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

[Prunesquallor]

Are they not buying cells from LG China?

I knew that was the plan, but I never heard whether it was happening yet. For some reason I thought packs were being shipped to Shanghai for the immediate future.

 

[sundaymorning]

So very happy to be wrong. These numbers are amazing!

 

[Beltsbear]

I missed that. So they're shipping cells over from GF1 and assembling packs at GF3? (Not meant to reignite cells/modules/packs discussion).

Probably not. Cells from another supplier or Panasonic in Asia. It would be much safer and easier to send a fully made pack from gf1.

 

[Mike Smith]

I wonder how many Cowen clients still have shorts on based on Jeffrey Osborne's "analysis". Perhaps with this new information he'll raise his price target another $20 to $230.

 

[sparcs]

we have already produced just under 1,000 customer salable cars and have begun deliveries. We have also demonstrated production run-rate capability of greater than 3,000 units per week, excluding local battery pack production which began in late December.

Sounds like that 280 per day GF3 quote from a few days ago was fairly misleading as some of us suspected. They only have 1000 cars today after seeing all the drone videos and these bullish quotes from employees.

We have all seen these run-rate numbers not translate into big delivery numbers. At this point, i'm hoping for 8k deliveries in Q1 out of GF3.

 

[jerry33]

They don't need a lot at this point. What's your info on LG's start / scaleup timeline?

Just what I've read it, but my assumption was that they would start shipping in 2020 as it seemed reasonable that they needed ramp up time and time for Tesla to verify their production quality.

 

[CorneliusXX]

The delivery report has a nugget for Q1 too:

"Despite breaking ground at Gigafactory Shanghai less than 12 months ago, we have already produced just under 1,000 customer salable cars and have begun deliveries. We have also demonstrated production run-rate capability of greater than 3,000 units per week, excluding local battery pack production which began in late December."​

I.e. Tesla was sandbagging GF3 production capacity, and their demonstrated burst rate is already beyond 3k/week.

Phenomenally fast ramp-up and no unexpected hiccups with the GF3 Model 3 ramp-up.

Today we also had the leaks from China that Q1 production capacity has almost been sold out already.

This bodes well for GF3 Q1 deliveries - Q1 profits and S&P 500 inclusion secured?

Not advice.

We saw the same thing with the M3 ramp at Fremont. This clearly isn't sustained production so we should be somewhat cautious about the timing to reach the sustained target.

That said 3k capability is better than no 3k capability.

 

[KarenRei]

What growth were you expecting?

Actually, about this much. I didn't think they'd be able to run down inventory this much But it's still worth pointing out that this is a one-time trick.

That said, they'll more than make up for it in Q1 production growth thanks to GF3! Whose Q1 output is already sold out.

 

[Drax7]

Those that rightly noticed a lack of promotions towards year end because
None were needed , had the right insight.

 

[Mike Smith]

The big tell for me was Elon bringing his mom to the delivery event.

 

[Matt L]

One point that shouldn’t go missed and will impact earnings is, they cancelled a lot of SR+ deliveries at the end of the year and moved up AWD and P deliveries. So these should have been higher margin M3 sold.

 

[Artful Dodger]

Almost certainly acting as a headwind.

Or, a money sink for all that cash being pulled out of other NASDAQ equities... TSLA is the ONLY large equity that is growing at 50% YoY.

SP 441.27 @ 09:15 EST

 

[jerry33]

Sounds like that 280 per day quote from a few days ago was fairly misleading as some of us suspected. They only have 1000 cars today after seeing all the drone videos and these bullish quotes from employees.

We have all seen these run-rate numbers not translate into big delivery numbers. At this point, i'm hoping for 8k deliveries in Q1 out of GF3.

Well, they said customer salable cars, so perhaps they were not including those cars for employees. (Yeah, it's a stretch).

 

[powertoold]

Geez these are crazy numbers, and some US customers didn't even get delivered in Q4 despite having delivery estimates for Q4.

 

[SpaceCash]

Pretty common trait and reaction of people in general; something to do with being survival hardwired. That’s also where negativity comes from. People can always come up with the worst case scenario in seconds and then hyper focus on it. Some people spend their entire lives honing the skill.

You can, however, learn to at least subdue that inherent tendency, but first you have to recognize it in yourself.

One way of combatting a tendency to negativity and overreaction is to not put yourself into situations that can threaten that which you consider a requirement to survive.

Case in point — if money is important to you, don’t risk that which you feel you can’t comfortably afford to lose. It’s really that simple.

If your constant worry that the market may dip based on events you have no control over, well — you’ve got too much invested in that venue for your current hardwiring and thought processes.

Well... right but I didn't sell anything for any of those events and I'm absolutely killing it.
I am just trying to illustrate the things that actually made me worry, made my heart a little fluttery. Because almost every single other thing I've ever seen raised as an issue is hilarious nonsense to me.

 

[CorneliusXX]

Yeah I'd also liked to have seen slightly higher production numbers. But 87k does about add up to 350k per year, which is their Fremont M3 production capacity according to Q3 letter. I guess I shouldn't have been surprised by this number.

This should also help predictions for future quarters. Tesla will never be able to magically 2x production in a quarter. We will only see substantial increases as new capacity comes online.

 

[Fact Checking]

Sounds like that 280 per day quote from a few days ago was fairly misleading as some of us suspected. They only have 1000 cars today after seeing all the drone videos and these bullish quotes from employees.

We have all seen these run-rate numbers not translate into big delivery numbers. At this point, i'm hoping for 8k deliveries in Q1 out of GF3.

I think you are misinterpreting this: the reason they only made ~1,000 cars in Q4 at GF3 was to reduce cash consumption: at ~$45k ASP they'd have cost of goods of around $30k per unit, so these 1,000 units are already using up ~$30m of cash.

There was very little reason to consume more cash in Q4, with 112k deliveries they probably knew it in early December already that they'll meet 360k guidance without any GF3 contribution, instead they demonstrated burst capacity of both equipment and their first shift at GF3 to beyond 3k/week throughput (which is amazing), trained their workforce, made the first ~1,000 units and are going to scale up their supply chain and their second shift in Q1 and hit 3k/week and beyond, and deliver most of the cars in Q1.

I wouldn't be surprised to see 20k production out of GF3 in Q1, maybe more.

 

[KarenRei]

Geez these are crazy numbers, and some US customers didn't even get delivered in Q4 despite having delivery estimates in Q4.

Forget the US; tons of people are waiting in EU. The vast majority of people who ordered SR+ last quarter, up to half of those who ordered LR AWD, a third or so of those who ordered P... plus everyone in the markets still waiting for Tesla to start deliveries.

 

[dl003]

Or, a money sink for all that cash being pulled out of other NASDAQ equities... TSLA is the ONLY large equity that is growing at 50% YoY.

SP 441.27 @ 09:15 EST

Exactly my sentiment. I sold everything and put all of my money into Tesla because I got tired of all the political shenanigans and Tesla seemed to be doing things on its own, things that I believe in.

 

[KarenRei]

Dang it, am I going to have to waste time this afternoon rolling a bunch of call spreads? Looks like I am. Gee, Thanks Elon. Work work work work work...