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

[Carl Raymond]

It's Jack Rickard. I know it's only one letter different but when Karen called him "Jack Richard" with no real context that I could identify him with, I had no idea who she was talking about.

One name is two first names, the other isn't.

And yes, I believe oil money is messing with TSLA stock. Whatever happened to that claim from last week that there was more info on this? Was it a court filing or a piece of investigative journalism?

Twitter

Steve Jobs Ghost tweeted that he had received documents from a whistleblower.

 

[RobStark]

More important is the provincial luxury sales tax for vehicles above 125k, which makes BC a model 3 province only from now on

A Model X starts at $116k Canadian.

 

[LN1_Casey]

Twitter

Steve Jobs Ghost tweeted that he had received documents from a whistleblower.

It's been over a week since he tweeted this, but hasn't done a followup as far as I'm aware. Dug through his tweets, but didn't find one.

 

[Sean Wagner]

unless they buy abandoned car factory in Germany ready for re-tooling

Brownfield sites can have their own challenges.

What Tesla will be looking for is a successful track record of local government and industry working together. Even in Germany permitting can be expedited and knowledgeable, proven contractors can build structures very quickly.

I agree that Tesla will go for the build-new-space model now that it looks like battery manufacturing is set to be integral to the Shanghai Pudong GF from an early date, and we begin to understand the scale of things to come.

Off the top of my head, Porsche eked out some space and built the new factory hall for EV production smack dab inside their Stuttgart Zuffenhausen factory complex. I visited it way back when the 959 was a big sensation - it's a good ole city location that ought to induce planning nightmares when gears don't mesh.

Another example to follow is the state of Thuringia's pursuit of EV manufacturing - they actively courted CATL, who are just now beginning greenfield construction of what will turn into one of Germany's big cell production facilities.

Berlin's putative new airport is the eponymous counter-example of misdirected meddling by local politics and a downward spiral into planning and regulatory hell. Incidentally, Berlin's government hasn't learned anything, as proven by their latest high-handed regulatory bombs dropped into the local housing market.

Pic: new EV manufacturing facilities at Porsche's Stuttgart-Zuffenhausen storied HQ. [Cute little money printing operation! They do have a new factory in Leipzig too.]

Ceterum censeo, German Tesla sales need to rise for GF4 anywhere in Europe to make sense. It would also help to have mixed production of Models 3 & Y on one line, ie. what BMW pioneered a generation ago to signal success [and have taken to self-defeating extremes lately].

 

[j6Lpi429@3j]

regarding the small increase in production in the last year... I agree, its a bit disappointing, I would have expected a lot more a year ago, but then the more I read (and funnily enough the more I playtest my car factory game in my dayjob) the more I realise that it gets VERY hard to make a single factory produce *more*. At some point, you have to build another one!

I am very excited about GF3 because
a) its a zero-space constraints new factory, so we can eventually look at doubling current production
b) its a BRAND NEW design of factory, with none of the layout constraints of fremont. Like...have you guys LOOKED at the mess that is the fremont layout:

Like WHO THE HELL would deliberately lay out a factory like that? unless it had slowly and awkwardly expanded over time in annoying fits and starts.... Whereas GF3 is not only a ground-up purpose built car factory, its a ground-up purpose built electric car factory designed for an existing car model.
I'll be amazed if the output/square foot for GF3 does not noticeably exceed fremont, and thats without 'china-fast' attitudes. Given cheaper labour costs, and an extremely friendly government, the financial benefits of having this factory are going to be dramatic.

I think thats why elon is so bullish about Q3/4 2020. Thats when he expects decent GF3 production, and he KNOWS its going to kick fremonts ass.

I'm bullish as hell, and pretty optimistic about earnings, even if the price gets manipulated for the first week or so afterwards.

 

[Causalien]

Per reddit he is referencing Andrew Yang's Washington Post interview. I think Elon is saying US needs to give China more carrot & less stick:

Yang's Washington Post interview with Robert Costa : YangForPresidentHQ

70percentCACAO

4 points·2 hours ago

Killed! Very good interview; asked tough questions; pressed to get a direct response. Would have liked the Uighurs mentioned, but the same applies; a carrot & stick approach will be needed to improve Chinese policy. Still a solid interview. Appreciate how much Bezos is mentioned & the ownership of The Washington Post clarified (even if it was late into the interview).

nakaninano

1 point·27 minutes ago

I just saw musks tweet about more carrot less stick. Was Andrews line in the interview about the right combination of carrots and sticks regarding China? I’ve heard musk speak very favorably of China and just wondering if he was suggesting being nicer to them. Thanks.

Fat chance of that. Trump is all about sticks. His carrots are trap sticks that is shaped like a carrot and painted red.

 

[UncaNed]

* Most of Tesla's FSD fleet is in the US, where total vehicle sales have been greatest and the FSD uptake rate has been highest
* Tesla moved Smart Summon into the completed category on their website, so regardless of whether it's "beta", they consider it delivered.
* Energy is not simply solar. There've been a number of announcements of completed powerpack projects in Q3 - and this is a market where significant growth is to be expected in general.

Summon and Smart Summon are fantastic when they're working, but NO WAY Smart Summon - or even regular "Summon" - should be considered "delivered". I had to keep trying to reconnect well over 40 times to get my Model X to move 100' with a 180 degree turn; the connection problem is just as buggy standing right next to the car trying to get it to move fore and aft; I'd look like an idiot if anyone were watching closely. Meanwhile, the app worked flawlessly for flashing the lights on command, so it appeared to not be a real connection issue.

(Edited a couple times)

 

[UncaNed]

Amazing really.
Largely due to how things are done in China.
Would not have been completed anywhere close to that time frame if done in America with the (sub)contractors and government here.

And unions dragging the whole process down with quadruple costs and triple time to completion at the very best. Just look what it takes to build a mile of DC Metro train. Need we discuss GM?? This is the reason I cringe at the spectre of a Democratic congress and president like Sanders.

 

[Cyrusis]

Me neither. If I did, it wouldn't have a good feeling for Wednesday either. But alas; it So happens It's Tuesday.

Summon and Smart Summon are fantastic when they're working, but NO WAY Smart Summon - or even regular "Summon" - should be considered "delivered".

For the sake of deferred FSD revenue recognition, it has been delivered.

 

[RobStark]

Fat chance of that. Trump is all about sticks. His carrots are trap sticks that is shaped like a carrot and painted red.

From Reagan through Obama US trade policy toward China has been about carrots and not sticks.

To create a middle class in China that would demand and eventually get a Democracy.

What we have is Repression in Hong Kong,Tibet, and Far West.

And 2.5% tariffs for Chinese cars coming into the USA and 25% tariffs for American cars entering China.

 

[KarenRei]

Summon and Smart Summon are fantastic when they're working, but NO WAY Smart Summon - or even regular "Summon" - should be considered "delivered".

Regardless of how you feel about its current state, Tesla has moved it from "Coming later this year" to the list of things that are already offered.

Meanwhile, the app worked flawlessly for flashing the lights on command, so it appeared to not be a real connection issue.

Not the same thing. It can tolerate as much lag and dropped/retried packets as it wants when just issuing a single command. For Smart Summon, they need basically zero latency and zero dropouts. Both on the side of your phone and the side of the car.

That said, I suspect that they may make it less picky about connection quality over time as they come to trust the system more. E.g. if it cuts out for a quarter second while moving at a max of, say, 2 meters per second, that's half a meter... so if they think they can trust it to not go from "everything's fine" to "accident" in half a meter, then they could allow quarter-second connection breaks. They might make it up the car's caution level when the connection is poor.

Traceroute might help figure out whether the problem is more on the side of your phone's connection or the car's connection.

 

[replicant]

regarding the small increase in production in the last year... I agree, its a bit disappointing, I would have expected a lot more a year ago, but then the more I read (and funnily enough the more I playtest my car factory game in my dayjob) the more I realise that it gets VERY hard to make a single factory produce *more*. At some point, you have to build another one!

I am very excited about GF3 because
a) its a zero-space constraints new factory, so we can eventually look at doubling current production
b) its a BRAND NEW design of factory, with none of the layout constraints of fremont. Like...have you guys LOOKED at the mess that is the fremont layout:

View attachment 468759

Like WHO THE HELL would deliberately lay out a factory like that? unless it had slowly and awkwardly expanded over time in annoying fits and starts.... Whereas GF3 is not only a ground-up purpose built car factory, its a ground-up purpose built electric car factory designed for an existing car model.
I'll be amazed if the output/square foot for GF3 does not noticeably exceed fremont, and thats without 'china-fast' attitudes. Given cheaper labour costs, and an extremely friendly government, the financial benefits of having this factory are going to be dramatic.

I think thats why elon is so bullish about Q3/4 2020. Thats when he expects decent GF3 production, and he KNOWS its going to kick fremonts ass.

I'm bullish as hell, and pretty optimistic about earnings, even if the price gets manipulated for the first week or so afterwards.

I wouldn't worry to much about vehicle production yet.

Tesla remains cell production limited. So they're right not to build many vehicle factories until they can supply them with enough batteries

Tesla had to

1. master the design and building of new vehicle production at Fremont. They learnt that with the ramp up of S, X and 3, and are now running tests for Y. They had to acquire and integrate Grohmann for that, too.
   
2. learn from their partnership with Panasonic before deciding to make the cells themselves. This went well until the decrease in S/X sales (which relies on Panasonic's 18650 cells) and Panasonic's final investments in Gigafactory 1. Now, Tesla is said to plan for a switch of S/X to 21700 but also to invest far more than Panasonic can sustain, so the time is right to become independent from cell suppliers
   
3. build a third factory in China, to prove that they are able to build fully-integrated plants, very fast, for cheap, and far from the US headquarters. Remember that Musk considers these plants to be the main Tesla products, not so much in the sense that tey'll sell plants to other manufacturers, but that they will build them en masse, to replace all ICE car manufacturers as quickly as possible. These plants should do cell, pack and vehicle production, so they had to wait for Fremont and Reno plants to ramp up, and replicate that in a single site, in a distant country.
   
4. the last move is in mining, because make cells for cars, trucks, semis and stationary storage requires far more minerals than the industry currently can provide.

I don't have the quote but IIRC, Musk asked shareholders in the last meeting to focus on battery and autonomy. It isn't a coincidence: what's holding back Tesla from transitioning the world to renewable is indeed battery production (not vehicle) and autonomy (so that one new car car replaces a dozen, thus limiting the need for… batteries).

In retrospect, making vehicles (or, more precisely, making plants that make vehicles) should be the easy part of Tesla's mission.

"Move your goalposts"

 

[Tslynk67]

Anyone have FactSet latest EPS and revenue estimates? It looks like EPS has gone down from -0,45 to -0,46, but can't find revenue

edit: found it 6.45B yeah it's hard to beat that nr

CNBC's consensus is $-0.41, I'm sure it was -0.49 last week, but I could be wrong.

 

[Christine69420]

Anyone in the UK have more precise info on this?

Electric car drivers could be given green number plates to allow them to use bus lanes and park for free

Electric car drivers could be given green number plates to allow them to use bus lanes | Daily Mail Online

These incentives along with VAT excemption and changing car taxes from beeing based on performance to pollution helped EVs to get a strong boost in Norway.

Especially in the Oslo area people bought EVs so they could drive to work in the bus lanes.

 

[serverguy247]

Anyone in the UK have more precise info on this?

Electric car drivers could be given green number plates to allow them to use bus lanes and park for free

Electric car drivers could be given green number plates to allow them to use bus lanes | Daily Mail Online

These incentives along with VAT excemption and changing car taxes from beeing based on performance to pollution helped EVs to get a strong boost in Norway.

Especially in the Oslo area people bought EVs so they could drive to work in the bus lanes.

It's great, I could get free parking in my city (without having to apply for a special pass thing). BUT not sure I want a green plate on my car... Not exactly a complimentary colour that goes well with white/grey/blue/red. Maybe I am being picky (We currently have white on front, yellow on rear in the UK).

 

[Dan Detweiler]

I don't mean to be flippant about the stress of watching your brokerage account shrivel for no good reason. It sucks. But I'm confident that Tesla is out of danger now, and will reward patient investors in a stupendous way. To reduce the stress of red days, I recommend what I have done:

1) Look at the quality of the analysts who have high conviction in TSLA (Ron Baron, ARK Invest, and many folks here) vs the intellectual and ethical quality of the bears (Spiegel, Chanos, etc.) and volatility milkers (Jonas, etc.).

2) Look at the quality of Tesla's products: their intelligence, creativity, and astonishing rate of improvement.

3) Look at the size of the markets Tesla is disrupting and plans to disrupt.

4) Look at the quality of the management and employees they are attracting. (SpaceX and Tesla are the most desirable employers for engineers, and are hiring only 1% of job applicants.)

5) Look at the boldness of Tesla's ambitions and innovations (new products and patents, vertical integration, "thinking from first principles", etc.).

6) Look at the environmental and social conditions favoring Tesla's growth (worsening climate change, tightening pollution regulations, rising populations of environmentally and computer savvy, etc.).

7) Look how far ahead of the competition Tesla is, as estimated by experts and proved by competing products.

I don't have time and skills to analyze balance sheets, shipping and sales reports, or technology details. I rely on the talented folks here for that. But I've seen enough to know that Tesla is a growth and innovation juggernaut unlike any company in modern history, including Apple. That is the forest that gives me confidence. The daily drama is fun to speculate and commiserate about, but it is trees and shrubbery.

8) Go for a long drive up into the mountains in your gorgeous, efficient, fun Tesla. Works every time.

Dan

 

[KarenRei]

Since it was so widely discussed yesterday:

Tesla, Inc. (TSLA) Analyst Ratings, Estimates & Forecasts

Consensus revenue is 6,34B, not 6,4B. That's $10M less than Q2 - not more than Q2. This implies that a consensus revenue beat means (Energy Gains + Service Gains + Credit Gains + FSD Recognition - ASP-Decline Losses > ~$80M). One could of course invert any of those parameters - e.g. Credit Losses or ASP-Rise Gains. Plug in your own values.

Also, looking ahead to Q4: consensus revenue estimates imply - assuming no price change, and that growth is even across divisions - about 104k vehicles if pricing were flat. After accounting for the recent entry price rises (assuming that they don't affect mix, and are simply a response to the current excess of orders they're facing vs. their production capacity) and FSD (assuming that it maintains a roughly even take rate, balancing out the extra sales due to Smart Summon), that goes down to 102k vehicles. Not at all ambitious. Guidance in the letter/call could easily lead to Q4 estimates being revised upwards, with a corresponding effect on the SP.

 

[Prunesquallor]

Elon Musk on Twitter

Elon is connected to Starlink

Gah! At first I thought you meant Neuralink.

 

[KarenRei]

Gah! At first I thought you meant Neuralink.

Today: Starlink
Tomorrow: Neuralink

Seriously, Starlink is going to be a cash printer. The global internet access market is $1T/yr, and growing at quite a clip; and by solving the "last link" problem, Starlink will grow it even more. If SpaceX proves it can be successful (technical, market) with Starlink, its value will skyrocket, and it should drag Tesla up with it (on the notion that Musk could use SpaceX to bail Tesla out of any problem, and might start buying the stock back himself). SpaceX's value could easily break $100B next year if Starlink goes as planned, and far more over the coming years. Even if Tesla were to flounder, if Starlink is a big success, I'd expect Musk's net worth to pass Bezos's within 2 years or so.

 

[Krugerrand]

Many at our workplace believe Tesla went broke last year.

What company is that? I’d like to avoid its products/services.