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

[kosarfan]

For what it’s worth....I just got my 2017 S90D upgraded to FSD (free upgrade - already had purchased FSD) on Friday and the Service Center was absolutely packed with cars prepped for delivery! Many Y’s too! (Indianapolis). What a great experience of service too! Exact opposite of Chrysler taking two days to do an oil change and software update due to a recall on our Pacifica.

 

[MC3OZ]

Doubtful. The new battery contract signed with Panasonic set pricing retroactive to the beginning of Q2 2020. It's most likely that Tesla split the cost savings with the customer (that'd be the $2K price cut for Model 3) and added some to gross margins.

This is the historic way Tesla has conducted rounds of price cuts. Look at how the SR+ varient was rolled out. Greater production volume allows Tesla to reduce the retail price. Net net, Tesla's ASP did not go down, and gross margins improved on higher volume due to spreading fixed costs over more units. That right there allows the lower retail price.

Cheers!

IMO this seems right for Model 3 price cuts...

Model S/X price cuts might be a hit to margins, but may be strategic.... For example they are introducing a higher priced Plaid variant soon and want a sufficient price gap.

In any case I'm expecting lower inventory at the end of Q2 than at the end of Q1, this net draw down should offset any margin reductions.

Same with FSD recognition, it may offset lower regulatory credits in Europe...

The big upside is more Model Y sales at what should be good margins..

So what I am expecting for Q2 is definitely better than Q2 2019, and kind of similar to Q1 2020.

If it is a great result rather than simply a good result, drawn down of inventory + Model Y margins, + China margins will be the difference.

 

[AlMc]

I know many here know this acronym, but since we are discussing them a bit...

SBOTC: Short Burn of the Century that EM predicted became LBOTC: Long Burn of the Century. as many longs. (actually mostly options people) got burned instead.

 

[BOBTHEJOCKEY]

I see a huge sell off in the macro market market coming soon. With all this publicity about the resurgence of the virus it almost guarantees a real slow down for much longer and worse than most people think. Which will happen first the Macro sell off or the Tesla rocket ship? This is why I am buying and holding more in the money long calls and day trading further out of the money cheaper long puts while staying in around 70% cash for the coming market crash. This is my first time using puts on Tesla stock. I love this game. It's even fun when I lose because that's when you really learn.

 

[Highway2Heel]

I see a huge sell off in the macro market market coming soon. With all this publicity about the resurgence of the virus it almost guarantees a real slow down for much longer and worse than most people think. Which will happen first the Macro sell off or the Tesla rocket ship? This is why I am buying and holding more in the money long calls and day trading further out of the money cheaper long puts while staying in around 70% cash for the coming market crash. This is my first time using puts on Tesla stock. I love this game. It's even fun when I lose because that's when you really learn.

You need to watch Cathie Wood’s latest podcast.

 

[EVortex]

yes. specifically the black semi, with a red 'wrap'.

I happen live in Rocklin and have been fortunate enough to see these in person on I-80 and charging at the local SC. I thought both the red and black were wraps on the same truck since both finishes had more of a matte or satin finish than Tesla painted finishes. The silver looked like paint to me, but I suppose it could have been a gloss wrap - not sure. It will be nice to see a lot more of these trucks on the road when production starts. It’s a privilege to witness this kind of innovation and positive change. Playing a small part in investing in this progress has also been satisfying.

 

[mongo]

Tesla had an almost 30,000 vehicle inventory that was produced in Q1 but not delivered, so it wasn’t counted in Q1. Since Tesla isn’t demand constrained, we know Tesla had an almost 30,000 vehicle “leg up” on Q2 which (YMMV) equates to a few weeks worth of production (let’s call
It around 6-8 weeks). I think that 30k pretty much bridged the Fremont shutdown and EM knew that and knew when he needed to ramp back up; hence, the mid-May ultimatums...

Were are you getting 30k from?

Q1 had a 14k vehicle inventory increase (102,672 built vs 88,400 delivered)
Tesla Q1 2020 Vehicle Production & Deliveries | Tesla, Inc.
Q4 had a 7k decrease (104,891 built vs 112,000 delivered) Tesla Q4 2019 Vehicle Production & Deliveries | Tesla, Inc.
Q3 was -1k, (96,155 vs 97,000)
Q2 was -8k (87,048 vs 95,200)
So starting Q2, there were 2k less cars in inventory than at the same point a year earlier.

Of course, Q1 2019 was a dog with a 14k inventory gain. (77,100 vs 63,000), yielding a net 12k inventory increase from the end of 2018 to end of Q1 2020.

 

[Dutchie]

Our Model X turned 3 last week. Love it, love it, love it! We bought it cash. I do, however, sometimes think about what could have been if we bought TSLA three years ago in stead of the car...

Same feeling when I bought my 286 computer back in 1989 or 1990 for about $2500 in stead of MSFT

 

[Highway2Heel]

Were are you getting 30k from?

Q1 had a 14k vehicle inventory increase (102,672 built vs 88,400 delivered)
Tesla Q1 2020 Vehicle Production & Deliveries | Tesla, Inc.
Q4 had a 7k decrease (104,891 built vs 112,000 delivered) Tesla Q4 2019 Vehicle Production & Deliveries | Tesla, Inc.
Q3 was -1k, (96,155 vs 97,000)
Q2 was -8k (87,048 vs 95,200)
So starting Q2, there were 2k less cars in inventory than at the same point a year earlier.

Of course, Q1 2019 was a dog with a 14k inventory gain. (77,100 vs 63,000), yielding a net 12k inventory increase from the end of 2018 to end of Q1 2020.

Thanks. It was somewhere between 20-30k and a record amount of inventory. Point being, Tesla started Q2 with some advantages to help mitigate the production shutdown.

 

[LJS22]

Driving down I10 in Texas today I can say the Q2 push is very real. I’ve seen a few trucks carrying new cars east. (Another truck was half Tesla’s half normal cars)

Not sure what the final numbers will be but it won’t be without great effort. Good job Tesla team no matter the outcome.

As far as Tesla options are concerned in the market..I’d expect to see increased option volatility this week. Not only because of delivery report, but Tesla is one of the few stocks volatile enough currently to make money on. Most other stocks are range bound, while Tesla was easy money this past week with its movement and predictably. Plenty of money to be lost there also. I know it’s an investment thread but I’ve seen many move into the options mark for some gambling. Enjoy the fun. This week will probably be something else.

 

[FrankSG]

Were are you getting 30k from?

Q1 had a 14k vehicle inventory increase (102,672 built vs 88,400 delivered)
Tesla Q1 2020 Vehicle Production & Deliveries | Tesla, Inc.
Q4 had a 7k decrease (104,891 built vs 112,000 delivered) Tesla Q4 2019 Vehicle Production & Deliveries | Tesla, Inc.
Q3 was -1k, (96,155 vs 97,000)
Q2 was -8k (87,048 vs 95,200)
So starting Q2, there were 2k less cars in inventory than at the same point a year earlier.

Of course, Q1 2019 was a dog with a 14k inventory gain. (77,100 vs 63,000), yielding a net 12k inventory increase from the end of 2018 to end of Q1 2020.

According to the Q4'19 ER, Tesla's inventory was 11 days of sales at that time. Q4'19 deliveries were 112,095, so that was 112,095 / 92 = 1,218 per day, and therefore inventory at that time was approximately 1,218 * 11 = 13,398 vehicles. In Q1'20 Tesla produced approximately 14,272 more vehicles than it delivered, so inventory at the end of Q1'20 was 13,398 + 14,272 = 27,670.

 

[FrankSG]

Model S/X price cuts might be a hit to margins, but may be strategic.... For example they are introducing a higher priced Plaid variant soon and want a sufficient price gap.

I wouldn't be surprised if the M3 price cuts were also partially strategic, to better position it against the MY. Some people might prefer a sedan over an SUV, but regardless the MY seems like it might be too good to pass up if it costs almost the same. The $2k price drop on the M3 differentiates them a bit more. A $5k price difference is the same as the difference between MS and MX.

 

[Singuy]

Tesla is going all out for q2.

Giving free supercharging for a full year to every Model 3 delivered before June 30th starting right now. People reported that only delieveries starting now gets this promo.

Tesla offering 1 year of free supercharging for Model 3 if delivery by 6/30 : teslamotors

 

[Highway2Heel]

According to the Q4'19 ER, Tesla's inventory was 11 days of sales at that time. Q4'19 deliveries were 112,095, so that was 112,095 / 92 = 1,218 per day, and therefore inventory at that time was approximately 1,218 * 11 = 13,398 vehicles. In Q1'20 Tesla produced approximately 14,272 more vehicles than it delivered, so inventory at the end of Q1'20 was 13,398 + 14,272 = 27,670.

Thank you for providing the substantiation that eluded me. I was going from memory on a data point I saw a few days ago and could not, with immediacy, produce where I found it.

 

[Buckminster]

According to the Q4'19 ER, Tesla's inventory was 11 days of sales at that time. Q4'19 deliveries were 112,095, so that was 112,095 / 92 = 1,218 per day, and therefore inventory at that time was approximately 1,218 * 11 = 13,398 vehicles. In Q1'20 Tesla produced approximately 14,272 more vehicles than it delivered, so inventory at the end of Q1'20 was 13,398 + 14,272 = 27,670.

So what do we think this will be post Q2? Increased production rate is a hindrance here.

 

[JusRelax]

So what do we think this will be post Q2? Increased production rate is a hindrance here.

Same here, but no regrets because purchasing a Tesla and experiencing it firsthand was a significant part of validating my belief in the company.

It is entirely possible that, without that purchase, I may not have been able to continue to hold through the sub-200s last year.

 

[ByeByeJohnny]

According to the Q4'19 ER, Tesla's inventory was 11 days of sales at that time. Q4'19 deliveries were 112,095, so that was 112,095 / 92 = 1,218 per day, and therefore inventory at that time was approximately 1,218 * 11 = 13,398 vehicles. In Q1'20 Tesla produced approximately 14,272 more vehicles than it delivered, so inventory at the end of Q1'20 was 13,398 + 14,272 = 27,670.

Worth noting though is that the lowest inventory they've managed is something like 7 days I think. And it's been 9-11 days most quarters lately. From memory so might be off a little. So they can't sell all 27k of those. Maybe 15-18k at best. Still very useful to have considering the shutdown.

 

[pz1975]

Got my Model Y tonight - so amazing! It is going to destroy the ICE SUV/crossover industry. DESTROY.

 

[FrankSG]

So what do we think this will be post Q2? Increased production rate is a hindrance here.

I'd guess somewhere in between Q4'19 and Q1'20 numbers. China inventory will definitely grow, simply because production rate grew.

Overseas excl. China will likely be extremely low, because demand should've outpaced supply. A lot of the production that is usually allocated to overseas, would've been produced during Fremont shut down.

They're likely doing their best to sell as much as they can in NA, but I'd guess it'll be slightly higher than at the end of Q4'19. Iirc they didn't have to use any incentives to sell inventory at the end of Q4'19, but all these incentives this quarter indicate Tesla is having to work harder to sell all vehicles in NA.

 

[RobStark]

View attachment 557076

I think most buyers are happy with the current Model S body shape..

However we we saw Plaid Model S going around the track, it had a different body shape, with a wider rear end.

I think Tesla will optimise things so the Plaid body shape is more similar to the current body shape, but I still expect significant differences.

Which leads to 3 possibilities:-
1) All new Model S are the Plaid Body shape.
2) The body shop produces 2 different Model S body shapes.
3) Plaid shape can be added in GA or after production.

Of these 3 alternatives I think 1) is slightly more likely, depending on how nice they can make the Plaid styling.
Plaid styling perhaps reduces range with more drag, but a bigger battery and reduced weight can fix this.

If Plaid Model S didn't exist, my hunch would be no major changes to the body shape, with Plaid Model S, I don't know which of the 3 options above they will run with. .

The other remote possibility is Plaid Model S now fits neatly into the existing body design.

Most people paying $75k plus are not happy with an 8 year old design and we see it in the sales numbers.

On merits, demand for the current spec'd Model S should exceed 50k units per year.