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

[uscbucsfan]

Nothing against those of you that are attorneys, but if that is the case then maybe just say that and leave out the ambiguity? I am sure the IRS has clear instructions on this.

One could argue that it's pretty encompassing.

Has to be stationary.
Cannot be used for other purposes.
Under property- not property primarily used in the transportation of goods or individuals

That covers any sort of battery powered machine that could eventually utilize V2G/H like a lawnmower, golf cart, car/truck, etc.

 

[EQC_]

The NHSTA investigation is on the NHSTA website, easy to read the source instead of the Reuters spin on it, just search for Tesla and view “investigations” under the model.

(Doesn’t seem that serious?)

Here’s the text:

April 25, 2024 NHTSA ACTION NUMBER: RQ24009OPEN INVESTIGATION
Recall 23V838 Remedy Effectiveness
NHTSA Action Number: RQ24009

Components ELECTRICAL SYSTEM

Opened From: April 25, 2024–Present

Summary

The Office of Defects Investigation (ODI) is opening a Recall Query to assess the remedy adequacy of Recall 23V838. On December 12, 2023, Tesla filed a Defect Information Report (Recall 23V838) applicable to all Tesla models produced and equipped with any version of its Autopilot system, which Tesla described as an SAE Level 2 (L2) Advanced Driver Assistance System (ADAS). Autopilot is the simultaneous engagement of Tesla’s Traffic-Aware Cruise Control (TACC) and Autosteer. In describing the safety defect, Tesla’s Defect Information Report (DIR) explained that “the prominence and scope of the system’s controls may be insufficient to prevent driver misuse,” and Tesla committed to the deployment of a multipart remedy aimed at improving system and engagement controls and reducing mode confusion.

EA22002 (upgraded from PE21020) was opened to investigate whether Tesla’s Autopilot contained a defect that created an unreasonable risk to motor vehicle safety and involved extensive crash analysis, human factors analysis, vehicle evaluations, and assessment of vehicle control authority and driver engagement technologies. The work conducted in these investigations aligns with Tesla’s conclusion in its 23V838 recall filing. During EA22002, ODI identified at least 13 crashes involving one or more fatalities and many more involving serious injuries in which foreseeable driver misuse of the system played an apparent role.

Tesla filed Recall 23V838 to address concerns regarding the Autopilot system investigated in EA22002. Following deployment of the remedy in Recall 23V838, ODI identified concerns due to post-remedy crash events and results from preliminary NHTSA tests of remedied vehicles. Also, Tesla has stated that a portion of the remedy both requires the owner to opt in and allows a driver to readily reverse it. Tesla has also deployed non-remedy updates to address issues that appear related to ODI’s concerns under EA22002. This investigation will consider why these updates were not a part of the recall or otherwise determined to remedy a defect that poses an unreasonable safety risk.

ODI is therefore opening this Recall Query investigation to further evaluate the adequacy of the remedy for recall 23V838

From the NHTSA text:

" Tesla has also deployed non-remedy updates to address issues that appear related to ODI’s concerns under EA22002. This investigation will consider why these updates were not a part of the recall or otherwise determined to remedy a defect that poses an unreasonable safety risk."

This part seems to be a *hopefully unlikely* risk of becoming downright silly and require even more software changes to be labeled as recalls. If it does go that way, though, it seems like it could become so silly as to make everybody see the absurdity of calling Tesla's software updates "recalls."

Technically, every FSD update probably has something in it to improve safety (in addition to general smoothness, more natural behavior, more abilities, etc.). Hopefully the NHTSA's use of the word "unreasonable" when applied to "safety risk" has some weight and meaning, and this doesn't lead down a silly road where every update to FSD has to be listed as a recall.

Heck, even if Tesla updates other software features to, for example, make the HVAC software slightly better and predicting human comfort and adjusting automatically -- that will result in a slightly less distracted human and a slight increase to safety. It would be simultaneously disappointing and hilarious if that had to be labeled as a recall, complete with mailed notifications to owners.

 

[Artful Dodger]

Yes these are shares, not options. He could have voted them even if still employed

Not if the stock options which created the shares were exercised after April 15th. Only shares that existed on or before that date have voting rights.

 

[M|S|M MYP]

Attention European TSLA shareholders

https://twitter.com/x/status/1783817517288370616

$TSLA I contacted DeGiro to double-check how to cast your vote.
IF you are an Tesla European shareholder and your broker is DeGiro:
- They can vote for you. It'll cost you €10.
- You can send your vote to [email protected]
- They'll send you a confirmation when they've cast your vote

Let me get this straight, you have to PAY someone to vote for shares that you own? Man!! I guess the equivalent in the US would be to wait 2 hours in line to get to the front of an event to pay admission to get in.

 

[Artful Dodger]

Lol, Tesla Economist hasn't posted on X for three whole days...

 

[Artful Dodger]

Let me get this straight, you have to PAY someone to vote for shares that you own? Man!! I guess the equivalent in the US would be to wait 2 hours in line to get to the front of an event to pay admission to get in.

I think the US equivalent is the poll tax.

 

[mongo]

I broke down and put all Drew's SEC forms in a spreadsheet.
First, a critical point: over half of his remaining compensation package was from a Dec 2020 plan and had a cost basis of $143.61. So knock any headline numbers in half and concider that 616k of those options had no net value based on the stock price going into the earnings call.

Near as I can tell, he exits holding 65k shares. Could be 37k higher if his performance award fully vested, but this seens unlikely as he stopped executing on that in late 2020 at the Edit: [3 of 4]2 of 4 tranch level. Numbers are also adjusted for 7 of 48 unvested tranches of his most recent comp plan that would have ended in November.

Final tally:
Shares held before departure: 31,200
Vested options: 1,175,479
Retained executed options: 34,117
Total shares held after option exercise and sale: 65,317
Net cash from sales: $51M at $170 stock price

1.18M options basis = $87M
1.18M options @ $170 = $200M
Gross pretax: $113M
Taxes: mostly NQSO so say 50% or $56M
Total cost: Basis + tax = $143M
Form 144 sale 1.14M @ 170 = $194M

Net payout: $51M in cash plus 34k shares worth $5.8M
Payout shifts $5M per $10 of stock price movement.

@The Accountant

 

[jschwefel]

Those guys should not be platformed, but all due respect to Sawyer and his clothing brand, but what are his credentials for being on CNBC? That he tweets out a lot of Tesla info? Does he have a background in finance or anything that would qualify him as more of an expert than 75% of people on this forum?

@Artful Dodger deserves a CNBC spot more than Sawyer!

You raise a good question, how does CNBC choose who they bring on the show? IDK, but given the variety of their guests, I'd say their selection process is not based on credentials or merit. Definitely do your homework before you make any financial decisions based on the opinions of their guests.

 

[Ellec]

Lol, Tesla Economist hasn't posted on X for three whole days...

View attachment 1042004

Did he buy puts again? Or was it LEAP calls he bought and when they popped and he lost it all he went full rage on Elon and Tesla.

 

[Artful Dodger]

Did he buy puts again?

Don't know, but meat Kevin did.

 

[unk45]

What does "Primarily" mean in this case? My CT sits in my driveway plugged into my house easily 51%+ of the time. So, it is primarily a home energy storage device for me. Not trying to cause trouble, but an honest question.

Given IRS treatments in roughly analogous situations (e.g personal aircraft and boats used for charter), percentage of personal use vs revenue generation, among other factors might be relevant. Despite that 'trasnportation' clause YMMV. Consult your tax attorney (not accountant) who can give you the most favorable opinion. Don't assume no, don't talk with an accountant, consult tax attorney.

disclaimer: I am neither an US accountant nor a US tax attorney, so keep in mind I cannot give any valid option on such subjects, therefore the foregoing is not an opinion in any way.

 

[Artful Dodger]

I broke down and put all Drew's SEC forms in a spreadsheet.
First, a critical point: over half of his remaining compensation package was from a Dec 2020 plan and had a cost basis of $143.61

Thanks! Can you estimate how much cash Tesla will receive from Drew executing his share options? Is that just the $87 million cost basis?

How much payroll tax does Tesla owe for Drew?

Cheers!

 

[unk45]

One could argue that it's pretty encompassing.

Has to be stationary.
Cannot be used for other purposes.
Under property- not property primarily used in the transportation of goods or individuals

That covers any sort of battery powered machine that could eventually utilize V2G/H like a lawnmower, golf cart, car/truck, etc.

Are you an accountant or a tax attorney? Ambiguity in seemingly straightforward statutes can be found in many cases. How might one categorize the optional Cybertruck battery pack?

 

[ItsNotAboutTheMoney]

From the NHTSA text:

" Tesla has also deployed non-remedy updates to address issues that appear related to ODI’s concerns under EA22002. This investigation will consider why these updates were not a part of the recall or otherwise determined to remedy a defect that poses an unreasonable safety risk."

This part seems to be a *hopefully unlikely* risk of becoming downright silly and require even more software changes to be labeled as recalls. If it does go that way, though, it seems like it could become so silly as to make everybody see the absurdity of calling Tesla's software updates "recalls."

Technically, every FSD update probably has something in it to improve safety (in addition to general smoothness, more natural behavior, more abilities, etc.). Hopefully the NHTSA's use of the word "unreasonable" when applied to "safety risk" has some weight and meaning, and this doesn't lead down a silly road where every update to FSD has to be listed as a recall.

Heck, even if Tesla updates other software features to, for example, make the HVAC software slightly better and predicting human comfort and adjusting automatically -- that will result in a slightly less distracted human and a slight increase to safety. It would be simultaneously disappointing and hilarious if that had to be labeled as a recall, complete with mailed notifications to owners.

Don't worry. The NHTSA isn't a nanny. I wish all government was as utilitarian as the NHTSA.

 

[Artful Dodger]

Washington water power FTW! How's about $127 a month for a Model 3 lease? Wowzers! That's less than a bus pass!

https://twitter.com/x/status/1783587904306196879

Forget the $25k Model 2, you can get a new Model Y for $23.5k in WA!

 

[uscbucsfan]

Are you an accountant or a tax attorney? Ambiguity in seemingly straightforward statutes can be found in many cases. How might one categorize the optional Cybertruck battery pack?

No, but those responses were from a tax attorney "expert" about the interpretation. Also, the F150L didn't qualify.

The battery pack will be fixed and dependent on the truck, so that won't change anything. It has to be stationary is an important distinction. I don't know how you could argue a truck is 1. Stationary and 2. Isn't primarily used to haul people or property...

 

[mongo]

Thanks! Can you estimate how much cash Tesla will receive from Drew executing his share options? Is that just the $87 million cost basis?

How much payroll tax does Tesla owe for Drew?

Cheers!

That's my understanding. Basis of $87M goes to Tesla. Payroll is 1.45% * $113M or $1.6M .
Fully diluted shares will decrease by ~127k due to early termination of comp plans (assuming performance didn't vest).

 

[jerry33]

Don't worry. The NHTSA isn't a nanny. I wish all government was as utilitarian as the NHTSA.

Wasn't a nanny until a few months ago. Not so sure now. They have done some pretty nanny like things to Tesla while avoiding others who have done much less than Tesla is doing. (e.g. Rivian removed the interior camera)

 

[CHGolferJim]

He'd only need to sell 20-30% to cover his taxes. Instead he sold nearly everything.

He was a high level exec with access to all info on 4680, FSD, Optimus, etc. and he wanted to exit asap. Hmmm.

Many folks that want or have to move on just do it, and add $90+ million to the portfolio.

 

[unk45]

No, but those responses were from a tax attorney about the interpretation. Also, the F150L didn't qualify.

The battery pack will be fixed and dependent on the truck, so that won't change anything. It has to be stationary is an important distinction. I don't know how you could argue a truck is 1. Stationary and 2. Isn't primarily used to haul people or property...

Well, I personally know of one person who successfully described his Gulfstream G550 as his primary residence. I do not suggest such arguments are either easy nor the norm. There is no question about how that would be conventionally viewed or whether doing such a thing would be wise.