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

[Unpilot]

Sort of. There's always going to be the next revision (I'm pretty sure I recall that on Investor Day they said HW4 design was 50% done.). However it has to be brought in at a price that makes sense. It's why you don't purchase a 32T SSD for your home computer. Even if you have the HW3, you're still running HW2 software. No one other than those with NDAs have actually seen what HW3 software really does.

Actually I have had a glimpse of the future and all I can say is....

 

[StealthP3D]

Ya, I still remember what gas smells like. (My preference was always 2 cycle mix... still like it.)

I can fix that for you.

We will just mount this to the back bulkhead of the frunk of your Model 3 and plumb the exhaust through a small heat resistant tube that runs over the frunk seal into the cabin air intake. We can size the tube to ensure you don't get enough concentration to kill you - well at least not immediately (there is always a small risk that you might get cancer or develop asthma or COPD).

 

[Unpilot]

Breaking news.....the train the shortz are on has left the station.

 

[SpeedGoat]

The Wuhan Virus: How to Stay Safe

“the entire mainland could go on lockdown soon...The Chinese government will take very drastic actions over the next few weeks, and this will be a time of hardship for the Chinese people.”

If we get to this place, it’s impossible to see how Giga3 ramps up no matter the customer demand from people wanting to avoid public transport. And more generally, it’s very bad news indeed for global macro environment. This is without getting on to the “hyperbolic” discussion of what else it might mean, which seems to upset some people here.

If this happened every auto maker on earth would be impacted. I doubt there is a single one that doesn't have a significant part of their supply chain in China.

 

[dc_h]

The Wuhan Virus: How to Stay Safe

“the entire mainland could go on lockdown soon...The Chinese government will take very drastic actions over the next few weeks, and this will be a time of hardship for the Chinese people.”

If we get to this place, it’s impossible to see how Giga3 ramps up no matter the customer demand from people wanting to avoid public transport. And more generally, it’s very bad news indeed for global macro environment. This is without getting on to the “hyperbolic” discussion of what else it might mean, which seems to upset some people here.

We should all wish the Chinese people and government well. The contagion ratio appears to be very high, with academics saying 2.6 to 4.8 people catching it from every infected person. That is exponential. They are taking it very seriously and it appears very sad for New Years celebrations, which are so important to the culture and family system.
Travel restrictions for now seem focused on personal. It is holiday, so hard to say yet, if it will have a significant impact on commercial logistics.
For yourself, take precautions. Wear a mask, don’t be proud. Hopefully it’s a nothing burger, but it has the potential to be a significant human and economic event.

 

[SpeedGoat]

Electrek just published an article with quotes and a partial transcript:

Listen to Trump's dinner guests talk complete nonsense about Tesla and EVs - Electrek​

Very good article that also debunks the shockingly large number of lies being told to Trump about Tesla and EVs.

This is why we need sunshine laws, such recordings of democratically elected leaders should be done every time a lobbyist is trying to influence leaders at "dinner parties". This is the kind of access money and influence buys.

Also, this is the kind of stuff they are trying to hide under "executive privilege". If this hadn't been leaked a judge would likely have sealed it and it couldn't be used in legal proceedings. We'd never know.

So this is a rare glimpse into how power truly works in the Trump administration, gives support for the ZEV rollback and the weakening of EPA regulations.

In a way this is actually good news for TSLA. It shows just how many people still fundamentally don't understand what Tesla is doing and how the market is changing. One by one these people (like Cramer) find themselves coming around and over time that leads to the landslide effect that Apple eventually experienced. (There was once surely a similar conversation in a similar room about Blackberry versus this new iPhone thing.)

 

[UncaNed]

Tesla should place false leads in their firmware and reference "submarine mode", "bankruptcy mode", "terminator mode" just to get the shorts in a tizz.

...Taycan short-range mode, ID3 undrivable no-software mode... and a dozen fictitious battery types and KWH's...

 

[Tim S]

Off the cufff, what if FSD hw3 isnt meeting expectations and there is a hw3.5 in the works? Maybe just a crucial rev. The result might be delays in the upgrades as we seem to be experiencing.
My only basis for this is how humans completely underestimated cpu/bus/memory needs... like forever. I still think this is the 64kb, 8 bit version by alalogy. My other reasoning is that my FSD is still doing crazy things, leading me to believe Tesla also underestimated the requirements. IMO, turning reliable left turns is another 2-3 years out. My car still changes lanes in an intersection if the road has a slight turn in it. (Predicting roads behind the mountain turn? How about the road right in front?) Many other improvements are being addressed, not this one (but I am completely enjoying the biggest Beta test in history).

I do think the next big leap for the stock will be FSD, but still several years out. The legal battle has only begun. Model Y sales could be a nice booster soon, but that's kinda baked into the SP already. Who doesn't want an SUV right?

So here's my "Analyst" prediction as good as any: Q1 pulls back to $450 but never breaches 600 until 2021, and 1,000 is years away tied to FSD approval somewhere in the US. Still holding, no changes here.



Ya, I still remember what gas smells like. (My preference was always 2 cycle mix... still like it.)

I completely disagree with pretty much everything in this post. 2021 before the SP hits 600? Ridiculous. This is not 2019 again. I say we hit 600 by Thursday at the latest, maybe tomorrow.

 

[shootformoon]

There is a term called hedge in the financial industry.

iirc towards the end of the Sengoku period of Japan, a warlord asked his two sons to fight for the two sides of the Civil war respectively. They were advised to fight so hard to earn enough credit to bail out their brother's family.

Don't know how people could cohabitate together with such opposing views. For a good long-term relationship you need similar life-philosophies, well either that or lots of really great sex - but the latter does tend to drop off a bit after the first couple of years and very much so when kids come on the scene.

It's like George and Kellyanne - how does that work? Answers on a postcard please, to the usual address.

 

[sundaymorning]

Daimler is insisting that there are no battery supply problems, the ECQ is simply selling poorly.

With Model Y selling price slated to be much less I don’t see how Mercedes can stay competitive with the EQC.

 

[Remus]

Silly advice. I've been in this game long enough to know a flu epidemic might affect stocks and options in the short-term but solid data and information on Tesla's financial standing and growth like we will get on Wednesday after the close will far outweigh any fears about a flu epidemic. Who would buy options expiring past the earnings release if they didn't think good results would be reported? There are no options expiring between now and then. Selling on Monday means you will likely be selling at the peak impact of the coronavirus scare, at least with regard to Tesla.

The most successful investors adhere to the "steady as she goes" philosophy, not reacting to every development that scares them. Sometimes they will take a hit but 9 times out of 10 the "steady as she goes" philosophy wins out.

I don't think next Monday would be the peak of the fear. You can't trust the numbers from China and nobody knows how this thing would play out. On the other hand Chinese government can do lots of things that other government can't do, without legislative process. Looks like Zhejiang and Shanghai maybe the next center. I suspect there will be one way lockdown in Shanghai soon, nobody going in, not without special permission.

But that's just me.

Edit:
On the other hand, thanks for wise folks here it's no secret for us earning would be great. And the virus thing would likely pass by July. So I have no idea how the stock price would react. Thus dollar cost average.

 

[Remus]

If this happened every auto maker on earth would be impacted. I doubt there is a single one that doesn't have a significant part of their supply chain in China.

Absolutely.

 

[gerebgraus]

I did some modelling of the impact of gross margin on profit a couple of months ago. Q3 gross margin was 22.8% and the trend is increasing as production increases. I expect the 10% production increase in Q4 to push this towards 25% and for it to remain around that level going forward. However on top of this we will have to add FSD revenues (when it is released) and the impact of FCA. I am sure that will be good for another 5-10% margin increase. Giga Shanghai may be lower initially but as the ramp up progresses and local content increases towards 100% I am sure they will achieve at least similar margin levels.

As Tesla made a profit at 22.8% margin in Q3 (with lower production levels than Q4 and those projected for 2020) this increase in margin should, all else being equal, flow through directly to profit. If this happens, the resulting figures would be, as noted by @StealthP3D , impressive.

Let's all hope that Tesla is able to achieve this .

Based on company behavior I am fairly certain that in Q4 gross margin (possibly with ZEV and ZEV like credit will be comfortably above 25%, valuation allowance will be at least partially released, and full year profitability will also be achieved possibly with a small help from the valuation allowance. The reasoning is a bit longer than I have time for it provide now. I will attempt to do it later.

 

[erthquake]

Software is the biggest bottleneck for HW3 retrofits (at least for HW2.5 cars). If the software doesn’t install correctly, Tesla has held cars for two days before the software loads correctly.

FWIW, I was told this by my service manager when I picked up my 2018 Model 3 after recently getting the HW3 retrofit.

 

[dc_h]

Air Canada was still selling tickets from Pearson to Shanghai 7 hrs ago. Hubei (the center of the outbreak) is more than 1,000 km from Shanghai. Do you have any sources for your "scare", or was this just some rando tweet.

Fight fear with facts.

This is likely not the latest data, but a comprehensive map of known affected people. The data is likely undercounting, as early victims would be listed as pneumonia and other misreporting. It may or may not become a big issue, but it is potentially market moving and both production and demand impacting. Hopefully it will be a short term issue. SARS took 6 months to fully contain, so the issue can take a long time to control and China is much more globally integrated now, versus 2003 when SARS hit.
I'm not hand waving or FUD'ing about, but it is a significant event already. I think we will know much better in the next 10 days, when better math models and more results are known. It is going to take a couple of weeks to know if the disease is going global, but capturing the early incidents here in the US is encouraging from a global perspective.
https://www.washingtonpost.com/world/2020/01/22/mapping-spread-new-coronavirus/?arc404=true

 

[TradingInvest]

I don't think we will see gross margins over 40%, ever. But the profit at 30%-33% margin will be unbelievable.

I think Elon has even said he plans to reduce prices as needed to maintain margins around 30%-35% or so.

If Tesla achieves FSD and enables Tesla Network, they could get 62% gross margin ($30k cost, $80k price). If leasing cost is $1k per month and the car can bring in $2k a month, there will be demand.

I have no doubt Tesla will achieve FSD and enable Tesla Network, just not sure about timing and potential competition.

 

[CanadaEV]

I completely disagree with pretty much everything in this post. 2021 before the SP hits 600? Ridiculous. This is not 2019 again. I say we hit 600 by Thursday at the latest, maybe tomorrow.

i’m with you in your assessment. Contrary to those who are overwhelmed by the difficulty of FSD, I believe Tesla is much much further ahead than almost anybody understands.
The doubters see only the “difficulty”. What is actually harder to see is what Tesla Autopilot is capable of right now.
Who has the guts to turn half a million cars lose to drive themselves under any imaginable driving situation as is the case now?
Sure, the driver is supervising. And Tesla/Musk have the guts to believe in the responsibility of half a million more or less random people to do the job, and they are doing it. Not stupidly, like Forbes, Business Insider, CNN, and all the other morons keep insisting. Tesla drivers are doing it just the way you would expect reasonably intelligent people to be supervising. And we are getting far less accidents, less by a factor of eight compared to the average car. Almost nobody sees the significance of this.
When I look at what it can do, even though I am fully aware of what it cannot do, I am blown away by its sophistication.
As Musk confidently says, FSD is virtually here.

 

[Prunesquallor]

Electrek just published an article with quotes and a partial transcript:

Listen to Trump's dinner guests talk complete nonsense about Tesla and EVs - Electrek​

Very good article that also debunks the shockingly large number of lies being told to Trump about Tesla and EVs.

This is why we need sunshine laws, such recordings of democratically elected leaders should be done every time a lobbyist is trying to influence leaders at "dinner parties". This is the kind of access money and influence buys.

Also, this is the kind of stuff they are trying to hide under "executive privilege". If this hadn't been leaked a judge would likely have sealed it and it couldn't be used in legal proceedings. We'd never know.

So this is a rare glimpse into how power truly works in the Trump administration, gives support for the ZEV rollback and the weakening of EPA regulations.

A potentially positive result of this nearly two-year-old conversation coming to light is a general realization of the extremely poor advice the President is getting. Talk about “well, THAT didn't age well”, these guys all have Jonas-level prediction dysfunction.

 

[PeterJA]

Can we please stop with the references to the annihilation of Elon. This is clearly spreading FUD and should not be tolerated on this forum. Thank you.

I mean no disrespect, but this request reminds me of the scene in WALK THE LINE where a prison warden asks Johnny Cash to not remind inmates that they're in prison.

1:32 here:

"Hope for the best, plan for the worst" is my philosophy.

 

[Skryll]

My recollection is that the goal of gross margin is around 50%. Do you have a link Elon saying that he plans to reduce prices to maintain gross margin?! I am fairly certain that he never said that and absolutely certain that he never thought that.

he did it many times in the past; why not now ?