought the X looked like a fat whale. But it's a sleek, fat whale and it's absolutely huge inside. To say it's a "weird-looking car" is mostly just saying that it looks different from other largish SUV's. And when you see what other cars with comparable interior volume look like, it's a huge compliment to say the X looks "weird". Because you have to be really "special" in a uniquely American way to think any of these look better:

2017 SUV - Google Search

(That's just a Google image search for "2017 SUV")

Designer Franz must have dug deep into his talents to make it appear as slim as possible for its size. It really is a breakthrough large car but a "refresh" isn't going to change its nature.



Yeah, the mass-market is key if you want to make an impact and Tesla is almost single-handedly transforming mass market cars from uneconomic junk (gas and oil powered cars) into desireable things of beauty and quality. Tesla is now solidly associated with "premium" and "high-end" so I would argue that refreshing their premium models is pretty low down on the list. It's all about churning out awesome cars in quantity at prices most new car buyers can afford.

That said, it's important to stay ahead of the technology/performance curve and I 100% support the development of the "plaid" platform. But let's not think Tesla needs to get caught up in the traditional games automakers play. A little new alcatera here, a little new chrome accent there, a different crease in the sheet metal or a more menancing looking front grill. It's still the same frickin' car. Tesla is a leader because their cars are superior in profound ways and have clean, timeless styling, not because they keep them "refreshed" and play superficial games with the styling. I find the whole "masculine" styling trend in the last couple of decades to be a sad (but hillarious) reminder of the stage we just went through. The future does not look like that. As Elon Musk might say, "Not cool".

I agree, and I think that the constant software updates probably do as much as the minor cosmetic changes you reference to keep the cars fresh for customers. But I may be wrong - I don't actually own a Tesla so I don't know.

 

[T3slaOwner]

Just an in-general comment here. It's only my opinion and I know I'll get some disagrees, but disagrees are actually encouraging to me, so it's ok.

It is TOTALLY worthless to read any article or comment that highlights sales information about other electric cars when discussing Tesla, and equally as worthless to compare Tesla sales figures to other EVs (and EV manufacturer's EV overall sales).

Tesla sells cars, and must compete against all cars now. Winning the 2% battle is a done deal and old news. Yes, Tesla won that battle, but there honestly wasn't much competition, and the payoff for that win is essentially nothing. The real battle is no different than any other company - to sell enough product at a high enough margin to sustain and grow the business over the long term.

If by the 2% battle you mean among the EVs, then that battle has not yet started. What Tesla did was what a start up EV company would do, go all in on EVs in every way they can think of, design, charging infrastructure, new sales methods... Tesla has no tie to the ICE status quo so they had no reason to hold back. In fact, it was a bit like storming the Bastille, the quicker, the better.

ICE companies don't go for billions of venture capital and blow it all in one big blast. They pick a tentative path and continually monitor the winds to see if they change. They also don't go all in at any time. Big Iron auto makers have a lot to lose so they want to be sure of each step. That doesn't mean they won't get to the ultimate finish line ahead of the startups. It's still unclear if the startups will even reach the finish line.

So when Big Iron gets serious in a couple more years the game will be very different. Think Russia in WWII vs the Germans. Hitler never really stood a chance against the dreadnought of mother Russia.

It is absolutely pointless to talk about BMW or Nissan lowering the prices of their EVs. That is actually a negative on Tesla because it would seem to indicate that EVs are not as popular as some believe.

I know it feels good to continuously bring up these stats and beat our chest over it, but it really is meaningless. Tesla's results are totally unrelated to the other EVs. Beating those cars will not get us anywhere. Tesla has to simply produce more vehicle models, and dominate each new release's segment as the S and 3 have (I have no idea what segment the X is in and how it is doing in that class).

You seem to talking about Tesla standing at the top of the hill when they are virtually the only ones on the hill. Nissan has a car they are selling, but it's not intended to be the same sort of car as the model 3. I'm not sure what the Bolt or the BMW i3 are intended to be. GM doesn't even advertise or support the Bolt in a meaningful way. Give these guys five years and it may well be that people say, "Tesla, who?" and "Why would I want to drive across town to use the red chargers when there are green chargers at all the supermarkets?"

Continuing to boast about beating other EVs would be like an NFL team claiming left hand QBs are better than right hand QBs, and bragging because they are FAR better than the other 3 teams with left handed QBs - though still the 24th best team in the league. Get my point?

Not really, poor analogy I think.

A better analogy is to talk about how you clearly are ahead in the Superbowl and preseason doesn't start for two more weeks.

 

[TheTalkingMule]

We really need something like that in the US where people just walk away from their jobs for a week or two. I worked with a French company once and around Bastille day they were shut down. Not one day, the week! I guess 4th of July is like that for us, but we really only get one day off work.

Working with mid to C-level execs over the last 15 years, I can tell you in the last 5 years or so they pretty much don't work from July4th to Labor Day or Thanksgiving thru New Years. And by "don't work" I don't mean they ratchet down their effort, I mean they disappear. I guess this coincides with their new-ish option to "work from home".

More everyday Americans need to know how these people operate and how relatively useless they are.

 

[Doggydogworld]

So any predictions on cash flows? Do we think we will see a repeat of Q2 when they added almost $1B is cash from operations.

Not that good. New car inventory is a key driver of OCF:
-640m OCF in Q1, inventory +14.1k cars
+864m OCF in Q2, inventory -8.3k cars

The other key driver is net profit/loss, which improved ~300m from Q1 to Q2. The other OCF drivers are smaller and often cancel each other out. In Q3 they reduced inventory by roughly 1k S/X and should improve net loss by another ~100m, so look for positive OCF in the 400-600m range

So...are we going to be profitable for this Q3 or no?

Almost certainly not. I thought they might try to recognize a ton of emissions credits as in Q1 and deferred EAP/FSD revenue thanks to Smart Summons. With ~102k deliveries and a low lease percentage that would push them to a non-GAAP profit and possibly a GAAP profit. But with 97k deliveries and high lease percentage I think they'll keep the emissions credits and deferred revenue in the cookie jar.

Q12020 is likely to be rough for several reasons. But why would one of them be the ongoing GF3 ramp during Q1? The capital cost of every robot and piece of equipment now installed in GF3 has been this quarter and some small add'l portion during Q4. Tesla will be adding more workers on the GF3 assembly line(s) over the coming quarters as needed by the overall rate of production on those lines.
The expensive part of the GF3 ramp will be counted in this year's financials.

That's not how it works. They don't count these expenses until they begin production of actual customer cars. Even then, they depreciate the upfront cost of the land, building, equipment and tooling over many years. Barring another production hell, the effect of these capital expenses on profit/loss is small. Some of these items will show up in on the cash flow statement under "Cash Flows from Investing Activities", but in the case of GF3 I believe most will not.

To add on to this, all of the robotics and equipment that was packaged up from freemont and Giga1 and sent over to Giga 3 has already been paid for and more importantly, is already factored into the finances when it comes to depreciation and such. So we shouldn't see the same profit hit that new equipment that tesla has to depreciate on a quarterly basis.

I have read of Tesla shipping module-making equipment from GF1 to GF3, but not equipment from Fremont. Do you have links? Anyway, it's possible to take equipment out of service and stop depreciating it for a while. Whether Tesla did this I can't say.

So just as an exercise, what would have been increase in Revenue if Tesla had actually sold 100K cars?

Depends if the extra 3k cars were 3s or S/X. Add 50k for each additional Model 3 and ~90k for each S/X.

Even at 100k cars revenue would be less than Q3 of last year, but probably above last quarter. As it is I expect Q3 revenue to be down both sequentially and Y/Y. That's actually pretty shocking for a seasonally strong quarter, and the death cult is going to be all over it. You can also expect to see "Is Tesla's Growth Story Over?" headlines from the media. Except CleanTechnica, of course

 

[T3slaOwner]

I've always thought the X looked like a fat whale. But it's a sleek, fat whale and it's absolutely huge inside. To say it's a "weird-looking car" is mostly just saying that it looks different from other largish SUV's. And when you see what other cars with comparable interior volume look like, it's a huge compliment to say the X looks "weird". Because you have to be really "special" in a uniquely American way to think any of these look better:

2017 SUV - Google Search

(That's just a Google image search for "2017 SUV")

I'd like to have a sexier car or even one that says something other than "Hey, me too!" My X does not stand out in a crowd until I open a falcon wing door. What I do love about it is after driving the model S loaner cars... too many times now... I know I would have hated owning an S even more than my X. The roof line is so sloped that I have to turn around and enter an S butt first. Even then I can hit my head or even my shoulders on the way in. Every mile in the X costs more in fuel, but at least I can get in it without contorting. Oh, and Tesla is paying the fuel bill anyway. lol

Designer Franz must have dug deep into his talents to make it appear as slim as possible for its size. It really is a breakthrough large car but a "refresh" isn't going to change its nature.



Yeah, the mass-market is key if you want to make an impact and Tesla is almost single-handedly transforming mass market cars from uneconomic junk (gas and oil powered cars) into desireable things of beauty and quality. Tesla is now solidly associated with "premium" and "high-end" so I would argue that refreshing their premium models is pretty low down on the list. It's all about churning out awesome cars in quantity at prices most new car buyers can afford.

That said, it's important to stay ahead of the technology/performance curve and I 100% support the development of the "plaid" platform. But let's not think Tesla needs to get caught up in the traditional games automakers play. A little new alcatera here, a little new chrome accent there, a different crease in the sheet metal or a more menancing looking front grill. It's still the same frickin' car. Tesla is a leader because their cars are superior in profound ways and have clean, timeless styling, not because they keep them "refreshed" and play superficial games with the styling. I find the whole "masculine" styling trend in the last couple of decades to be a sad (but hillarious) reminder of the stage we just went through. The future does not look like that. As Elon Musk might say, "Not cool".

Tesla has been making cars for what, 10 years now? They are still making rookie mistakes. Big Iron sells cars the way they do because it sells cars. The first 50-60 years had many, many car companies go out of business. Why? Because they hadn't learned their lessons fast enough. Even Chrysler ended up being bought out. We will see what Tesla has to teach and what they have to learn.

 

[jerry33]

Analyst prediction are adjusted to reflect customer positions.
If your customers are short hedge funds, your predictions are bearish
To accommodate them in return for commission income.

Analysts are similar to consultants. They get their money by agreeing with those that pay them.

 

[T3slaOwner]

I agree, and I think that the constant software updates probably do as much as the minor cosmetic changes you reference to keep the cars fresh for customers. But I may be wrong - I don't actually own a Tesla so I don't know.

I think the updates should be fewer between with smaller impacts to the UI. We need to consider who has bought the cars to date and the overwhelming masses who haven't. When people ask me about the car's interface and operation I tell them it's not so much a car with smarts, as it is a cell phone with wheels. That's not meant to be a bragging point.

They have early adopters and not so early adopters selection in the UI. Maybe they need a third option... "What, come again?"

 

[jerry33]

This is all good. Still, haven't they said they'd be able to produce 7K M3 per week by the end of 2019 for some time now?

FIFY

 

[Unpilot]

Analysts are similar to consultants. They get their money by agreeing with those that pay them.

And they do it with mealy mouth,mamby pandy language. "We believe...they might...concern's going forward...coming competition...ect..ect"
Once you learn the lingo you can write this crap in your sleep.

 

[Christine69420]

While Tesla sells more cars than they are making, other brands are not so lucky.

In Norway BMW is dropping the price of the BMW i3 by $10,000 or 21.88% down to NOK 375,800 from NOK 481,060. The newpaper is calling this a Monster Discount.

Source in Norwegian: BMW i3 med monsterrabatt | Finansavisen

This after Nissan recently started selling the Leaf with a $4000 or NOK 40,000 discount. This after Nissan have sold only half the number of Leafs they had this time last year. Now only 4568 YTD.
In Norway the Nissan Leaf starts from NOK 287,900.

Source in Norwegian: Kraftig salgsnedgang for Nissan Leaf | Finansavisen

It is absolutely pointless to talk about BMW or Nissan lowering the prices of their EVs. That is actually a negative on Tesla because it would seem to indicate that EVs are not as popular as some believe.

OK this post I made may have been interesting only to me.

For me it's interesting because while BMW i3 and Nissan Leaf have been popular in Norway they were really slow to innovate. Now they both have not so popular cars and any no replacements coming for quite a while. And at the same time the very innovative M3 tops the list of cars sold.

For me this is indicating that Tesla is doing the right thing. Others are not. So this morning I bought more shares in Tesla.

This is not investment advice. I haven't any relevant education or experience so when investing I basically have no idea what I'm doing.