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

[Usain]

Only about 2/3rds of Americans live in detached single family housing.... folks in apartments without garages or other easy home charging options will be far more dependent on public charging for at least the near/medium future (or longer depending how fast apartments adapt).

Apartments will adapt quickly, starting with the high end properties and working down. An apartment complex can turn a nice little profit by adding L2 chargers while tenants save money buying electricity instead of gasoline.

In 5 years, the vast majority of apartment complexes will offer charging.

 

[RichardL]

I live in a master planned community - essentially a park surrounded by apartments, condos and town houses. There are ChargePoint chargers distributed throughout, and they make a profit and are in frequent use.

I was wondering if Norway (since it has one of the highest adoption rates) is seeing closing of gas stations - is there any data on that?

 

[The Accountant]

Some Commentary on Q2 EPS Estimates

When a public company is facing a difficult quarter, they can take one of three approaches:

Kitchen Sink approach:
With this approach, a company will try to get all the bad stuff out of the way in one quarter.
They may accelerate spend into the quarter, take a larger restructuring charge to address changes to the business, etc.
Gary Black appears to have assumed this approach with his $1.40 estimate. IMO, Gary's $180M restructuring charge is very high for the 10% salaried headcount reduction.

Business as Usual approach:
With this approach, a company takes no special action to either improve or worsen the quarterly results. They move ahead with business as usual. I would say that James Stephenson has taken this approach with his $1.73 estimate.

Save the Quarter approach:
With this approach, a company will take actions that will increase revenues and/or decrease costs to improve and save the quarter.
This may include a hiring a freeze, travel freeze, reduction in the use of contractors, prioritizing the shipment of higher margin products, etc.
My $2.01 estimate and I believe Matt Smith's $1.94 estimate assume this approach. Matt is assuming Tesla takes $480m in FSD revenue recognition. I have assumed prioritization in high margin vehicles (Plaids/Performance models), tight control on production costs during the Shanghai lockdown period and SG&A cost controls.

Wall Street now at $1.85 and the Whisper Number at $1.63. I assume these numbers have no Bitcoin, Severance or FSD.

 

[AudubonB]

I strongly suspect there is a demographic correlation I’ll not expound upon, but in _xxx__ decades of driving, a time period that fully encompasses the rise of the Convenience Store fueling station, I never - not once - in many hundreds of thousands of miles of driving, have purchased anything at any one of them other than gasoline or diesel. Not even antifreeze, oil, wiper or blinker fluid.

 

[TheTalkingMule]

Anyone think the MM algos will try to dive down to expire the $700c for today? Volume seems low enough. Why not?

Took a peek at the 7/29 open interest and there's quite a put spike at $400. My hope and prediction is that we're zooming past $850 on the 29th.

 

[growler23]

Pretty sure I read Tesla was partnering with Bucees to supply them with superchargers

I stopped and charged at the Buccees between Austin and San Antonio. I had never seen 24 charging stalls in a row (I know, you Californians will laugh at that). Wow! Good chargers and a big enough store to spend some time in. The only downside was the 80 yard walk through 2 lines of gas-fume-pumps to get to said store.

 

[ZsoZso]

Apartment parking lots and workplace parking lots are ideal for L2 charging, and I expect that to become standard for both in the near future (with appropriate business model, e.g. charging a decent profit margin on top of costs). In addition to that, shopping mall and restaurant parking lots should have L3 fast charging (more appropriate for typical time spent there). These infrastructures will be built out in major cities as the number of EVs grow, simply because it makes business sense for the owners of those establishments. Thus EV charging for apartment dwellers will be sorted out automagically by market opportunities, and I do not see corner gas-stations with convenience stores transformed into corner EV charging stations as part of that infrastructure, because it makes no sense for EV users to stop and spend time at those places.

 

[Nocturnal]

The only way I see those gas station stores to survive in the next decades is bringing EVs on the spot to get them buy snacks in which they make probably more margin than on selling gas. Not that it’s a good business model but a business model that is going to save them from bankruptcy.

That's how they make nearly all of their money now even. The problem is that EV throughput will be lower than gas so the small corner stations won't make it, only the larger ones that are already convenience stores/restaurants.

 

[Ogre]

Yeah, especially considering maybe >90% of residences have an available wall plug, but <1% have a gas pump! Not the same demand.

Yes, @Knightshade , many apartments don't have an available wall plug, but then, compared to single-family dwellings, many fewer of people who live in buildings own a vehicle. And, as an example, in Ontario (Pop.: 15 M) adding EV chargers has been a building code requirement since 2018.

Chargers will become standard on apartment buildings before too long. It's a feature a lot of people will demand.

I think chargers will become even more common at hotels as well. There might be fees associated with them in some places. I only rent hotel rooms if there is a destination charger and I'd certainly never rent/ buy an apartment which lacks charging at this point. As more and more people get electric cars it will demanded.

 

[Usain]

Some Commentary on Q2 EPS Estimates

When a public company is facing a difficult quarter, they can take one of three approaches:

Kitchen Sink approach:
With this approach, a company will try to get all the bad stuff out of the way in one quarter.
They may accelerate spend into the quarter, take a larger restructuring charge to address changes to the business, etc.
Gary Black appears to have assumed this approach with his $1.40 estimate. IMO, Gary's $180M restructuring charge is very high for the 10% salaried headcount reduction.

Business as Usual approach:
With this approach, a company takes no special action to either improve or worsen the quarterly results. They move ahead with business as usual. I would say that James Stephenson has taken this approach with his $1.73 estimate.

Save the Quarter approach:
With this approach, a company will take actions that will increase revenues and/or decrease costs to improve and save the quarter.
This may include a hiring a freeze, travel freeze, reduction in the use of contractors, prioritizing the shipment of higher margin products, etc.
My $2.01 estimate and I believe Matt Smith's $1.94 estimate assume this approach. Matt is assuming Tesla takes $480m in FSD revenue recognition. I have assumed prioritization in high margin vehicles (Plaids/Performance models), tight control on production costs during the Shanghai lockdown period and SG&A cost controls.

Wall Street now at $1.85 and the Whisper Number at $1.63. I assume these numbers have no Bitcoin, Severance or FSD.

View attachment 828861

As I've expressed in the other thread, I don't think there is any way that there will be FSD recognition in Q2. Probably won't happen until some time in 2023.

When you laid out the three approaches, I thought to myself, "Elon's style is to take a Business as Usual approach. He runs the company like it's not really public, which is what he would prefer anyway."

That being said, I think Tesla's business as usual has always been to prioritize high margin vehicles and keep a tight control on costs. Given that, I would still support @The Accountant number.

 

[WVCS]

It is likely that each of the cost of initial set up and the cost of ongoing operation of a supercharger location for the business is low compared to cost of set up and operation of a gas station. So the utilization rate does not have to be anywhere near as high to run an EV charging facility profitably as it is to run a gas station. Secondly, Tesla probably subsidizes the set up cost and pays some marginal rent for the real estate since they'd have to do undertake those expenses anyway for superchargers they put up in Tesla's own locations. These businesses probably view the EV chargers less as core business and more as an additional convenience to their customers.

 

[Zero CO2]

I strongly suspect there is a demographic correlation I’ll not expound upon, but in _xxx__ decades of driving, a time period that fully encompasses the rise of the Convenience Store fueling station, I never - not once - in many hundreds of thousands of miles of driving, have purchased anything at any one of them other than gasoline or diesel. Not even antifreeze, oil, wiper or blinker fluid.

that is truly bizarre and hard to believe ... how about restrooms or is this porto-potty your preferred method on those long trips... i hope you did not buy blinker fluid The History Behind Blinker Fluid

 

[neverdone]

that is truly bizarre and hard to believe ... how about restrooms or is this porto-potty your preferred method on those long trips... i hope you did not buy blinker fluid The History Behind Blinker Fluid

View attachment 828912

We have certainly used restrooms but rarely make a purchase; not sure how to count when a Dairy Queen is attached to the Chevron gas station (Beaver Utah).

 

[ZenRockGarden]

Apartment parking lots and workplace parking lots are ideal for L2 charging, and I expect that to become standard for both in the near future (with appropriate business model, e.g. charging a decent profit margin on top of costs). In addition to that, shopping mall and restaurant parking lots should have L3 fast charging (more appropriate for typical time spent there). These infrastructures will be built out in major cities as the number of EVs grow, simply because it makes business sense for the owners of those establishments. Thus EV charging for apartment dwellers will be sorted out automagically by market opportunities, and I do not see corner gas-stations with convenience stores transformed into corner EV charging stations as part of that infrastructure, because it makes no sense for EV users to stop and spend time at those places.

I agree Apartment and Urban areas would be well served by widespread L2 charging points. But given how poorly maintained even the best of the CCS fast charging operations are, can you imagine the abuse and neglect L2 chargers in dense environments are gonna get? Charging works great in secured home garages, and at big well supervised stations like Teslas Superchargers. Everything else? Bleh - I see an unholy mess coming.

 

[Ogre]

It is likely that each of the cost of initial set up and the cost of ongoing operation of a supercharger location for the business is low compared to cost of set up and operation of a gas station. So the utilization rate does not have to be anywhere near as high to run an EV charging facility profitably as it is to run a gas station. Secondly, Tesla probably subsidizes the set up cost and pays some marginal rent for the real estate since they'd have to do undertake those expenses anyway for superchargers they put up in Tesla's own locations. These businesses probably view the EV chargers less as core business and more as an additional convenience to their customers.

I just don’t see Tesla installing superchargers in a lot of these locations. Tesla isn’t going to install and maintain supercharger locations unless they are either expanding the reach of the network or profitable.

Adding a Supercharger at a suburban convenience store isn’t going to happen unless it’s on a transportation corridor

 

[insaneoctane]

One thing to keep in mind is that many gas station owners/operators state that they make very little if any profit on the gas itself. All of their profit comes from sales inside. That being the case you can swap the gas pumps for electric pedestals and it's arguably more possible for profit as there's people that have to wait for the charging vs just pumping in a few minutes. There is a serious market there and it will get captured by someone. I know with charging at home this is cut down but many can't do this and no one can do it on any type of road trip. So the market is there.

Except people don’t generally fuel EVs around town if they can charge at home. You lose most of that traffic and settle for people on a long road trip or renters.

 

[Snerruc]

that is truly bizarre and hard to believe ... how about restrooms or is this porto-potty your preferred method on those long trips... i hope you did not buy blinker fluid The History Behind Blinker Fluid

View attachment 828912

I believe Audie is in my age category. I can’t believe he would pass up a men’s room on a stop. Also, us old guys grew up using a milk jug. Youngsters!

 

[Tronguy]

I just don’t see Tesla installing superchargers in a lot of these locations. Tesla isn’t going to install and maintain supercharger locations unless they are either expanding the reach of the network or profitable.

Adding a Supercharger at a suburban convenience store isn’t going to happen unless it’s on a transportation corridor

Ha. Living in NJ, which is often described as a footpath between NYC and Philly, I can attest to that. On US Route 1, we've had a long time SC at this mall in Central Jersey. As I speak, there's new SCs going in at convenience and gas stores six miles in both directions up and down the road. Admittedly, the mall SC has been somewhat oversubscribed with lines occasionally, but, still.

At the rate these things are going in there's going to be more SCs than gas stations in a couple of years. Well, probably not. But there's like, twelve of these SCs open or in development within 20 miles of here, and that's probably an undercount.

 

[Max Plaid]

Don't see it reported elsewhere, although it has been mentioned as "likely".

Electrek is reporting that Tesla has official permission now to sell the "test" cars it produced in Giga Berlin, assuming they meet production specs:

Tesla is allowed to sell Model Ys produced during 'test phase' at Giga Berlin, potentially thousands of EVs

Tesla is now allowed to sell the Model Y vehicles it produced during the long “test phase” at Gigafactory Berlin....

electrek.co

That's potentially ~2000 more Performance Y's that can be added to Q3 sales.

I find this curious: "Some people in Germany are suggesting that Tesla is violating the conditions under which it was allowed to produce those vehicles"

Now why would anyone question this decision other than a wish for Tesla to fail? Disgusting!

 

[mongo]

I find this curious: "Some people in Germany are suggesting that Tesla is violating the conditions under which it was allowed to produce those vehicles"

Now why would anyone question this decision other than a wish for Tesla to fail? Disgusting!

Well, they were technically correct. The temporary permit called out that the vehicles could not be sold. However, the recently recieved approval overrides that restriction.
So a less up to date person could reasonably be confused without ill intent. Hanlon's razor.