Artful Dodger
"Neko no me"
Tesla's Boosted Acceleration Upgrade is a Large Improvement Over the Standard AWD | 0-60 Race
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
RobStark
Well-Known Member
Lots of people "downgraded" from Lexus to Prius for environmental reasons.
California is the top market for Prius and Tesla.
There are no luxury nameplate minivans.
I don't think a family with Prius plus Minivan buying a Model X is that unusual for a Model X buyer profile.
Bullish_Bear
Member
hi Zaxxon nice to read your post! Are you still in Colorado as your profile shows or you are in California now? Just curious if Tesla got that hot in CO
Simple. Blockchain kinda thing. Each VIN has all components used to build it digitally attached to it. Also, when introducing new improved parts does not necessarily mean you break backwards compatibility.
All you need is a full digital parts chain and some some ahead planning. Of course it helps if you have a few thousand parts less in your car than an ICE vehicle ...
Artful Dodger
"Neko no me"
Surprised nobody is scribbling the obvious here:Sure, mark-up with crayons is very flexible. Is where you're going "the 12 Days of Christmas"?
View attachment 490920
To state the obvious: Somebody B.I.G. is running a buying program right now, and controlling the SP in a narrow upward channel, enforced by frequent increases in a 'buy-wall' floor to the SP.
Cheers!
P.S. Thanks, Larry!
Cheers!
I am totally amazed at how many cars are being delivered in the Netherlands this quarter, it looks like it will be like 16,000 cars by the end of Dec... As a Model 3 owner myself I know how good the car is and I am aware that incentives will change at the end of the year in NL, but the numbers are still hard to grasp. For example, Tesla is on track to deliver more cars in Dec in NL than during all of Q1 in Norway (which was Norway´s best quarter ever)! Also likely more than for all of 2018 in Norway.
My theory about this is that once the settings are right and demand hits a certain threshold, everybody knows someone who has a Model 3 and that leads to further demand which is to a certain extent an exponential effect. I think that is what is at play here. I posted in the NL subforum to find out what lead to this demand explosion and came away with these points (some are just my own ideas):
- Incentives drop at beginning of next year
- NL has the highest population density of European countries so distances travelled are limited, so people don´t think about range limitations so much Population density by country - Thematic Map - Europe
- NL has had a good 3rd party charging network buildout during the last few years
- NL doesn´t have major automakers itself
- Tesla´s Tilburg facility is in NL, might help in identifying with the brand
While all of these probably help, it doesn´t seem like all are necessary - Norway, which has been the poster child for EV and especially Tesla adoption for years in Europe is at the other end of the population density spectrum for example (16 vs 411 inhabitants per square km).
Looking at German numbers which have been disappointing, we have the opposite setup in a few points:
- Incentives will increase next year
- Many local automakers, people waiting for their offerings in EVs
- No Tesla presence yet except sales and service
I wonder how demand/deliveries (possibly deliveries are not a good measure for demand at the moment as NL might be prioritized for efficiency reasons by Tesla) will change next year when incentives increase and Tesla starts building GF 4 Berlin.
Regarding NL deliveries, I also found this video which is really cool, shows the whole process starting inside the boat (!) until customers takes over his car - enjoy!
Een enorme logistieke uitdaging: zo werkt Tesla aan een ‘afleverrecord’
EDIT: According to the ship tracking spread sheet this was likely the last ship arriving in Europe this quarter (RCC Europe), arrived in Amsterdam in the early morning of Friday. https://docs.google.com/spreadsheets/d/10Uh_GSkShwPPlrE5mOJcrkZ-T3NmLkLnTo6xqbdtaOI/htmlview
EDIT2: It looks this was actually the only ship going directly to Amsterdam, the other ships in the spreadsheet were actually scheduled for Zeebrugge.. So looks like Tesla is optimizing and sending the last shipment to the location with the lowest logistics overhead (cars picked up directly from port) so they can all be delivered by year end.
My theory about this is that once the settings are right and demand hits a certain threshold, everybody knows someone who has a Model 3 and that leads to further demand which is to a certain extent an exponential effect. I think that is what is at play here. I posted in the NL subforum to find out what lead to this demand explosion and came away with these points (some are just my own ideas):
- Incentives drop at beginning of next year
- NL has the highest population density of European countries so distances travelled are limited, so people don´t think about range limitations so much Population density by country - Thematic Map - Europe
- NL has had a good 3rd party charging network buildout during the last few years
- NL doesn´t have major automakers itself
- Tesla´s Tilburg facility is in NL, might help in identifying with the brand
While all of these probably help, it doesn´t seem like all are necessary - Norway, which has been the poster child for EV and especially Tesla adoption for years in Europe is at the other end of the population density spectrum for example (16 vs 411 inhabitants per square km).
Looking at German numbers which have been disappointing, we have the opposite setup in a few points:
- Incentives will increase next year
- Many local automakers, people waiting for their offerings in EVs
- No Tesla presence yet except sales and service
I wonder how demand/deliveries (possibly deliveries are not a good measure for demand at the moment as NL might be prioritized for efficiency reasons by Tesla) will change next year when incentives increase and Tesla starts building GF 4 Berlin.
Regarding NL deliveries, I also found this video which is really cool, shows the whole process starting inside the boat (!) until customers takes over his car - enjoy!
Een enorme logistieke uitdaging: zo werkt Tesla aan een ‘afleverrecord’
EDIT: According to the ship tracking spread sheet this was likely the last ship arriving in Europe this quarter (RCC Europe), arrived in Amsterdam in the early morning of Friday. https://docs.google.com/spreadsheets/d/10Uh_GSkShwPPlrE5mOJcrkZ-T3NmLkLnTo6xqbdtaOI/htmlview
EDIT2: It looks this was actually the only ship going directly to Amsterdam, the other ships in the spreadsheet were actually scheduled for Zeebrugge.. So looks like Tesla is optimizing and sending the last shipment to the location with the lowest logistics overhead (cars picked up directly from port) so they can all be delivered by year end.
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This is probably a typo but I'd say it's more accurate than intended.
In Norway. So we can get some Teslas to without the Netherlands grabbing them all for themselves.
What were Tesla thinking letting the ships go there with the cars?
Given it’s a Sunday and Tesla share price is at new highs, I thought it worth elaborating on my prior post and explaining more about my views of what a share price actually is and what needs to happen to drive a share price on to a new level.
I generally find theory, papers and studies in finance are of a far lower quality than those I read in Science or Machine Learning. Nearly always I can almost immediately find absurd assumptions or failure to account for or isolate key variables which make most of the conclusions largely meaningless. In particular I find many of these papers start with the ridiculous assumption that the efficient market hypothesis is correct and this leads them to make big mistakes when setting up their analysis.
Even outside of the financial academic community and their efficient market dream world, I find very few people actually working in financial markets ever take a moment to think from first principles what is actually happening and what terms in finance actually mean.
For example many Short Investors and market makers seem to have never considered what shorting actually is. In my previous post I talked about this process and described Shorts creating new synthetic shares when they short a stock, but that is a term I made up because I don’t even know if finance has a word for it.
Similarly, few people in finance seem to have actually thought about what a Share Price actually is. And I can’t even find a reasonable answer for it when googling.
Wikipedia’s first sentence includes the obviously false: “In layman's terms, the stock price is the highest amount someone is willing to pay for the stock, or the lowest amount that it can be bought for.” Yes it is the lowest amount it can currently be bought for, but it is not the highest amount someone would be willing to pay.
Investopedia tells you: “Most people believe a stock's value is determined by its price. That's only true to a certain extent. But there is a real big difference between the two. The stock's price only tells you a company's current value or its market value.” Yes this is true, but it is not a functionally useful definition when considering what will actually drive changes in the price.
Investopedia tells you: “Most people believe a stock's value is determined by its price. That's only true to a certain extent. But there is a real big difference between the two. The stock's price only tells you a company's current value or its market value.” Yes this is true, but it is not a functionally useful definition when considering what will actually drive changes in the price.
A company’s stock price is not the true value of a company’s equity. Nobody knows the true value of a company’s equity, not an individual investor, not company management and not the market as a whole. A company’s true value is the discounted value of its real future cash flows. We can make educated guesses what these future cash flows will be, but we cannot know for certain, and hence it is impossible to know a company’s true value.
On my definition, a share price is:
The equilibrium point where the available capital owned by Active Investors with a company valuation estimate greater than the current share price is equal to the number of shares (plus synthetic shares) available for active investors to purchase.
Hence a share price is changed by 3 key things:
- Changes in fair value estimates of individual investors that are currently invested in or valuing the company. These valuation estimates/share price targets do not have to be rational, analytical or even conscious. This could be investors that think that a stock is currently undervalued based on gut feel, it could be people that bought because they see upcoming positive catalysts which they think will increase the price (such as S&P 500 inclusion or M&A), it could be people buying based on signals from technical analysis. For people that do build a firm valuation model, there is still huge disagreement on which valuation methodologies to use and which fundamental assumptions to make about future cash flow. Some investors may make all their investment decisions based on multiples of historic financials. Some may make a single base case model and perform a discounted cash flow analysis. Some may make many or even hundreds of different models for future results and take a probability weighted average valuation. These valuations or gut feels will mostly be changed by changes to a company’s fundamentals, technicals or upcoming catalysts. Often there is a strong correlation between an investor's valuation and the actual stock price. For example at any moment the investor may always think the stock should be worth 30% more, and as the stock goes up they subtly tweak their models to justify this higher valuation. This is because emotion and gut feel is a far larger driver of investment decisions than investors like to admit (even to themselves).
- Increased or decreased pool of capital considering the stock & making fair value estimates. The pool of investors may increase because people simply had not heard about the stock before. It could increase because some investors had previously dismissed the stock based off a media narrative or equity analyst reports without ever forming their own valuation opinion, but when the narrative changed they decided to do some work. It could increase because investors had previously been unable to invest based on fund mandate requirements such as only profitable companies or only companies in the S&P or only dividend paying companies etc, and one of these factors now changed. The pool of investors may decrease because a fund decided to cut all exposure to a particular sector, or because the stock was too volatile and they decided it wasn’t worth the stress etc. Note that each individual investor only has a certain amount of their wealth or fund available to invest in a particular stock. So the pool of capital considering a particular stock is also constrained by position or risk limits, but these could also change up and down, particularly if a stock starts to be considered less risky.
- Changes to number of shares available for active investors to purchase.This can change due to share buybacks, changes in short interest, share issuance, purchases by passive index funds (which reduce the share pool available for active investors to use for their valuation based investments), share lock up expiry, changes in shares held by Options or Convert Delta Hedging etc. A reduction in these shares reduces the pool of shares that active investors are competing to buy and hence lowers the threshold of investor capital needed for the company to reach a particular share price.
To illustrate this with regards to Tesla.
- There is a certain pool of available capital available (for a single stock) controlled by Active Investors who have considered a Tesla investment and have formed their own view of valuation. Perhaps this is $150bn, perhaps $200bn, we don’t know. But each of these investors will have a view on whether Tesla is under or over-valued based off a financial model, technicals or gut feel etc.
- Currently there are 206m Tesla shares available for longs to buy – 180m real shares and 26m synthetic shares created by shorts. In reality Elon’s 34m shares are not available for active investors to purchase, so this leaves just 172m shares worth ~$69bn. Again, some of these shares are already held by passive funds tracking an index such as Russell, Nasdaq or MSCI, perhaps this is 10m shares, so again these are not available for Active investors to purchase. This leaves $65bn of Tesla long exposure available for Active investors to purchase.
- Of the say $200bn available capital controlled by Active Investors who have considered a Tesla investment, $65bn need to think Tesla is undervalued for us to achieve the current share price. Within the $200bn of potentially Tesla friendly capital there will be a wide distribution of views on valuation. $135bn thinks Tesla is worth less than $400 so would only invest if the share price fell below this level. Maybe $25bn thinks it is worth more than $600 so would only begin to sell if the share price rises above $600. $40bn have valuations between $400-600 and each would sell when share price rises above their valuation (unless they have changed their view on valuation in the meantime). These numbers are not estimates by the way, they are completely made up just for illustration.
- Change to the valuations made by this current $200bn pool of capital. This could be due to company specific or market wide reasons. For simplicity, if some event caused every single investor to increase their valuation by the same amount, say $50, then investors that were previously uninvested because they thought Tesla was worth $350-400, now think Tesla is undervalued (with valuations now ranging from $400-450. So these investors will now buy shares until a new equilibrium price is found. What exact price this moves to will depend on the distribution of different investor’s value estimates, but it will not likely be as high as $450.
- New investors considering a Tesla investment and adding to the $200bn pool of capital. This will change the whole distribution of valuations and will change the equilibrium point where the value of available Tesla shares is equal to the amount of capital valuing the company above the current share price. So this can change the share price even if no individual ever changed their Tesla valuation.
- Changes to the pool of shares available for active investors to purchase. For example since May the number of synthetic shares created by shorts has reduced by around 17 million. This has reduced the pool of shares available for active investors to purchase, and hence reduced the amount of Active investor capital needed to reach a particular share price. Similarly, if 20 million shares get bought by passive S&P 500 trackers, these shares will be removed from the pool of shares available for Active investors to compete over. These passive funds effectively have an infinite price target on Tesla because nothing will cause them to sell aside from changes in the size of their funds. So these things can permanently change the share price even if no investor changed their valuation and even if no new investor started considering an investment.
Just as a note. Instead, on the efficient market definition, which forms the foundation for much of financial theory and models, a share price is:
The true value of the company given all available information (presumably where the market has magically arrived at the correct answer because it is an infallible and emotion free superintelligence).
Hence a share price is changed by 1 thing: New information which changes the fundamental value of the company and is immediately perfectly reflected in the share price.
So on this definition a share price cannot be impacted by supply and demand. The change in available shares driven by changes in short interest, share buybacks, purchases by index funds, new investors, share lock up expiry etc cannot change the share price.
What I find most exciting about the Netherlands sales this year is what it could mean for the UK next year.
Norway has by far the most favourable EV policies (relative to ICE) but only had 148k car sales in 2018.
Holland had 3x more car sales at 440k in 2018 and has had the second most favourable EV policies globally, mostly via lower BIK taxes on company owned cars. Given the company car market is huge in the Netherlands this has had a huge impact.
The UK had 5.4x more car sales than Holland in 2018 at 2,367k. Starting in April 2020 it will introduce BIK EV policies even more favourable than Holland. The company car market is also huge in the UK. c.20% of UK car sales are made in March of each year, i would guess mostly due to company car sales to fleets ahead of the beginning of the new tax year in April.
I listened to the whole video, quite passively I admit, and must've missed something. Where were any comments about the FSD sneak peek and early access program mentioned?
The class action law suits in this situation would be numerous and it is about the only time I would participate in one
One way a publicly traded company can get shareholders to sell their stock voluntarily is with a stock buyback. In a buyback, a company announces a plan to repurchase a certain number of its shares. It may do this by buying shares on the open market or by using a tender offer, in which it essentially seeks bids from investors on how much stock they are willing to sell and at what price. Buybacks reduce the number of outstanding shares, thus increasing a company's earnings-per-share ratio. Companies cannot force shareholders to sell their shares in a buyback, but they usually offer a premium price to make it attractive.
From another site:
Shareholder Agreements
Often called “buy-sell agreements” or “forced buyouts,” these arrangements allow the majority to force the minority to sell their shares either to the majority stockholders or to the company itself. The same agreements protect minority shareholders by forcing the company to buy their shares if they choose to sell out. In a well-structured buy-sell agreement, the offer by an outsider to purchase the company should allow a shareholder to counteroffer. The agreement should also specify how to determine the fair value of the shares subject to forced sale.
So in short, there's a legal requirement in the code somewhere for "fair value", and thus, it's in their interests to make an unambiguous "fair value" in order to A) minimize the number of people who don't accept the offer, B) the fraction of those who are disgruntled enough to sue, and C) their odds of winning (thus decreasing #B as well)?
15:50 into the video. If true imo this huge. Market is putting very little value to Tesla FSD, if they in fact will have some form of impressive release for EAP next weeks, IMO it should indicate a 10%+ chance that Tesla captures 10%+ of a $5T market...
There was a very brief comment by the contributor about two thirds of the way through. Frank summed it up well in his original post - the contributor has a friend on early access and the contributor thinks that the videos we are going to be seeing in the next couple of weeks will blow people away. It was almost done as a teaser - 'this is what we will be talking about in a couple of weeks time'.
Edit - @heltok got there first (and with better reference time)
Except that the first day of Christmas is December 25th.
BIK tax rates are paid on company cars because the car is a "benefit in kind" which is essentially a supplement to salary.
In UK the BIK tax rate will be 0% on EVs from April 6th 2020, 1% in 2021 and 2% in 2022. This is down from 16% in 2019.
This compares to a 28% BIK tax rate for the 124.5g/km CO2 for the average UK car in 2018. The BIK tax rates vary from 0% to 37% depending on emissions, but most will be above 100g/km and above 23% tax.
The BIK tax rate is multiplied by cars value and the employee's marginal tax rate (20% £12.5k-50k salary, 40% £50k-150k or 45% >£150k) - I would guess the majority of company cars go to employees on the 40% tax rate.
So for example a car with CO2 emissions at 100-104g/km would pay 23%, for a marginal 40% tax bracket and £43k car price (SR+ 3), would pay 23%*40%*43 = £4.0k per year, or £11.9k over a 3 year lease ($15.4k).
From next tax year (April 2020) the EV BIK tax rate will be 0%, then 1% in 2021 and 2% in 2022. So compared to a 100g/km £43k ICE, this is equivalent to a c.$15.4k EV incentive over 3 years of ownership.
The UK also has a £3.5k ($4.6k) EV grant which i assume will also apply to the company cars (can anyone confirm this?) taking the total 3 year incentive to $20k. And this is only vs the lowest emissions cars, the saving vs an average ICE car is significantly higher.
Also, no BIK tax is paid on electricity charging costs provided by your employer.
The market for BIK company cars in UK is likely 350k-500k per year (compared to a total UK car market of 2,400k). This is similar in size to the entire car market in the Netherlands (450k) and significantly larger than the Norway car market (150k).
But the size of the company car market is likely to increase as it will now make much more sense for employees to take a company EV car rather than buy a car themselves (an untaxed EV is now much better value than a pay rise or bonus) .
It seems hard to justify purchasing a ICE car via the BIK system now there are EVs such as Model 3 available.
In addition to this, the UK also provides a grant up to 75% of home chargepoint installation costs, and has announced all new homes will be required to have an EV chargepoint and that all non-residential buildings undergoing major renovation projects must introduce chargers to 20% of parking spaces.
Considering UK petrol prices are over double the US average, the 2.4 million annual UK car demand is starting to look very well positioned to transition to EVs. The main obstacle is FUD and lack of knowledge of the EV options available and TCOE advantage.
Looking at Holland
The BIK tax rates for EVs are:
- 2018: 4%
- 2019: 4% up to a maximum of €50,000 (22% for the amount above)
- 2020: 8% up to a maximum of €45,000 (22% for the amount above)
The income tax rates are 36.65% (Eur0-20k), 38.10% (EUR20k-34k), 38.10% (EUR34-68.5k) and 51.75% (>EUR68.5k).
So the BIK benefit vs an ICE in Holland in 2019 for a EUR50k SR+ was 38%*EUR50 * (22% - 4%) = EUR 3.4k
or 52%*EUR50 * (22% - 4%) = EUR4.7k.
This is $11.4k to $15.6k BIK benefit over 3 years.
So significantly less than the at least $20k new UK incentive.
CO2 emissions rise to highest average since 2014, as the shift from diesel to gasoline continues - JATO
https://www.smmt.co.uk/wp-content/uploads/sites/2/SMMT-CO2-Summary-2019.pdf
New company car tax rates criticised by ACFO and ICFM
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