TSLA Market Action: 2018 Investor Roundtable

[beachbum77]

Sounds stupid to me, given that they only delivered 1/4 of the pre-existing reservations, and the order book is increasing.

Anecdote: had by booster shot of Shingles vaccine today, and one nurse asked if I was doing anything interesting for the rest of the day. I mentioned I was getting a new car. The two of them went gaga that I am (hopefully, still won't believe it until it arrives) getting our M3 in a couple of hours.

"given that they only delivered 1/4 of the pre-existing reservations, and the order book is increasing."

Then please do NOT go look at recent updates to Troy's spreadsheet. It will ruin your day.

Congrats on your upcoming delivery! Fingers crossed all goes well.

 

[Nocturnal]

Completely agree!

I actually think the true $35,000 Model 3 configuration should be built and exported from the new Chinese plant once it is finished and not built in Fremont ever. I think there is enough demand for an optioned SR to last until the Chinese factory is operational. That will keep margins up until then. That is just how I would move the chess pieces on the global board.

Your take on the global LR percentage is spot on too. Here in the U.S. the SR base model will be a popular commuter car. But globally, there are cheaper commuter car EV options. Global buyers are going to pick a Model 3 for the speed and acceleration and creature comforts. My friends in Europe buy lifestyle cars, not basic transportation.

Definitely. The base 3 will never compete with a 15k bare bones vehicle with 80 mile range. That isn't Tesla's market anymore than it is Toyota's market (in the US at least).

 

[ItsNotAboutTheMoney]

Either I'm misreading or misunderstanding, or they actually reduced the effect of the previous mandate? It says that the previous mandate was reduction of 30% by 2021, now it is 20% by 2025?

This is on top of the 2021 mandate.
The 11/13/2017 article linked at the top of that link explains the previous 2030 target.
CO2 reduction targets 'overly aggressive', says European car industry | Autocar

The following article makes it clearer that this vote is for standards beyond 2021:
EU lawmakers back tougher CO2 emissions reductions

The parliament’s environment committee endorsed rules that would lower carbon dioxide emissions by 20 percent in 2025 and 45 percent by 2030, compared to a fleet average of 95 g/km by 2021. This is tougher than the European Commission's call for reductions of 15 percent and 30 percent. The full parliament is expected to vote on the rules next month.

My bold.

2021 is 95g/km
EU Parliament target is
2025: 20% relative reduction i.e 95 x (100%-20%) = 76g/km
2030: 40% relative reduction i.e 95 x (100%-40%) = 57g/km
Plus additional targets that:
2025: >=20% of sales must be vehicles below 50g/km.
2030: >=35% of sales must be vehicles below 50g/km.

 

[Remus]

LOL... Yes, we know the rest of the world is out there. But we also know that U.S. sales represent half of all Tesla revenue.

Karen, I still expect to see Tesla open configurations for Europe this month (including Iceland). It makes a lot more sense to keep pumping out LR AWD and P models to other markets before introducing the SR version here in the U.S. What none of us have the visibility to see is how much of the remaining demand is waiting for either the LR or SR. Only Tesla has that data and no one has leaked it...yet. Troy last reported he does not want to include the SR waiters on his spreadsheet until the configuration can be ordered.

I still believe once the SR is introduced it will require the ordering of other options as well. The true $35,000 model is still a long time away IMHO.

Again thanks for providing the number here. Can we continue using the 'half their revenue' estimate and conclude the demand of high margin cars would be similar to north america?

 

[Fact Checking]

... until they are sold in 3-6 months, when they become income. Just like the other old inventory that gets regularly sold off.

BTW., to add to @beachbum77's description of the life cycle of the inventory, another mechanism is that beyond periodic trimming of inventory levels they also do regular write-downs of inventory, for cars that they don't deem marketable anymore and where they are lowering the prices.

That's about 1.5% of the finished goods inventory in every quarter, for in Q2 it was ~$27.5m. These write-off costs are flowing back into cost of automotive sales IIRC.

 

[oneday]

Landing should be on time.
Martian High Command

Are they going to ask, “Take me to your leader?”

In this case, I’m afraid the only conversation of substance they can have is about how great he is.

 

[dondy]

Yeah, I guess there is still a battery supply problem, but it probably won't always be that way. Kind of wonder how things are going with Panasonic? The long-term equation is basically do they want to go higher volume lower margin like Amazon, or lower volume higher margin like a traditional bookstore. Eventually they'll end up crushing most of the competition that doesn't adapt, and then start bumping margins back up once they are the 800lb gorilla.

Panasonic wants to become Mistubishi Electric. Stable contracts, stable money flow, stable future. Shortly Stability.

 

[cheshire cat]

This is on top of the 2021 mandate.
The 11/13/2017 article linked at the top of that link explains the previous 2030 target.
CO2 reduction targets 'overly aggressive', says European car industry | Autocar

The following article makes it clearer that this vote is for standards beyond 2021:
EU lawmakers back tougher CO2 emissions reductions



My bold.

2021 is 95g/km
EU Parliament target is
2025: 20% relative reduction i.e 95 x (100%-20%) = 76g/km
2030: 40% relative reduction i.e 95 x (100%-40%) = 57g/km
Plus additional targets that:
2025: >=20% of sales must be vehicles below 50g/km.
2030: >=35% of sales must be vehicles below 50g/km.

Dieselgate genesis----part deux-----wonder how this one works out

 

[ggr]

This is on top of the 2021 mandate.
The 11/13/2017 article linked at the top of that link explains the previous 2030 target.
CO2 reduction targets 'overly aggressive', says European car industry | Autocar

The following article makes it clearer that this vote is for standards beyond 2021:
EU lawmakers back tougher CO2 emissions reductions



My bold.

2021 is 95g/km
EU Parliament target is
2025: 20% relative reduction i.e 95 x (100%-20%) = 76g/km
2030: 40% relative reduction i.e 95 x (100%-40%) = 57g/km
Plus additional targets that:
2025: >=20% of sales must be vehicles below 50g/km.
2030: >=35% of sales must be vehicles below 50g/km.

Greatly appreciate the clarification, thanks! This is great news for all EV manufacturers.

 

[CorneliusXX]

4k per week is full capacity now?

I don't think that is what was implied. More that Tesla can't make enough P3Ds for the world from their one factory if they can't even satisfy NA demand

 

[ggies07]

Some of you that are going on and on about the SR 35k never getting here sound like bean counters from other companies and are forgetting the mission. If Elon/Tesla really want to speed up the adoption of EVs, they won't care if a batch of SR models are bare bones as long as the company has positive cash flow. The dream is not to make a certain percentage per car, that's not in the master plan, it's to get the EVs in the hands of the public. It's really weird that people on here have flipped ever since the company has been locked in on a F-U to the markets.

 

[beachbum77]

Again thanks for providing the number here. Can we continue using the 'half their revenue' estimate and conclude the demand of high margin cars would be similar to north america?

This quarter with what is happening in China may cause a shift. But if you look at Note 15 in the latest 10-Q you will see the following breakdown of revenues by geographic location.
U.S. 56%
China 13%
Norway 5%
Others 26%

I think the demand for higher margin (more expensive) Tesla cars will fall outside the U.S. as Karen mentioned in an earlier post. For true EV purists the U.S. does not have nearly as many vehicle options. The Renault ZOE and a host of Chinese models come to mind.

Here in the U.S. a car with a range of 60-80 miles is practically worthless. My city, Jacksonville is 35 miles from one side to the other. I can put 100 miles easily on my car in a day just running errands between offices. However, when I have traveled to Europe and rented a car for sightseeing I can go for a few days on 100 Km. The U.S. is a very different market compared to the rest of the world with maybe Australia being the exception.

 

[EVNow]

The other day I was dropping off my kid at her pre-school. One of the teachers asked me how I like my 3. She said they just ordered 3 and was giddy about it.

In terms of order book, the current list doesn't matter much. After 2 years, it is not probably firm anyway. Good thing is Tesla has a ton of things they can still do to increase demand if it was to fall below the production.

We all had our doubts about even Model S & X demand after the initial order book was exhausted. But we have seen years of increased sales with no advertising etc. This should be kept in mind when we talk about demand.

The other thing is the political environment for EVs can only get better from now on. Not just EVs, but solar as well.

I have to wonder whether the shorts & longs have a fundamental difference of opinion about the future of EVs - which is tied to whether one thinks climate change is real and needs to be addressed or not. If someone is a climate change denier, why would the person think EVs have a good future ?

 

[Lessmog]

What do you guys think of this video?


https://www.youtube.com/watch?v=5It3nHaOhZA&index=2&list=WL

Always used to love Rick Astley ... but then gave him up.

 

[EV forever]

Just opened Google app on my phone and here is the screenshot of the headline

So has he actually resigned? All articles below are just bunch of rehash. I still don’t understand how the new deal was worse than old deal. We never knew terms of the first deal, so how exactly was the second deal ‘worse’? So tired of this nonstop FUD

 

[uselesslogin]

There are 1 million shares available for shorting at IB although the fee rate is not down much yet.

Is it possible IB has more shares than others? Could that be from retail longs buying on margin? Or could it be shorts covering?
I've actually kept an automated daily pull of available shares and the fee rate going back to February 2015 at IB. There are almost never this many shares available. The exception was a week or so at the end of Q3 2017 and for all of November and December. We could be seeing it for similar reasons this time around. People buying on margin in hopes of a big move and/or shorts covering in fear of the same thing. It didn't turn out so well Q3/4 but I think the evidence points to Tesla actually pulling through this time.

But, alas, that also means the shorts have more ammo. I just want to fast-forward to earnings now...

 

[WarpedOne]

They will surely get tired of losing money at some point no?

Majority of TSLA shorts are not here to profit from the TSLA SP down, they are here preventing it going up.
They prevented 5 GF being operational in 2018 already. They prevented 1M model 3 production in 2018 already.
Tesla shorts are not losing money, they are investing it into slowing Tesla.

You think Tesla is held back by lack of knowledge or lack of (giga) funds?
Try to imagine where Tesla would be today without massive attacks at the SP and all the smear campaign for the last 5 years.

You think they would still only had one factory to assemble cars and one factory to build cells if there were no shorting and smearing?
Think again.

Also forget about SP rise after q3 earnings, shorts do not lack funding. They will attack even harder.
The only way to stop this massive hold-down is to remove the shares available for shorting.
Though this wont happen as long as there is enough of stupid longs willing to take a miserable interest as their profit.

Buyback and kick them out.

 

[AWDtsla]

There are 1 million shares available for shorting at IB although the fee rate is not down much yet.

Is it possible IB has more shares than others? Could that be from retail longs buying on margin? Or could it be shorts covering?
I've actually kept an automated daily pull of available shares and the fee rate going back to February 2015 at IB. There are almost never this many shares available. The exception was a week or so at the end of Q3 2017 and for all of November and December. We could be seeing it for similar reasons this time around. People buying on margin in hopes of a big move and/or shorts covering in fear of the same thing. It didn't turn out so well Q3/4 but I think the evidence points to Tesla actually pulling through this time.

But, alas, that also means the shorts have more ammo. I just want to fast-forward to earnings now...

Two pieces of nytimes fud in one day? Yeah I assume they're covering.

Wish I could short this. Think we’ll see $270 by Friday unless Elon releases earnings early or Saudi/China announce stake.

Go ahead, you guys still didn't trigger my buy orders. Chicken.

 

[CuriousSunbird]

4k per week is full capacity now?

Not meaning to imply anything on capacity or use thereof. Tesla knows what they hope or expect their factory to be doing over the next few months and based on that they are setting SR delivery estimates at (lat time I checked) 3-6 months.

 

[shootformoon]

The other day I was dropping off my kid at her pre-school. One of the teachers asked me how I like my 3. She said they just ordered 3 and was giddy about it.

In terms of order book, the current list doesn't matter much. After 2 years, it is not probably firm anyway. Good thing is Tesla has a ton of things they can still do to increase demand if it was to fall below the production.

We all had our doubts about even Model S & X demand after the initial order book was exhausted. But we have seen years of increased sales with no advertising etc. This should be kept in mind when we talk about demand.

The other thing is the political environment for EVs can only get better from now on. Not just EVs, but solar as well.

I have to wonder whether the shorts & longs have a fundamental difference of opinion about the future of EVs - which is tied to whether one thinks climate change is real and needs to be addressed or not. If someone is a climate change denier, why would the person think EVs have a good future ?

I never dream we can convert these deniers' mind, but the reality will change their behavior. One day, when 90%+ of the cars are EV, most of the gas stations will be gone. They will have nowhere to add gas and will have severe range anxiety. Then they will have to buy an EV. It does not matter how they think.