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

[Discoducky]

I feel like @petit_bateau should make at least a few near term predictions (of some kind of tolerance band) to help understand what is being said.

It should be apparent to folks that TE is going to grow massively in this next quarter earnings.

How much? Therein lies the prediction. Maybe produce a graph on what are the next quarters of earnings?

Will Tesla breakout the different products and their respective revenues or shipped quantities? Not sure, but maybe @petit_bateau could make a prediction?

Will Tesla talk about VPP financials? Not sure, could be a prediction there as well.

I don't have predictions other than: TE will be massive in Q4 earnings and Tesla will most likely talk about more details surrounding MP ramp and hopefully some details PP, PW, ST and SP that equate to a predicted ramp for TE over the coming year. How does 50% CAGR sound?

 

[mongo]

Here's a few points on revenue recognition for FSD Beta:

• Tesla started the Full Self-Driving (FSD) beta program in October 2020 in the U.S.
• Eight (8) financial Quarters have passed since FSD Beta began (Q42020 - Q42022)
• Wall St. intends to "back-out" the approx $1B in revenue (~$0.25 added to EPS) for the milestones achieved to date by FSD Beta ('cuz it's one time, ya kno?)
• Wall St. never gave Tesla any credit for that $1B in revenue because it was deferred, now they won't recognize it because its one-time (WTF?)

Here's a proposal for how Tesla can fix this problem with Wall St. deferred valuations:

• restate earnings for the past 8 quarters to recognize FSD purchases as Income
• important financial metrics used by Wall St. "Twelve-Trailing-Months" (or TTM) revenue and earnings are all boosted, perhaps by ~$125M/qtr or about $0.04 EPS,
• this Earnings growth IS NOT a "one-time" event, and will continue into the future indefinately as Tesla is able to recognize all FSD purchases as income, and
• this permanent increase in revenue is likely to grow as adoption rates increase organically with future product improvements (higher growth <> higher PE multiple)

Paging @PlaidCPA @The Accountant

Is past breakdown that reflective of future adoption due to the step change of availability and performance?

Per 10Q, FSD revenue is booked under automotive, so maybe break out the contribution going forward from that point? Possibly at the purchase vs subscription level? I could see analysts side eyeing gross margin if month by month subscriptions are a material contributor.

....none of this makes any sense.

Tesla recognized SOME of the FSD revenue the whole time- based on delivered features.... (I think the last time Zach commented it was ~60 percent)

They will recognize more based on delivering more (I'd expect 100% recognition for US/Canada buyers who bought after March 2019 either in Q4 or Q1 '23 for example-- but NOT for pre 3/19 buyers as they still owe them more than they have delivered... ditto for buyers outside those geos on any date as they're also still owed things)

Accounting rules say you literally can't recognize revenue for things you haven't actually delivered- so restating to include backdated recognition when they hadn't delivered is nonsensical.

And it's certainly one-time income because the same people aren't rebuying FSD for the same vehicle over and over again so no idea what you're on about there either.

FSD -subscriptions- are not one- time of course, but doesn't appear to be what you're talking about.

I think the thought is that some portion of the deferred revenue is a repeating quarterly contributor (like the most recent quarter's vs the ones before that). First full quarter after recognition would give such a value regardless, so it's just a minor data speed up.

 

[Knightshade]

I think the thought is that some portion of the deferred revenue is a repeating quarterly contributor (like the most recent quarter's vs the ones before that). First full quarter after recognition would give such a value regardless, so it's just a minor data speed up.

Ah, you mean if say they recognize 100% in Q4 22 there's the buyers FROM that quarter that shouldn't be backed out? I would expect that to be clear/obvious because that'd show up as revenue from THIS quarter- different from the recognized deferred revenue from past quarters no? (and even if it didn't, the fact they already recognize 60% before wide release and that it'd only apply to Q4 FSD buyers suggest it'd barely show up as a rounding error anyway)

 

[Rarity]

Elon tried privitisation once before that didn't go well, and retail shareholders asking him not to do it was one reason given for abandoning the idea.

Apart from a desire to give a buyer a great deal, there is no reason to do it.

A hostile take over at these prices, just as unlikely for different reasons.

Gordon Johnson becoming Tesla CEO .... slighly more likely.

To the contrary, Elon's privatization went swimmingly. It kicked the Saudis out of the cap table. Almost everything about it turned out well.

We need to be discerning shareholders and read between the lines on that event.

As to a takeover of any sort at this point, I doubt there is a big enough pocket to make it happen.

 

[The Accountant]

I see....so more people can't buy stuff...get forced out of their homes....that's a good thing!

Although I understand what the Fed is trying to do, there is this perverse logic:
With 10% inflation, many of us can only afford 90% of what we need/want. By forcing unemployment on some (where they will afford 0% of what they need/want), the rest of us can go back to 100%. In other words, some of you will need to lose your job so I can get back to 3% inflation. Thanks in advance!

 

[Artful Dodger]

The fact that both huge factories are mainly going to build Ys in the next couple years indicates that Tesla expects solid demand for all those extra Ys, and they have better data and understanding on the demand than we outsiders have.

This fact also recognizes the difficulty involved with first manufacture of any new product, while emphasizing the relative ease of cloning an existing manufacturing line in other locations.

The choice of 3:1 for clones vs. original should also give us a hint about the future of the Gen3 platform, ie: I expect it will be built in 4 locations worldwide, with ~2M/yr installed capacity at each site:

• Lingang, Shanghai, China (possible 1st Site of manufacture)
• Santa Catarina, Nuevo León, Mexico (possible 2nd site)
• Berlin / Brandenberg, Germany (call it 3rd due to permitting)
• Ulsan, S. Korea (and/or possibly) Osaka, Japan

I also expect that these 8M Gen 3 vehicles, when added to Tesla's current 2M/yr capacity after the ramp of Model 3/Y, will take Tesla to a annual world-wide capacity of 10M/yr within 4 years (that is, by the end of FY 2026).

Then once Robotaxi is ready, in 2027 each site clones itself to take us to 20M/yr capacity by 2030 (with 10M robotaxis made per year, and with Tesla buying a third of all R/T production for its own fleet, based on 30% gross margins for R/T)

#PREDICT

 

[mongo]

Ah, you mean if say they recognize 100% in Q4 22 there's the buyers FROM that quarter that shouldn't be backed out? I would expect that to be clear/obvious because that'd show up as revenue from THIS quarter- different from the recognized deferred revenue from past quarters no? (and even if it didn't, the fact they already recognize 60% before wide release and that it'd only apply to Q4 FSD buyers suggest it'd barely show up as a rounding error anyway)

Right, the lump sum is the remaining portion of reoccurring deferred revenue over time, as opposed to a detacted-from-business winfall. So, in that sense, with some fractional multiplier, it is quarterly revenue.

Data from the quarter the deferred revenue is recognized might work, but would partly include time before full functional release. So I think it's clearer (and easier) to just wait another quarter and publish data representative of adoption of the full feature set.

 

[elasalle]

https://twitter.com/x/status/1610679721540423683

 

[EVNow]

this Earnings growth IS NOT a "one-time" event, and will continue into the future indefinately as Tesla is able to recognize all FSD purchases as income, and

Recognition of past quarters is a one time event. This quarters FSD revenue will be immediately recognized and flows in to PnL. That's the portion that'll continue to be available for recognition going forward.

 

[Drax7]

The China demand situation is wrecking the stock. Other
EVs are not experiencing a demand slowdown in China
this December, actually they are growing sales aggressively.

Any thoughts why this unexpected drop?

 

[The Accountant]

WuWa says GF Shanghai is back in production.

Wu Wa's written commentary to video (Jan 5):
" As I set up my drone to observe, the factory presented a busy scene. I was impressed by the line of haulers waiting to enter the factory outside and the neatly arranged haulers in the factory parking area. I counted about 45 haulers parked on site, the most I've seen so far, and it was clear that Tesla has picked up the pace of logistics . . .morning buses transporting employees shuttled through the plant one after another, and private car parking lots were full of cars, all of which suggests that the epidemic is not preventing the plant from running normally, and the rumors of not resuming work are not valid".

 

[2101Guy]

The China demand situation is wrecking the stock. Other
EVs are not experiencing a demand slowdown in China
this December, actually they are growing sales aggressively.

Any thoughts why this unexpected drop?

BYD..(as one factor)..

BYD beats Tesla in 2022 EV sales, vindicating Warren Buffett’s bet

The lay-offs in China’s technology industry and the pandemic-ravaged economy are pushing buyers down market towards cheaper, locally made EVs, instead of imported models or foreign brands like Tesla.

www.scmp.com

China has much more EV competition (and competition that has readily available inventory) than the USA

 

[Bobfitz1]

Also shows how well Tesla would do with genuine news articles.

Exactly. Bias by omission.

I was watching one of the networks evening news with my wife and after the short segment on the crash, paused the playback. I asked her why there was no mention of the miracle the passengers all survived and what make/model car had saved all their lives. A great example of the current media bias to only highlight negative Tesla news.

 

[2101Guy]

Exactly. Bias by omission.

I was watching one of the networks evening news with my wife and after the short segment on the crash, paused the playback. I asked her why there was no mention of the miracle the passengers all survived and what make/model car had saved all their lives. A great example of the current media bias to only highlight negative Tesla news.

If we really want to eliminate any form of bias and go strictly with science, there are multiple factors that determine fatality (or lack thereof) in a crash. To include speed/angle/surface/position of vehicle upon impact/rollover or lack of/, etc.

Make/model is not the sole factor. Scientifically speaking, of course. Its always easy to see a very bad accident aftermath and go "the only reason those persons survived is because the make/model of the vehicle", but scientifically speaking, its deeper than that.

 

[capster]

The China demand situation is wrecking the stock. Other
EVs are not experiencing a demand slowdown in China
this December, actually they are growing sales aggressively.

Any thoughts why this unexpected drop?

If we don’t go much lower than we’ve been this week, maybe it’s just the Street shaking the lure a few more times for the dumb shorts? At least to keep those already short from bolting, if not to get more.

 

[NicoV]

IP 66, three phase, Chinese, Huawei

Interesting product, exactly what I need. So I start reading the installation manual.
It turns out that although it is rated IP66, the installation manual explicitly requires you to install it under an awning to protect it from direct sunlight and rain. I don’t call that weather proof.
Powerwall is IP67. I don’t have access to an installation manual but I haven’t heard it requires installation under an awning. The Tesla site says water-proof and robust against all weather.
It basically confirms my prejudice about Chinese products versus quality western products.

 

[Todd Burch]

WuWa says GF Shanghai is back in production.

<s>Impossible, since there's no demand!</s>

 

[StealthP3D]

You missed this from last January: Elon said Tesla intends to switch all TE products to LFP

Tesla Hints At Transition Of All Energy Storage To LFP Batteries | Teslarati (Jan 27, 2022)

I believe the question I referenced that assumed Powerwalls would also be going LFP was prompted by the statement that stationary storage would be transitioning to LFP. That's when Elon said it only applied to large scale storage, that Powerwalls were a special use case that benefitted from high energy density.

I'm simply reporting what Elon said, not making the case that they won't change their mind.

 

[mrmage]

Although I understand what the Fed is trying to do, there is this perverse logic:
With 10% inflation, many of us can only afford 90% of what we need/want. By forcing unemployment on some (where they will afford 0% of what they need/want), the rest of us can go back to 100%. In other words, some of you will need to lose your job so I can get back to 3% inflation. Thanks in advance!

For the second year it's 80% of what you need, then 70% the third year, etc. It's partially offset by wage gains, but the wage-inflation gap increases with inflation so the problem never stops. At some point they need to bite the bullet, but gets harder every year.

 

[superblast]

https://twitter.com/x/status/1610679721540423683

You did it, Mary!