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

[Fact Checking]

By the way. The 2 billion number comes from the Financial Times (actually the headline says 1.8 billion euros). The article is behind a paywall and I don't think I've actually seen it so not sure what the wording is but the Financial Times doesn't really make up stuff they don't have reliable sources for.

The headline says

Fiat Chrysler to spend €1.8bn on CO2 credits from Tesla

It says to spend, not to save or recover. Sure, wording and headlines aren't always correct but this isn't written in a way to give doubt.

Note that the Financial Times is owned by Japanese old money, and they are generally happy to help out in information warfare of the Japanese industry heavyweights (Nissan in this case).

Here's the exact wording from February:

I'm sure more details will be disclosed, but until then let's attempt to read between the lines and speculate about the sum:

• The exact wording in the FT was:
  • "Fiat Chrysler Automobiles has agreed to pay Tesla hundreds of millions of euros so the electric carmaker’s vehicles are counted in its fleet in order to avoid large fines for breaking tough new EU emissions rules."
    
  • "Analysts at Jefferies forecast FCA could face fines in excess of €2bn in 2021 when the new targets become law. "
• The Financial Times is owned by "The Nikkei" Japanese business media giant with opaque ownership - Japanese old money I suspect?
• The source of the story was FCA. To FCA this is probably a negative story, and they'd want to break it slowly, with a drip-drip of details.
• Tesla is probably under NDA until they must file financials. No big motivation for them to leak.
• "Hundreds of millions of euros" is 200m-900m. "Hundreds of" technically includes 200-999m, but above 500m the "more than half a billion" would be more appropriate.
• FCA's motivation is probably to downplay the figures: this is an extra cost. If it was only 200m then I'd expect them to leak that. If it was say 300m then they could say 'low hundreds of".
• FCA probably has no motivation to exaggerate the sum.
• Hence my guess: 400-600m euros, which is $450m-$670m.
• Less or more is possible as well, but I'd be surprised if it was below 300m: FCA would leak it immediately, plus it's too low compared to the looming 2 billion euros fine per year.

The big question: why keep this secret? It would come out in Tesla financials anyway.

Speculation only. Not advice. Might have to eat crow.

The journalist writing this later narrowed it to "low hundreds of millions of Euros" on Twitter - which is in line with my €360m estimate for 2020.

Actual payments to Tesla could be much higher due to the PSA merger, and due to the IMO rosy "we'll sell a lot of EVs" expectations of FCA leadership.

 

[Prunesquallor]

FCA execs talked about this, and from their words and from reading between the lines I got this impression:

• FCA will reduce some of their emissions via ICE technology tweaks. (You can pollute a bit less by reducing engine power and other tricks. Since every ICE maker is forced to do this there's no competitive disadvantage in the first approximation - the EU is now pricing pollution.)
• They'll get rid of some outliers by not selling some models in Europe (pickup trucks, etc.),
• They have rosy expectations about their ability to sell their own EVs,
• They have no real plans to use the Tesla skateboard and powertrain,
• They'll pay Tesla for any shortfalls.

I.e. selling more EVs isn't the only method to reduce emissions, but they are planning that too.

I also had the impression that FCA doesn't really know, and that they consider Tesla as "insurance" against having to pay the full 100% penalties and paying the marketing/political cost of being "fined" for pollution ...

The 2020 “Phase-in” rules allows a manufacturer to designate 5% of their worst emitters for exclusion from the average emission calculations. When I researched that for the original assessment, FCA had some real stinkers, for example the petrol Panda and 500x. In 2018, more than 200,000 Panda+500x were sold, but I couldn't find a breakout between diesel and petrol. If FCA is discontinuing a bunch of their petrol polluters, it might help quite a bit.

 

[EVNow]

Just tried my hand at making a TMC diluted GAAP EPS estimate "consensus." Could only find four posted diluted GAAP EPS estimates since the P&D report, however. From @EVNow, @Todesbuckler, @FrankSG, and @luvb2b; posts linked here, here, here and here.

Unweighted average is 1.47. Average weighted by number of total posts on TMC is 2.02.

Here is what we have now. Did I miss anyone ?

 

[madodel]

It’s possibly the same tent that Machine Planet, a.k.a. Paul#######, a.k.a. The Keeper of The Blocklist, a.k.a. Shorty AirFarce commander took some drone photos of. According to a permit reg. discovered by the pinnacle of journalistic integrity that is Lora K., it might be a “storage tent to support general assembly”.

Twitter
View attachment 499367

Do those idiots realize this is good news? Are they painting this as a negative? There is so much demand that Tesla needs to put up tents to handle the load or move storage out of the factory. Truly stupid people just can't handle basic reality.

 

[Green Pete]

Do those idiots realize this is good news? Are they painting this as a negative? There is so much demand that Tesla needs to put up tents to handle the load or move storage out of the factory. Truly stupid people just can't handle basic reality.

Its utterly amazing to me how I am on the TSLAQ block list despite barely ever tweeting. Can't read the tweet. For stuff like this it might make sense for people to post screenshots when they can as many of us appear to be on the block list?

 

[Zaxxon]

I'm pretty sure it wasn't him, a bit less sure that it was @wk057 (Jason Hughes).

Oh, it was definitely @neroden. Might have also been @wk057, but @neroden was all over it, all the time.

Edit: one example: They said "you can't stay on 7.0 forever. .."

 

[Zaxxon]

Its utterly amazing to me how I am on the TSLAQ block list despite barely ever tweeting. Can't read the tweet. For stuff like this it might make sense for people to post screenshots when they can as many of us appear to be on the block list?

The solution isn't screenshots, it's incognito mode or a signed-out browser.

 

[ke6jph]

FYI found this eastbound car transport on the 10 east near Highway 177 in California by Desert Center

 

[ke6jph]

 

[dc_h]

Kind of odd when the movie got paid by Coke and Ford. The Tesla served no purpose and just looked like a product placement. Seems like Ford paid a good chunk since most the cars are Ford.

Maybe ford paid to put the bad guy in a Tesla?

 

[ke6jph]

This was at at about 10:35 this morning

 

[EVNow]

It’s possibly the same tent that Machine Planet, a.k.a. Paul#######, a.k.a. The Keeper of The Blocklist, a.k.a. Shorty AirFarce commander took some drone photos of. According to a permit reg. discovered by the pinnacle of journalistic integrity that is Lora K., it might be a “storage tent to support general assembly”.

Twitter
View attachment 499367

Does this Paul guy have multiple accounts ? Which account creates the blocklist ?

 

[dc_h]

Yeah, I think it precisely the other way around. Diess sees the future, while the octogenarian patriarch of the Piëch family is firmly vested in the past. I don't see the owners of VWAG changing their minds before slowly fading away. Diess is frustrated, but largely has his hands tied wrt the pace of Elektromobilität.

He also needs to provide some ground cover for the new id.3, which is now delayed. They’re 8 years late and now have this decabillion program and they’re spotting Tesla another year due to software issues. Tesla could have GF4 built by the time the id program is hitting stride and is on track to continue growing faster then VW’s EV program.

 

[FrankSG]

Yeah, I was thinking of sharing that earlier.... but really, there's not much to see.

More interesting out of Germany: here's VW's Diess whining about Europe trying to force the auto industry into a "painful transition", and by "painful transition" he means having a mere 30% of vehicles being electric by 2030.

“There’s a misperception about the automotive industry.”

Meanwhile, his company's EVs be like...

Earl of Frunkpuppy on Twitter

The best positioned traditional car manufacturer is saying 30% EVs by 2030 would be a painful transition?

That's not a good sign for traditional auto... I think Tesla could in an optimistic scenario by 2030 electrify almost 30% of the world's car production capacity on its own.

 

[ke6jph]

Also found this at Quartzsite Arizona

 

[Mad@gascar]

Yeah, I was thinking of sharing that earlier.... but really, there's not much to see.

More interesting out of Germany: here's VW's Diess whining about Europe trying to force the auto industry into a "painful transition", and by "painful transition" he means having a mere 30% of vehicles being electric by 2030.

“There’s a misperception about the automotive industry.”

The best positioned traditional car manufacturer is saying 30% EVs by 2030 would be a painful transition?

That's not a good sign for traditional auto... I think Tesla could in an optimistic scenario by 2030 electrify almost 30% of the world's car production capacity on its own.

I believe you are misunderstanding what Diess is saying. To be clear, Diess is talking about a 30% reduction in CO2 emissions of the German automobile fleet by 2030 (which might be achieved by an automobile fleet that is 30% electric), not 30% of yearly automobile production being EVs. Considering that cars have a life span of up to 20 years, achieving an automobile fleet that is 30% electric in 2030 would require moving to almost 100% EV production within the next few years. I suppose if regulators forced such a fast transition, while good for the planet, that would indeed be painful for VW.

 

[Prunesquallor]

Yeah, I was thinking of sharing that earlier.... but really, there's not much to see.

More interesting out of Germany: here's VW's Diess whining about Europe trying to force the auto industry into a "painful transition", and by "painful transition" he means having a mere 30% of vehicles being electric by 2030.

“There’s a misperception about the automotive industry.”

Meanwhile, his company's EVs be like...

Earl of Frunkpuppy on Twitter

This "painful transition" has been clearly articulated by the EU for the last eight years. If VW had spent their effort on developing zero-emission vehicles instead of criminally fraudulent diesels it would have been a lot less painful.

 

[Chocochip]

Its utterly amazing to me how I am on the TSLAQ block list despite barely ever tweeting. Can't read the tweet. For stuff like this it might make sense for people to post screenshots when they can as many of us appear to be on the block list?

The tweet in the link is the one I attached a screenshot of, precisely because I had an expectation that many here with Twitter accounts would be on the block list and therefore not able to see it. Which is probably why the tent news didn’t make it on here until today.

But there is a quick fix if you find yourself on the block list, as below:

The solution isn't screenshots, it's incognito mode or a signed-out browser.

The reason I can access all these tweets is because I simply don’t have a Twitter account. I mean, how much more of my day would I be spending on Tesla-related stuff if I had one?!

Does this Paul guy have multiple accounts ? Which account creates the blocklist ?

I believe it’s just this account. He recently confessed he has a very low threshold for adding accounts onto the block list (over 7100 accounts on it atm), as the “collateral damage” is less than 10% and doesn’t justify the extra effort required to actually checking who he’s blocking. As far as I can tell, the way it works is, a $TSLAQ member tweets some random bile, somebody replies to question said nonsense, at which point the $TSLAQ member replies to that tweet with Paul’s handle in the message to get his attention, and the guy adds that account to the block list. The person being blocked would have to know who this Paul guy is to realise what just happened. Most don’t, they just find the reply strange. And then they stop seeing $TSLAQ tweets.

 

[ByeByeJohnny]

Note that the Financial Times is owned by Japanese old money, and they are generally happy to help out in information warfare of the Japanese industry heavyweights (Nissan in this case).

Here's the exact wording from February:



The journalist writing this later narrowed it to "low hundreds of millions of Euros" on Twitter - which is in line with my €360m estimate for 2020.

Actual payments to Tesla could be much higher due to the PSA merger, and due to the IMO rosy "we'll sell a lot of EVs" expectations of FCA leadership.

You could be right but the hundreds of millions comes from an April 7 article. April 6-7 is the first mentions of this deal in media. It was evidently registered with EU in late February but no one seemed to notice until April.

The article with the 2 billion headline is from May 3. It's from a different reporter and there's a corresponding twitter thread from him (Peter Campbell) that seems to come out of a Fiat Chrysler earnings call.

Here's some quotes

"Mike Manley makes some comments on CO2 pool with Tesla in Europe - says it's the lowest cost way of meeting the European CO2 rules in 2020/21, but doesn't replace FCA's plans to roll out hybrids/EVs."

"Total cost of credits across both Europe and Nafta is euro1.8bn, CFO Richard Palmer says"

"2020
20% conventional ICE tech rollout
80% credit pooling

2021
40% ICE tech
45% from EV/hybrid rollout
15% credits

2022
50-60% EV/hybrid
40% ICE tech

Manley: "if there is need for pooling [in '22], it will be v v small""

There is a follow up on a question on the twitter thread the next day, question is "you make it sound like this is almost all going to Tesla, but can't draw the same conclusion from the transcript myself. Do you have another source for that?

Peter Campbell answers "The two contracts are with Tesla in EU (open pool) and with Tesla in US. So yes, all goes to Tesla."

I don't have twitter so had to google this and can't find any later references where he comments on the numbers.

I'm frankly not sure what this actually means anymore. I don't think I've ever seen that the deal with FCA is also regarding the US anywhere else but he seems very specific on this. That could indicate that Tesla not being able to deliver enough in the EU is a much lower risk than believed. It might not be for 1.8 billions but I don't really see anything that confirms it's not.

If it's the total liability for FCA that is 1.8 billion, instead of the value for Tesla, that would still be 900x0.80+900x0.15=720+135=845 million and then whatever value of that Tesla would get payed.

So I assume that your 360 million number comes from Tesla being payed 50% of that 720 million for 2020?

Also who is FCA kidding? Only needing 15% credits in 2021 and none in 2022 is not happening.

 

[Unpilot]

After review of his "dad" moves at the GF3/Shanghai Delivery Event, Elon has been practicing his rocket-assisted "dance" moves. Here's super-secret video leaked just last night, including Neuralink demo hardware. Watch to the end to see a RUD (Rapid Unscheduled Disassembly):

Cheers!

Paging @Unpilot What we got upcoming for the week, ol'son?

Well I'm relocating from the perpetually grey Midwest...to a coast. So my magic crystal ball is packed away.

However in me bones I feel there is only one direction for this stock...and that is North of 五百