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

[JRP3]

Size. Tesla cars are too wide for Japanese roads and parking lots.

Is the Camry not sold in Japan? Because it looks to be only 1 inch narrower than the Model 3 and 8 inches longer.

 

[Krugerrand]

With all due respect to @Troy , it is not ok to be ok about being 2.6% off. His estimates serve a purpose which is more relevant to traders than investors, but there is still a purpose nonethelesss. To this end, being off 2.6% can mean the difference between TSLA tanking or rallying and so its disheartening to see him offer no critical reasoning for why he was off by that much. Maybe the nature of TSLA’s growth is making everybody’s job impossible to do with precision, I get that, but Troy will need to do better than saying “I forgot to include Elon factor.” If this keeps up, before long his voice will only add to the noise which I hate to see.

https://twitter.com/x/status/1410940383962533893

I suppose the biggest issue is that a few percentage points becomes more and more a discrepancy as Tesla grows. 2.6% of 10,000 deliveries vs 2.6% of 500,000 deliveries is a big difference to the bottom line.

Honestly, though, I’ve been using my consistent delivery estimate of 83,000 for several quarters now. I’m never disappointed with the announced results that way.

 

[Singuy]

Interesting exchange on Twitter this morning from some of the ship tracking gurus - all Model 3 orders for Europe pushed to November from August. However, that apparently includes at least some existing orders (previously scheduled for August) as well. The causes range from bullish to bearish, so hopefully we get more information soon - preferably in the form of ships bound for Europe from Shanghai and/or Port 80.

https://twitter.com/x/status/1411983409774219266

https://twitter.com/x/status/1412046510783598596

What is the US sending to Europe besides some plaids or performance 3s? So they are saying China is going to reduce exports this Q or all exports accounted for? Or building up demand for Berlin? Very odd.

 

[Right_Said_Fred]

I already gave my explanation. I’m not bashing Troy for being off. I’m crticizing him for giving his audience no serious, technical reflection on why he was wrong, which would tell us how he would improve going forward. I do pay for his service but thats not the point. If you want constructive criticism, this is it.

Even though I appreciate the efforts @Troy makes in putting together his estimate (and I hope he continues, with some finetuning), I personally prefer Rob Maurer's approach. He looks at things from the production side, which seems to work well because Tesla is production constrained and doesn't have a huge inventory. This quarter he was extremely close with an estimate of 208,824 for production (came in at 206,421) and 202,824 for deliveries (came in at 201,250). It can't get much better than that.

 

[JRP3]

Tesla isn't production constrained

I assume you meant "is".

---

Right_Said_Fred: thanks, fixed it

 

[jbcarioca]

Is the Camry not sold in Japan? Because it looks to be only 1 inch narrower than the Model 3 and 8 inches longer.

The Camry was designed and produced as a North American model. It is too big and inefficient to be a popular Japanese model. Toyota now has numerous models around the world that are pretty much local variants, even when they carry a traditional name they are often different vehicles. In some markets vehicles such as Nissan Sentra ands Toyota Corolla are positioned as upscale vehicles, while in other markets they are near the bottom of the line. This all becomes hard to rationalize.

In a non-Japanese case the Chevrolet brand is the largest selling in Brazil, led by the Onix, itself based on the GM GEM platform, itself designed in China by the SAIC/GM Joint Venture. Toyota has an analogous approach that adapts both nameplates and platforms to suit local markets around the world.

Japan-market vehicles tend to be narrower, shorter and taller than are non-Japanese market vehicles. Larger cars in Japan market use are always luxury models, almost always, there are exceptions, but they tend to be taxi and livery applications. Generally only the luxury ones are too big so are limited to people with large parking spaces, not a widespread commodity.

 

[JohnnyEnglish]

Even though I appreciate the efforts @Troy makes in putting together his estimate (and I hope he continues, with some finetuning), I personally prefer Rob Maurer's approach. He looks at things from the production side, which seems to work well because Tesla is production constrained and doesn't have a huge inventory. This quarter he was extremely close with an estimate of 208,824 for production (came in at 206,421) and 202,824 for deliveries (came in at 201,250). It can't get much better than that.

Agree. Rob's approach is also easier to calibrate with the monthly production figures from China. It will all become more difficult when Berlin and Austin start to ramp - but in a good way

 

[CHGolferJim]

I have an employee who is going to get Japanese citizenship soon, who is a Chinese national. It's difficult, but not impossible.

BTW here, Tesla will need three essential things to penetrate the Japanese market.

1. Cost. Japanese is not getting richer in these 10 to 20 years, of course, except for people who invested in TSLA. Typical cars cost $20k-$25k on average.
2. Size. Tesla cars are too wide for Japanese roads and parking lots. When I purchase my condo in Tokyo, I need to make sure I can book a parking lot for the disabled, even though I'm not disabled. Parking spaces for regular cars are too narrow and have weight restrictions, usually up to 2.2-2.3t. People don't care about rollover accidents, so they buy very tall and narrow cars.
3. Reliability. Many people here spend five to ten years without visiting dealerships for defects or issues. And Japanese are usually not pragmatic (ahem), and they (we) care about small things.

I think Tesla has other higher priorities to work on, so it would be best for Tesla to leave the non-standard markets such as Japan for now. Maybe, Chinese gigafactory can design cars suitable for the Japanese market.
# I purchased an S, two X, one 3

Omoshiroi desu. I had a great experience living in Shinagawa-ku, Tokyo 1988-1993. At that time, it seemed that younger people in business and other areas were really starting to look at things differently than the traditional post-1960s approaches. Perhaps they are now entering positions of influence (becoming 50+)? Do you think a joint venture could work with Tesla and a major oem that would enable Tesla to break through the distribution challenges? Granted, that is a totally different way of doing business for Tesla, but international expansion is all about doing what is locally required, not parachuting a standard way of doing things. Would love to hear your thoughts, arigato.

 

[hiroshiy]

YeI stand corrected. Thanks.
As for parking etc. My first owned car was in Japan, and I had a parking place that was just fine for my Honda N360 and even the S600 that replaced it but not for anything much larger. Much, much later I drove an I-MIEV for some time. That was quite magical for me, the first EV I ever drove.

It is very difficult for me to imagine any material market penetration for Tesla. Perhaps vehicles specifically designed for Japan might be successful although it seems probable to me that they would need to be manufactured in Japan also. Frankly, does that not seem rather unlikely? On the other hand, Post-Nissan and Renault things did change, despite the ignominious end of the Ghosn-magic. I was working in Japan with a Japanese auto maker when that happened, at the time it seemed almost infinitely improbable.

Frankly, I know just enough about Japan, (after living there twice separated by several decades) to be acutely aware that I really do not understand very much. A number of years working with Japanese companies in other countries I am far more confident of understanding how international business works, just not domestic.

For Tesla perhaps the years of experience working with Toyota and Panasonic, among others, might give them a better perspective than most. After all they do have a good beginning on a Supercharger network.

Considering your three factors, do you think Tesla has a chance? Somehow I think Tesla might value success in Japan above the nominal market potential.

Yes, I think Tesla has a chance to gain a particular market share in Japan. As you know, Apple dominated the Japanese smartphone market with a whopping 70% share, making all Japanese smartphone manufacturers bankrupt. Now we only have Sharp.

It will take some time, as the general population is much older since iPhone was introduced. Average Toyota customers are already over 60 years old. Younger people know Tesla and its autonomous driving, but they don't need cars to move around. In fact, most employees in their 20s at my company do not have driver's licenses. To penetrate, Tesla needs to understand better what aged Japanese ojisan (old guys) like.

There is one advantage for Tesla against other automakers; the supercharger network. It is vastly superior to the existing CHAdeMO network, as the Japanese government spent subsidies to spread quick chargers across the country, rather than strategically located along the well-traveled routes. After Toyota and Honda (the top two) releases viable mass-produced EVs, they will face the charging network problem, which they still don't get, unfortunately.

 

[Scuttlebutt]

The run to $900 in early Jan was no "momo move"; Momo doesn't cause a further 30% gain in 8 days, 17 days after the event.

No, the move to $900 was a short covering rally; MMs had sold short about 40M+ shares by the end of Dec 2020. That $900 SP is what was required for long term holders to actually hand over that volume of shares (Ron Baron's fund sold too early in Dec at ~$640, haha).

A simple supply'vs'demand economics model predicted the Jan SP peak given short interest data as of Dec 31, 2020.

Don't trivialize that fact that those shares were largely sold to S&P 500 Index Funds (this is a crucial difference vs Aug 2020). These are organizations who will not accept a mere Broker's promise that they hold their shares. Large Funds are actual Beneficial Holders of the shares they own, and thus their ownership is registered in their name with Tesla's share distribution agent.

No group pooling scams were possible in Jan 2021, like happened to many Retail investors here at TMC upon the Fri, Aug 29, 2020 share dividend. Some retain investors didn't receive their rightfully owned shares in their accounts until Thu, Sep 3, 2020 or even later. In the mean time, they were denied access to their legally owned shares. What did that cost, you ask?

These retail shareholders were unable to trade 80% of their shares while the SP plunged, beginning in the Pre-market on Aug 31, 2020 ($538 @ 7:01 when Tesla announced their $5B share offering, giving shorts an escape hatch from the ongoing squeeze). SP plunged over 14% to $470 by 10:00 am. That's the power of a short squeeze, and the effect when the buying pressure is relieved: (the effect? Retail holds the bag)

View attachment 681474 View attachment 681475

In 2021, any counterfeit shares sold to Index Funds would be easily detected ; Funds would sue any MMs or Hedgie that performed their usual 'fail-to-locate | short-sale | fail-to-deliver' kabuki dance. That's why the SP marched up to $900 in early Jan 2021; because MMs and hedgies HAD to locate and purchase real shares. It's called the law of supply and demand, and it's how the Markets are supposed to work.

Instead, legalized naked short selling by Options Market Makers (via SEC Reg. SHO, a.k.a. the "Madoff exemption"), allows the priviledged few to violate the law of supply and demand, and has artificially depressed TSLA's share price for years (except for brief breakouts). And the situation is not getting any better: as TSLA market cap increases, more MMs are piling in with their manipulation games. It's literal free money to them, and almost without risk since the SEC has turned a blind eye on MMs behaviour, it's long-term damage to both retail investors, and to the Market itself.

In the meantime, MMs and Hedgies play fat, dumb and happy. That is, until the next round of share dividend induced panic-buy-to-cover-shorts they've hidden since February as the SEC snoozes. This level of manipulation and white-collar crime can not continue, and will not end well. Who will break first?

The situation is ridiculous, embarrassing, and routinely ignored in polite society of NYC.

#GAMESTOP

Though you have written of this before, this is by far the most succinct and relatable explanation of what happened during the stock run-up.
Bravo.
Years from now I will refer back to this in order to explain the story of how TSLA got to the insane valuations that will be our reality years in the future. Thank you.

 

[Cherry Wine]

Interesting exchange on Twitter this morning from some of the ship tracking gurus - all Model 3 orders for Europe pushed to November from August. However, that apparently includes at least some existing orders (previously scheduled for August) as well. The causes range from bullish to bearish, so hopefully we get more information soon - preferably in the form of ships bound for Europe from Shanghai and/or Port 80.

https://twitter.com/x/status/1411983409774219266

https://twitter.com/x/status/1412046510783598596

And on the heels of this news, WuWa’s latest video out of Shanghai talks about a batch of cars being prepped for the Middle East. On the other hand he also describes reduced activity.

 

[hiroshiy]

Omoshiroi desu. I had a great experience living in Japan 1988-1993. At that time, it seemed that younger people in business and other areas were really starting to look at things differently than the traditional post-1960s approaches. Do you think a joint venture could work with Tesla and a major oem that would enable Tesla to break through the distribution challenges? Granted, that is a totally different way of doing business for Tesla, but international expansion is all about doing what is locally required, not parachuting a standard way of doing things. Would love to hear your thoughts, arigato.

Tough question. IMHO joint ventures do not work, because it slows down the business. The only way to succeed (I would guess) is to hire a perfect Japanese president and his support personnel, who can bridge him and Elon. Many people still don't speak English here, and it's super hard to find an excellent entrepreneur-minded businessperson with enough English and cross-culture experience.
I think Microsoft was lucky to have such a good talent in Japan. At Tesla Japan, they don't even have an official president for a long time.

In other words - the Japanese can work together without the president. Isn't it funny? ;-)

 

[jw934]

Interesting exchange on Twitter this morning from some of the ship tracking gurus - all Model 3 orders for Europe pushed to November from August. However, that apparently includes at least some existing orders (previously scheduled for August) as well.

Looking at Twitter and here at TMC, not all Europe Model 3 orders are pushed. As per @Mr Miserable, U.K. RHD from China will still be on time for Q3 with 2 and possibly 3 ships to U.K. this quarter. He is also expecting a shipment of Model 3 Performance to U.K. at some point, but at this moment no ship is leaving Pier 80 this month for Zeebrugge.

I see on twitter that even back on June 8, some M3 long range (but not others M3s) were pushed to November for Europe. Now it appears all M3 (except U.K.) are. Since LR uses more batteries, Tesla might divert them to fulfill the 3 to 5 week backlog of Model Y (as per @sheilmakan ) , and 4 to 8 weeks (as per @JeffR) backlog for Model S LR/Plaid and are diverting the cells available for U.S. manufacturing to those while upgrading the Model 3 line.

Edit: If we see Fremont Model 3 line shutdown for upgrade , then that could be positive to the financials for Q3 earnings assuming margins are higher on Y and S, . Changed my mind: volume loss would be a negative.

Tweet from June 8:

https://twitter.com/x/status/1402272372456050700

 

[hiroshiy]

Is the Camry not sold in Japan? Because it looks to be only 1 inch narrower than the Model 3 and 8 inches longer.

Yes. My mother says Camry is a prestigious car... And that 1 inch is crucial. Japanese parking lots are usually double-lined, and my Model X sometimes step on the lines on both sides, which means very rude to other people (I personally don't care much but ordinary people can not do that).

Above is my MX parked at a typical Japanese parking lot.
# my car is parked approx 1 inch to the right from the center in this video.

 

[replicant]

In fact, most employees in their 20s at my company do not have driver's licenses. To penetrate, Tesla needs to understand better what aged Japanese ojisan (old guys) like.

Idem in big European cities. I'm 35+ and never had the need for a car (except for maybe one week a year if I have to make a road-trip, which is more and more seldom).

I hope that Tesla will try to serve this growing market at some point (those who don't a car for most of their transportation). The priority is to convert old guys driving ICE, but the automobile (self driving or not) is certainly not the future.

I'd be really disappointed if my TSLA shares can't be converted into some Tesla sales... although I could stock empty Tesla Tequila bottles

 

[replicant]

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[Christine69420]

I think its time for the $1000 mark to be tested by Septembers end. But on this weeks episode 700 bucks will be a barrier no more.

What is the likely size of a split? IMO, it could be anywhere from 5 to 10 for 1. I believe a big factor here is the potential (I would say inevitable) inclusion in the DOW 30 Industrials. Currently, TSLA is the 6th largest public company, by market cap. The DOW is a stock-price weighted index, as such, often companies have to split their stock in order to get the appropriate initial weighting. For example, AAPL split its stock 7 for 1 when it joined the DOW 30. What would be the appropriate initial weighting for TSLA? I don't know but, the current median of the 30 stocks is shared by JNJ and AXP, at ~$170. So a 5-1 split (i.e. 4 share dividend) would theoretically produce a post-split price of around $135-140. A 10 for 1 split would put the post-split price around $70, a very affordable price for smaller investors. In any case, it will be interesting, and exciting. Thoughts?

These two post make me think that my handle on this forum is getting out of touch. When I bought my first shares at $240.80 a couple of wild years back my moniker had a sensible aspiration level. But after passing $600 both pre and post split I think I need to rethink myself. And I am open to well grounded suggestions. Christine600 -> Christine900 is one possibility but why stop there? 4200? 60000 69000? Or should I just ask Warren Redlich? Perhaps a technical analysis is the way to find a suitable number? This is keeping me up at night. I need help! Plz!

I suppose the biggest issue is that a few percentage points becomes more and more a discrepancy as Tesla grows. 2.6% of 10,000 deliveries vs 2.6% of 500,000 deliveries is a big difference to the bottom line.

Honestly, though, I’ve been using my consistent delivery estimate of 83,000 for several quarters now. I’m never disappointed with the announced results that way.

Personally I subscribe to the school of Adam Jonas and do my calculations based on a wider range from 82,000 to 84,000. This drastically reduce the possibility of my estimate to be totally off the mark. Not Advice.

 

[Maarten]

Since it´s the weekend (at least in the US), a well thought out contribution to the advertising discussion:

https://twitter.com/x/status/1411730281858490381

I can relate to this.
My grandson became 2 years old today.
Yesterday birthday party, with family and friends.
My wife and I had to leave early and he started to cry uncontrollably as soon as he understood he was not going in the Tesla with his grandparents.
And I can assure everyone that without a shred of doubt he didn't cry about us.

 

[JustMe]

…I need to rethink myself. And I am open to well grounded suggestions. Christine600 -> Christine900 is one possibility but why stop there? 4200? 60000 69000? Or should I just ask Warren Redlich? Perhaps a technical analysis is the way to find a suitable number? This is keeping me up at night. I need help! Plz!

69,420 obvi

 

[Ohmster]

Let's just say the Japanese are not impressed with teslas fit and finish. This is a culture where people are obsessed with fine details. No other culture sells 5 thousand dollar melons because the patterns are perfect, or need to spend 7 years of training to make the perfect sushi rice. I have noticed most Toyota/lexus having amazing fit and finish, something I can't say for any of the German brands.

Years ago our company received an order for multiple SEMs for a distributor in Japan. Knowing how they would be critiqued at a new level of detail we went all out in QC; checking every one of them multiple times. We received an unsatisfactory rating. They had lined up all 20 or so systems and noted that the fan finger guard on the back of one unit was 90 degrees off the rest.