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

[goinfraftw]

I found the following enlightening. Hope you do too:

"I’ll paraphrase: in a logistic curve penetration, the first 1% takes forever; from 1% to 5% is like waiting for a sneeze –it is going to be explosive, you just don’t know when it will happen; 5% to 50% happens much faster than you think – that is when the restructurings and bankruptcies happen.

No single “sneeze” will wipe out fossil fuel use across energy and transport; It will occur sector by sector, country by country. Over the past six years, LED light-bulbs have gone from less than 5% global market share to over 40%; coal power in the U.K. from 40% to a couple of percent; plug-in vehicles in Norway from less than 5% to over 50%. In each case, there was a slow start, an agonizing wait, and then the sneeze."

Liebreich: Peak Emissions Are Closer Than You Think – and Here’s Why | BloombergNEF

Tweetstorm: Michael Liebreich on Twitter

 

[Causalien]

I think the answer is that the Republican (conservative) movement has splits in it, and people in the conservative media don't want to get permanently identified with the losing faction. If Tesla is wildly successful, you don't want to be in the camp that says Tesla is a zero. You lose credibility when that happens.

Right now there's an ultra-conservative branch of conservatives that is actively working to undermine scientific claims about climate change plus working to keep fossil fuels profitable. People like Charles Koch and his now-departed brother David personify the ultra-conservatives. They didn't even identify with the Republicans years ago. Instead, David ran as a candidate of the Libertarian party. Social security, involvement in foreign wars, border enforcement (they like cheap labor), public education, and any form of welfare are just considered hippie voodoo by these people. They long for a world where government basically does little more than protect the financial interests of its citizens.

In recent years, the ultra-conservatives such as the Kochs have migrated into the Republican party and have realized that they are now old people who are near the ends of their lives but have billions in wealth and want to do something with that money that is positive (in their minds), so they fund think tanks, lobbyists, and policy groups that substantially influence politics and try to keep things "as they are". There is an incredible amount of money being thrown at politics by these ultra-conservatives.

The tug-of-war in the party is between the economic ultra-conservatives and the more mainstream Republicans. Fox News anchor Tucker Carlson created a tempest when he suggested that the Kochs aren't good for the Republican Party in this June 2019 video. Then there's the issue of Trump. He's not nearly the ultra-conservative as these other billionaires, and his strong borders stand really bugs some of the ultra-conservatives. My guess is that he adopted the strong climate denial viewpoint not because he doesn't understand the issue (his daughter is smart enough to lay it out fairly) but because he wanted to bring the money of the ultra-conservative billionaires into the party and to support his candidacy. Trump was practically the last choice the ultra-conservatives wanted to become their candidate, and so Trump is now working to mend the wounds by supporting fossil fuels.

In the meantime, expect Republican commentators to read the direction the wind is blowing and be influenced by it. A successful Tesla on its way to becoming the world's most successful auto manufacturer with lots of manufacturing in the U.S.A. is a stunning example of how U.S. companies can thrive in a competitive world environment and is no threat to real conservative values. Rather, it's a threat to fossil fuel prosperity and is therefore opposed by the ultra-conservative billionaires. Thus, there's a natural conflict within the party regarding Tesla.

Speaking of global warming denial

I am surprised that we don't have fellow Australian Tesla owners venting their frustration right now. The fire must've been less severe than the media portrayed.

 

[Bet TSLA]

Hmm, not seeing any of these on Supercharge.info.

At supercharge.info they deal with facts. The Tesla "coming soon" list is largely aspirational. One you can believe, the other you can use to be hopeful about.

 

[VValleyEV]

On Page 2 of the 10Q report you attached, you will find the info I pasted below:
Ford Gross Margin is calculated as follows for Q3 2019:

$ 36,990 Total revenues
$(32,282) Cost of Sales (aka COGS)
$ 4,708 Gross Margin (Revenues less COGS)
13% Gross Margin % (Gross Margin divided by Revenue)
View attachment 495304

Got, it, thanks! I was off in the EBIT margin numbers, which I suppose is off in the weeds for comparison purposes with Tesla 10-Q

One question: your revenues/COGs margins include “Ford Credit”, which I believe is a separate for-profit operation. Does it make sense to include that in comparison to Tesla? I am guessing it is small enough not to matter.

 

[Menifeer]

Charles Gasparino? When did he flip?
FOX Business use to trot him out and he never said anything good about Tesla.
what he did say was usually poorly researched, headline stuff.
Wow...

A few months ago on the Fox Varney program, Gasparino mentioned that he makes a point of parking in EV charging spots. I regret not having recorded the conversation.

 

[VValleyEV]

At supercharge.info they deal with facts. The Tesla "coming soon" list is largely aspirational. One you can believe, the other you can use to be hopeful about.

Got it, so this is from “tesla.com/findus”, then filtering for superchargers to minimize clutter. As you say, doesn’t make it into supercharger.info until there is at least a permit verified by someone.

Is there another source/location for this info, especially some way to tell what is new on this map beyond using my (faulty) memory?

 

[MP3Mike]

First, Tesla will never say if AP was used because any comment only draws in more attention no matter the truth. So heads down, keep going Tesla!

Yes they will To the NHTSA which will then release the information publicly.

 

[VValleyEV]

Edit: as @The Accountant pointed it out below, this is incorrect:

Spoiler: Barking up the wrong tree

There's one thing in this area that appears to be fundamentally different between traditional OEMs and Tesla: Ford for example appears to capitalize their R&D as capital expenses, it goes onto the balance sheet and is depreciated from there. (Am I reading their financials correctly?)

Tesla expenses R&D expenses immediately, as part of opex.

If I'm interpreting this correctly then the traditional OEM approach is smoothing R&D costs, and it might hide spikes in forced R&D expenses related to the EV transition - they'll only show up in cash flow. This lag in GAAP expense recognition might be temporarily hiding the true profitability cost of the EV transition for several quarters or even years, depending how quickly they are depreciating those expenses back into the GAAP space.

Tesla's R&D expensing seems far more straightforward and immediate.

But maybe I'm barking up the wrong tree there?

Yes. The reason I wound up here is that the different treatment of R&D by Tesla is being used by TESLAQ to support a claim that Tesla’s margins are overstated wrt OEMs. Claim is that once an adjustment is made to Tesla’s numbers to include R&D as COGs, that Tesla’s margins are similar to OEMs. So far my digging says that they are still better, especially when you consider how much of Tesla’s R&D is FSD, and how little OEMs are spending on that.

 

[printf42]

I did a quick check with Ford by searching their annual report. They expense R&D to Cost of Sales immediately. It does not get capitalized.
View attachment 495311

It makes senses since their R&D is mainly for car body and engines, which has hardly any residual value once the car goes to next generation.

Their software value created through R&D would be nearly zero if not negative.

 

[The Accountant]

Got, it, thanks! I was off in the EBIT margin numbers, which I suppose is off in the weeds for comparison purposes with Tesla 10-Q

One question: your revenues/COGs margins include “Ford Credit”, which I believe is a separate for-profit operation. Does it make sense to include that in comparison to Tesla? I am guessing it is small enough not to matter.

yes - I do Include the Ford Credit revenues in the calculation. If you remove them, the Gross Margin calculation for Ford will get even worse.
I didn't remove it because my analysis was not a deep dive. If you want to get apples to apples, then if you remove Ford Credit from Ford's Sales, then perhaps we should remove Tesla Energy Sales from Tesla's Sales. My analysis keeps it simple by taking Total Sales reported and Total Cost of Sales reported. Simple but I think still informative.

 

[Prunesquallor]

Whenever he said anything even remotely nice about Tesla, TSLAQ trolled him harshly on Twitter. They turned a person who was neutral-to-hostile about Tesla into a person who specifically dislikes TSLAQ via their trolling.

Hmm. Maybe those guys do (unintentionally) serve a useful purpose.

 

[jerry33]

At supercharge.info they deal with facts. The Tesla "coming soon" list is largely aspirational. One you can believe, the other you can use to be hopeful about.

Correct, although every so often there is a surprise location because supercharge.info relies on people spotting the permits/construction/open and there some places which no one checks and reports on.

 

[StealthP3D]

I too am eagerly looking forward to Battery Investor Day.

I just hope Elon applies his own standards of "show me" and "prove it" battery-claim skepticism to Tesla's claims that will be made that day. I want roadmaps, dates, milestones, and at least a few short-term shipping dates for new battery technology in cars that can be ordered *that day*. I don't want just pie-in-the-sky pronouncements. I'm hoping that's why this day has been pushed out a bit into 2020. So as many of the announcements as possible can be real not just promised.

Tesla has always been very "matter of fact" and understated when they speak of future battery technologies so I tend to take what they say very much as gospel. And I don't think I'm wrong or blind to think that.

The mainstream media has been somewhat successful in their attempts to pin Musk with a reputation for over-hyping but I don't see there is any substance to these claims with the sole exception of AutoPilot and FSD timelines. Yes, some of their new Models are a few months later than projected but, given the excellence of the products they have delivered, I see the lateness as being simply amazing instead of unbelievably amazing. There was also the $420 tweet but I think he was sincere in his wish to take TSLA private and he wanted it so bad he didn't think he was thinking too big. But the MSM has painted Musk as a shyster, huckster, hypester who will say outrageous things just to pump the company. The only thing I find outrageous is he typically delivers on these promises. It's actually amazing when you stop and think about it.

So I'm looking forward to the Battery Investor Day as being very informative as to where they are going with batteries.

 

[Sudre]

Interesting thought when I read, "Norway from less than 5% to over 50%"

I heard from the oh so reliable TSLAQ crowd long ago if we switched over to EVs there would be no way to charge them all and we would be experiencing blackouts all over the place.... Why have I not heard about this in Norway?

Could this another lost TSLAQ bullet point?

 

[NJ Plugin]

Yes there is a lot potential regions to add to the supercharging network. I was at Israel during thanksgiving and was surprised to see no tesla car/supercharger there. Ideal country for electrical cars. But I did see a Tesla destination charger at the parking lot of a Hyatt hotel in Amman, Jordan. Anyway there is a lot of regions to expand and a lot of room to grow. Tesla doesn’t even sell in us territory Puerto Rico yet. Those islands would be ideal places to drive evs

The other night (Sunday) I saw my first (of any islands) Tesla (a Model X) in Old San Juan. I am always looking for one when I travel.

 

[sundaymorning]

Yes, so what? This does not mean that Tesla has anything like a "model year" that means anything. The difference between the last 2019 Model 3 and the first 2020 one is... probably nothing. It's exactly the same as the difference between the last February Model 3 and the first March one, of whatever year.


I asked for evidence. You are responding by confirming that this is stuff you simply made up, or misinterpreted from something you read. I don't believe you. Where is your evidence that this is true for Teslas?


Anything may be true for other makes, but that isn't what you were asserting. You were claiming this is true for Tesla. Unless you have some evidence, I'll stick with my belief that you're just making things up.

We really don't need more noise here. FUD is everywhere. Try not to contribute to it. This one is relatively minor compared to the 3000/wk from Shanghai by the end of the year.

uh, this is common knowledge and I’m surprise you’re not picking it up. I’ll just leave it at that and end it here. If you’re curious you’ll need to research it on your own instead of asking others to take their valuable time to put it down for you. If you think a guy like me who has 90% of his life savings in tesla and has been a contributor since 2013 Is spreading FUD then nothing I put down will persuade you that a 2020 Model Year is more valuable than a 2019 Model year, this is why buyers often wait till the new year to purchase their vehicle. If you go back earlier on this thread, you’ll see a lot of buyers express they would rather wait till 2019 to take delivery instead of taking their model 3 at the end of 2018 for reasons I’ve stipulated. The mistake that investors often make is to be so convinced of their thesis that they’re blinded by facts.

Shanghai is moving along just great, and credit to @mongo for pointing that the 3,000/week number was meant for mid 2020. Despite this, when markets heard of Tesla extrapolating 28/hour to 1,000/week the stock pulled back, by coincidence? I don’t think so, but that’s just my opinion.

At any rate, please don’t reply. I’m over this discussion. All I want is for Tesla to beat so I can buy more. If Tesla misses ill wait and buy more.

 

[sundaymorning]

Kelley Blue Book
2018: 17k miles = $44,113.
2019: 17k miles = $45,510.

Your turn for evidence.

thank you for taking the time to do this. I didn’t have the urgency to pull this up. My uncle use to be in the car business for a decade and it was common knowledge amongst our conversations at the dinner table.

 

[FrankSG]

You have to educate yourself about the company. @FrankSG 's recent blog is a great place to start.
My Tesla Investment Thesis 2.0: Tesla's Monopoly Potential

Spoiler

Tesla's potential is not like Apple's. It is far greater.

Thanks Peter!

And yes, it most definitely is. The market sizes of Apple's consumer products and all of Tesla's business are in completely different leagues. The world spends WAY more on transportation than on smartphones, laptops, etc.

 

[deffu]

The other night (Sunday) I saw my first (of any islands) Tesla (a Model X) in Old San Juan. I am always looking for one when I travel.

Yes, I saw one model 3 in San Juan as well the other night. I did some research. Looks like they import tesla from the continent and need to pay a hefty import tax.

 

[Bet TSLA]

uh, this is common knowledge and I’m surprise you’re not picking it up.

Well, there you go. There is no applicable "common knowledge" for Tesla. Since about 90% of all published articles about Tesla consist mostly of lies, and that's where "common knowledge" comes from, only truly foolish people rely on that. Evidence please, or assume it's false.

Despite this, when markets heard of Tesla extrapolating 28/hour to 1,000/week the stock pulled back, by coincidence? I don’t think so, but that’s just my opinion.

You just keep repeating garbage without evidence. Tesla never extrapolated anything. Various media sources reported incompletely or incorrectly on quotes from Shanghai Tesla managers, but those managers never extrapolated anything. Please stop it. Stick to facts. Go on, come up with a real source for this extrapolation nonsense. What the "markets heard" were media lies or misdirection, just like the media nonsense about cars being "assembled" rather than actually built in Shanghai. At least you're not spreading that idiocy here too.

At any rate, please don’t reply. I’m over this discussion.

I can imagine that you're "over this discussion", and I'm glad to hear it, because you keep posting incorrect information. Please stop it. There's nothing wrong with maintaining silence when you don't know what you're talking about.

On this forum we should adhere to a higher standard. We should be able to expect that what we read is true, or at least has a much higher chance of being true than something we read anywhere else (excepting Tesla's own published documents).