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

[elasalle]

View attachment 832472

https://twitter.com/x/status/1551388575735767040

Shorts at work. Where are the "there will be blood lawyers" when we need them ....

https://twitter.com/x/status/1551396865421152256

 

[Webeevdrivers]

At the risk of lowering the bar on learned members.

Opening up Superchargers will raise the utilisation rates marginally and make supercharging itself marginally more profitable, in turn funding further expansion.

Outside of China, Tesla will probably scale vehicle production faster than most others, and demand is currently not a problem. Inside China, Tesla is already adhering to the Chinese standard.

Eventually the whole world will have very good fast charging options everywhere were they are needed, owning the network and building it, means that others may build less. Not doing it, means others will build more,

It may be a moat, but it is a moat that can easily and quickly be filled in,

Eventually I think CSS will be supported for most cars in most countries, if Tesla keeps the proprietary connector for the US and Canada, that is a likely marginal expense of dual cables at each Supercharger stall.

I'm sure the CSS standard isn't the best we can do, but Tesla would need to work with the official standards process.

Thanks for that perspective. Still lots of questions though. The whole adapter approach and how they control it is interesting.

 

[StarFoxisDown!]

I’d say Elon has a very legitimate case for slander against wsj……that’s probably the most blatant slandering of character I’ve seen in a long time. That’s a new low for wsj

 

[mongo]

Except, no, it's not out of context.

You're using Deepaks one mention of "other" only because it's the full category name to ignore all the actual things Elon said after.



Here's the longer set of the quote, where he's specifically talking about PROFITABLE non-warranty service.

I bolded the most relevant bits.





not "and other"- just service...

But sure let's see the additional context-






That is explicit that Elon expects future profits- and increasingly so- from non-warranty service.

At no point is he discussing "other" like used cars or retail merch as providing those profits- but service specifically doing so-- Certainly the big bump in used car pricing is going to provide even more- but it's crystal clear that wasn't what he was talking about in 2018.




Elon certainly does prefer NO service--- you can tell by how underfunded the # of service centers has continued to be, something even some pretty major bulls like Sawyer and Omar have commented on-- something Elon has admitted was a problem than that he'd fix soon- multiple times since, and still hasn't fixed--- but he absolutely changed his mind from 2013 when he thought it was terrible to make any profit on service- to by 2018 explicitly saying they expect to make a profit on service.

And?
I included that full response from Elon which was in response to the question of "service and other" not just Deepak throwing "other" in.
Even taking vehicle service on its own. Increased revenue does not mean increased profit, it means increased business (which means higher utilization of capacity). Positive gross margin does not mean increasing profit for profit's sake, it means covering costs with some buffer. Charging 5-10% over cost is not making auto-service a profit driven center, it's making it sustainable and expandable, shifting costs off of automotive pricing (hidden out of warranty pass alongs), and contributing to the division's corporate opEx overhead.

Further, you claim Elon changed his mind but did not address Elon's 2021 statement, "Unlike other makers of cars, our goal is *not* to profit from service." Seems pretty consistent with 2013: "Our philosophy with respect to service is not to make a profit on service."
Did he change back, or has his position been consistent and your interpretation of 2018's earning call is the problem?

 

[WolfHero]

Competition is coming /s

Report that Mercedes will axe EQC in 2023 due to abysmal sale.
Mercedes-Benz EQC to be axed in 2023 – report

 

[AudubonB]

This thread is filled to the Brin with non-news. MOST such posts have been deleted. Least salacious; least off topic currently remain. NO more such in this thread.

 

[Ogre]

Here's the fixed graph. Did it on the PC this time!
View attachment 831802

Might as well flesh it out a bit more while we are at it.

 

[Artful Dodger]

2.46x macros

 

[brantse]

The 10-Q is out.

 

[ThisStockGood]

The 10-Q is out.

Waiting for all the clever heads in here to fabricate a TL;dr

 

[Todd Burch]

Glad to see the story about Elon is untrue. Elon’s story is easily proven (and WSJ’s story easily disproven), so I believe him.

Not sure what is holding Elon back from a libel lawsuit against the WSJ. Maybe the media can use “allegedly” in any story and get off the hook for lying.

Feels like today is going to be one of those Monster Mondays, where Friday’s max pain is out of reach (would require much urinating into the wind) and the stock continues its march upward.

Last Thursday showed that with bad news in the past, bigger funds are getting on the train with good news ahead. But a <10% move like we saw Thursday is not enough of a move for this to really have happened much.

I think we’ll see more upward movement this week, followed by more conservative, longer-term funds jumping in once Tesla’s Moodys rating is upgraded. (And I believe it now will be, with Moodys now having run out of excuses and people like Gary Black starting to bring their rating discrepancy more into the light—especially having shown now that a profit and positive cash flow is achievable even with a factory out of commission for a month).

 

[jw934]

Comment from a former Moody on Tesla bond rating (Edit: MmeAlexandraS on Twitter, thanks, @new_sneakers)

”
according to Alexandra Merz, founder of L&F Investor Services, which advises international investors on the creation or purchase of U.S. businesses. Merz spent years as a credit officer at Moody’s in France.

Merz is comparing cash to debt, debt to equity, and debt to operating profits, among others. “It’s ridiculous,” adds Merz about the rating versus metric paradox. “Tesla is clearly in the top 3 strongest [large cap companies.]”

S&P and Moody’s might not have acted yet because they are typically slow to do so, adds Merz.
”

https://twitter.com/x/status/1551193224773074944

 

[Artful Dodger]

The 10-Q is out.

"As of July 19, 2022, there were 1,044,490,015 shares of the registrant’s common stock outstanding."

And here's the all-important 2018 CEO Performance Plan status:

"As of June 30, 2022, we had $9 million of total unrecognized stock-based compensation expense remaining, which will be recognized over a weighted-average period of 0.3 years."

"For the three and six months ended June 30, 2022, we recorded stock-based compensation expense of

• $8 million and $57 million, respectively, related to the 2018 CEO Performance Award, and
• $176 million and $475 million, respectively, for the same periods in 2021."

So there it is folks: Only $9M left to go in Elon's stock awards, and that will be payed out entirely in Q3 2022. Now about those payroll taxes...

Cheers to the Longs!

 

[jw934]

MmeAlexandraS wrote

“on July 15th, and only 32 of the 296 funds even hold Tesla. $TSLA represented only 1.56% of all holdings, so significantly lower than its weight in the S&P 500.”,

”whereof ARK holds 89% of the 1.5M shares”

This means the actively managed ETFs other than ARK only hold approx 0.18% of their funds in Tesla, until they decide to play catch-up to SP500 weighting.

https://twitter.com/x/status/1551262605678768128

 

[mongo]

The 10-Q is out.

tl;drb Much Wow

Interesting tidbits:
Growth continuing:

we currently expect our capital expenditures to support our projects globally to be between $6.00 to $8.00 billion in 2022 and each of the next two fiscal years.

Vehicle tax credits were primarily due to regulation change causing additional recognition of previous quarters.

Automotive regulatory credits revenue increased $151 million, or 17%, in the six months ended June 30, 2022 as compared to the six months ended June 30, 2021, primarily due to changes in regulation which entitled us to additional consideration of $288 million in revenue in the first quarter of 2022 for credits sold previously, in the absence of which we had a decrease in automotive regulatory credits revenue driven by lower sales of regulatory credits.

$168 Million hit on cost of automotive due to shutdowns. On the upside, S/X costs decreasing.

Cost of automotive sales revenue increased $3.03 billion, or 43%, in the three months ended June 30, 2022 as compared to the three months ended June 30, 2021, in line with the growth in revenue year over year, as discussed above. There were also idle capacity charges of $168 million due to the temporary suspension of production at Gigafactory Shanghai as well as the ramping up of production in Gigafactory Texas during the three months ended June 30, 2022. Further there was an increase in combined average Model 3 and Model Y costs per unit due to overall rising raw material, commodity, logistics and expedite costs and the ramping up of production at Gigafactory Berlin-Brandenburg and Gigafactory Texas during the three months ended June 30, 2022 as compared to the three months ended June 30, 2021. These increases were partially offset by a decrease in combined average Model S and Model X costs per unit driven by lower average cost for the new versions of Model S and Model X from ramping up production.

 

[OrthoSurg]

Competition is coming /s

Report that Mercedes will axe EQC in 2023 due to abysmal sale.
Mercedes-Benz EQC to be axed in 2023 – report

Competition is leaving

 

[new_sneakers]

Comment from a second former Moody on Tesla bond rating (in addition to MmeAlexandraS on Twitter)

I’m glad to see pressure building with this article, but this is only a second Alexandra when there is a mirror in the room.

 

[unk45]

I believe it will happen this year yet, in 2022. There really isn't any viable reason NOT to upgrade Tesla anymore, it's almost become comical at this point.

There is one viable reason. The rating agencies revenues:

https://pdf.sciencedirectassets.com/

Science Direct:
Procedia Economics and Finance 30 (2015) 631 – 642

That chart shows precisely why tesla is not yet investment grade. Tesla has repaid nearly all it's debt and is not issuing new debt. Hence, low ratings.

In simple English: Tesla doesn't pay, Tesla doesn't get.

There is an exception, Tesla does issue securitizations, but even there:
tesla-halts-bond-sale-backed-by-auto-leases-amid-market-turmoil

Bluntly, Tesla is cash rich, has strong positive cash flow and simply doesn't issue corporate bonds or other such obligations at all.

That does not necessarily preclude upgrades anyway, with Securitizations in mind.

 

[Knightshade]

And?
I included that full response from Elon which was in response to the question of "service and other" not just Deepak throwing "other" in.

Which is why it's weird you tried to pretend Elon meant "other" when he not only didn't say other, explicitly made clear he meant service

Even taking vehicle service on its own. Increased revenue does not mean increased profit,

Is there some other way besides "profitable" that you are reading Elon saying

I would expect service to be a significant revenue item, and to be a positive margin contributor

and

as the warranty expires, so there is like non-warranty items then we'd expect service to positive gross margin.

because that's a weird read.

. Positive gross margin does not mean increasing profit for profit's sake

PENALTY!

MOVING THE GOALPOSTS!


The discussion was on Elon originally stating they had no intention of running service for a profit.

And his later remarks clearly showed he'd changed his mind- based on the real world results and realities of the business.


You denied this- but are now moving the claim to "well sure they're running for profit, but there's REASONS!"


Sure there are.

Reasons Elon realized a while ago- hence why he changed his mind on this.



The ability and willingness to do that in the face of changing situations is one of Elons greatest strengths.


So it's always strange to me when people here try and "defend" him by saying he didn't actually change his mind, when he's not only literally saying he did- but that it's a great thing that he's willing to


A willingness to change your position when new information presents itself is sorely lacking in the general population.

 

[inconel]

Competition is leaving

Veni, Vidi, Exiti