TSLA Investor Discussions

[mitch672]

Yes, we're a bit off topic about the SuperChargers in the stock thread, however, that announcement (when it's made) is likely going to affect the stock price, one way or another, so it's not totally off topic. With that said, we don't know what their actual plans are, but whatever they announce, we are going to have to live with, be it WalMart or some other large nationwide footprint chain.. No point in getting worked up about it until we hear the actual announcement.

 

[Doug_G]

Yes, we're a bit off topic about the SuperChargers in the stock thread

Indeed... I think we're approaching the limits here. Everything Tesla does arguably affects the stock price, but we can't discuss everything here. Let's move our random speculation closer to the topic at hand...

 

[Fr23shjive]

Normally true, but when in the 'profitability' transition mode of TSLA not so much. Most of the analyst I've seen are modeling a more conservative 3000

I was Really worried when I heard the somber speech that Elon gave but now that you mention it you're right. Most analysts that are overweight on tesla are taking a much more conservative estimate versus what tesla has been saying. Now the only thing I'm worried about are run away costs. Hopefully their costs are in the ball park of what they estimated and aren't too out of control.

I really don't understand why Elon would take such a somber tone and even bring up bankruptcy if the company is doing well. Im pretty sure everybody knows the risks. I could understand of they needed to mention lowering their production numbers but why mention "going under". I hope he's just trying to spook people so that he can get more shares but he's got me second guessing myself

 

[vfx]

...

I really don't understand why Elon would take such a somber tone and even bring up bankruptcy ...

Maybe he want to buy more.

 

[Lloyd]

Maybe.... but those arn't Super Chargers are they?

Kevin, Isn't the Leaf having trouble keeping their batteries together and temperatures controlled at lower charge rates?

 

[Norbert]

Maybe he want to buy more.

Or maybe he doesn't want us to be too harsh with Tesla-skeptics, as without knowing Tesla well, what Tesla is trying to do must seem like a huge (not just big) challenge. So as not to appear ignorant, or even crazy, he says: yes, it is a big challenge, there is in fact a danger of not succeeding.

Plus, some say that in order to address anxiety, it is good to rationally consider the worst thing that can happen. And, he says, even in that case Tesla will have shown others what is technologically possible, and even that will have been worth the effort (in some sense).

 

[CyberDutchie]

Plus, some say that in order to address anxiety, it is good to rationally consider the worst thing that can happen.

Agree, Elon likes to beat the odds, and seems to always want to emphasize how difficult things are. In interviews he often talks about that he thought the SpaceX project had less than 50% chance of succeeding. But he went ahead and put all his worth in it anyway.

 

[onlinespending]

Just to be honest, TSLA is not a stock I'd want to own now. Simply too much stacked up against it short term. It's crunch time when more reservation holders are asked to commit and when they need to ramp up production. If either one of these aspects are disappointing, investors will freak. There's already so much short interest and downward pressure (not to mention the macro economic scares) that I just can't stomach owning this stock in the short term. If it gets beaten down to sub $20 maybe I'll jump in, or I'll simply wait until Tesla's story is a bit more clear. Sure I may miss the initial ramp up in share price if I wait, but I feel like I'll avoid potentially far worse. TSLA has done well for me, so I'm very content with the profits I've made already.

 

[Kevin Sharpe]

But none I'd prefer to Tesla's design. Tesla will lead. (And they did look.)

You need to revisit the history of Tesla's engineering visit to Europe and ask yourself how they missed the Type 2 ("mennekes") design. You may think Tesla will lead but how will that be true when Type 2 is on millions of cars and Tesla proprietary connector on a few thousand?

 

[Kevin Sharpe]

Kevin, Isn't the Leaf having trouble keeping their batteries together and temperatures controlled at lower charge rates?

Sorry I don't understand this comment... what's your point?

 

[Kevin Sharpe]

No offense Kevin, but you have some horrible ideas. If Tesla implemented your ideas, they would be out of business.

Well, my business acumen allowed me to retire at 50 so I can't be a complete nut case :wink:

I do not think you want to dilute a premium brand like Tesla with WalMart... IMO their is a shift taking place in the attitude of many young people and I don't think Tesla want to be on the wrong side of that. Think Shell and Greenpeace - Arctic Ready

 

[Robert.Boston]

So, Canadian pricing is out -- US price + tariffs + a small markup for higher shipping costs. This seems like about as fair a deal as good be expected. If Tesla uses this same formula for Europe, what does that portend for global sales? Any sense that the Street will like this policy, or even care?

 

[GSP]

Personally, I find such straight-talk from a CEO to be realistic and reassuring. What would worry me is a CEO who didn't realize how critical the next 6 months are.

Exactly. Very well said.

This kind of leadership improves Tesla's chance of success a great deal.

GSP

 

[JRP3]

You need to revisit the history of Tesla's engineering visit to Europe and ask yourself how they missed the Type 2 ("mennekes") design. You may think Tesla will lead but how will that be true when Type 2 is on millions of cars and Tesla proprietary connector on a few thousand?

The Tesla plug looks better than the mennekes, and adapters are easy to use the few occasions you might need them, so it's just not a big deal.

 

[Adm]

The Tesla plug looks better than the mennekes, and adapters are easy to use the few occasions you might need them, so it's just not a big deal.

I hope I don't start a 3 phase discussion again, but the Tesla plug is not capable of delivering 3 phase regardsless of the adapter.

 

[NigelM]

I hope I don't start a 3 phase discussion again, but the Tesla plug is not capable of delivering 3 phase regardsless of the adapter.

You can start the discussion again, no problem, just in the correct thread please. :smile:

 

[NigelM]

Cash Flow

There's been some comments in various threads and concerns about Elon saying that Tesla must become cash flow positive soon; well Elon was just stating a known fact but I though it worth looking (very rough and unscientific!) at some numbers to see what really needs to happen.....

1. It's fair to assume that Tesla's investment needs will diminish somewhat. There are certainly development for costs for Model X and for Gen III but unlikely to be any serious tooling costs in the short-term.
2. FY2011 Tesla increased their cash holdings over 2010 by roughly $160m, but also drew down $200m cash from the DOE loan facility. 2011FY loss $254m so we can round it all together and say that worst case they burnt through about $300m in cash last year.
3. 1H2012 and Tesla has $40m less in cash and drew down $150m from the DOE facility. 1H2012 loss was $100m so assume they burnt through roughly $300m worst case. Now given all the investments in Q1 and Q2 it's fair to assume that 2H will be 50% lower as far as cash drain is concerned; let's say FY2012 comes in at a burn rate of $450m.

OK, what does Tesla need to do to become cash flow positive:

1. Let's be really pessimistic and say that they need to generate $100m per quarter from Model S only.
2. Average Model S price $75k. So they have to deliver 1,333 cars per quarter, or 450 cars per month. Even if we take out the deposits and assume $70k per car, that's still only 475 cars per month needed for basic cash flow to be +/- zero

And profitable:

1. Assume that 1H2012 losses continue, but at a lower rate and FY2012 comes out at $350m. It's pretty fair to assume that FY2013 costs will be more like 2010 levels and I'd assume that Tesla will need about $250m in margin to break even.
2. Uising their stated and indicated margins, and assuming no powertrain business, at a Model S average price of $75k Tesla will need to deliver about 13,000 cars next year.
3. IMO, with powertrain and development revenues it's quite feasible that Tesla can breakeven with around 8,500 cars next year.

Conclusion, I'm not concerned about the current cash rumors and I can see why Tesla might raise capital (especially if it's cheap enough) , but why they shouldn't need to raise capital. I find it pretty amazing that my private model shows a breakeven of 8,500 cars and I remember Elon saying somewhere a long time ago that Tesla could breakeven with 8,000 cars per year.

 

[joefee]

There's been some comments in various threads and concerns about Elon saying that Tesla must become cash flow positive soon; well Elon was just stating a known fact but I though it worth looking (very rough and unscientific!) at some numbers to see what really needs to happen.....

1. It's fair to assume that Tesla's investment needs will diminish somewhat. There are certainly development for costs for Model X and for Gen III but unlikely to be any serious tooling costs in the short-term.
2. FY2011 Tesla increased their cash holdings over 2010 by roughly $160m, but also drew down $200m cash from the DOE loan facility. 2011FY loss $254m so we can round it all together and say that worst case they burnt through about $300m in cash last year.
3. 1H2012 and Tesla has $40m less in cash and drew down $150m from the DOE facility. 1H2012 loss was $100m so assume they burnt through roughly $300m worst case. Now given all the investments in Q1 and Q2 it's fair to assume that 2H will be 50% lower as far as cash drain is concerned; let's say FY2012 comes in at a burn rate of $450m.

OK, what does Tesla need to do to become cash flow positive:

1. Let's be really pessimistic and say that they need to generate $100m per quarter from Model S only.
2. Average Model S price $75k. So they have to deliver 1,333 cars per quarter, or 450 cars per month. Even if we take out the deposits and assume $70k per car, that's still only 475 cars per month needed for basic cash flow to be +/- zero

And profitable:

1. Assume that 1H2012 losses continue, but at a lower rate and FY2012 comes out at $350m. It's pretty fair to assume that FY2013 costs will be more like 2010 levels and I'd assume that Tesla will need about $250m in margin to break even.
2. Uising their stated and indicated margins, and assuming no powertrain business, at a Model S average price of $75k Tesla will need to deliver about 13,000 cars next year.
3. IMO, with powertrain and development revenues it's quite feasible that Tesla can breakeven with around 8,500 cars next year.

Conclusion, I'm not concerned about the current cash rumors and I can see why Tesla might raise capital (especially if it's cheap enough) , but why they shouldn't need to raise capital. I find it pretty amazing that my private model shows a breakeven of 8,500 cars and I remember Elon saying somewhere a long time ago that Tesla could breakeven with 8,000 cars per year.

Good numbers … but the other issue dragging down the stock now is the production ramp/run rate which is not moving at rocket speed right now!

 

[Norbert]

Good numbers … but the other issue dragging down the stock now is the production ramp/run rate which is not moving at rocket speed right now!

No, I think that's the issue Nigel is talking about. We are in the phase that GeorgeB has blogged about 11 days ago, and any changes since then that we might know about, and discussing here, are very temporary. There is no other new information other than anxiety which some people think they need to express over and over.

 

[Johan]

There's been some comments in various threads and concerns about Elon saying that Tesla must become cash flow positive soon; well Elon was just stating a known fact but I though it worth looking (very rough and unscientific!) at some numbers to see what really needs to happen.....
[...]

I agree with your calculations, I posted a crude spreadsheet here a few weeks back with basically similar conclusions. Just think how positive the cash flow will be when the pump put 20k cars in 2013, or even 30k (as implied that they could do with not that much more effort in the quarterly call). I think that the sooner TSLA becomes profitable and the more profitable it gets, they will move faster toward the Gen III vehicle, which is smart because they want to keep, or even try to advance, the headstart that they have on almost all of the competition.