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

[Johnny Ma]

That's cool - there's a lot of R&D and other white collar staff there who can work from home. By reinstating 3 shift assembly on the S/X lines they can keep production output with a smaller workforce.

Only about 40% of the Fremont workforce are line workers who must be physically present.

They also have S/X pack assembly and powertrain subassembly at Fremont, which they might be able to move to GF1 and Lathrop.

Lots of ways to get higher production out of a smaller workforce present at any particular moment in Fremont.

The worst-case was a 100% shutdown of manufacturing.

There's a lot of evidence that the model Y line(s) require fewer production staff, right? Would be real interested to find out how they allocate the 25% that come in. Might not see a huge dip in production at all.

 

[Fact Checking]

A bigger concern might be legal liability. If refusing to comply with a county's order to shut down temporarily constitutes negligence per se, all an injured party would only have to prove is damages (medical expenses, mental anguish, etc. related to contracting the virus) and that the refusal to shut down was the proximate cause of contracting the virus.

Either Tesla doesn't have Business Interruption insurance or has a high threshold of self-insured retention.

I disagree, the Tesla HR email made it very clear that not only do employees who elect to not report for work due to virus risks face no negative consequences, Tesla also offered them extra PTO days and other benefits.

I suspect the employees who do continue to work might also be asked to sign an agreement that they will follow health safety guidelines, and that they are aware of the risks.

Furthermore I'd also expect Tesla to (confidentially) filter out employees with pre-existing conditions that might have elevated coronavirus risk.

I.e. there's true choice by employees, there's disclosure, there's informed agreement by a consenting adults, there's compensation and there's common sense protection and mitigation.

None of the elements of "negligence" are present.

I.e. I'm certain that Tesla will dot all the liability i's and cross the liability t's.

 

[RiverCard]

I don't think COVID-19 is covered by business interruptions - generally, you need some physical damage to property for BI to kick it. They may have it as a sublimit coverage, but even then, there's a 30 day waiting period (deductible) usually. They may have some other type of insurance to cover potential plant shutdown costs though - i.e. trade disruptions, etc.

It depends:

Is Your Business Insured for the Coronavirus? | JD Supra

Fremont is situated on the northern end of a known fault line so maybe the internal risk managers set up some kind of program.

 

[phantasms]

I’m back in with 75% of my original holding as of today. I paid for all those shares, and some BYND, with TSLA profits. If it all goes to zero, I walk away even in as an investor. I do think it has a bit lower to go as once the Fremont factory closes [we know it will eventually] that’s got to hurt the stock, and maybe the shorts will manage to drag it down some more. I’ll continue to buy more at 300, 250, etc. If it goes up, I didn’t miss the rise and I’m happy. If it goes down, well, it’s all gravy.

Good luck everyone. Get some sleep.

 

[Right_Said_Fred]

I have a confession to make: I sold all my shares at 800 a few weeks ago. After my well publicized bailout and buyback - a few weeks earlier - I was convinced I wouldn’t be selling anymore. But then corona happened. After the situation in Italy started deteriorating it became crystal clear to me how events in the rest of Europe and the world would roll out. And TSLA would not be immune to it. So I decided to preserve my gains. It wasn’t fear, it just seemed like the smart thing to do.

But it was always my intention to get back in and that’s what I started doing today: I bought half of my position back at 370, 360 and 352 (358 average). It may have been too soon, as the US has not yet seen the height of the corona crisis and the economic impact still has to become visible. So I’m still keeping cash to buy back the rest, plus more, if we go lower.

Over the last few weeks, as we were going down, I felt a lot of respect for the HODL’ers here, for sticking to their conviction no matter what. But I also felt sorry for them, for not being able to cash in on their gains and being able to buy back more shares at a lower price. I’d want that for all longs.

 

[X Fan]

GM and Ford had about ~$28B rainy day fund. Don't know what it will be on their Q1 2020 report.

FCA has been paying into their employee pension fund which had a huge deficit and buying back FCA stock from the UAW.

I've been wondering whether GM & Ford's Finance Companies are systemic risks for them.....

 

[ZeApelido]

Another in a series of useful battery day analysis videos

 

[avoigt]

Operation continues as of now:

Hi Team!

We still do not have a final word from the City, County, State and, Federal Government on the status of our operations. We have had conflicting guidance from different levels of government. Until then, we are operating with Essential Employees only while all others are working from home, and working to incorporate all CDC guidelines into our operations. There are no changes in your normal assignment and you should continue to report to work if you are in an essential function: production, service, deliveries, testing and supporting groups as discussed with your manager. If you are not assigned to support an essential function, your manager might suggest a temporary relocation to support essential functions, or you may need to be on call. If you are not feeling well, please stay at home and use PTO. If your PTO balance is low, you can borrow up to 80 hours (2 weeks), after you exhaust your PTO balance. Please inform your manager and follow the normal procedures for sick time. If you cannot or are reluctant to come to work, you can also use your PTO. Please inform your manager. You can also take unpaid time off, after your exhaust your PTO. You will not be penalized for your decision. There will be no disciplinary action for attendance based on health or impossibility to come to work. We will communicate with everyone again tonight and we appreciate all you are doing to keep safe social distance.

Thank you!

Valerie

Tesla addresses coronavirus "shutdown" of Fremont factory in email to employees

 

[Prunesquallor]

This 25% workforce agreement smells like Elon’s four-dimensional chess to me. He’s inoculated himself against factory closure for an indefinite period. He no longer has to fight that fight. And as others have suggested, I’ll bet he has found a way to maximize profits as a function of workforce.

 

[mongo]

Operation continues as of now:

Hi Team!

We still do not have a final word from the City, County, State and, Federal Government on the status of our operations. We have had conflicting guidance from different levels of government. Until then, we are operating with Essential Employees only while all others are working from home, and working to incorporate all CDC guidelines into our operations. There are no changes in your normal assignment and you should continue to report to work if you are in an essential function: production, service, deliveries, testing and supporting groups as discussed with your manager. If you are not assigned to support an essential function, your manager might suggest a temporary relocation to support essential functions, or you may need to be on call. If you are not feeling well, please stay at home and use PTO. If your PTO balance is low, you can borrow up to 80 hours (2 weeks), after you exhaust your PTO balance. Please inform your manager and follow the normal procedures for sick time. If you cannot or are reluctant to come to work, you can also use your PTO. Please inform your manager. You can also take unpaid time off, after your exhaust your PTO. You will not be penalized for your decision. There will be no disciplinary action for attendance based on health or impossibility to come to work. We will communicate with everyone again tonight and we appreciate all you are doing to keep safe social distance.

Thank you!

Valerie

That is old news. They can run Fremont at 25% workforce.

 

[AMN]

The Model Y I ordered costs 60990$ in the US today. I have to pay 48378$ since Tesla have no currency clause in their contract with customers...

Anyone with ideas on how the currency might affect them? I know that it will be a bad for all Model Ys ordered from Norway, and the same for a lot of cars ordered these days before Tesla adjust the prices...

I am sure they hedged the exchange rate.

 

[Fact Checking]

That is old news. They can run Fremont at 25% workforce.

25% staffing levels I believe.

By expanding 3-shift operations and offloading some work to GF1 and Lathrop, I believe they can reach almost full output with 50%-60% of the workforce more spread out in time (so that the 25% staffing constraint is not violated), and the remaining 40%-50% either work from home, or work at other locations (Lathrop).

I.e. I believe Tesla can largely work around the 25% staffing constraint via smart scheduling and a bit of reorganization.

If they cannot keep up output they might also be able to compensate by producing higher margin and lower labor cost vehicles, such as the Model Y.

Finally, they could also redirect some of the GF1 battery output to GF3, and ramp to 3 shifts there. Tesla is battery constrained, not assembly constrained.

According to the latest info I'm aware of GF1 is still operating fully, and has introduced GF3 style health protection procedures recently.

 

[printf42]

not unless they are disinfecting cars after every workstation touches it. Hundreds of people touch the same car in the course of its run through the factory, so one person exposes them all.

You mean hundreds of hands touched my car without gloves?
Let me go disassemble it and wipe it inside out.

I got the car a bit over a year ago though.

 

[Cohiba]

Extrapolate the Italian daily death rate to the US. Imagine pictures of the hospital ships being full and refusing extra patients. Restaurants and hotels will go out of business, people will loose their jobs and houses. Construction halts. The service industry halts. Travel is dead. Banks will be in worse shape than in 2008. Companies will be valued accordingly. The Model Y launch did nothing for the share price. Nothing. So will battery day (for which I was very excited!) Nothing matters at this point, only the health of those close to you. The only thing which will move the market is death counts, riots and medical shortages.

I was long TSLA in shares until the return to 600. The US pandemic is bigger than everyone imagines, it will be equal or worse than Italy. Now I'm short on companies which are impacted (long list to choose from)

7 disagrees so far. I will report back when the above has happened. It won’t be too long. We went through the same denial stage in the EU. Today 475 people died in Italy due to Corona. Extrapolated, that means 2700 dead americans in the US only due to corona in one day. Every day.

Yes, they kiss and shake hands more. No, they are not partying in Miami. And their gun ownership rate is drastically less. No need for a discussion based on assumptions, time will tell (unfortunately)

 

[DrL90]

Seen three fully loaded trucks coming across i76 eastbound in Pennsylvania today on my way from Philadelphia to Ohio. Many of the Kia and Hyundai dealers I deliver to are no longer accepting deliveries until further notice. As well as the rental car places at the airports as they have no room for vehicles. All units are tendered in the ports or rail yards for this time. I'm not lucky enough to move Tesla's so I'm not sure if this would be the case for them as well. But I haven't seen a lack of Teslas heading east I run this route twice a week and always spot a few.

 

[Causalien]

I have a confession to make: I sold all my shares at 800 a few weeks ago. After my well publicized bailout and buyback - a few weeks earlier - I was convinced I wouldn’t be selling anymore. But then corona happened. After the situation in Italy started deteriorating it became crystal clear to me how events in the rest of Europe and the world would roll out. And TSLA would not be immune to it. So I decided to preserve my gains. It wasn’t fear, it just seemed like the smart thing to do.

But it was always my intention to get back in and that’s what I started doing today: I bought half of my position back at 370, 360 and 352 (358 average). It may have been too soon, as the US has not yet seen the height of the corona crisis and the economic impact still has to become visible. So I’m still keeping cash to buy back the rest, plus more, if we go lower.

Over the last few weeks, as we were going down, I felt a lot of respect for the HODL’ers here, for sticking to their conviction no matter what. But I also felt sorry for them, for not being able to cash in on their gains and be able to buy back more shares at a lower price. I’d wish that for all longs.

It's ok. Some of us shorted the market 3x.

 

[Maitri982]

Hire a few thousand min wage workers and pay them to stay home so you increase your employee count and thus more of your regular workers (now the 25%) can still report...hell its practically a community service at that point as you give the bartenders and restaurant workers some income but cheaper than paying your high cost laborers to stay home and do nothing.

25% staffing levels I believe.

By expanding 3-shift operations and offloading some work to GF1 and Lathrop, I believe they can reach almost full output with 50%-60% of the workforce more spread out in time (so that the 25% staffing constraint is not violated), and the remaining 40%-50% either work from home, or work at other locations (Lathrop).

I.e. I believe Tesla can largely work around the 25% staffing constraint via smart scheduling and a bit of reorganization.

If they cannot keep up output they might also be able to compensate by producing higher margin and lower labor cost vehicles, such as the Model Y.

Finally, they could also redirect some of the GF1 battery output to GF3, and ramp to 3 shifts there. Tesla is battery constrained, not assembly constrained.

According to the latest info I'm aware of GF1 is still operating fully, and has introduced GF3 style health protection procedures recently.

 

[avoigt]

That is old news. They can run Fremont at 25% workforce.

Is it? It just came from Teslarati with that mail has been send out Wednesday evening just 20 minutes ago to the Tesla employees but you guy may be more current on that news.

I've seen that back and forth between that Sheriff but ask myself if there is now really an agreement in place of not?

 

[Nocturnal]

UK schools closing pretty much from the weekend onwards.

WFH was working out quite nicely for while there....

We are closed for the rest of the year already, and I'm in Kansas.

 

[lklundin]

At this time, Max Pain for this Friday is 550$. With the next two day's options trading that's likely to change.
What do people think Max Pain will be come Friday?

Opricot Open Interest|Volume|Max Pain