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

[Curt Renz]

Which Friday is the next triple witching day?

Next week on June 19. The large quarterly options expirations (Triple Witching Days) occur on the third Fridays of the final months of quarters.

 

[SouthSeas]

Per Ron Baron's Feb interview: he believes 1T - 1.5T market cap is doable for Tesla by 2030, given their projected 50% YoY revenue growth. That would be a 9X from today's market cap, however, doesn't automatically mean a 9X from today's share price. There will be some dilution along the way from executive stock option compensation plans, employee stock purchase program, cap raises, etc.

I'm anxious for the interview less than 6 hours from now, to find out if Ron Baron's gotten more bullish on Tesla.

50% growth for 10 years seems a bit over stated. That would amount to growth of 58x from the current level of a third of a million to become nearly a quarter of all world vehicle sales. Even so, there will be who knows what bumps in the road slowing progress. There is presently no reason to expect such a rosy future from a company that has yet to achieve a year of profitability GAAP. No?

Tesla Net Income 2009-2020 | TSLA

The CV issues are going to whack this year pretty hard. So maybe 2021 will be better.

 

[tslagreen]

I have some bad news for you - Uber & Lyft currently operate their ride share networks at a massive loss. The “revenue stream” that supports them able to operate with negative margins is massive amounts of capital injected first by Private Equity and then by shareholders once they went public.

if Tesla operated A network with human drivers in a “Neutral profit manner” it would likely be at higher prices than what Uber/Lyft charge.

Cue the sad trombones, Debbie Downer.

 

[EVortex]

Ford's been teasing an all-electric F-150 since the SEMA show in the Fall of 2008. If (and that's one BIG 'IF') it arrives in 2022, then it'll only have been delayed fourteen years.

Meanwhile, the long-since retired imagineers over at the GM EV1 program say "HOLD MY BEER!"

The gap continues to widen between Tesla and start-ups and existing car companies. It just goes to show the significance of what Tesla has accomplished and how difficult it is to duplicate. Tesla for the long.

 

[Khamul]

Some weekend SpaceX news:

Starlink is gearing up! You can now sign up for updates based on your zipcode, here: Starlink
I got it to accept my email and zipcode, despite not being in USA. Really doubt they'll deliver here anytime soon unfortunately.

There's yet another Starlink launch tomorrow at at 5:21 a.m. EDT - just in time for a late breakfast in Europe.

 

[SouthSeas]

At least VG is actually producing vehicles and testing them, and has twice the amount of employees as Nikola.

Why are employees good? Employees cost lots of money that you have to sustain. In slow times they get laid off losing experience and in good times they have to be hired and trained. A good company is a lean company that doesn't need as many employees.

 

[MC3OZ]

Latest GF Shanghai video:-

The motor factory will be next to the Power Workshop, that answers a long standing question.

GF Shanghai should be close to totally free on any dependence of GF Nevada by the end of the year.

 

[Curt Renz]

Relatively sanguine reactions from two "Fast Money" traders.

CNBC - hour ago:

 

[MC3OZ]

Yes, but that is a long term view. Sales of cars tend to be driven by short term effects. Short term all auto sales are down. Even with the recent rise in oil prices over the last month or so, it's still far below the prices at the start of the year.



Yeah, but it will be another couple of years before that kicks in really. BEVs are less than 2% of car sales in the US and will increase fairly slowly in quantity even if more rapidly in percentage. With the CV issues it is hard to see forward. In any event it will likely be 2023 or later when EV sales have significant impact in gasoline usage. The next three years ahead are full of minefields for each and every auto maker.

I"m really surprised you are making this comment on a Tesla investment forum.

Look at the video I posted above on GF Shanghai.

Consider the scale of GF Berlin, plans for GF Texas, Tesla striving to ramp Model Y production at Fremont.

Consider that Tesla will soon start the Semi production, Cybertruck production is coming.

Tesla will design and build a compact EV in China.

Battery Day should announce that Tesla will make their own cells, in Fremont, Nevada, Shanghai, Berlin and Texas, in addition to continuing to use cells from Panasonic, CATL and/or LG. Consider that Battery Day should mean price party with an ICE drive-train.

That is just Tesla.

Around the world multiple battery factory projects are in progress.

German automakers in particular VW are stepping up their programs, software issues on the ID3 are unfortunate but will be solved.
Outside of this the ID3 is a good car.

The Chinese government is all in on eliminating oil imports, Chinese expertise and knowledge of all stages of battery production is impressive and deep. Chinese EVs are rapidly improving in quality, range and performance...

What part of the above strikes you as likely to increase fairly slowly?

It is a land grab for market share, pure and simple, late to the party, means you don't get a prize...

So if car companies are stepping up their level of ambition now, in 1-2 years, they will be in a mad panic to get it done yesterday.
Necessity is the mother of invention...

 

[LJS22]

Goldman’s downgrade of Apple sent them to 262 from 282 so expect a 20% positive move following today’s dip for Tesla haha

 

[SouthSeas]

Yep. Never came close to capacity here. Texas:

Texas may well see a lot more issues in their second wave than they did in the first.

Even if the infection rate never over tops the hospitals, there are 2,000 new cases every day in Texas and 25 deaths. That puts this disease high in the list of preventable deaths. Yes, preventable. The US has taken the attitude of surrender allowing the disease to roll over our population and relying on it's mercy as to who it does not kill.

Not exactly the Alamo spirit, eh?

What is happening in Texas regarding company owned dealerships and repair centers? Is Tesla ever going to have non-owned repair facilities? Will they ever allow third parties to buy their parts?

 

[MC3OZ]

Texas may well see a lot more issues in their second wave than they did in the first.

Even if the infection rate never over tops the hospitals, there are 2,000 new cases every day in Texas and 25 deaths. That puts this disease high in the list of preventable deaths. Yes, preventable. The US has taken the attitude of surrender allowing the disease to roll over our population and relying on it's mercy as to who it does not kill.

Not exactly the Alamo spirit, eh?

What is happening in Texas regarding company owned dealerships and repair centers? Is Tesla ever going to have non-owned repair facilities? Will they ever allow third parties to buy their parts?

For someone of a Tesla Investment forum, you don't seem very informed about Tesla.

Body shops can buy Tesla parts now... Tesla will always service their own cars...

If you are a Texas car dealer hoping to sell Tesla cars, you are out of luck..

 

[MTL_HABS1909]

Some weekend SpaceX news:

Starlink is gearing up! You can now sign up for updates based on your zipcode, here: Starlink
I got it to accept my email and zipcode, despite not being in USA. Really doubt they'll deliver here anytime soon unfortunately.

There's yet another Starlink launch tomorrow at at 5:21 a.m. EDT - just in time for a late breakfast in Europe.

Thanks for the heads up. I just added my name to the list. Even if it’s more expensive than my current provider I’ll be switching to StarLink. I’d rather have my money fund SpaceX and our future among the stars, than give it to a telecom company.

 

[jhm]

A Tesla rideshare program would sell a lot of Teslas to Millenials still living with their folks who otherwise couldn't afford them. They would rack up high mileage and displace a lot of ICE miles. "Look mom, I signed myself up for a job!". Tesla sells another car, thousands of people are exposed to Teslas and the air gets cleaner! Win, win, win!

Product placement, provides test rides for future buyers. Who says Tesla doesn't advertise?

 

[Unpilot]

Thanks for the heads up. I just added my name to the list. Even if it’s more expensive than my current provider I’ll be switching to StarLink. I’d rather have my money fund SpaceX and our future among the stars, than give it to a telecom company.

Same here.

 

[SouthSeas]

I"m really surprised you are making this comment on a Tesla investment forum.

There are lots of fanbois here. I'm trying to be realistic. I am still holding 288 shares and put in a sell order for 920 the other day, then canceled because I've already sold a bunch and don't want to pay more taxes. I want to properly estimate the likelihood of doing better by holding until 2021 and a good time to buy back in on the stocks I have sold.

Look at the video I posted above on GF Shanghai.

Consider the scale of GF Berlin, plans for GF Texas, Tesla striving to ramp Model Y production at Fremont.

Consider that Tesla will soon start the Semi production, Cybertruck production is coming.

Fremont production of Model Y is behind schedule because of the virus and possibly quality issues (not sure if the reports are valid or not). So they may still achieve +50% in 2020.

GF Berlin is not new. It's a year out or so, no? Will that ramp production 50%, I don't think so. More like +33%. So how to get +50% in 2021?

GF in Texas is still just a wet dream, producing what exactly? Semi perhaps? So is this being counted twice? Cyber truck? All of these are a fair way from production, 2022 maybe? Even then, will that be +50% in 2022 on top of S, X, 3 and Y production? Very unlikely. More like +20%.

I just don't by an average growth of +50% for 10 years. This is pure speculation and whatever the opposite of FUD is.

Tesla will design and build a compact EV in China.

That would be great... when? Battery costs are still too high for a lower cost compact. It will happen, but not in the next couple of years for certain.

Battery Day should announce that Tesla will make their own cells, in Fremont, Nevada, Shanghai, Berlin and Texas, in addition to continuing to use cells from Panasonic, CATL and/or LG. Consider that Battery Day should mean price party with an ICE drive-train.

Ok, we will see.

That is just Tesla.

Around the world multiple battery factory projects are in progress.

German automakers in particular VW are stepping up their programs, software issues on the ID3 are unfortunate but will be solved.
Outside of this the ID3 is a good car.

The Chinese government is all in on eliminating oil imports, Chinese expertise and knowledge of all stages of battery production is impressive and deep. Chinese EVs are rapidly improving in quality, range and performance...

What part of the above strikes you as likely to increase fairly slowly?

Not sure I said anything about "fairly slowly". Another post talked about a prediction that Tesla will grow an average of 50% a year for the next 10 years. That would be along the same lines as gas consumption tailing off significantly in the next year or two other than from external issues like the coronavirus.

It is a land grab for market share pure and simple, late to the party, means you don't get a prize...

I'm not sure it is that simple. Surely there are advantages of being first and having infrastructure to support EVs. But there is time for all entries to grow as the market grows. Then later when something happens to slow the growth or shrink the market there will be a shake out. I see this often in the semiconductor market. They have similar investment in large fabs costing billions of dollars.

So if car companies are stepping up their level of ambition now in 1-2 years, they will be in a mad panic to get it done yesterday.
Necessity is the mother of invention...

Mad panic is not a term I would use. The world is still buying 50 times more ICE than EVs. I think there is still time to design the right sort of EVs. That's why companies change their plans rather than come out with a product that might not sell well. A poor product at this time would be very bad for the company and very bad for careers. Much worse than a delay.

I pity Ford who likely would love to push an electric F150. But will their customers really like that or is it the wrong market for an EV?

 

[kengchang]

50% growth for 10 years seems a bit over stated. That would amount to growth of 58x from the current level of a third of a million to become nearly a quarter of all world vehicle sales. Even so, there will be who knows what bumps in the road slowing progress. There is presently no reason to expect such a rosy future from a company that has yet to achieve a year of profitability GAAP. No?

Tesla Net Income 2009-2020 | TSLA

The CV issues are going to whack this year pretty hard. So maybe 2021 will be better.

GAAP Net Income is terrible metric.

Look at the trailing EBITDA

 

[skybluecgreen]

There are lots of fanbois here. I'm trying to be realistic. I am still holding 288 shares and put in a sell order for 920 the other day, then canceled because I've already sold a bunch and don't want to pay more taxes. I want to properly estimate the likelihood of doing better by holding until 2021 and a good time to buy back in on the stocks I have sold.




Fremont production of Model Y is behind schedule because of the virus and possibly quality issues (not sure if the reports are valid or not). So they may still achieve +50% in 2020.

GF Berlin is not new. It's a year out or so, no? Will that ramp production 50%, I don't think so. More like +33%. So how to get +50% in 2021?

GF in Texas is still just a wet dream, producing what exactly? Semi perhaps? So is this being counted twice? Cyber truck? All of these are a fair way from production, 2022 maybe? Even then, will that be +50% in 2022 on top of S, X, 3 and Y production? Very unlikely. More like +20%.

I just don't by an average growth of +50% for 10 years. This is pure speculation and whatever the opposite of FUD is.




That would be great... when? Battery costs are still too high for a lower cost compact. It will happen, but not in the next couple of years for certain.




Ok, we will see.




Not sure I said anything about "fairly slowly". Another post talked about a prediction that Tesla will grow an average of 50% a year for the next 10 years. That would be along the same lines as gas consumption tailing off significantly in the next year or two other than from external issues like the coronavirus.




I'm not sure it is that simple. Surely there are advantages of being first and having infrastructure to support EVs. But there is time for all entries to grow as the market grows. Then later when something happens to slow the growth or shrink the market there will be a shake out. I see this often in the semiconductor market. They have similar investment in large fabs costing billions of dollars.




Mad panic is not a term I would use. The world is still buying 50 times more ICE than EVs. I think there is still time to design the right sort of EVs. That's why companies change their plans rather than come out with a product that might not sell well. A poor product at this time would be very bad for the company and very bad for careers. Much worse than a delay.

I pity Ford who likely would love to push an electric F150. But will their customers really like that or is it the wrong market for an EV?

I knew we were in trouble at 'big iron'

 

[StarFoxisDown!]

GAAP Net Income is terrible metric.

Look at the trailing EBITDA
View attachment 550923

Seriously, I don't get why anyone would focus so much on how much GAAP profit Tesla makes for the next 2-3 years. EBITDA, cash flow, and revenue growth are king. Amazon showed Wall St what's possible with little to no GAAP income

I'm glad though that after Q2, Tesla will at least be profitable, even by a $1 from here on out(for the most part). So sick of hearing Tesla isn't profitable

 

[SouthSeas]

Goldman’s downgrade of Apple sent them to 262 from 282 so expect a 20% positive move following today’s dip for Tesla haha

Your optimism did not pan out today. Perhaps it was because Tesla was trading at an all time high that is hard to justify at this point in time. I would expect to see pricing more like 500. I'm not sure what Q2 results will bring, but they can't be terribly good. I guess it will depend on how generous the market is feeling at the time.