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

[Todd Burch]

Logic would seem to imply that now would be the best time to get into TSLA for those who were waiting on the sidelines and didn’t have the cajones to buy in the $600s, since the bad news, worst of inflation, etc is behind us now and there should be a long string of incredible TSLA quarters ahead.

Now we wait to see if the market has finally removed its head from its exit orifice or if logic continues to be on vacation on Wall Street.

Although Elon said Tesla is still open to crypto on the call, I hope he was just being “crypto-politically neutral” to limit the flak from crypto-nazis and really does not intend to dive into that mess further.

Hopefully during the investor meeting enough investors throw a stink over that foray that it doesn’t happen again.

 

[Mengy]

I like Kevin but I think he made a boo-boo here especially in regards with Bitcoin and impact current assets versus liabilities

I saw that this morning and I think Kevin is simply spouting Tesla FUD as clickbait. He's a savvy YouTuber so he knows posting negativity against the grain will garner clicks. Q2 was incredibly positive for the future of Tesla, much more so than expected, and anyone saying otherwise either doesn't know what they are talking about OR are being purposefully disingenuous.

I think Kevin is being the latter here as he studies Tesla deeply and usually understands them well.

 

[NicoV]

With interest rates rate rising fast, no debt and 18+B$ cash, shouldn’t interest (revenue-expense) become a much bigger part of the profit? While at the same time, becoming a drag on the results of the competition?

 

[JusRelax]

I saw that this morning and I think Kevin is simply spouting Tesla FUD as clickbait. He's a savvy YouTuber so he knows posting negativity against the grain will garner clicks. Q2 was incredibly positive for the future of Tesla, much more so than expected, and anyone saying otherwise either doesn't know what they are talking about OR are being purposefully disingenuous.

I think Kevin is being the latter here as he studies Tesla deeply and usually understands them well.

More than likely, he was expecting Tesla to have a bad quarter, and was hoping for TSLA to drop more before buying back in. I noticed a bunch of negative comments on Rob Maurer's livestream of the Q2 earnings report as well; if I were to take a guess, there are a lot of people that are out of TSLA (either fully or partially divested) that are expecting to get back in at a significantly lower price.

Makes me bullish that, as the train leaves, it will hopefully pick up steam real fast!

 

[ZachF]

No breakthrough needed for transition to sustainable energy!!!!!!!!!

Did I hear that right?

We’ve already been there for a bit, it’s just about scaling now.

Solar is already the cheapest energy in the world, with utility scale LCOEs in the under 3¢ range in sunny climates.

Battery prices are already low enough to compete with ICE vehicles.

LFP stationary storage at $200/KWh installed and 10,000 cycle life is 2¢ per KWh storage cost.

It’s all about ramping now.

We can’t pull up the landing gear yet, but the plane is on the runway, has spooled up its engines, and is moving forward faster and faster.

 

[ammulder]

Do we know, when they build 2170 packs at Austin and Berlin, are they structural 2170 packs or old-school 2170 packs?

 

[2daMoon]

The two biggest takeaways the WS analysts will base their decisions on going forward is that Tesla held onto Dogecoin and that they avoided addressing multiple questions about the looming Demand problem.

/s

 

[ZachF]

CNBC current headline

“Tesla grows revenue 42%, but automotive margins decline​

Tesla’s margins were impacted by inflation and fiercer competition for the components that go into EVs.“


On call, specifically debunked by Master of Coin. He said that the shutdown and restart costs was the problem for the margins. But hey let’s just make up some stuff and call ourselves journalists!

Tesla had one of its two existing factories shut down for covid while ramping up two new ones, and likely crushed all other automakers on margins.

 

[PKEllefsen]

Dave has done a great concise review on YouTube. Here’s his numbers gained by plugging in the output required to hit the newly guided 50% growth. I added the lower highlight. Dave was going so fast he just waved over the eps numbers.

View attachment 830808

Wait... He has ASP falling hard in Q3 and Q4?

 

[Max Plaid]

BTC was an asset, turned into cash when sold.
Without BTC, cash flow would be $-34M.
Except it wouldn't, because advanced debt repayment is optional, as was the $90M purchase of marketable securities.

Apparently this is not a correct assumption

https://twitter.com/x/status/1549938643476721664

 

[ZachF]

Anyone notice the reduction in SG & A and R & D this quarter. Lower than Q1 even when you include the severance costs.

229M lower without the severance costs. This is 12% reduction before they made the 10% headcount reduction? Does not make sense to me. Is it possible some of Shanghai employees were not paid due to government benefits during shutdown. I just doubt China management would have this large of a $$ impact even if this were the case.

Q1 Q2
View attachment 830804

R&D expense doesn’t just include salaries, for instance writing off a large chunk of bad 4680 cells at Kato while they were still figuring out production would be an R&D expense.

Shanghai facility also performs R&D too, so the shutdown there probably reduced expense some even if the salaries were paid during the shutdown.

 

[Maarten]

Boy, am I happy with:
- the results of Q2;
- the lookout for Q3 and Q4;
- the change in positive sentiment here;
- the return of many financially related posts.
Quite a change from the past weeks.
Find myself pressing on the like-button more than a few times per page.
A lot to like my friends, thank you all!

 

[traxila]

Standard doom from WSJ. Does’t even try to parse numbers a bit. Just sticks to how this proves that Tesla is a standard carmaker that will suffer appropriately when the time comes.

Tesla’s Tough Second Quarter Shows What Might Happen in a Recession

The electric-vehicle maker isn’t a tech company that can exist in a parallel digital universe free of worries about factories and supply chains.

www.wsj.com

 

[mongo]

Apparently this is not a correct assumption

https://twitter.com/x/status/1549938643476721664

Indeed, and I corrected myself last night. Cash Flow != Free Cash Flow

Correction to my post, Free Cash Flow (operating cash flow - CapEx) was $621M and did not include BTC sale.
The $902M is just the change in cash balance (which does include BTC).

 

[ZachF]

Standard doom from WSJ. Does’t even try to parse numbers a bit. Just sticks to how this proves that Tesla is a standard carmaker that will suffer appropriately when the time comes.

Tesla’s Tough Second Quarter Shows What Might Happen in a Recession

The electric-vehicle maker isn’t a tech company that can exist in a parallel digital universe free of worries about factories and supply chains.

www.wsj.com

Sometime next year Tesla will pass Toyota to become the world’s most profitable automaker.

I look forward to the cope from the usual suspects.

 

[mongo]

Do we know, when they build 2170 packs at Austin and Berlin, are they structural 2170 packs or old-school 2170 packs?

Old school, there are no structural 2170 packs. This is part of why the current 4680+dual use chassis design is over engineered. The chassis works with a non-structural pack, so it's over built; and the 4680 pack has extra design margin even it were a more integral part of vehicle structure.

 

[CaliBear1]

I saw that this morning and I think Kevin is simply spouting Tesla FUD as clickbait. He's a savvy YouTuber so he knows posting negativity against the grain will garner clicks. Q2 was incredibly positive for the future of Tesla, much more so than expected, and anyone saying otherwise either doesn't know what they are talking about OR are being purposefully disingenuous.

I think Kevin is being the latter here as he studies Tesla deeply and usually understands them well.

I don't follow this guy, but If this is true, it baffles me that such YTs are willing to dash their credibility against the rocks in exchange for a few more clicks.

 

[X Fan]

For the accountants: how much of the net cash gain this quarter was due to DPO (Days Payable Outstanding) going from 72 to 80 days (it was 71 days LY's quarter)?

 

[X Fan]

Standard doom from WSJ. Does’t even try to parse numbers a bit. Just sticks to how this proves that Tesla is a standard carmaker that will suffer appropriately when the time comes.

Tesla’s Tough Second Quarter Shows What Might Happen in a Recession

The electric-vehicle maker isn’t a tech company that can exist in a parallel digital universe free of worries about factories and supply chains.

www.wsj.com

yup....from a UK based WSJ "auto" guy who seems to put out more than his fair share of Tesla negative stories

 

[mongo]

For the accountants: how much of the net cash gain this quarter was due to DPO (Days Payable Outstanding) going from 72 to 80 days (it was 71 days LY's quarter)?

The accounts payable expense in Q2 increased $41M from Q1's $11,171. So total outstanding stayed similar.
Adjusting the Q2 value of $11,212 from 80 to 72 (assuming uniform distribution), yeilds $10,091. So the extra 8 days was worth $1,131M of cash on hand.

Edit: they also have $1,417M in additional inventory on hand, this increase in both lines up with the operating leverage concept.