TSLA Market Action: 2018 Investor Roundtable

[Fact Checking]

Next step: Show the data of how much money that saves tesla compared to paying peak prices for electricity, and project as proof of concept onto model of production energy consumption data.

Yeah, so while this is true, I think they are secondary cost factors. The biggest cost advantages the Semi has over traditional rigs:

• much cheaper fuel,
• constantly dropping, non-fluctuating fuel prices,
• much lower maintenance costs. (Especially in Europe where truck operators are not allowed to turn off emissions control and roll coal.)

All of these are very big deal factors to trucking businesses.

Just a quick estimate: a contemporary Volvo rig has a reported mpg of 5-9. With 50,000 miles per year that's 5,500-10,000 gallons of fuel, which at $3/gallon is $16.5k-$30k/year cost. In the EU it's twice as much and an additional 20-30% higher if OPEC countries need more oil revenue.

Whatever the electricity costs of a Tesla Semi are going to be, they are still on a ~10x lower baseline than diesel costs. (Assuming my napkin didn't mess up the math.)

So it would make sense for Tesla to maximize availability of the Semi and to build out charging infrastructure first.

(Only tangentially related to market action: next week might start pricing in the latest Semi news.)

 

[EinSV]

@TrendTrader007, lengthy article but this is the bit I think you want:

“By Wednesday evening, they had a presentation for Mr. Musk, proposing a roster of deep-pocketed investors, including Volkswagen and Silver Lake itself, that had agreed to contribute as much as $30 billion, people familiar with the matter said.

They weren’t the kind of investors Mr. Musk had in mind. He was deeply suspicious of rival car companies, believing they wanted to piggyback on what he called the “Tesla halo.” He also was lamenting a loss of small investors, who had been his most vocal champions.

Finally, the deal team advised him, the money would likely come with strings attached: The new investors would want a lot of say in the company, and each would likely want to hammer out terms of their own.

The following day, Thursday, the board meeting was convened at the Tesla factory conference room. Mr. Musk had told some board members earlier in the day that he had doubts about the proposal, according to people familiar with the matter.

The advisers said they were confident it could be done, and then left.

Then Mr. Musk spoke. Based on the latest information I have, he said, I’m withdrawing the proposal.

“Woohoo,” one board member let out.”

 

[Artful Dodger]

With average sales price of over $100k that's a trillion dollar market

That's makes it a $100 Billion market, not a Trillion.

 

[TrendTrader007]

@TrendTrader007, lengthy article but this is the bit I think you want:

“By Wednesday evening, they had a presentation for Mr. Musk, proposing a roster of deep-pocketed investors, including Volkswagen and Silver Lake itself, that had agreed to contribute as much as $30 billion, people familiar with the matter said.

They weren’t the kind of investors Mr. Musk had in mind. He was deeply suspicious of rival car companies, believing they wanted to piggyback on what he called the “Tesla halo.” He also was lamenting a loss of small investors, who had been his most vocal champions.

Finally, the deal team advised him, the money would likely come with strings attached: The new investors would want a lot of say in the company, and each would likely want to hammer out terms of their own.

The following day, Thursday, the board meeting was convened at the Tesla factory conference room. Mr. Musk had told some board members earlier in the day that he had doubts about the proposal, according to people familiar with the matter.

The advisers said they were confident it could be done, and then left.

Then Mr. Musk spoke. Based on the latest information I have, he said, I’m withdrawing the proposal.

“Woohoo,” one board member let out.”

Thanks bud! Appreciate it

 

[Thekiwi]

Anyone has access to WSJ
Article out this evening confirming Elon had $30B funding secured including VW
Thanks
Twitter

I pasted the link into google search and it popped up a result that got around the paywall.

 

[Krugerrand]

I think you are word-smithing. When I say unsold it is to differentiate from in-transit.

That’s as dishonest as it comes, buddy.

I know who’s word-smithing. Someone without an anti-Tesla agenda simply says cars in-transit if they mean cars in-transit. No where in my thesaurus does it say in-transit is a synonym for unsold.

FYI, pick a new charade. You are not good at this ‘I’m just a business numbers, swing trader guy’ one.

 

[Foghat]

Yeah, so while this is true, I think they are secondary cost factors. The biggest cost advantages the Semi has over traditional rigs:

• much cheaper fuel,
• constantly dropping, non-fluctuating fuel prices,
• much lower maintenance costs. (Especially in Europe where truck operators are not allowed to turn off emissions control and roll coal.)

All of these are very big deal factors to trucking businesses.

Just a quick estimate: a contemporary Volvo rig has a reported mpg of 5-9. With 50,000 miles per year that's 5,500-10,000 gallons of fuel, which at $3/gallon is $16.5k-$30k/year cost. In the EU it's twice as much and an additional 20-30% higher if OPEC countries need more oil revenue.

Whatever the electricity costs of a Tesla Semi are going to be, they are still on a ~10x lower baseline than diesel costs. (Assuming my napkin didn't mess up the math.)

So it would make sense for Tesla to maximize availability of the Semi and to build out charging infrastructure first.

(Only tangentially related to market action: next week might start pricing in the latest Semi news.)

What is the market for rail that platooning cuts into?

Instead of needing select rail sites, they can just drive the platoons directly to manufacturing sites anywhere nationwide, correct?

 

[TrendTrader007]

So based on what I’m reading on $TWTR and here about the WSJ article I have a super hard time convincing myself that the SP is going to drop tomorrow
Unless I’m missing something $TSLA should soar
Can’t wait for premarket

 

[Electroman]

According to article Elon apparently could have easily done the private deal if he wanted to since he had the initial financial backing lined up

That $30B funding he had backing would have been sufficient iff instituational investors and retail investors had a path to stay back in private (atleast the majority would have stayed).

Now given that there is no clear easy path for them to convert their public to private shares I think that $30B would not have been enough. So in the hand he was perhaps short on funding.

Just my speculation... and unlike Donn Bailey I have been known to have been wrong more often than not.

 

[Krugerrand]

yes, hydrogen is difficult to make viable, financially impossible if its renewable.
but
600 nonstop miles is definitely not long distance. any any distance which is nonstop with a single driver is not long distance. whats permitted varies between jurisdictions, but 600miles is not long distance.

It is if you’ve had enough coffee.

 

[Fact Checking]

“By Wednesday evening, they had a presentation for Mr. Musk, proposing a roster of deep-pocketed investors, including Volkswagen and Silver Lake itself, that had agreed to contribute as much as $30 billion, people familiar with the matter said.

BTW., a $30 billion max budget is 125% of the $420 initial offer which was priced at $24 billion: i.e. Elon possibly had a buyout leeway of $420-$525 per share.

Quite nice valuation those investors are putting on Tesla.

(I also suspect Volkswagen is also totally, very, maximally unhappy about this leak of their involvement: it is completely discrediting the "Tesla is worth only $185 or lower" narrative of the shorts.)

 

[dmunjal]

Anyone has access to WSJ
Article out this evening confirming Elon had $30B funding secured including VW
Thanks

Twitter

Mod: copyrighted content deleted. DO NOT DO THIS! --ggr

 

[RobStark]

try that with a Toyota Mirai (which costs $57,500).

In Japan Mirai cost 7.25M Yen or $65k before incentives of 2M Yen in National Japanese Government subsidies and 1M Yen in Tokyo municipal subsidies. That is total of $27k in subsidies for a Tokyo resident.

My guess is it cost Toyota ~$110k to make a Mirai.

 

[Fact Checking]

So based on what I’m reading on $TWTR and here about the WSJ article I have a super hard time convincing myself that the SP is going to drop tomorrow

So in theory short interest dropped from peak 40 million shares in May to 33 million: 7 million shares of dilution they could still create and depress the share price.

Their problem: there's a documented buying power of 57 million Tesla shares at $420, by big investors who saw right through peak FUD.

If just a fraction of those investors start buying in the open market at the current deeply discounted $320 price levels then the shorts are screwed and their dry powder is largely irrelevant.

Another problem the shorts have: the 57 million shares forced sale at $420 got removed - now shorts have to compete with all the buyers to cover their 33 million shares short position. I.e. unlimited upper price which their brokers will be happy to pay should shorts run out of margin.

And only 5 weeks left until Q3 delivery letter and 9 weeks until Q3 quarterly statement.

Tick-tock.

 

[Fact Checking]

Then Mr. Musk spoke. Based on the latest information I have, he said, I’m withdrawing the proposal.

“Woohoo,” one board member let out.

Would have loved to be a fly on the wall on that meeting.

 

[ZenMan]

Anyone has access to WSJ
Article out this evening confirming Elon had $30B funding secured including VW
Thanks
Twitter

If you turn on your private messaging or send me an email I'll send you the entire WSJ article text.

 

[TrendTrader007]

If you turn on your private messaging or send me an email I'll send you the entire WSJ article text.

Thanks but I got it as posted above
Appreciate it
Sounds like Frankfurt stock exchange should open in less than 5 hours so that’ll be an early indication for $TSLA

 

[RobStark]

The number of semis on the road is absurd. I can’t recall the figures, Googlable.

There is room for everybody.

5% of that market will support a very very successful business.

There isn't room for a technology that is significantly more expensive than the other. Everybody is competing for the same customers.

The only possible route for HFCEV trucks is if they can get solar electricity for almost free during the summer, use it to crack water, then use the resulting H2 throughout the year. That might support a small percentage of the Semi fleet to run on H2.

 

[Fact Checking]

That's makes it a $100 Billion market, not a Trillion.

Indeed, off by a decimal place, and too late to edit ... Mod: I’ve gone back and fixed it.

I made some other mistakes too, which understimated global sales:

• in China alone about 1.1 million heavy trucks are sold per year.
• U.S. appears to have a record year in 2018, with over 300k expected.
• EU seems to be at 250k
• I'd guesstimate the rest of the world to be another 1 million

Total is thus 3m, plus there's also the scaled down Semi they mentioned - mid size trucks with sales of another 5 million units?

So while not 1 trillion dollars - several hundred billion dollars certainly.

 

[defc0n]

Nice to know all these folks are willing to throw billions at a $420 private Tesla, but the lot of them apparently haven’t done so historically in the public market at a cheaper price (sans Saudi Arabia, recently). Investors make no damn sense to me sometimes. I guess they feel they’d have more control in a private scenario so willingly to pay higher for that compared to public.

In that sense, I’m not yet convinced these billions can be directly extrapolated into the public share price now?