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

[2daMoon]

Is this typical? Says it was updated this AM.
Are the lights on?

View attachment 899985

It is a slow day, what did you expect?

 

[MP3Mike]

Is this typical? Says it was updated this AM.
Are the lights on?

View attachment 899985

They keep track of when you last viewed it, and you only get an update every 30 minutes. (I think it is 30 minutes.) That and the data is delayed 15-30 minutes.

Here is what it shows me, because I looked a few minutes ago:

 

[Artful Dodger]

Take a look at that call wall at 150.

Yup, big call wall at 150 means MMs will want to manipulate the SP to that level (at least). Also, the Upper-BB is at $151.02 as of 10 a.m. so technical traders will see that as a sell signal as well:

 

[SOULPEDL]

Solid if conservative guidance of 1.8 million units (which Elon immediately and stupidly torpedoed by resetting expectations to 2 million -- there was no benefit in doing so ... sorry i know this is supposed to be the positive portion of the post)

I thought the same thing right as he said it. But this is how Elon sets the goals internally. Then he announces them publicly as part of his direction.
He does this often, it's a management style. The public sees this as evidence he is missing his goals (FSD, 1M in '22...), but I see it as a driver to raise the bar beyond what sounds reasonable. He takes it on the chin for this all the time, but it might be a strength and certainly his style. Sometimes things do come in 2 weeks, and I bet the teams pulled all the stops to meet that public statement of the month.

 

[Rarity]

The discontinuity lies in that Tesla can hit 50% YoY (1.8m) with basically zero QoQ growth.
Not that there is a problem with that, Cybertruck is a 2024 volume item as is Semi; but it looks a little weird since Berlin and Austin would theoretically increase output to the 2.0m+ level.

Possibilities:
Sandbagging/ expectation management
Lack of factory growth
Some other short term limit
Demand issues
Slow roll due to product step change

To pick a nit: 1.8 million production does not equal 50% YoY growth. Rather, you would need 2.05 million production.

 

[SageBrush]

Will the "analysts" remember the ~ 30k undelivered cars this quarter when Q1/2023 ends ?
That is over $1.5B in revenue

 

[M|S|M MYP]

Will the "analysts" remember the ~ 30k undelivered cars this quarter when Q1/2023 ends ?
That is over $1.5B in revenue

They will conveniently remember it when the market turns south and then put out a FUD piece (They always have built up ammunition), this is almost guaranteed.

 

[Mengy]

To pick a nit: 1.8 million production does not equal 50% YoY growth. Rather, you would need 2.05 million production.

Tesla has never stated it plans for 50% YoY growth. They have stated, since 2020, they plan for 50% CAGR growth (Compounded Annual Growth Rate). That means an average over time, not a singular number per year.

2021 was an 87% growth. 2022 was a 40% growth. They are guiding for 2023 to be a 37% growth. The average of those three years combined is 54% (still over 50%).

 

[CitizenKane]

I'm a little surprised at wall street's unsubdued reaction to the earnings call. Personally i heard as many questions as answers. I thought it was a decidedly mixed bag. I'm an optimist so i'll start with the cons, and end on a positive note with the pros:

Cons:

• Cybertruck volume production in 2024 at the earliest (and I think that's optimistic based on its radical design and where they are in the process).
• 4680 volume production is still not close.
• Margins will probably tighten further.
• Sales in China do not appear to be growing quarter over quarter.
• Next-gen FSD will not be retrofittable to existing cars (so much for the whole "Teslas will become appreciating assets" line)
• Primary focus seems to be on maintaining the short-term margin and cash numbers rather than R&D (and to a lesser extent, service). I would prefer Tesla were less worried about Wall Street's reactions quarter to quarter, and made fewer choices based on ruthless cost cutting and more choices based on providing a superior product to the market.
• Solar? Do we still do that? Looking at P&L it looks like Solar makes up less than 1% of profit and is low margin at best, and its growth is anemic. Hard to glean specifics since it's lumped in with Energy Storage on several charts, which is doing much better.

Pros:

• Immediate bottom line still extraordinarily healthy in terms of free cash flow, cash on hand, and margins relative to the industry.
• Model 3 and Model Y are crushing it everywhere around the world.
• Solid if conservative guidance of 1.8 million units (which Elon immediately and stupidly torpedoed by resetting expectations to 2 million -- there was no benefit in doing so ... sorry i know this is supposed to be the positive portion of the post)
• Energy storage revenue is growing at a very healthy rate, even faster than Auto, and looks like it will continue to do so.

So like I said, kind of a mixed bag. Obviously I'm happy that Wall Street is happy, but I definitely have my own set of serious risks and questions in my personal valuation of the company that I would love to see addressed somehow. I know we're all banking on future product reveal events to clear some of these up. We shall see.

That seems like a good summary but I think Wall Street had serious concerns about demand and profitability and much less so after the call. Hence the reaction. (I think)

 

[petit_bateau]

I have a THEORY for the sandbagging 1.8m production number for 2023.

Please note, this is just my reading of the tea-leaves, but it fits the limited and available data we have.

In a nutshell - Project Highland for the Model 3.

Why? Tesla is going to take one or more lines in Fremont offline and completely retool them, including for casting. This is a major rework, which will cause months of lost production from each line that goes offline for the rework to a casted production line. Each line will also be slow to spool back up.

In the end, this will result in a lower cost Model 3, with higher customer demand, and higher overall production capacity.


The loss in 3 production will be offset by increased ramps from Austin and Berlin on the Y.

I like the suggestion but ...

.... including paint shop ? which AFAIK is a constraint

where are the planning / building control applications - I thought that the paint shop issue required a lot of chewing over ?

 

[Gigapress]

What a cool graphic. Some points:

- Service cost & revenue is a wash, which exactly jibes with Musk's contention that they will not make Service as a profit cost center.

- Energy made a small profit 0.1B over 1.3B revenue = 7% profit. So this puts to rest the astronomical claims of 50% profit on Megapacks by some internet Tesla enthusiasts.

Those profit estimates are based on switching to LFP cells, US $45/kWh battery credits, Megapack XL which is priced much higher than the original Megapack, and economies of scale at Lathrop. None of this was really in effect in Q4.

 

[SOULPEDL]

Yup, big call wall at 150 means MMs will want to manipulate the SP to that level (at least). Also, the Upper-BB is at $151.02 as of 10 a.m. so technical traders will see that as a sell signal as well:

View attachment 899987

There's another wall today at 160 in case you're interested.

 

[ZsoZso]

Is there a reverse of the uptick rule that got triggered at +10% which broke the momentum ?

 

[Rarity]

Tesla has never stated it plans for 50% YoY growth. They have stated, since 2020, they plan for 50% CAGR growth (Compounded Annual Growth Rate). That means an average over time, not a singular number per year.

2021 was an 87% growth. 2022 was a 40% growth. They are guiding for 2023 to be a 37% growth. The average of those three years combined is 54% (still over 50%).

To pick another nit: @mongo was talking production YoY rather than deliveries YoY.

NB: As far as I heard, Tesla did not provide delivery guidance.

 

[Artful Dodger]

Elon Musk: Demand far exceeds production | CNBC Television (1 hr ago)

 

[dhanson865]

Elon/SpaceX/Teslabot can't use them on Mars (atmosphere is < 1% of the density of Earth). So let the Earthlings make wind turbines...

I don't think SpaceX or Tesla will ever make wind turbines for Earth or Mars but someone will make them for Mars

Wind farms on Mars could power future astronaut bases

If wind power could prove useful on the Red Planet, it might play important roles that other forms of power do not.

www.space.com

 

[GOVA]

I feel dirty restating it but here it goes:

Gordon Johnson is a tool to rent by CNBC and others to push their agenda. Nothing more. There have been several like him.
Gordon Johnson graduated from Morehouse College. He invents new math because he does not care. His only task is to be against Tesla.
His "company" seems to consist of 2 guys and it's been only set up to exist so CNBC can say that they ivited an analyst.

First guy even has a typo in his last name! It should be Bardowski
Source
James A. Bardowsk CFA

Education:
Bachelor of Science - Hotel Management, University of Massachusetts
Master of Science in Finance degree Suffolk University

Work History - Just look at those dates
GLJ Research Chief Information Officer GLJ Research 2019-2020
Sidoti & Company Key Research and Analysis Positions 2011-2019
RJ Finlay Key Research and Analysis Positions 2009-2019
Wolfe Research Associate Analyst 2015-2015
Source

Now, their domain was registered in one of the worst times for TSLA. Curious why exactly then?

The stock was at really rough times and price of ~225 pre-pre split.

Domain Information
Name: GLJ-RESEARCH.COM

• Created: 2019-06-25 15:03:12 UTC

Do your research. There is no place for any trash in this forum in my humble opintion.
I just wish that people would not mention him anymore here.

 

[ggies07]

I don't think SpaceX or Tesla will ever make wind turbines for Earth or Mars but someone will make them for Mars

Wind farms on Mars could power future astronaut bases

If wind power could prove useful on the Red Planet, it might play important roles that other forms of power do not.

www.space.com

cool! thanks

The scientists discovered that out of 50 proposed Martian landing sites, wind speeds at 40 of the sites could supply at least some useful power. At three sites, wind speeds could generate 24 kilowatts — enough to support a six-crew team — for more than 35% of the year. At seven others, wind energy can supply more than 50% of total power needed either during winter months or dusty times. If wind power is needed only for scientific instruments, it could prove useful for another 30 sites.

 

[Prunesquallor]

Go Inside the New Tesla Semi: Features, Screens, Seats, and More​

Nothing too new, but an interesting read.

Go Inside the New Tesla Semi: Features, Screens, Seats, and More

We visited Frito-Lay to find out what the Semi's interior looks like, and how it drives and charges.

www.motortrend.com

 

[BrownOuttaSpec]

The 50% yoy growth with the red and blue lines shows deliveries and the 1.8 million number mentioned. What if the plan for 2023 is to make Robotaxi devices and not sell them to customers but keep them for the future fleet therefor not delivered? /tinfoil hat

The $5 billion Credit line sounds like the Moody's credit rating increase to Investment Grade might be very close, maybe this is a big deal?
"Revolvers are like a credit card that a company can borrow, pay back, and then borrow again over a period of time. Investment-grade rated companies typically do not draw on their revolvers and instead use the loan as a back-up in case other sources of liquidity dry up.

Tesla currently has a high-yield rating from Moody’s with a positive outlook. In October it got upgraded to a high-grade rating by S&P. It needs just one more upgrade from another major credit grader for its debt to be broadly considered investment grade. It’s unrated by Fitch. "