Todd Burch
14-Year Member
I think folks are waiting for the call to finish before buying, just to be sure Elon doesn’t insert mouth in foot.
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Tesla, TSLA & the Investment World: the Perpetual Investors' Roundtable
- Thread starter AudubonB
- Start date
Has anyone had experience with placing claims under Tesla insurance? Was it as pain free as they’re saying? I have T insurance, but fortunately have never had to use it.
Pezpunk
Active Member
well i can exhale, Elon didn't start any fires on the call and was overall a model CEO Technoking.
Phobi
Member
Sigh. So proud. Bravo Elon & the Tesla team.
I’ll hold their beer till the end of time.
I’ll hold their beer till the end of time.
And think about how much Geico spends on ads, 1.5 billion a year or so. Tesla with no advertising will be able to lower rates for owners and make more money because they don't piss it all away on advertising.
ZachF
Active Member
larmor
Active Member
I wonder if this means they want to mint money err mine lithium...
That said (and I agree completely) Tesla's rise will make one hell of a case study for the class of 2030-5 students of business. Makes me want to get my MBA all over again... Not.
When Moody's did their credit rating increase in January (conveniently the day before Q4 results), they used up to Q3 2021 results. For the financial factors they listed to further upgrade, two of the interesting ones were these:
- sustained EBITA (Earnings Before Interest, Tax, and Amortization) of 7% or higher (excluding reg credits)
- considerable commitment available under revolving credit facility
I recalculated EBIT (Earnings Before Interest and Tax) using the quarterly slide decks instead of EBITA. Depreciation and amortization are lumped together so it was difficult to get an accurate amortization figure. Plus, EBIT makes the calculation more conservative than using EBITA.
When Moody's did their calculation, Q4 2020 and Q1 2021 were both narrowly profitable, and below their 7% threshold, so their hesitancy is understandable. However, since Q2 2021, the EBIT margins have been growing strongly and are well above the 7% threshold they laid out in their report. As Tesla has had very strong EBIT for four straight quarters, seasonality no longer has a significant impact on their financial performance.
On the revolving credit facility, they previously had drawn $1.9B of the $2.1B revolving credit facility in Q3 2021. However, they have essentially paid off all of their recourse debt as of the end of Q1 2022, so this credit facility should now be fully available.
Based on both of these factors, from a financial perspective, Moody's has no reason not to upgrade Tesla shortly after the 10-Q comes out. They might keep waiting until the supply chain issues and factory ramps are looking better before upgrading though, but there's no doubt now that the financials are good enough for investment grade.
- sustained EBITA (Earnings Before Interest, Tax, and Amortization) of 7% or higher (excluding reg credits)
- considerable commitment available under revolving credit facility
I recalculated EBIT (Earnings Before Interest and Tax) using the quarterly slide decks instead of EBITA. Depreciation and amortization are lumped together so it was difficult to get an accurate amortization figure. Plus, EBIT makes the calculation more conservative than using EBITA.
| End of Q3 2021 ($millions) | Q4 2020 | Q1 2021 | Q2 2021 | Q3 2021 | Trailing 12-Months |
| Revenue excl. credits | 9,942 | 9,871 | 11,604 | 13,748 | 44,895 |
| EBIT (excl. credits) | 198 | 88 | 978 | 1,688 | 2,952 |
| EBIT % (excl. credits) | 1.99% | 0.89% | 8.43% | 12.52% | 6.58% |
| End of Q1 2022 ($millions) | Q2 2021 | Q3 2021 | Q4 2021 | Q1 2022 | Trailing 12-Months |
| Revenue excl. credits | 11,604 | 13,748 | 17,405 | 18,077 | 60,564 |
| EBIT (excl. credits) | 978 | 1,688 | 2,370 | 3,046 | 8,082 |
| EBIT % (excl. credits) | 8.43% | 12.52% | 13.62% | 16.85% | 13.34% |
When Moody's did their calculation, Q4 2020 and Q1 2021 were both narrowly profitable, and below their 7% threshold, so their hesitancy is understandable. However, since Q2 2021, the EBIT margins have been growing strongly and are well above the 7% threshold they laid out in their report. As Tesla has had very strong EBIT for four straight quarters, seasonality no longer has a significant impact on their financial performance.
On the revolving credit facility, they previously had drawn $1.9B of the $2.1B revolving credit facility in Q3 2021. However, they have essentially paid off all of their recourse debt as of the end of Q1 2022, so this credit facility should now be fully available.
Based on both of these factors, from a financial perspective, Moody's has no reason not to upgrade Tesla shortly after the 10-Q comes out. They might keep waiting until the supply chain issues and factory ramps are looking better before upgrading though, but there's no doubt now that the financials are good enough for investment grade.
Yes. that was arguably the most entertaining part of the call, Zach mentioning SEC, Elon audibly laughing out loud in the background, and Zach having a big suppressed grin in his voice as he continues talking, trying to remain focused, that had me laughing out loud in my room for a few minutes, loved it !
This was the best earnings call since I started to listen in. I'm very impressed with the leaders of this company. All kinds of challenges handled so well. They ended with "See you in three months". And I really look forward to that.
Time to take out the Teslaquila bottle and see if there is enough left for a night cap.
Time to take out the Teslaquila bottle and see if there is enough left for a night cap.
Interesting comparison. By serving as underwriter, perhaps TSLA gets to be like Buffett with the reserves!
TheTalkingMule
Distributed Energy Enthusiast
With debt now essentially zero, and raw materials the top need......why not put out some massive future commodity purchase orders?
I don't mean committing to 2025 supplies, I mean something like 2024-2032. Certainly that would be easier than actually getting into the mining business, and banks would cut these players checks for new expansion if Elon we're financially committed for a decade.
I don't mean committing to 2025 supplies, I mean something like 2024-2032. Certainly that would be easier than actually getting into the mining business, and banks would cut these players checks for new expansion if Elon we're financially committed for a decade.
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I have not been this happy after an earnings report ever. And most of them have been positive. To accomplish all this in the midst of incredible challenges is astonishing. They all seem to have lost their deep inherent sense of unknown. It's as if they're so battle-hardened that nothing can really faze them any more. Incredibly, they all worked together and Elon did not interrupt. He really trusts his team now.
Krugerrand
Meow
All very interesting, but I suspect they’re just rolling a single dice in a back room and Tesla doesn’t get investment grade until they role a seven.
Krugerrand
Meow
I have had a $6k repair on my Model 3 and it was super simple and easy with Tesla Insurance. I got a Tesla rental as well, but I had to push for it.
What an amazing earnings call, I think Elon might have had some public speaking coaching and listened.
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