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

[Singuy]

Not referring to the twitter poll. I am talking about the options that he needs to exercise or lose them. Is there a reason for him to exercise all the options by the end of the year. I believe they expire in March. So he could choose to exercise those after December 31st.

Yes like many said, they may increase taxes on rich individuals on the ordinary income level by 2.9% for those making over 500k/year. Since all the exercised options are considered as ordinary income, that's an increase in 2.9% taxes for Elon, meaning he will retain 2.9% less shares if he were to exercise them next year.

 

[st_lopes]

I suspect every one of us who have worked with OEM financial issues has many anecdotes, mostly NDA covered. I know I do.

Can confirm.

 

[Radish11]

Not as

The same FUD that TSLA is exposed to with SBC and EV Credit Sales?

And you ignore the interest charge that is 100% related to Automotive? Yet you include pension obligation gains that are entirely a future expenditure reduction (assuming investments in their portfolio don't drop)?

One thing is for certain - American OEMs employ an army of financial engineers. Strip away the noise and you'll quickly see that their operating margins for automotive are awful.

View attachment 744273

Back out the stuff that has nothing to do with F's vehicle sales and you have a structurally non-profitable business. At least based on their current volumes. If they manage to get production back to 2019 levels, then maybe that perspective changes.

$90B in sales, less $82B in Cost of Sales, less $8.7B in selling costs (that almost exclusively relates to vehicle sales), less $1.4B Interest Expense (again ONLY relates to their vehicles divisions), ignoring Other Income (RIVN revaluation as well as Global Pension revaluation), and again you end up with an objectively negative operating margin for all things related to their vehicle business.

Their segment disclosure is financial engineering at its finest. It's taking large expense buckets and putting them in stand-alone categories in an attempt to frame that as unrelated to the vehicle business.

To tie this back to Tesla, it's one reason that I appreciate the transparency and simplicity of their quarterly and annual disclosures. This is coming from someone who deals with public company disclosures for a living. F and GM remind me of legacy GE. Layers of financial engineering interplay all to try to paint things in rosy lights, when the underlying data clearly shows you structural issues.

Bruh, stop spreading FUD. There is a line specifically on their earnings report that states their YTD automotive profit. Here it is. YTD automotive EBIT $5.7B.

 

[woodisgood]

Integration with SpaceX (Starlink terminal manufacturing) and Boring Company (anybody else notice there's no obvious place for a Logistics lot at Giga Texas, other than perhaps the existing East employee parking lot)

A teeny part of your overall post, but could you explain how you foresee Boring Co streamlining logistics at Giga Texas? Seems like there’s ample land for logistics lots many times the size of Shanghai, not to mention those can be paved quite quickly. How do tunnels/underground make it more efficient, aside from the incognito aspect? Do we believe transport from factory to logistics lot is a bottleneck somehow, one that will remain so even if the cars drive themselves to said lot? Genuinely asking.

 

[-=buzz=-]

I am genuinely interested to know if anyone had any insight into this.

As far as I've seen most of these xx billion $ claims include multi year purchase agreements/intentions for EV specific components like batteries or motors. So essentially raw materials which are part of COGS and aren't paid through profits. The actual R&D expenses that have to be invested upfront are likely much smaller.
Additionally every single person working on anything remotely related to EVs will get his cost assigned to the EV-project, simultaneously unloading the the ICE cost-structure keeping their margins up on the spreadsheets..

 

[rallykeeper]

So do we think Elon has accelerated his sales to get them all done before the end of the year. In the reconciliation bill our there new taxes that make it advantageous to get all the sales done by year end?

Yes. Argued way upthread, but he faces an 8% additional tax on his option exercises under BBB.

Since he has to exercise by August of next year anyway, he might as well pay the lower tax rate this year (and consequently keep additional shares).

Even if BBB doesn't pass (or passes without the 8% hike), the timing doesn't hurt to finish all this year.

 

[Nocturnal]

Famously hackish website Jalopnik just ran a piece claiming that the CEO of Time is biased towards Musk because he is a SpaceX investor.

Shocker, but they have been accused themselves of writing favorable coverage for advertisers.

Gizmodo Media Staff Enraged at New CEO’s ‘Insane’ Direction

High-level staffers at the company that now owns ex-Gawker sites like Jezebel and Deadspin complain their new leader is destroying a famously freewheeling culture.

www.thedailybeast.com

Two people with knowledge told The Daily Beast that in a private meeting, Spanfeller reviewed the coverage of Lexus with the editor-in-chief of Jalopnik, a car-focused website, to ensure that its stories did not discourage the luxury automaker from advertising with G/O sites.

 

[Artful Dodger]

A teeny part of your overall post, but could you explain how you foresee Boring Co streamlining logistics at Giga Texas? Seems like there’s ample land for logistics lots many times the size of Shanghai, not to mention those can be paved quite quickly. How do tunnels/underground make it more efficient, aside from the incognito aspect? Do we believe transport from factory to logistics lot is a bottleneck somehow, one that will remain so even if the cars drive themselves to said lot? Genuinely asking.

Firstly, compare Giga Texas to Giga Shanghai. New Model Y cars will exit the GA line near the SW corner of the plant, and there's certainly no room for a logistic lot over there. Tunnel to the other side of the highway? Or to the far East side of the plant? There's also no obvious place for a test track (Shanghai has two already, both near the exits of their respective assembly halls).

The Boring Company has established operations about 30 miles from Giga Texas,. I suspect there's a reason for this beyond just convenience for Elon to visit (he likely doesn't need to see the gopher dig the hole). Could it be that Boring Tunnels are part of the Master Site Plan for Giga Texas?

Genuinely intrigued.

 

[ZsoZso]

The legacy announcements of how much they will spend over the next decade on electrification are aspirational. They hope to have access to that amount of capital. But when it becomes apparent to all involved just how quickly the change is coming, everything will snowball, and they won't have profits or access to capital.

Aspirations are nice but they are forward looking statements, not actual fact.

What is most telling to me is, that even in their wildest aspirations they project maximum 50% EV sales by 2030 (or only 30% in case of Toyota's latest "brave" announcement where they finally aspire to join the BEV movement -- what they so far avoided and mocked in their ads).

 

[GOVA]

Meanwhile it is getting greener there. Let's see what the day end brings.

 

[st_lopes]

Bruh, stop spreading FUD. There is a line specifically on their earnings report that states their YTD automotive profit. Here it is. YTD automotive EBIT $5.7B.

Bruh, read the actual, legally binding 10-Q.

That $5.7B is also buried in their 10-Q under a segment note disclosure. Here I'll find it for you. Take your blinders off. Dig in to the details.

2020 - completely not profitable across entire business once you back out Argo AI revaluation
2021 - auto not profitable when you back out pension revaluations (all auto related, currently in Special Items), interest expense (all auto related, currently in stand-alone column), and selling expenses (almost all auto related, only a small portion has seemingly been attributed to Auto, and rest likely buried in Corporate Other); try to reconstruct the $5.7B to their actual Income Statement... you can't. You can almost reconstruct the Ford Credit amount of $3.7B to the penny. Where'd the rest of SG&A go? What is that SG&A supporting?

Moral of the story: Ford executive have done an excellent job investing in other businesses. Their Corporate VC team should be well paid. Their own business though... jury is still out on that one.

 

[elasalle]

Looks like Fishing expeditions is over
The sharks are full and will try tomorrow

 

[jbcarioca]

Elon is planning to provide an updated Tesla product roadmap on the Q4 Conference Call. Yet we all know that Tesla's REAL product is the factory, which is evolving rapidly. So, I think its time that we make a list of future Innovations planned for Giga Texas: (the new mothership)

1. Plaid Model Y - f/r castings, structural 4680 bty pack, carbon overwrapped SRPM motors == low volume, high margin car to start production (Jan 2022) - this is just a teaser, produced by integrating exisiting tech which is now spread over several products and facilities
2. Cybertruck - monsterous performance, outrageous tech, ultimate overlander (Jan 2023) - hardcore smackdown to pickup trucks; makes them eat quiche
3. Cathode plant - not yet under construction, though factory footprint already layed out on East side of Main Plant, beyond the current main parking lot. Brings another critical component in-house, essential for exponential production ramp (possibly 2023/24; may depend on separate Piedmont Lithium hydroxide source, and/or Tesla lithium brine extraction process); could be associated with Redwood Materials recycling plant due in 2025
4. Texas Institute of Science and Technology - where else would you put the new campus but within sight of Giga Texas? With over 4 square miles of contiguous land owned by Tesla, and with easy access to the City of Austin and its Int'l Airport, this will be a very attractive site for post-secondary students, and with nearly assured internship and work experience opportunites. (Date pending an announcement and possible endowment from Elon to fund this new institution)
5. Robots. Lots of Robots. Sorcerer's Apprentice level of Robots, and the Factory that builds them. Built with assistance of robots.
6. Integration with SpaceX (Starlink terminal manufacturing) and Boring Company (anybody else notice there's no obvious place for a Logistics lot at Giga Texas, other than perhaps the existing East employee parking lot)

I'm sure you can think of more. Share your ideas with the group.

Finally, I draw your attention to the parallels between Giga Texas and the fictional Industrial Campus described in the Tom Swift series of novels. Elon was inspired by many works of fiction in his boyhood; I believe this was one of them. Paging @Prunesquallor

Tom Swift and His Electric Runabout (1910) | Wikipedia - in this story, Tom creates a nickel bty giving a 500-mile range to his home-made electric car, at a time when Henry Ford had just started building his "Model T" 2 years earlier.

Cheers!

My father read this and gave me a copy when I was very, very young. I had the rest of the series too, all from his collection in 1912 or so. I lost them. I just downloaded it again. Thanks!
His father gave him themselves when they acquired their first car, a 1909 Brush.

 

[Gigapress]

A teeny part of your overall post, but could you explain how you foresee Boring Co streamlining logistics at Giga Texas? Seems like there’s ample land for logistics lots many times the size of Shanghai, not to mention those can be paved quite quickly. How do tunnels/underground make it more efficient, aside from the incognito aspect? Do we believe transport from factory to logistics lot is a bottleneck somehow, one that will remain so even if the cars drive themselves to said lot? Genuinely asking.

I doubt tunnels would be necessary, judging by what we've seen at Giga Shanghai where they have an entire side of the building with a line of loading docks and materials are brought directly from the shipping container to the production line. At Shanghai they cycle through ~2k containers per day, so it's not like we ever see traffic from too many trucks at once.

If they eventually build a Boring Co tunnel to Giga Austin, it'd probably be for employee commutes.

 

[Krugerrand]

As a lifelong sci-fi'er I love space and the big ideas, but as an engineer I am a bit flummoxed by the Mars happy talk I see here and elsewhere. Even if we get a tiny human presence under some Martian domes at incredible risk and expense over the next decades, there is no conceivable way to live sustainably on Mars. I loved "The Martian" (movie) but as best we can tell, can't actually grow anything on Martian soil, even cleverly bringing our own bacteria. Soil microbes cannot survive in any of the heavy-metal-contaminated toxic "soil" (really pulverized regolith) that we know of on Mars. And even if they could, we now know it took those early microbes 1-2 billion (!) years to form the biological substrate that plants eventually were able to utilize here on Terra Firma - and that was done with better atmosphere and solar conditions, a Van Allen belt to shield them, a temperature above 0, life-friendly oceans (!) and many other helpful terra-centric factors.
I dearly hope we all put 99% of our resources on saving this planet over the next 50 years. It's where we have to live for the VERY FAR foreseeable future. Glad to see Tesla doing this and glad to see some of what SpaceX does, but priorities, folks! Climate crisis (and related deforestation/biodiversity crisis) MUST be the priority.

TL;DR Mars is not suitable for human civilization any time soon. Let's help Tesla work to keep earth that way!

Debbie Downer. Dream Destroyer.

I’m all about being realistic, sensible, practical et al… but thank goodness there’s people like Elon knowing that despite the challenges and odds; some stuff has to be attempted. And you know what? If you work hard enough and want it badly enough; you can do what most everyone else said couldn’t be done. I’m so sick of the innate negativity of people disguised as realism, pragmatism, history, fact etc….

 

[Artful Dodger]

I doubt tunnels would be necessary, judging by what we've seen at Giga Shanghai where they have an entire side of the building with a line of loading docks and materials are brought directly from the shipping container to the production line. At Shanghai they cycle through ~2k containers per day, so it's not like we ever see traffic from too many trucks at once.

If they eventually build a Boring Co tunnel to Giga Austin, it'd probably be for employee commutes.

Trucks and containers are definately out for Boring tunnels: they are too big to fit.

Logistics also involves movement of the finished product. It's not obvious, at least to me, how loading the cars will be handled at Giga Texas. I think there may be a surprise coming (or, they'll just drive around the building to the big empty parking lot, haha)

I'd PREFER to see autonomous cars driving through dedicated tunnels, like will soon be operational at the Las Vegas Convention Center. FSD software, give it a preprogrammed map during initial assembly, move along little doggies...

Cheers!

 

[Krugerrand]

Stating the demise of an American company is "is going to be fun to watch" really isn't warranted. If it does happen an awful lot of good people get hurt.

Those good people won’t be hurt if they’re paying attention to what’s going on with the company they work for and the one they don’t.

They have access to the same information we do. They can at any time make decisions and choices in their best interests or stick their heads in the sand and wait for it all to implode. They’re all responsible for themselves.

 

[Johann Koeber]

Unfortunately the cool stuff is not available in Germany (Europe)

- Belt buckle

- Whistle

- Plaid

Anyway we can buy the stock und do not get distracted

 

[woodisgood]

Wife decided, in a fit of frugality, to delay our Model Y. Fine by me, I’ll plow the cash into TSLA. Disheartened to not be contributing to Q4 as planned.

 

[EVMeister]

Wife decided, in a fit of frugality, to delay our Model Y. Fine by me, I’ll plow the cash into TSLA. Disheartened to not be contributing to Q4 as planned.

Never mind. Your time will come! And there are worse things than having to plow cash into TSLA.