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

[Artful Dodger]

But the location of the major dutch port for distribution cannot be moved.

Tesla vehicles built at GF4 would primarily be sold in Europe, most of which will never visiting a port for distribution (with exceptions like northern Norway). The issue with ports for Europe is primarily for the supply chain of raw materials. Will Tesla get its cathode powders, steel or aluminum primarily from inside Europe? If so, then its upon Tesla to see that the suppliers they choose are well situated wrt ports. And of course land transport of bulk materials by train allows more EV usage to avoid legacy ICE-powered ships.

Cheers!

 

[vigleik]

I see what you mean but they are still taking a decent amount of risk doing that. I often change/cancel my limit orders and if I change my order after they bought ahead of me, they are fully exposed to what they bought.

For example, if I put in a limit order at $230 and they buy when the price is $232 hoping they will just unload to me at $230, they are hoping I don't cancel that order.

I assume it averages out to where they still make money on it but they are still taking that risk.

They don’t buy at $232, they buy at $230.01. And this happens at a very short time scale.

 

[Carl Raymond]

GF4 should be in Netherland. I think Elon should have Germany and Netherland do a competition to see which country sells more Tesla and use that as a way to gauge where to put the factory. I don't know why Germany beats Netherland as a factory location right now, but it'd be trivial for a German to move to Netherland to work right? But the location of the major dutch port for distribution cannot be moved.

I wonder if the decision is influenced by a desire for geopolitical stability. If the luxury ICEV market crashes, Germany will recover faster if they have GF4. Skilled workers will abound - pick them up off the street.

 

[Ulmo]

 

[Fact Checking]

I see what you mean but they are still taking a decent amount of risk doing that. I often change/cancel my limit orders and if I change my order after they bought ahead of me, they are fully exposed to what they bought.

For example, if I put in a limit order at $230 and they buy when the price is $232 hoping they will just unload to me at $230, they are hoping I don't cancel that order.

I assume it averages out to where they still make money on it but they are still taking that risk.

They don’t buy at $232, they buy at $230.01. And this happens at a very short time scale.

It's even better than giving an opportunity of buying at $230.01: basically a retail customer placing a limit order of buying 100 shares for $230.00 gives middlemen the opportunity to go long 100 shares between $230.00 and the current market price, with a guaranteed stop order at $230.00, for whatever order delay the customer is accepting.

For example if there's a big cluster of buy orders at $230.20 from institutional investors protecting an options strike price, the front running algo will have a few seconds of opportunity to place a buy limit order at $230.21 in the hope of a bounce from $231.20 - and worst case they'd get a guaranteed exit price of $230.00 from you. Without your buy limit order no such price guarantee exists: when breaking through resistance the price can and often will drop to $229.50 or lower without filling the algo's $230.00 exit price sell order.

So your "pending" order gives them a guaranteed exit price, which is very valuable: half of the highly leveraged margin-trading HFT shops on Wall Street went bankrupt during the infamous "Flash Crash of 2010", because they underestimated that a "no guaranteed exit price" low liquidity event isn't a joke and might be 10% below the current price:

Few retail customers will question 1-2 seconds of delay after clicking "BUY", and I've seen retail platforms with 10+ second delays in "processing" new orders...

Even 1-2 seconds of delay is an eternity of opportunity in the HFT world: it's 1,000,000-2,000,000 nanoseconds.

Retail limit orders are particularly lucrative if your new limit order is just below the current market price and the price happens to drop below $230.00 in the 1-2 seconds after you placed the order (or shortly before it). In that case instant profits are guaranteed: they'll buy for $229.90 or $229.73, or whatever lowest price they manage to hit (via buy limit orders, so they never risk getting a higher than $229.99 price), and if they cannot get 100 shares in that 1-2 seconds time window they simply place your limit order in the NASDAQ order book and call it a day: "heads I win, tails you lose".

Note that "cancellation" or modification of your limit orders doesn't change any of this, in fact it increases the opportunity to front-run your order: the primary time window is the few seconds between your click and the notification of your new, cancelled or updated order. The time window between you clicking and them actually performing a legally binding order on your behalf on the NASDAQ trading system (aggregated with other orders), which cannot be front-run anymore.

This all is possible because technically the retail broker is not bound by SEC "best national price" regulations and guarantees until your order has been "processed" - and the SEC is very careful to not require brokers from having a fiduciary duty to get best possible order execution for clients.

Your own broker, or third parties your broker is selling your "retail flow" to are free to trade against you, using the temporary knowledge of your guaranteed purchase price of $230.00 of 100 shares.

Sometimes they'll also give a few crumbs back to you and give the shares for $230.01 and advertise it as a "price improvement", which also gives them plausible deniability for more egregious cases of front-running...

That blinking "order being verified" status feedback of your order? The weirdly slow placement of new orders, while we can do online gaming with <50 msec latencies that perform much more complex algorithms than simple order book management?

That delay is the sign of you getting scammed.

 

[Antares Nebula]

Has anybody done a calculation of the max liability and expected reasonably liability should the NTHSA force a recall of the affected models with the so called battery issue? (Not saying it will happen, but just want to know the liabilities in case.)

Basically, we need to know the number of models affected and what would be the expense per car, be it whether it's a full battery replacement or some fractional financial renumeration. I have no idea what the former is, but the latter I can take a wild (and wide) guess of a $1000 - $10,000.

 

[T@oo]

The substation doesn't look like it will be finished in a week. Perhaps the remaining work is cosmetic?

View attachment 463229

This already looks better than some of the "finished" buildings in Shanghai. Just sayin.

 

[Pezpunk]

fairly certain Maryland is just as stupid.

Not according to any actual data i can find. Care to present any evidence to back up the assertion? Maryland has Texas beat handily on quality of public schools (http://worldpopulationreview.com/states/public-school-rankings-by-state/), overall education level of the populace (List of U.S. states and territories by educational attainment - Wikipedia), and overall literacy (State and County Literacy Estimates - Compare).

 

[elasalle]

Bloomberg - Are you a robot?

President Vladimir Putin needs to go green quickly to stop the permafrost from melting, so that Russian oil and gas companies can keep pumping the hydrocarbons that are warming the planet and making the permafrost melt.



Even I’m struggling with the warped logic of that one, but it’s the conclusion I’ve reached from Russia’s sudden ratification of the Paris climate accord and from reading the latest report of the Intergovernmental Panel on Climate Change.

 

[HG Wells]

Green Pete. It was meant to be arrogant and offensive.
But you are right its cluttering up this board.
I have deleted it.

 

[KarenRei]

Has anybody done a calculation of the max liability and expected reasonably liability should the NTHSA force a recall of the affected models with the so called battery issue? (Not saying it will happen, but just want to know the liabilities in case.)

Basically, we need to know the number of models affected and what would be the expense per car, be it whether it's a full battery replacement or some fractional financial renumeration. I have no idea what the former is, but the latter I can take a wild (and wide) guess of a $1000 - $10,000.

The NHTSA filing says around 2000 vehicles. They could always up that later (surely there were more of this pack than that, no?), but if it stays at 2000 - barring the risk of any punitive punishment - looks like under $40M, as I doubt it costs more than $20k to supply and put a new pack in a Model S. And they certainly have the capacity to make them.

That said, the plaintiff's own argument is that the software was designed to ameliorate a fire risk. Wherein, if the software does what it's supposed to do, the liability should be zero.

 

[Drax7]

I see what you mean but they are still taking a decent amount of risk doing that. I often change/cancel my limit orders and if I change my order after they bought ahead of me, they are fully exposed to what they bought.

For example, if I put in a limit order at $230 and they buy when the price is $232 hoping they will just unload to me at $230, they are hoping I don't cancel that order.

I assume it averages out to where they still make money on it but they are still taking that risk.

They execute the trade when the offer hits 320 but don’t assign it to you unless the price goes lower. If it goes higher
They keep it. If lower , then you are filled.

 

[Pras]

That said, the plaintiff's own argument is that the software was designed to ameliorate a fire risk. Wherein, if the software does what it's supposed to do, the liability should be zero.

Agree. Seems the argument is pretty lame. This lawsuit seems another one of shortie force’s desperate acts. It’s like they are frustrated how easily Tesla can overcome its problems.

 

[kbM3]

Misleading video that claims Maxwell DB Electrode technology is not compatible with Hibar Electrolyte technology.

I agree, on that aspect. I had actually paused the video after a particularly informative slide, and posted it over here. When I went back and finished the video, I saw the section you mentioned, and debated going back to edit my post, but I was not sure enough of what he was claiming.

 

[PaulusdB]

GF4 should be in Netherland. I think Elon should have Germany and Netherland do a competition to see which country sells more Tesla and use that as a way to gauge where to put the factory. I don't know why Germany beats Netherland as a factory location right now, but it'd be trivial for a German to move to Netherland to work right? But the location of the major dutch port for distribution cannot be moved.

The Dutch tax authorities are hated by all their fellow European counterparts for making very attractive offers to large multinational companies. No doubt Tesla is already financially structured in ways to maximize its friendship with the Dutch. A Dutch GF4 fits into that picture.

 

[Todd Burch]

The NHTSA filing says around 2000 vehicles. They could always up that later (surely there were more of this pack than that, no?), but if it stays at 2000 - barring the risk of any punitive punishment - looks like under $40M, as I doubt it costs more than $20k to supply and put a new pack in a Model S. And they certainly have the capacity to make them.

That said, the plaintiff's own argument is that the software was designed to ameliorate a fire risk. Wherein, if the software does what it's supposed to do, the liability should be zero.

I am personally affected by the BMS changes (both lower range and lower Supercharging rate), and even *I* am not sure if Tesla has a legal obligation to replace the pack (though I am no legal expert). They issued a software update to correct the safety issue as soon as it was discovered, and do not have anything in the warranty (for packs of that vintage) saying that degredation cannot exceed some specific amount. So from a safety perspective I feel like they're covered.

However, the bigger concern to me as a big TSLA stockholder is in the negative impact to goodwill on the customers---many of whom (like myself) are very early adopters of Tesla products and felt not only rolled over the coals, but were never given an up-front explanation from Tesla. Many of us have a sour taste in our mouths as a result of how this was handled, and it does leave the impression that if you don't drive the latest and greatest car, Tesla doesn't care about you all that much. Not saying that's actually the case, but many affected feel that way--as much as I want to cheer Tesla for everything.

I hope they at least make some sort of gesture of goodwill toward those affected. We all want Tesla customers to be happy, right?

 

[Antares Nebula]

The NHTSA filing says around 2000 vehicles. They could always up that later (surely there were more of this pack than that, no?), but if it stays at 2000 - barring the risk of any punitive punishment - looks like under $40M, as I doubt it costs more than $20k to supply and put a new pack in a Model S. And they certainly have the capacity to make them.

That said, the plaintiff's own argument is that the software was designed to ameliorate a fire risk. Wherein, if the software does what it's supposed to do, the liability should be zero.

Thanks. Yes, I would think 2000 is too small, but unsure. From what I understand it's specific model years, with specific battery pack sizes. So not the entire prior S,X line. On the other hand $20k per car would be very expensive. If the total number of affected cars is max 10k, then you're talking about 10k x $20k = $200mm, which is kinda steep, but absorbable for Tesla. Anything more would start getting concerning.

I think the best solution (for all parties concerned), should a recall happen, is that either a financial renumeration or trade-in with a max $10k discount/benefit. I mean why retrofit these older models with new batteries? They don't have all the latest self-driving tech. Better to software limit their range and sell/trade them for a discount, and eventually phase them out.

 

[Drax7]

The Dutch tax authorities are hated by all their fellow European counterparts for making very attractive offers to large multinational companies. No doubt Tesla is already financially structured in ways to maximize its friendship with the Dutch. A Dutch GF4 fits into that picture.

Does Holland have the labor force to man/woman gf4 ?

 

[Antares Nebula]

I am personally affected by the BMS changes (both lower range and lower Supercharging rate), and even *I* am not sure if Tesla has a legal obligation to replace the pack. (But I am no legal expert). They issued a software update to correct the safety issue as soon as it was discovered, and do not have anything in the warranty (for packs of that vintage) saying that degredation cannot exceed some specific amount. So from a safety perspective I feel like they're covered.

However, the bigger concern to me as a big TSLA stockholder is in the negative impact to goodwill on the customers---many of whom (like myself) are very early adopters of Tesla products and felt not only rolled over the coals, but were never given an up-front explanation from Tesla. Many of us have a sour taste in our mouths as a result of how this was handled, and it does leave the impression that if you don't drive the latest and greatest car, Tesla doesn't care about you all that much. Not saying that's actually the case, but many affected feel that way--as much as I want to cheer Tesla for everything.

I hope they at least make some sort of gesture of goodwill toward those affected. We all want Tesla customers to be happy, right?

You have a point here. Yes, I think the safety concern has been addressed (as it should be, a priority). But (correct me if I'm wrong) I think customers are now upset about the reduced range (and as you say, the way Tesla went about it). Tesla fixed the fire risk at the expense of range. Tesla consequently claiming that the range degradation was natural is what I think pissed off folks.

What do you think would be an appropriate financial renumeration, either in cash or trade-in / new purchase discount?

 

[Antares Nebula]

Or perhaps, they can give all affected owners life-time free supercharging, attached to their name (and not car). I don't know what the average cost per customer would come to with this, but, it might be worth considering after crunching the numbers??