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

[kengchang]

You are probably confusing BG with Balmer. Balmer's father used to work in Ford and he is still loyal to Ford. Ofcourse he has other cars too (he bought an early Leaf, for eg.).

You saw the video of BG in a Tesla.

Even earlier, Gates had fast sports cars. He would drive crazy too.

ps : Do you guys remember the ice bucket challenge that Musk did with his kids ? The challenge was given by Gates to Musk - considering he gave the challenge to only 3 celebrities, ofcourse they know each other.

pps : Whatever little respect I had for Gates vanished after the revelation about his multiple contacts with Epstein.

ppps : If you saw Gates in a Ford, its probably a Microsoft shuttle. They used to have Prius shuttles, but replaced with Ford hybrids.

Pretty sure that's a Ford Focus

 

[MarcusMaximus]

You are probably confusing BG with Balmer. Balmer's father used to work in Ford and he is still loyal to Ford. Ofcourse he has other cars too (he bought an early Leaf, for eg.).

You saw the video of BG in a Tesla.

Even earlier, Gates had fast sports cars. He would drive crazy too.

ps : Do you guys remember the ice bucket challenge that Musk did with his kids ? The challenge was given by Gates to Musk - considering he gave the challenge to only 3 celebrities, ofcourse they know each other.

pps : Whatever little respect I had for Gates vanished after the revelation about his multiple contacts with Epstein.

ppps : If you saw Gates in a Ford, its probably a Microsoft shuttle. They used to have Prius shuttles, but replaced with Ford hybrids.

Oh, but I read on Business Insider that Elon was once in the same room as Epstein.

 

[M3Rider]

1. This was a discussion about energy density. The statement was, "it needs a battery advancement happen to get 500 Miles range". No, it does not. No energy density improvements, or only marginal ones (depending on the specific Cybertruck energy consumption and pack dimensions), are needed when you use a double-thickness pack. Which is the plan.

Are you making a statement of fact?
Please include a link to your sources, preferably from Tesla. Otherwise, I don't understand your persistence.

 

[M3Rider]

Lora Kolodny joins Ryan and Dana.
Lora Kolodny on Twitter

Reporting on Tesla, future, etc.
Blocked for outstanding reporting.

Did Linette survive this round?

 

[Toumal]

View attachment 485740
LMFAO.

Dana was trolling, plain and simple. But of course she will claim that she is doing her journalistic duty. I would love for her to answer if she has any connection to Plainsite the public should know about. You know, just in case a securities investigation rolls around later. One never knows...

 

[Snapdragon III]

Pretty sure that's a Ford Focus
View attachment 485994

Isn't CES in Las Vegas? Is the theory that Bill drove his Focus from Medina to Vegas and back instead of taking his Jet?

 

[RFernatt]

Uh, what? Maybe someone can interpret Toyota speak for me.

Toyota executive warns of "electrified armageddon" for auto industry

...But Toyota thinks there's still not enough demand for EVs, and it remains primarily focused on hybrids like its hot-selling Rav4 hybrid. ....

Toyota EVP Bob Carter: "Somebody's got to buy these things. I've been saying we're going to see electrified armageddon. Because of the cost premium, supply is going to get ahead of true customer demand."

 

[Causalien]

I moved my reply here from the Daily Charts thread because I hope some of you with more expertise is specific areas than me will join the discussion.

* GF-3 deliveries impact on Q-1
We need some of our spreadsheet wizards who know the accounting rules to step in and give some perspective on this issue. As a rough idea, though, I'd say that with labor costs very low in China and list price of Model 3s still high in the country, Tesla could produce positive margins, even in Q1. The combination of higher delivery numbers in China next quarter and at least a small contribution towards profits would be viewed very favorably by the market.

* Growth in Canadian Prairies and north central US due to completion of coast-to-coast Supercharger access and improved Service access
Lots of possibilities here... The Rocky Mountain and east of the Rockies states showed lots of interest in CyberTruck, and since that vehicle is still a couple years from production some of that interest could spill over to Model Y (and Model 3 too). More service centers definitely results in more sales in areas where a long drive to service is cut way down. My guess is that Supercharging the Trans-Canada Highway will have a lesser impact on sales because the distances between population centers are so great in central and western Canada and the highway is only 2 lanes in some areas. It's so much easier to fly from Toronto to Vancouver than to drive.

* Model Y introduction in Q1
I continue to believe that we won't hear about earlier beginning of Model Y production until either the cars are rolling off the assembly line or Elon answers the question in the 4Q19 ER conference call. Model Y can cannibalize some Model 3 sales and Tesla doesn't want buyers thinking about Model Y until they're ready to deliver. That said, the market will respond favorably to the likely highest-selling Tesla becoming available earlier than expected. Naturally, TSLAQ will frame the situation as Tesla speeding up Model Y production beginning because there was a demand problem beginning for Model 3.

* Small GAAP profit in Q-1
I think you nailed the pivot point. TSLAQ is counting on a Q-1 dip. If Q-1 produces a small profit, Tesla is in the catbird seat for S&P500 inclusion. Once the market figures out that S&P500 inclusion is likely, there will be no holding the stock price back. This is the primary reason why I have gone all in with the money I am willing to invest in TSLA, rather than holding any back for a possible dip. I think the only reason TSLA didn't climb higher this past week was because of poor macros on Monday and Tuesday and significant manipulations the rest of the week to create the illusion that the market was worried about the Unsworth trial. Concerns about Tesla getting cleared for actual deliveries of MIC M3s and producing seriously were put to bed this past week. The slow but steady increase in weekly output at GF-3 has finally begun. In comparing TSLA downside potential to upside right now, the upside looks so much greater.

Bet for upward movement for Jan option or stock. Then again for Feb option from Q4 ER call. Cap it off with covered call since Q1 is iffy so the runup will lose steam.

Q1 result will be weird. If it is positive it is an unexpected beat. So you'll earn a lot if you bet correctly. However, the option premium lost from Feb to May will eat up your profit. It is better to bet on a straddle around April's time. In any case, we should have a feeling on how it will turn out around May based on delivery numbers. The headwind for Q1 is just too much for me to confidently bet on short term calls here.

Q2 will be another muddle through and Q3 Q4 will be great again. Just like always. Best time to buy long term calls is always August sept period.

I personally will not be accumulating any long term shares or calls anymore as I have enough. After 10 years of accumulation, most of you who've been here since the beginning shouldn't be accumulating any more as a precaution. The biggest headwind is Trump's Gina deal. Heck, how much longer can you delay this.

 

[kengchang]

Isn't CES in Las Vegas? Is the theory that Bill drove his Focus from Medina to Vegas and back instead of taking his Jet?

The video is about Bill Gate's last day at Microsoft and he played this video while doing his last CES Keynote

 

[Fact Checking]

• Average ASP is likely significantly higher than $52.6k, because Tesla can pick higher value orders as the first 3,000 customers to serve, to help fixed cost absorption and margins.

• GF3 order backlog is probably significant: there's reports of heavy interest and Tesla's China order system having a brief outage due to overload when the 24,750¥ domestic EV incentives eligibility of the GF3 Model 3 was announced a day ago.

• They save tariffs CoGs, and labor CoGs is probably at least 50% labor costs. They save about $1,500 per unit on transportation costs. This would offset some of the early inefficiencies.

The important notion here is that the Chinese GF3 made Model 3 ASP is only about $2,000 less expensive than the U.S. version, but Tesla gains these margin improvements straight away:

• They don't have to pay import taxes - 15% at the moment (there could be an additional +25% on December 15), or $7,500.
  
• RORO transportation costs of Fremont made Model 3's - around $1,500 per unit.
• Lower labor costs - direct labor costs on the Model 3 are estimated to be at around $7k-$10k. In China this would be cut in half even with above-average pay for experienced auto industry workers.

U.S. made Model 3 margins are about $10,000 per unit. In GF3 there's an additional margin improvement of around $12,500, pretty much independent of scale.

I.e. GF3 could prove to be a gold mine straight away if fixed costs are reasonably low, even with just 1,000-2,000 deliveries in December.

 

[jbcarioca]

If I had to wager, based on almost no data, it'd be that he accidentally knocked the car out of AP when reaching back.

Same thing has caused crashes in airplane autopilot systems too.

Good observation. Accidental disconnecting of aircraft autopilots is not unusual; I have done it myself, at least twice doing that caused potential catastrophic consequences. Somehow many otherwise diligent people seem to think a Tesla autopilot is somehow impervious to error, or behave as if that were so. Human error persists and will continue. Frankly we need something akin to a type rating to operate automobiles with current and evolving technology. Safely operating highly automated vehicles is materially different than it is for old technology models. That is a material challenge for Tesla. It also is becoming much more crucial as Tesla moves more deeply into mass market penetration.

until this issue can be dealt with seriously it will be a constraint on unimpeded growth, and limit effective FSD revenue recognition.

 

[Fact Checking]

Q1 result will be weird. If it is positive it is an unexpected beat. So you'll earn a lot if you bet correctly.

So:

• If FCA contract starts paying by volume of deliveries in Europe,
• and GF3 starts delivering,

then Q1 profits are IMO all but certain, including S&P 500 inclusion if Q4+Q1 GAAP profits are at least $265m. (Famous last words.)

However, the option premium lost from Feb to May will eat up your profit. It is better to bet on a straddle around April's time. In any case, we should have a feeling on how it will turn out around May based on delivery numbers. The headwind for Q1 is just too much for me to confidently bet on short term calls here.

JFYI, Q1 delivery numbers will arrive early April - most likely on April 3 - so Q1 probabilities of Q1 profits will solidify in early April already.

I believe the strong Q2 options premiums are a reflection that S&P 500 inclusion has a higher than 90% probability in Q2:

• the large Q1'2019 loss of -$702m will have rolled off the 12-months profitability S&P calculus
• marginal Q2 profits are all but guaranteed by seasonal patterns, FCA, GF3 and promised Model Y high ASP volume deliveries by June 2020.

What hasn't been priced in yet IMO is the possibility that Q1 might be profitable and would trigger Q1 S&P 500 inclusion - which event will become much easier to estimate on April 3.

My disastrously wrong end of 2018 S&P 500 inclusion expectations should be a warning though: things can change quickly. Not advice.

 

[Artful Dodger]

(Dec 05 29 2019）Tesla Gigafactory 3 in Shanghai Construction Update 4K
by Jason Yang

 

[Fact Checking]

The biggest headwind is Trump's Gina deal. Heck, how much longer can you delay this.

I'd like to warn everyone that there's a line of thought that expects Trump to not do any China trade deal until the elections, at all. The current friendly tone might just be an attempt to tide things over until the Christmas season is over - but "China tough talk" can continue after that, especially since that news cycle can be used to blunt the narrative of impeachment events, without tanking the U.S. economy straight away.

I have no idea what plans Trump has in this area, if any - but there's a lot of headwinds possible there, and it will weigh on TSLA.

 

[jbcarioca]

We can make educated guesses though. GF3 capex so far was $219m at the end of Q3:



Let's estimate Q4 capex:

• Tesla characterized GF3 total expected capex as "less than $500m" - let's say a conservative $490m - $271m outstanding.
• In Q4 they probably made more equipment payments: rumored ramped up output is about 25% of planned capacity, so let's assume that 25% of the remaining $271m became due: $68m - EOY GF3 capex of $271m+$68m = $339m total....In any case, I think it's pretty clear from the above numbers that if they can make at least ~1,000 units then GF3 probably reaches positive per unit margins (Tesla will probably put some fixed overhead into SG&A), and if they can make and deliver 3,000-5,000 units then they might be able to reach U.S. Model 3 margins of ~20% (!).

(Shout-out to @ReflexFunds, @EVNow, @Doggydogworld and @TradingInvest.)

I agree with your points, but we do not know a couple very material components, notably the contractual provisions for robotics and other production equipment. The stated “less that $500 million capex” implies a massive improvement in capes efficiency in GF-3 compared to anything else comparable. Frankly I have little doubt that GF-3 total OpEX and allocated capex will end out reflecting ~25% improved cost per vehicle. My reluctance to project specifics is due to lack of proof, not lack of confidence.

Realistically the most reliable evidence we have of extreme efficiency in GF-3 is the shipment if vehicles from GF-3 last week. That would not have happened were a traditional set of cost accounting constraints to have been applied. Specifically I am confident that a substantial portion of GF-3 total costs will be payable based on volume output rather than the traditional 100% Capex fully allocated upon delivery/installation. Further, the Tesla industrial learning curve seems even faster than we have previously seen. I applaud those brave enough to make estimates, which clearly show unprecedented capital efficiency.

Perhaps as significant as capex is the design efficiency of Model 3, accelerating for Model Y and again for Cybertruck. The total parts count is reducing rapidly on the order of 65% parts for Model 3 vs Model S. Model Y is doing that again. Think wiring, BMS/controllers with parts count more than halved. The increased reliability and construction simplicity further increase both capital and operating efficiency while reducing warranty costs and service overhead. Thus I actually think that GM of mature GF-3 will exceed 30% with current pricing, so I expect continuing price drops as efficiency rises and capacity increases, thus expect GF-3 next phase to come on line as rapidly as did the first phase.

in sum, we are all imagining a steady state when Tesla is continuing to produce something nearly like exponential growth. In sum when GM’s near 25% Tesla will reduce prices rather than improve per unit profits.

 

[Artful Dodger]

Uhm, utter rubbish.

Tesla's current valuation is primarily the automotive growth story and higher EV margins - burdened by the high capital costs of the sector.

Adam Jonas valued Autopilot at $6b total - that was about $25 of his $250 bullish valuation scenario when TSLA was below $250. The Q3 jump to ~$330 was entirely due to better growth and margins, with near zero FSD news.

V10 release with a few more steps towards FSD? Almost no TSLA stock price reaction.

Red light recognition, stop sign recognition, lane speed synchronization - precursors of City Navigation and feature-complete FSD? Almost no TSLA stock price reaction.

If TSLA had any meaningful "Tesla wins the FSD race over Waymo, GM and Uber" valuation, it would be above $1,000.

Thanks for replying to that comment, so I don't have to.

Yeah, AJ assigned a tiny (token) value, and an unflattering time horizon to FSD. Wallstreet has NOT priced in FSD for TSLA.

Indeed Waymo, who have just a single (not ready) product, is given an enterprise value HIGHER than Tesla's according to these same analysts. Yeah, by the same guys who don't understand how LIDAR dead ends?

I laugh when *certain* people come on this board talking their book, as if they can make the SP go down by continually repeating debunked FUD talking points.

I don't hope he loses his shirt, but its sorta inevitable. 'Play the churn; feel the burn.'

Cheers!

 

[jbcarioca]

Yes read it and it was certainly pilot error.

Except one pilot kept stalling while being told to do the opposite.

And the other pilots did not realize (until the last minute ) because of fly by wire.

NO! FBW had nothing to do with it. Pilot error did, specifically lack of pilot partial panel training. FBW did not even contribute. FBW beginning with A320 and on to all subsequent Airbus plus Boeing beginning with B777 and now B787 reduce risks. Pilot awareness and systems management remain crucial. Uniquely pilot tubes still in 2020 are the weakest link, as B737MAX again proves. Blaming FBW is the equivalent if blaming Tesla Autopilot. Not true, but convenient to blame.

 

[Artful Dodger]

Note that the autonomy day didn't move SP up.

Yeah, but it did move the SP: (TSLA was down $40 over the week that started with Autonomy Investory Day)

Wall St. habitually places a NEGATIVE value on ANY statement that Elon makes.

To wit, 'if Elon says it, Wall St bets against it' (then INEVITABLY loses that bet).

FSD will be the same in the end.

Cheers!

 

[SO16]

There hasn't been that many bad news lately. Elon won the court case, Cybertruck is preordering like gangbusters, GF3 is delivering cars..nothing but one good news after another. The manipulators need something and I'm just saying they finally got something. A 5% rally now turned into a 1% rally, who knows. Short term we always see exaggerated drops from stupid news.

Hey I would be ecstatic if AP crashes doesn't affect SP anymore. That to me is better news than anything I can think of because I constantly worry about on some random day AP causes some kind of serious accidents when now there are over 500k Teslas on the road. It'll be a freaken huge win if CNBC doesn't pick up the story at all!

Even if it does dip, it will most likely be very temporary. The real question is, are you going to sell premarket based on your concerns? I’m sure not. I have terrible luck timing the market.

 

[SO16]

Lora Kolodny joins Ryan and Dana.
Lora Kolodny on Twitter

Reporting on Tesla, future, etc.
Blocked for outstanding reporting.

View attachment 485996


Did Linette survive this round?

Lora is quick to block others when her reporting was questioned. Only fitting that she gets blocked. Love it!!!!!!