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

[Webeevdrivers]

Inventories in North America are very high. In Europe inventories are higher than last quarter but they are about the right level. Great Britain that has the best incentives for Q1 seems to be sold out.
In China there are no Model 3 new inventories at all and they will apparently start long range RWD very soon and that should increase demand even further. I suspect we can forget inclusion in S&P after Q1, but is they manage to ramp up Model Y fast and the all powerful government does not force production shut down they will not even need to reduce production.
Overall it seems that there wil be a hit from the virus, but things are in control.
The interesting question: what will happen after the idiotic virus panic is over. I do not believe that macros will have V shape recovery, but I would not exclude the possibility that Tesla will have one.

And sadly no M3 AWD Red white interior with sport wheels in the pipeline for Vancouver .at least not that my SA can see. 5 to 8 weeks min. snivel, snivel,

 

[KarenRei]

Maybe I'm stating the obvious, but the short term financial ramifications of a 3 week shutdown would be quite significant, correct? Like on the order of a billion dollar Q1 loss? And this would obliterate any chance of S&P inclusion for maybe a year.

I'm not trying to promote FUD if someone could better estimate the costs of a 3 week loss of product, that would be informative...

Don't be afraid to ask It's a touch over two weeks of production, almost all of it which of likely would have been sold in this quarter, unless they'd been planning to start pre-producing for Q2 overseas markets. Maybe 18k cars? Maybe $250M?

 

[KarenRei]

you are assuming the Nevada GigaFactory stays open?

It's not in Alameda. No rumblings from Reno so far.

That could of course change, but in the near term, it's looking like it'll be open but Fremont will be closed.

 

[NicoV]

Some borders are closed for some goods, see e.g. Subscribe to read | Financial Times . It is not clear to me whether Tesla Model 3s would fall in the category ‘components needed for manufacturers’. There’s definitely an issue here since Ursula von der Leyen urged the member states this weekend not to close off the internal EU market.

France is in lockdown now, only people in essential services can go to work now.
So no Tesla deliveries in France anymore in Q1.

 

[rxlawdude]

The only concern I have is watching the new inventory in SoCal. The numbers are swelling quickly - well over 50 inventory M3s and 30 MSs, double the number two weeks ago.

I know it's the end of quarter push, but given the economic developments it's not likely they will be selling the way they have at EOQ in the past. I think earnings will be weak.

 

[sparcs]

As a resident San Franciscan, this order is pretty vague on the details at the moment...

Not sure what I can and can’t do, or how it will be enforced.

Seems pretty likely Fremont will be down though.

The article from the SF Chronicle was very clear:

Everyone is to work from home, or stop working, unless they provide an essential service, which includes health care workers; police, fire and other emergency responders; and utility providers such as electricians, plumbers, and sanitation workers.

 

[Thekiwi]

Just speculation on my part, but there is a chance Trump decides to shut the stock market.

Even though he would likely do this out of a desire to curtail the bad headlines, there may be some merit to shutting the market at some point perhaps. Worth thinking about the ramifications, good and bad.

 

[ev-enthusiast]

Here is some hope for Giga Shanghai to keep running and ramping at a great rate to mitigate the consequences.

 

[kengchang]

The only concern I have is watching the new inventory in SoCal. The numbers are swelling quickly - well over 50 inventory M3s and 30 MSs, double the number two weeks ago.

I know it's the end of quarter push, but given the economic developments it's not likely they will be selling the way they have at EOQ in the past. I think earnings will be weak.

Well, there won't be new cars off the line starting tomorrow for 3 weeks.

 

[Alphacrux]

HODL

 

[Fobble]

OMG. Is that green, AH?

Yep. Enjoy while you can until the next trading day

 

[wipster]

Tesla cars will shine during a lockdown provided that they don't lock down car travel.
No need to conserve gas usage for fear of shortages.
Entertainment while charging
Work on your laptop all day at a sunny spot in the country side.
Bio weapon defense mode in the cities where millions of droplets rain down on the road from apartment dwellers high above.

Tesla cars are made for this.

Even more so when they start delivering themselves along with a hologram that gives the new owners instructions on how to operate their new toy.

For that matter, the holgrams can sit in the driver's seat on the way over... don't know how they'll show license and insurance if they get pulled over though...

 

[ZeApelido]

Don't be afraid to ask It's a touch over two weeks of production, almost all of it which of likely would have been sold in this quarter, unless they'd been planning to start pre-producing for Q2 overseas markets. Maybe 18k cars? Maybe $250M?

I just estimated ~ 6 billion in automotive revenue / quarter. a loss of 3 weeks would be ~ 23% of revenue, or ~1.3 billion. I don't know how much is variable costs so I just wag 1 billion. (yes one of those weeks is in Q2, not Q1).

 

[KSilver2000]

France is in lockdown now, only people in essential services can go to work now.
So no Tesla deliveries in France anymore in Q1.

I read that people in France can’t even go to see family living separately.

OMG. Is that green, AH?

Depending on how you’re trading, take it as an exit opportunity IMO.

 

[tslagreen]

The only concern I have is watching the new inventory in SoCal. The numbers are swelling quickly - well over 50 inventory M3s and 30 MSs, double the number two weeks ago.

I know it's the end of quarter push, but given the economic developments it's not likely they will be selling the way they have at EOQ in the past. I think earnings will be weak.

Every company in the world, let alone the US, will be negatively affected by CVD-19. Tesla is certainly not unique to in that regard.

 

[sparcs]

I'm a little relieved as now their won't be some FUD article about how Tesla enslaved their workers to work through the coronavirus in unsafe conditions.

I guarantee kolodny had one already written up.

 

[wipster]

Well, there won't be new cars off the line starting tomorrow for 3 weeks.

Now we know the real reason Elon wants to build the machines that build the machines.

 

[Thekiwi]

I just estimated ~ 6 billion in automotive revenue / quarter. a loss of 3 weeks would be ~ 23% of revenue, or ~1.3 billion. I don't know how much is variable costs so I just wag 1 billion. (yes one of those weeks is in Q2, not Q1).

Well it could be much higher as most of the quarters cars are delivered in March. Its not just a couple of weeks of lost Fremont production, its also increasingly deliveries of cars already produced in the quarter unable to be delivered in Europe & North America.

 

[Fobble]

I read that people in France can’t even go to see family living separately.

Even if they can visit, they should not. They don't want to bring the virus home to the aging parents.

 

[Fact Checking]

I just estimated ~ 6 billion in automotive revenue / quarter. a loss of 3 weeks would be ~ 23% of revenue, or ~1.3 billion. I don't know how much is variable costs so I just wag 1 billion. (yes one of those weeks is in Q2, not Q1).

That's horribly miscalculated - that much revenue might be lost in Q2 primarily - but profit impact is about 20% of revenue, i.e. the $200m-$250m that @KarenRei mentioned.