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

[FrankSG]

Tesla Model 3 gross margin could be as high as 39% in China: report

'Sina indicates that the MIC Model 3 SR+ delivered by Tesla in Q1 2020 has a gross margin of 39.37%. This means that with its ¥271,550 price tag ($38,275), the vehicle actually costs ¥188,700 to produce ($26,653). Assuming that Sina‘s figures are accurate, Tesla China could be making a profit of around ¥82,285 ($11,622) per Model 3 SR+ sold.'

Hmm? 39.27% of $38,275 is 15,031, not $11,622.

Also, Tesla clearly said during Q1'20 call that MiC M3 margins were close to the M3 coming out of Fremont. 39.37% would be about double the Fremont margins.

 

[Maitri982]

Is the performance issue really so important? First, how many model 3s can perform at that level? Most are much more mundane and still pricey compared to many cars that people buy in large quantities.

If Tesla made 10,000,000 model 3s and Ys per year to sell at $35,000 each, I don't believe they could sell a fraction of them. The market needs to grow and the price needs to come down. They don't need to become higher performance. Given some time, this will all happen. I don't believe it is only about building more factories and "they will come". People need to see others driving them and learn that they are workable and in fact better in many ways. I think a big issue is learning that you may never need to charge anywhere other than at home again. The gas station paradigm is so deeply ingrained.

Wrong again. If Tesla made 10 million cars the cost would be significantly lower then it is now and they would sell like hotcakes.

 

[Todd Burch]

Weekend fun:

Mr. Beast’s latest video features quite a bit of Tesla action:

Starts around 7:20 and goes for the next few minutes.

Moral of the story: the kids love their Teslas, therefore the stock is a steal even in the $900s.

Also, one additional east coast Tesla order confirmed.

 

[Captkerosene]

Yeah, I like this idea a lot. I wonder if ARK actually has some inside knowledge on whether Tesla is really thinking about implementing this? And I wonder what "it would take our price target up considerably" means?

Freakin' Tesla. Just when you thought all the upcoming goodies were on the table, something else comes along (Semi and now Teslyft).

Why not Tuber?

 

[wipster]

I did well on the results of multiple splits of IBM back in the 90’s, but not sure about the impact in today’s market with high priced stocks like AMZN where institutional investors are the majority - would it prompt more small investor participation? Not sure. What do others think?

Well the reason I support it is because big stock prices scare away some of the smaller investors just starting that don't know about Robinhood and the availability of fractional shares and would much rather own 5 or 10 shares of TSLA worth $500 than half a share for the same amount. Plus I think it psychologically makes it easier for a stock to grow more quickly. A stock moving from $50 to $60 to $100 in a month doesn't seem as monumental as one growing $1000 to $1200 to $2000 in the same time period. I don't know maybe that's just my experience...

 

[Prunesquallor]

Why not Tuber?

Better than Tesluber.

 

[Prunesquallor]

Living in Delaware I have been trying my best to promote a factory here with local representatives

LOL. Only state that doesn’t want a Tesla factory is California.

kidding

 

[vikings123]

No, they need to get their clients in at a lower SP before the raise and the SP takes off (IMO)

Very interesting read on the downgrades. GS and MS were the underwriters for the most recent capital raise which was announced on February 13th morning. MS reiterated underweight rating for TSLA on Feb 6th with a price target of 350. GS did not cover TSLA back then. Stock was down 6% premarket on Feb 13th and finished up 4%. It also makes sense when you think about the leaked email related to semi production.

I would think the battery technology advancements would be announced before any capital raise is completed.

 

[HG Wells]

Better than Tesluber.

I think that's a lubricant you buy in a drugstore.

 

[Prunesquallor]

I think that's a lubricant you buy in a drugstore.

You have to ask the pharmacist for it.

 

[printf42]

Well the reason I support it is because big stock prices scare away some of the smaller investors just starting that don't know about Robinhood and the availability of fractional shares and would much rather own 5 or 10 shares of TSLA worth $500 than half a share for the same amount. Plus I think it psychologically makes it easier for a stock to grow more quickly. A stock moving from $50 to $60 to $100 in a month doesn't seem as monumental as one growing $1000 to $1200 to $2000 in the same time period. I don't know maybe that's just my experience...

Believe it or not, my wife used to say TSLA at 300 was too expensive, AAPL was only 250.
I guess there are people who just buy the brand with their IRA and don’t know anything about stonk.

 

[printf42]

Very interesting read on the downgrades. GS and MS were the underwriters for the most recent capital raise which was announced on February 13th morning. MS reiterated underweight rating for TSLA on Feb 6th with a price target of 350. GS did not cover TSLA back then. Stock was down 6% premarket on Feb 13th and finished up 4%. It also makes sense when you think about the leaked email related to semi production.

I would think the battery technology advancements would be announced before any capital raise is completed.

Also Elon has been missing from Twitter for 2 days now, not even a like, which if I remember correctly very rarely happen without an announcement, something is up.

 

[RobStark]

California 2020 Q1 Sales .

Brand..................CA 2019.................................... % Share

1. Toyota........86,057 ...........,............................17.0
2. Honda........56,421.........................................11.1
3. Ford...........43,976..........................................8.7
4. Chevrolet...39,101..........................................7.7
5. Nissan........28,106..........................................5.5
6. Tesla.........23,250......................................4.6
7. Subaru......19,282............................................3.8
8. KIA.............18,439............................................3.6
9. BMW..........17,844............................................3.5
10. Hyundai......17,350...........................................3.4
11. Merc Benz...16,909..........................................3.3
12. Lexus..........15,702..........................................3.1
13. Jeep............15,663..........................................3.1
14. RAM.............13,067.........................................2.6
15. Mazda..........12,251.........................................2.4
16. Volkswagen..11,075........................................2.2
17. Audi..............10,998........................................2.2
    
18. GMC.............9,810..........................................1.9
19. Dodge..........9,129..........................................1.8
20. Chrysler........5,283..........................................1.0
21. Acura ...........5,033.........................................1.0
22. Land Rover ..4,977.........................................1.0
23. Infiniti............4,033,,........................................0.8
24. Cadillac.........3,375..........................................0.7
25. Porsche........3,364,,.........................................0.7
26. Volvo.............3,248..........................................0.6
27. Mitsubishi.....3,240..........................................0.6
28. Lincoln..........2,072..........................................0.4
29. Buick.............2,057..........................................0.4
30. Jaguar...........1,538.........................................0.3
31. Mini...............1,497.........................................0.3
32. Alfa Romeo....1,092........................................0.2
33. Genesis.........800............................................0.2
    
34. FIAT................164...........................................0

Total.........................507,646 ..................................100

https://www.cncda.org/wp-content/uploads/Cal-Covering-2020-Q1-Combined.pdf

 

[MTL_HABS1909]

Also Elon has been missing from Twitter for 2 days now, not even a like, which if I remember correctly very rarely happen without an announcement, something is up.

And he didn’t even warn us this time

Edit: It is odd though. He didn’t even retweet anything from SpaceX leading up to or after the launch which is very unusual. Maybe you’re right that there is an announcement coming and the board told him to lay low to make sure he doesn’t let anything slip....

 

[StealthP3D]

I don’t think they need cash for building more GFs, local government around the world would be bending over backwards to give them loans to do that.
At least before they fully automate General Assembly lines though.

Tesla will steadily increase automation, where and when it makes sense, but there will always be human workers required in reasonable amounts, the throughput will just be faster. More product per sq. ft. per day. The jobs, on average, will be more skilled, higher paying jobs. Production engineers, software, etc. Someone has to keep the automation running in top form. Local communities will value Tesla as an employer just as much. It's not only the volume of jobs communities desire - it's the quality of the jobs. And all Tesla employees have a stock in the companies success. Having a highly successful company in your community benefits the entire community.

As to whether Tesla would benefit from a capital raise at this time, I think on a functional/expansion level, they probably don't need it unless they want a "rainy day" cash buffer or they want to move up timelines or accelerate production capacity. I trust the current management will make the most pragmatic decision for the strength of the company as it rapidly grows.

If they do a capital raise the bulls will say it strengthens the company and the bears will say "it's about time". If they don't do a capital raise, the bulls will say "they don't need it" and the bears will be screaming how risky it is to NOT do a capital raise. Personally, I hope they can continue to expand at the present rate and meet or beat their targets without a capital raise but I'm not opposed to one at this time if management thinks it could help them expand production capacity and accelerate new models or ramp major battery production more quickly and with less risk.

 

[StealthP3D]

And he didn’t even warn us this time

Edit: It is odd though. He didn’t even retweet anything from SpaceX leading up to or after the launch which is very unusual. Maybe you’re right that there is an announcement coming and the board told him to lay low to make sure he doesn’t let anything slip....

If Elon is laying low, it's because Elon wants to lay low (or he's crunched for time). The board does not pull the strings!

 

[StealthP3D]

Guys, can you look at S/X delivery estimates for your region? Seems like S/X has dramatically increased delivery times for the east coast. 8-12 weeks now for FL.

1-3 weeks for Model 3
4-8 weeks for Model Y

I love end of quarters with Tesla. Even in the middle of a pandemic! Tesla brings hope and light to the world.

I'm not kidding.

 

[Krugerrand]

In a few hours, my family will trade in our first Tesla, Blueberry, a Model S 85 from 2015, and take delivery of our new Model Y LR.

Raspberry?

 

[LN1_Casey]

If Elon is laying low, it's because Elon wants to lay low (or he's crunched for time). The board does not pull the strings!

Maybe it’s finally the Battery Day announcement.

I don’t think that Tesla should raise capital at this time. I think they should do it after BD, and after Q2 results. Two huge triggers for SP that would allow them to dilute less.

They last raised in the upper 700’s. As of closing Friday, that’s only $200 more per share. If they wait until after Q2 and BD, then the SP maybe in the mid 1000’s. and those are not that far away.

 

[UncaNed]

Also shouldn't you go balls to the walls with expansions at least after this covid dust settles? Expanding too fast and hard during a recession is a good way to shoot yourself in the foot.

Nope. That's clearly backwards. Why would you want them to build when it costs more instead?