Tesla is not just a consumer, it is a colaborator. They are doing R&D in battery chemistry and defining the specs. This is a symbiotic relation, else why would panasonic commit to being housed in GF if they did not see an advantage from their perspective?
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Tesla is not just a consumer, it is a colaborator. They are doing R&D in battery chemistry and defining the specs. This is a symbiotic relation, else why would panasonic commit to being housed in GF if they did not see an advantage from their perspective?
"Of course I still love you", we just have "A Shortfall of Gravitas"I really wish people on this board stop being more optimistic than Musk himself, continuing to create expectations that Tesla can't leave up to.
Do you remember once Tesla doing "oh, by the way" when discussing financial results? I've listened to the last 12-13 CCs, don't remember it.
Tesla will have that "oh, by the way" for product reveals, but conference call isn't the place to expect them.
I hope I'm wrong.
Now, please, carry on with the optimism...
I bet the advertising on that page will be very interesting.
I thought boats and planes held their values better than cars.
One hit wonder it seems. Will be interesting to see where things are at in another 15 years.
If he’s taking a short term short position based on fallout from Q2 results, then OK, but that’s still risky. We pretty much know top line revenue from the delivery numbers. So if the Q2 results are as bad as we all expect, what will share price do? Sounds like gambling to me.
If Eisman is taking a long term short position, well, he’s just stupid. Didn’t anyone learn anything from Amazon? Interestingly, from re-reading sections of The Big Short, he was brought up as a traditional value equity analyst. And he has a predisposition to finding short positions. He gets off on calling people idiots. His reports were very acerbic, like the one where he said of a financial company “xxx is perfectly hedged, they lose money in all interest rate scenarios” (he was right, they went bankrupt shortly thereafter).
Anyways, we all know that if you look at Tesla’s financials, they suck. Tesla is undercapitalized now, and to realize their dreams they will have to raise buckets more money. The thing Eisman forgets (even as he admits it) is that Elon, and Deepak, aren’t idiots. If Tesla’s undercapitalization and future cash needs are obvious to me, then you know Elon has a plan and several contingency plans to meet the challenge. (Spoiler alert, he’s running off internal cash until huge Model 3 sales and company profitability are shown in the Q4 report In early February, then he’ll raise money, and he probably will have a large corporate investor for China factory).
The fundamental error with fundamental company analysis is to not take into account future growth potential and the company’s ability to meet it. That’s why so called growth stocks lose tons of money quarter after quarter. The most important single metric, IMHO, for growth stocks is top line revenue. Are we in the 50-100% YoY territory? People who have never run a company don’t realize just how inefficient a company is when it doubles in size every year. It takes a lot of resources to find, hire, and train all these new employees, and they are a drag on the company’s expenses for the first year or so (more if they are R&D engineers), not to mention, in Tesla’s case, all the capital expenses that are bought up front, yet only make money for the company on a cash basis in 10 years or whatever.
Btw, five years after Amazon went public, analysts were dumping on them, of course. You know what one of the knocks against them was? They were bad at distribution. I kid you not. The irony is that the analysts were probably right back then. Amazon was growing so quickly that they were barely able to ship out products in time. They were scrambling, spending much more money doing distribution than they would have liked. But given time, Amazon eventually got ahead of their rapid growth, and in that time, they worked really hard at fixing distribution, which, as an online retailer, HAD to be a core compentency if they were to be dominant. Do you think Bezos didn’t know Amazon had to get world class good at distribution even as analysts said they sucked at it?
The parallel to Tesla is too easy. What does everyone now say Tesla is bad at? Manufacturing. Do you know how hard it is to ramp up manufacturing when you’re growing 70% YoY? It’s really hard. Eventually they’ll get ahead of their demand, and meanwhile they are working really hard to make manufacturing much more efficient because, just like Amazon, they have no choice, the demand is so big, and also because Elon isn’t an idiot. I know he isn’t because starting several years ago, he stated that Tesla will be world class in manufacturing. I remember when he first said that in a conference call. You could almost hear the disbelief. But is obvious that one of the core competencies of Tesla has to be manufacturing. And so, eventually, they will be world class at it because that’s a strategic goal.
I certainly don't disagree, on the energy side Tesla is also breaking new ground in the sheer volume of capacity it intends to produce.
I only addressed the vehicle side, as that was the comparison made (to GM's production).
They are leading on multiple fronts.
A source other than "because you said so" would help lend some credence to your assertions, given statements from Panasonic that would seem to indicate otherwise:
Panasonic willing to invest additionally in Gigafactory... a "vote of confidence"
Panasonic indicates possible partnering again on China gigafactory
dc_h
Active Member
For a company that was making 2500 cars in 2012 5000 a week is a milestone. It doesn’t make them GM and thank god. 5000 is magic because that is where they are cash flow positive for the model 3. Every car after 5000 could be making $20,000 or more per vehicle, which is fu money for Tesla. At 7000 a week and 20k per car that’s 40 million per week and 500 million in earnings a quarter. At that rate they can pay their debt. If they can pay their debt, ironically, they can borrow. Which would allow them to speed up growth. I personally don’t see any competition in mass until 2022, so growing organically at 50% rather than with borrowing at 80% is a tough call. That question really depends on the terms and risks of economic downturns in 2019 and 2020. Tesla current debt with 30 billion in revenue will be very manageable in a downturn and let them pay off some of the less favorable securities.
Would be ironic for Tesla to be better prepared for a downturn because of the short attacks.
2virgule5
Member
That is complete speculation. Factual links to support this are welcome.
Sure:
NASDAQ | SEC Filing
Tesla owns the land and building and leases to Panasonic. Any other arrangement would be insane from Panasonic's perspective.
they’re talking about your claims that panasonic doesn’t want tesla as a partner. which is quite absurd since they are partners and panasonic has openly said they’d be willing to invest in future. you’re just being cute, but it’s not. don’t p!ss down our backs and tell us it’s raining.
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dc_h
Active Member
Good point. If they were talking to bankers they’d look at current numbers and show cash flow for July, which should be very good.
I’d guess most bankers, being conservative, would want to know the July data is sustainable.
I should note that I price in absolutely no value for "autonomy" in my Tesla estimates. Even if GM has the best autonomy, if they insist on putting it on gas cars, they'll have a huge disadvantage, and they are well behind on electric cars.
dc_h
Active Member
So Panasonic has tied most of their internal capex the last 5?years and made EV production their strategic focus so they could pick up Tesla’s plant in bankruptcy? That’s really smart. Dang, the car company would go bankrupt too though. Would Panasonic takebthat over also?
This is the most amazing long term plan I’ve ever heard of. Spend billions in a sure thing requiring years of planning knowing that Tesla will flame out and the bankruptcy will gonyour way and you’ll get it all. The odds are like a million to one this would work out, if you weren’t in a movie plot.
It's not just speculation, it's ridiculous. If Panasonic didn't want to have any responsibility for the factory, they could easily have just told Tesla "It's OK, we'll build our own factory in {Japan, Korea, China} and ship to you." And yet, instead, they invested over a billion dollars in Sparks. Not in the building itself, but in equipment and staffing.
And it was a fine company, but at the *start* of the dot com bubble, they were *already* dominant in routers, and routers were *already* a pretty mature market.
One could estimate their room for expansion, and I probably would have underestimated it, but even with their actual expansion levels, it still couldn't have justified the 100 x revenue multiple. Cisco gets nearly 20% margins, but priced at 100 times revenue, that's 500 times profits; one could not come up with a clear plan for them to multiply the size of their market by a factor of 50.
A long time back, I estimated the true value of eBay by estimating that it would take half of the world auction market, looking up the size and profit margins of that market. This turned out to be *correct* and that's more or less where eBay's price stabilized. Unfortunately, I didn't believe my own analysis and never made that investment. Since then I've made an effort to believe my own analysis when it makes sense.
Some of us have done the analysis on this elsewhere and have concluded that they're using existing Powerpack and solar panel production costs, but planning to sell the electricity "at cost" and not accounting for land/permitting expenses.
Not initially.
It looks like they're planning to break even, and they haven't accounted for some overhead costs.
I guess I'm missing your logic here. We (presumably) agree that EVs are better than ICEs. But companies like Cadillac and Volvo have been doing research in autonomy in ICE cars. What do you think it is about EVs that make them better for autonomy than ICEs? Other than just being generically better, that is.
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