TSLA Market Action: 2018 Investor Roundtable

[jhm]

I like Kimbal's focus on what's important. They tried to confuse him, but he remained focused
Are we focused?

FOCUS ON DELIVERIES. THERE IS NOTHING BUT DELIVERIES.
FOCUS ON DELIVERIES. THERE IS NOTHING BUT DELIVERIES.

FOCUS ON DELIVERIES. THERE IS NOTHING BUT DELIVERIES.
FOCUS ON DELIVERIES. THERE IS NOTHING BUT DELIVERIES.
FOCUS ON DELIVERIES. THERE IS NOTHING BUT DELIVERIES.​

 

[Starno]

I'm wondering if Tesla is now virtually positive this quarter.. what do you guys think ?

 

[KarenRei]

It sure is ironic that shorts are all up in arms over a tweet from Elon that made them, on the whole, billions of dollars.

And how overwhelmingly the longs don't want this investigation. Ironic, given that the SEC's job is to protect shareholders.

 

[SO16]

It sure is ironic that shorts are all up in arms over a tweet from Elon that made them, on the whole, billions of dollars.

The shorts want to make more and see this as an opportunity to create more uncertainty in the company. Chanos must be as giddy as a schoolgirl at the moment.

 

[X Fan]

Haven't read the last 10 pages yet - was out boozing yesterday evening, so only saw the cliff-drop and read a few headlines.

However, as I understand it, there is no criminal investigation, nobody has been subpoenaed and Tesla gave some info voluntarily to what is probably a relatively normal process. And yet the SP closes 20 points lower and remains there in pre-market?

Earlier today, CNBC had a positive headline from UBS, since then has been replaced with dear old Bobby Lutz - you know the FUD's on full-throttle when the trundle him out! Screen-grabs attached, no links...

View attachment 336209View attachment 336210

"since then has been replaced with dear old Bobby Lutz"

And a headline in Google News....it sure seems Google posts are almost always "bad" news re: Tesla.

 

[Artful Dodger]

I'm wondering if Tesla is now virtually positive this quarter.. what do you guys think ?

This has already happened as of the end of Q2. So with increased production and deliveries, Q3 will be profitable. Here's the statement from Tesla CFO Deepak Ahuja:

Tesla (TSLA) Q2 2018 Earnings Conference Call Transcript - The Motley Fool

Deepak Ahuja -- Chief Financial Officer

Elon, you described it extremely well. So just to sort of summarize, this was a major milestone for us in Q2 that the gross margin in Model 3 turned slightly positive and we feel really good about the path ahead.​

 

[KarenRei]

This has already happened as of the end of Q2. So with increased production and deliveries, Q3 will be profitable. Here's the statement from Tesla CFO Deepak Ahuja:

Tesla (TSLA) Q2 2018 Earnings Conference Call Transcript - The Motley Fool

Deepak Ahuja -- Chief Financial Officer

Elon, you described it extremely well. So just to sort of summarize, this was a major milestone for us in Q2 that the gross margin in Model 3 turned slightly positive and we feel really good about the path ahead.​

Starno is talking about a profitable quarter, not about a positive gross margin, like Deepak Ahuja was saying.

 

[Tslynk67]

Great monologue and sum-up of Tesla’s advantage:

 

[gora321]

Europe trading-next opportunity:

 

[mongo]

Starno is talking about a profitable quarter, not about a positive gross margin, like Deepak Ahuja was saying.

Right, so is @Artful Dodger. A positive quarter comes from positive gross margin multiplied by lots of cars:
Underlining added:

this was a major milestone for us in Q2 that the gross margin in Model 3 turned slightly positive

So with increased production and deliveries, Q3 will be profitable.

 

[traxila]

NYT lead business story.

WSJ second story on sidebar.

Snooze.

Gonna buy some shares today.

 

[Reciprocity]

While you have some fair points, in 2017 North America has made up 53% of Tesla S/X sales. Not 25%. I don't think we have regional numbers of Model 3 reservations to be able to make such a claim.

This is True, but I believe FC is referring to addressable market. Teslas numbers are so lumpy and they adjust based on many factors including tax incentives being phased out or ending like Canada this year and HK a year or two ago.

Important to also note, its almost illegal to sell a Tesla in many states in the US. People have to go through a lot of hoops to get a Tesla. Wisc and MI are delivered from Chicago for example. Texas, you have to pay for the car before it gets delivered. So even in Tesla primary market, there are barriers that could be removed over the next few years.

On demand, something people need to understand. The average Lux Sedan customer keeps their car for 6+ years. I think what has been seen as flat demand for S is actually many S lease returns going with the Model X. What you will start to see escalate is that 6 year cycle. The traditional buyer will be in the market for another Tesla in growing numbers starting next year. Some will go to X some will get model 3s, but my guess is that those who bought the minimal low margin S, will opt for a higher margin 3. This will actually be positive cannibalization replacing <15% margin cars with >30% margin cars. S will seem to be flat, but in fact, they will be selling more S100Ds and less S75Ds and more Xs will be sold then S. ASPs will grow and margins will trend up, giving pricing power if Tesla needs to offset lost tax incentives.

For a moment, think of what will happen when EQC and eTron have tax breaks paid for by US tax payers for cars made in Hungry or elsewhere and Teslas and GMs made in the US have no such benefit. I think this might be one of the first times in history that the MAGA crowd will agree with the Dems. What say all of you? I am all for eliminating all tax incentives for Gas and EV and Solar and Coal. But I think there is a good chance that this thing gets extended in some form, maybe a set phase out date for all starting in 2020.

 

[Fact Checking]

While you have some fair points, in 2017 North America has made up 53% of Tesla S/X sales. Not 25%. I don't think we have regional numbers of Model 3 reservations to be able to make such a claim.

Yeah, thanks for the correction, I was thinking more in terms of expected global demand for the Model 3, which is only sold in US+CA right now. The base price is about half of that of an S/X and addressable markets strongly depend on income distribution and GDP per capita.

If we go by the following annual income distribution of the U.K., overlaid with new car purchase price distribution (2013 data):

Then we can see a remarkably consistent relationship: new car prices roughly track the annual income of the person, with a lower cap at around $10k-$15k USD. (Below which new cars really start to suck.)

2013 UK per capita GDP was around $42k, which corresponds to an about $30k new car price.

From this histogram we can estimate the expansion of Model 3 addressable market if the Average Sales Price drops from $104k Model S/X to the ~$57k of the Model 3: it's a massive expansion of at least a factor of 10. Beyond the lower half of advanced economies this is going to push the Model 3 to emerging markets as well that have lower per capita GDP levels, and is going to shift a lot of demand to non-US markets.

Note how the reduction of the entry price to $35k will put the Model 3 right in the middle of the histogram: its pricing is going to be accessible to about half of the population in an economy like the U.K.

If we also weigh it by revenue (a $60k car sale is equivalent to three $20k car sales) then it gets even better for Tesla. I am not surprised at all that they cannot seem to be able to run out of demand in the U.S. alone.

If we also weight the histogram by margins then it gets even better: with the Model 3 Tesla will have access to over 75% of all the gross margin available in the automotive market, avoiding the cut-throat low margin high-volume lower segment entirely.

The only missing piece is the Model Y: there are consumers who won't buy sedans, and by adding the Y Tesla rounds up their offerings.

But even with the Model 3 alone the addressable market is huge, and Tesla possibly won't be able to make enough cars for the next 5 years.

 

[Drax7]

This whole investigation should amount to very little
In my non legal view.
Because there was No intent to defraud. That is the most
Logical explanation.
However Was surprised the investigation was even refered
to the DOJ. Which in turn may indicate how weak the SEC
Case could be.
Just pure speculation on my part.

 

[HG Wells]

FACT CHECKING

Is that just those with incomes. IE Where are all the children ? Should see a much larger 0 number.

Household income would be a better group to compare.

 

[Matias]

All your base are belong to us - Wikipedia

All Our Patent Are Belong To You

 

[Fact Checking]

Yusaku Maezawa 前澤友作 on Twitter

Shortsville Times: Japanese billionaire and SpaceX Moon astronaut Yusaku Maezawa inspects BFR, finds panel gaps!

Also, rocket is way too small and is built in a tent.

 

[keydiver]

One thing that surprises me is that very few find it troubling that the 6000 per week guided number is no where near the reality.

6,000 Model 3's per week was the production target for the end of August, not every week for the entire quarter. And, as we have discussed MANY times, a burst rate target is just that, a burst rate target. The guidance for the entire quarter was more like 4,000/week.

 

[avoigt]

The shorts want to make more and see this as an opportunity to create more uncertainty in the company. Chanos must be as giddy as a schoolgirl at the moment.

The entire story has Chanos hand writing all over it. If you read what he did in the past and his ties to Bloomberg I would not be surprised if he was the one with the large sell orders 2 minutes before the story has been release from Bloomberg.

It worked for him before and people tend to repeat what worked before.

That they manage to construct a 9.8% retreat avoiding a 10% makes it even more suspicious. That enables them to continue their game today.

Today morning was another pre market dip that looks fishy as well but SP does look like it recovers now. Expect that shorts try to ride the story today once more unless the last uncertain long realizes there is nothing behind the story.

 

[Webeevdrivers]

6,000 Model 3's per week was the production target for the end of August, not every week for the entire quarter. And, as we have discussed MANY times, a burst rate target is just that, a burst rate target. The guidance for the entire quarter was more like 4,000/week.

Did not know that. Was that clearly written somewhere? If so it needs to be publicly repeated as I know others are under the same impression I was.