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

[SPadival]

Elon & Herbert having a bromance

Herbert Diess on LinkedIn: We are ready for take off! | 77 comments

 

[RobStark]

In the manufacturers ranking, Kia (14%) is in the leadership, followed by Tesla (11%), with Volkswagen (10%) and Volvo (also 10%) are running for the Bronze medal.

EV Sales: Netherlands August 2020

 

[Kalani]

https://twitter.com/somospostpc/status/1302915230075420672?s=20 Elon Musk/Herbert Diess meeting at Braunschweig airport before leaving Germany

 

[amolina]

Germany is buying the dip $393.24.

I'm taking the wife to Germany for our next vacation have to support the economy after helping us buy the dip

Oh yeah man, come to Germany

That is correct.

In that case, the price target is too low .
I would be very much looking forward to the battery day to understand how fast they can scale up their mega packs. We need to remember that the Australian battery that costed around multi million euros was paid back within 3 years. If Tesla has figured out production of these mega packs, we are in for a crazy upwards in revenues.

Also, I prognose that the meeting with Diess could have been also about the mega packs since we know that Volkswagen is using those at their charger stations.

 

[ammulder]

I am not familiar with how MPGe ratings are worked out so wondered if any of you guys could help clarify if this means that there has been a 20% increase in range in Model 3s produced now vs 2020H1? There is a similar bump for Model Y

My concern with a chart like that is that most 2020 models have not going through a North American winter yet. I expect "real-world" efficiency (especially for the Model 3 without a heat pump) to suffer during the winter. So I wonder if those 2020 numbers will be lower 6 or 8 months from now. Interestingly, that could make Model Y look even better in comparison to Model 3, if the heat pump is really all that.

 

[Yuha]

Sorry for posting about this again, but on page 20-22 of this report there's a really good rebuttal of solid-state batteries. I was aware that solid state batteries work in small lab batteries and had trouble with mass-fabrication, but I didn't know any details. This makes it much more clear why Tesla's strategy of focusing on getting li-ion $/kWh costs down is the right path forward.

Remember that Sila develops silicon anodes and lithium metal anodes aka solid state batteries are a competing technology. So anything they say about that should be taken with a few grains of salt.

 

[Artful Dodger]

Mkt Cap: TSLA / TM = $389.794B / $184.96B = 210.75%
TSLA 1-mth Moving Avg Market Cap: $356.72B
TSLA 6-mth Moving Avg Market Cap: $201.51B
Nota Bene: Mkt Cap likely unlocks 3rd tranche of CEO comp. plan as of today, Sep 04, 2020

Am I the only one that noticed that Elon likely earned the 3rd tranche of his 2018 CEO compensation plan on Friday?

 

[T@oo]

The graph below is taken from a teslarati article yesterday Tesla Model Y efficiency exceeds early-production Model 3, data shows.

View attachment 585313

I am not familiar with how MPGe ratings are worked out so wondered if any of you guys could help clarify if this means that there has been a 20% increase in range in Model 3s produced now vs 2020H1? There is a similar bump for Model Y

If this is correct am I right to infer that a significant part of this range increase will be due to battery improvements. Weight reduction seems unlikely to provide this improvement, especially as the 3 has been around for 2 years now. Efficiency from the other parts of the drivetrain (motor etc) also seem less likely for an improvement of this magnitude.

Not enough info in the article to know how software improvements are taken into account (is the data the current MPGe being reported by the vehicles - hence including the impact of software improvements - or the figures when the vehicle was new. I lean towards the first option as this info has been collected by an app).

Which brings me back to how MPGe is calculated. According to Google ' The EPA calculates that 33.7 kilowatt-hours of electricity is the equivalent to one gallon of gas, so an electric or hybrid vehicle that uses 29 kWh per 100 miles would get a combined 115 MPGe rating.' Is this based on a measured battery capacity? Just wondering what happens when Tesla improve battery chemistry and hence capacity. Is the new battery capacity taken into account in the calculation or is it still based on the original battery capacity (as originally measured by EPA).

Thoughts/feedback really welcome as this is not clear to me. I think this is positive news but want to understand exactly how it is positive

I think the data they are looking at is misleading. I think it‘s summer / winter related. It start seeing higher consumption at 10dgrees C and less. There might be some gains in efficiency but nothing near the suggested 20%.

 

[T@oo]

I believe Energy could be similar to Auto with FSD. The battery and solar market will grow fast, but eventually will be surpassed by the software grid market solution. TE will become a software grid, on top of the physical grid. It is possible they won't get to scale, but they seem best positioned to take an early lead. The software grid will allow car owners to share burst energy during premium demand and delay charging, commercial buildings to charge at night cheaply and run batteries during peak demand, consumer solar\battery customers to share their power during peak demand and for large scale utility providers to leverage peak demand solutions. If Tesla can capture some microtranasction payments by providing the market, it will provide tremendous value and profit for all of these participants and create a more resilient grid that will grow faster then the economy. The electricity market should grow faster then the overall energy market as fossil fuels decline, even as the cost per KWh falls over the next decade. This could be a trillion dollar market, with 10's of billions of profits annually by 2030.
I would expect Tesla to be forced to spin off energy from auto, as the scale of the company grows more powerful than governments will be comfortable to accept. From a value perspective that would be a rounding error once this business is at scale and could be more valuable to spin off.

Remeber, in this case only the early bird gets the worm. If there someone shaving off peak usage and using the nightly dips to charge, well there is no peak and nightly dip anymore. No?

 

[Webeevdrivers]

Rookie question re S&P 500. If Tesla doesn’t show a profit this quarter do they have to start over with four consecutive quarters of profit before being considered again?

Is there a likelihood they will show a profit again this quarter?

cheers.

 

[mongo]

Am I the only one that noticed that Elon likely earned the 3rd tranche of his 2018 CEO compensation plan on Friday?

Interesting, looks like 3 operational milestones (4 quarter totals)are also met to enable the 3rd tranche award.

Adjusted EBITDA: $4.418B
Revenue: $25.708B

A fourth operational milestone is close also (4.5B Adjusted EBITDA).

These will weight down the Q3 GAAP probability. Q2 had a 347 million stock comp expense.
Q2 call: Tesla (TSLA) Q2 2020 Earnings Call Transcript | The Motley Fool
"Stock-based comp increased from Q1 to Q2. This is driven almost entirely by an expense related to the next tranche of the CEO grant, as well as early vesting of the first tranche, which is reflected in SG&A within operating expenses."

 

[dl003]

Gamma squeeze: To what degree is TSLA affected?

There has been a lot of talk on high volume OTM call buying leading to share price gains.
Whether it the influence of call buying by retail is more of was buying by institutions more is a different question.

The volume of options, at least the numbers quoted (if true) imply this theory as credible.
From what I read, TSLA if anything has more vulnerability to Gamma squeeze.

How much of this do you guys think contributed to the TSLA price gain in the last couple of months?
If significant, I see a significant downside risk.
I do think upcoming events can help mitigate a significant downside risk.
But if the unwinding of this Gamma Squeeze happens across tech stocks, I would think TSLA would get significantly impacted not withstanding the upcoming positive events.

@FrankSG @generalenthu @dl003 @StealthP3D Tagging you guys based on my perception of your knowledge on this from your earlier comments on this thread

Edit: I would add that, the Gamma Squeeze impacting share price movement up can also be seen from an organic growth point of view.
In other words, one can say, retail started buying TSLA options once they started seeing the strong growth potential of TSLA since Q3, Q4 2019. More retails coming in, perhaps coinciding with more retail getting into options in general (how true?) amplifies the call buying and thus Gamma squeeze.
Prior to Q3, Q4 the call buying (and buying common) wasn't significant enough to cause the squeeze.

I think macro-wise we have some room to go down (NASDAQ future - 1%) although the chart says another run is imminent. If we look at the last 2 monster runs in TSLA, some similarities can be drawn.
Post Q4 2019, we rallied from 580 to 960 or 65% before dipping back down to 730, or 24%
post q2 p&D, we rallied from 1000 to 1795, or 80%, before sliding down to 1375, or 24.4%.
This time, we ran up from 275 to 500, or 81%, and has already fallen to 390, or 22%. I'd say we are close to a bottom, especially with B Day so close and NASDAQ bounce, stimulus news, and vaccine news imminent.

 

[st_lopes]

Rookie question re S&P 500. If Tesla doesn’t show a profit this quarter do they have to start over with four consecutive quarters of profit before being considered again?

Is there a likelihood they will show a profit again this quarter?

cheers.

If they don’t post a profit they would no longer qualify for inclusion (criteria is cumulative 12 month profit AND most recent quarter profit), and would only requalify once both criteria are satisfied.

Odds of not posting a profit is near zero. Tesla’s breakeven (point where it makes no profit) floats around 90k units a quarter (inclusive of regulatory credits, which will at least continue through rest of this year). It will crush that number. The fact that it’s financials now clearly show that breakeven point is one of the largest catalysts to Tesla’s rise in stock price, as it’s finally showing off what kind of long term profitability that it is able to achieve.

 

[vigleik]

Rookie question re S&P 500. If Tesla doesn’t show a profit this quarter do they have to start over with four consecutive quarters of profit before being considered again?

Is there a likelihood they will show a profit again this quarter?

cheers.

Some misinformation just won’t die. There is no requirement for four consecutive quarters of profit. We’ve been over this literally a hundred times on this very thread. Might be more, I sometimes skip ahead.

As for whether or not next quarter will be profitable? Wall Street certainly seem to think so. A back of the envelope model also suggests this quarter will be better than last quarter, for all the obvious reasons.

 

[j6Lpi429@3j]

I would be staggered if Q3 is not profitable. I'm counting on a quite a jump in profitability too. Something that makes the P/E ratio look less *ambitious* would be welcome.

 

[mongo]

Rookie question re S&P 500. If Tesla doesn’t show a profit this quarter do they have to start over with four consecutive quarters of profit before being considered again?

Is there a likelihood they will show a profit again this quarter?

cheers.

If they don’t post a profit they would no longer qualify for inclusion (criteria is cumulative 12 month profit AND most recent quarter profit), and would only requalify once both criteria are satisfied.

Odds of not posting a profit is near zero. Tesla’s breakeven (point where it makes no profit) floats around 90k units a quarter (inclusive of regulatory credits, which will at least continue through rest of this year). It will crush that number. The fact that it’s financials now clearly show that breakeven point is one of the largest catalysts to Tesla’s rise in stock price, as it’s finally showing off what kind of long term profitability that it is able to achieve.

Indeed, most people are getting this wrong. It is not full quarters of profit, it is the sum of the trailing four quarters should be GAAP profitable (along with the most recent). If Q3 were not, they could still be eligible if Q4 were profitable and Q3's loss were less than the sum of Q1, Q2, and Q4.

Where TSLA may have a hiccup is that Elon's stock compensation plan factors into GAAP profit, and, as @Artful Dodger pointed out, another tranche looks like it will get awarded.
If the expense is similar to Q2, they should be ok since Q3 revenue and profit should be better.

 

[kanweg]

In the manufacturers ranking, Kia (14%) is in the leadership, followed by Tesla (11%), with Volkswagen (10%) and Volvo (also 10%) are running for the Bronze medal.

EV Sales: Netherlands August 2020

September so far

i3 133
Mini 121
Niro 120
Model 3 104
Skoda 68

 

[JohnnyEnglish]

I think the data they are looking at is misleading. I think it‘s summer / winter related. It start seeing higher consumption at 10dgrees C and less. There might be some gains in efficiency but nothing near the suggested 20%.

According to the article the X axis is when the vehicle was produced, not when the MPGe figure is recorded.

 

[Dreadnought]

Remeber, in this case only the early bird gets the worm. If there someone shaving off peak usage and using the nightly dips to charge, well there is no peak and nightly dip anymore. No?

The differences in supply and demand are driving the price differences. Traditionally, utilities have mitigated this to some extent by reducing supply at times of low demand but that comes at a certain cost, too, and won't save any for renewables. You can arbitrage if you have both the software and storage. The software can theoretically scale quite fast but storage is the limiting factor. In a business model where Tesla and storage owners split the arbitrage, this only makes sense when the payout to the storage owner compensates for the depreciation of the battery and then some. Therefore, this hinges on battery cost per kWh and charging cycles.

Even if some other party comes up with their version of auto bidder + virtual power plant, this doesn't work out if there is no remote controlled battery on the backend. And Tesla is limited by the amount of storage deployed that makes economical sense to participate in a VPP.

In other words: Cost for a stored kWh has to be less than the sum of compensation for pulling it out of the grid and feeding back in. And when energy prices are not far off from the mean, it only pays for the lowest cost batteries again taking lifetime cost into account).
Simply regulating demand by taking control over when vehicles charge is always viable.

When modelling Tesla energy, this kind of recurring revenue needs to be taken into account. As a positive side effect, it ensures that the market for private storage will get saturated at a lower pace: The owner is encouraged to charge and discharge beyond his own consumption and thus needing a replacement earlier than otherwise.

 

[ggr]

Am I the only one that noticed that Elon likely earned the 3rd tranche of his 2018 CEO compensation plan on Friday?

Yes, the rest of us relied upon you to tell us, you slacker... ;-)