TSLA Market Action: 2018 Investor Roundtable

[NikeWings]

Bob Lutz. Bob, freaking chapter 11, Lutz. Is that you? You know a bunch of people have been nominating you for new chairman. If that happens, you’ll right the ship I’m sure of it. That chapter 11 you pulled off at GM was brilliant, plus you got over on the taxpayers over $11billion dollars. 11 must be your favorite number.

I really wanted to go to sleep now but I'm laughing so hard it ain't going to happen.

 

[gora321]

Holding. I think they're in trouble. I mean it when I say I think bankruptcy is coming. I will admit that I covered because I want my potential losses capped to the modest position I have.

I think the lack of Q3 and Q4 guidance is troubling, and I think the lack of any mention of the waitlist is also significant. These are the two pillars of how they would avoid bankruptcy, and yet no mention at all.

Turning around a company of this size, with this cash burn, is very hard. The problem Elon faces is that the scale game includes scaling talent, and he has had huge brain drain this year.

Losing people like his VP of logistics in June was just brutal -- and it cost them. Elon called out "delivery hell," a problem that a talented VP of logistics would see coming. And losing his solid VP of global supply chain in September? Brutal.

These are the people you depend on for keeping a lean organization that produces great margins.

A lot of customers are having negative model 3 experiences. The repair backlog has been accumulating, with some customers waiting months for parts. They're one of the most complained about companies in Norway.

Which is why it's so unfortunate to look back and see him lose talent in the service and customer experience department...

The lethal blow is SolarCity. SolarCity has been a disaster. They just aren't producing enough cash. They've lost nearly all their market share. And they have big loans coming due.

Without SolarCity, so much of this debt wouldn't be here.

Which is why they should file for chapter 11, recapitalize the company, and go back to being the niche, luxury car manufacturer.

I just can't resist and buy more.

 

[oneday]

I really wanted to go to sleep now but I'm laughing so hard it ain't going to happen.

You ever see the Bill Maher skit: I don’t know it for a fact, I just know it’s true.

It’s like that.

Edit: trivia- it was on Bill Maher’s show where Bob Lutz made the comment, climate change is a crock of sugar.

 

[dqd88]

Someone tell me how the stock price can actually go higher? With all of the media fud? I just don’t see it. Every positive is turned negative. We’ll all be holding this bag.

Do you believe in the company long term? If so, then hold. Unless you're broke. In which case, sell what you need.
Don't panic. This is the best position the company has ever been in. It may take a while, but the street will eventually catch up.

 

[Yggdrasill]

I've always wondered about this. Never been to Europe. But I see the narrow streets and small cars (mini cooper, fiat). Yet there are big cars made there too (bentley, range, benz). Is there friction between these groups of owners? Do they all play nice in the sandbox?

I haven't observed much friction in the basis of vehicle size. The most amount of friction is where bus-lanes merge with regular lanes, and EV drivers who can drive in the bus lanes need to merge. Not all fossil car drivers play nice.

When it comes to vehicle size - I would keep in mind that Europe is a big place. It has a larger population than the US, and much more diversity when it comes to driving conditions. From the autobahn in Germany, to single lane country roads in the UK, to everything in between, and much more.

On the roads in Norway, the Teslas work just fine. Almost all roads accomodate semis and buses just fine, and a Tesla is of course much smaller. We do have some narrow roads, mostly in the mountains, where two meeting vehicles can't pass each other, and there are pockets where one vehicle has to stop to let the approaching vehicle pass. I've driven my Model X on such roads and I can't say it works much worse than any other vehicle. It's no different from a large van.

The biggest issue is parking. This is however a general issue, not limited specifically to Tesla. The minimum standard for the width of parking spaces hasn't changed since 1974. In the mean time, vehicles have gotten larger and larger. A VW Golf is around 20 cm / 8 inches wider now than 40 years ago. Older houses often have garages built for much smaller cars, and a large Tesla simply won't fit. This is the sort of issues we see in Norway.

 

[NikeWings]

You ever see the Bill Maher skit: I don’t know it for a fact, I just know it’s true.

It’s like that.

Exactly! Like an orange haired orangutan !

 

[Yggdrasill]

A lot of customers are having negative model 3 experiences. The repair backlog has been accumulating, with some customers waiting months for parts. They're one of the most complained about companies in Norway.

There have been issues with servicing. Definitely.

But it's also important to remember that Tesla drivers are ecstatic about their cars. As long as customer satisfaction is high, some growing pains in the service department doesn't matter.

 

[aubreymcfato]

In "Today's Sobering News", a report on ongoing climate talks in Incheon, South Korea:

Climate scientists are struggling to find the right words for very bad news

Even if the world converts it's entire fleet of ~1.1 billion actively operating automobiles to electric tomorrow, it might already be too late to stop significant climate change. We have something like a decade to reduce global carbon emissions by around 40% if our goal is merely to keep global warming below 1.5 C which is the threshold set to prevent island nations like Micronesia from drowning in the ocean.

Things are desperate enough that they are talking openly of attempting worldwide carbon sequestration, which no actual technology exists that can do that right now and even if we developed it, we would have to avoid the "Snowpiercer Scenario" where a misguided sequestration resulted in a new Ice Age instead.

Random ironic thought of the day: The movie Snowpiercer was directed by South Korean director Bong Joon-Ho, where these climate talks are currently ongoing.

This is why we need Tesla Energy to do its part and ramp-the-hell-up. I'm curious to see what we'll achieve with the 3 additional lines from Panasonic in GF1, and everyday I'm waiting for good news from GF2.
I'd be content to know that they are deploying all the solar cells they make, even for internal use (superchargers, solar roof, GF1 roof).
In the end, residential and commercial energy storage could enable a lot of renewable energy generation from third parties, which is a very attainable goal with the right prices.
I'd love to see Elon leading this in 2019, after a succesful Q4 in automotive. He focusing on TE, along JB, could really be game-changing, right now it seems they are in stealth mode.

PS: regarding carbon sequestration, it's not fancy but... plant trees. Now. We can come up with something better later, but this is good now and has multiple positive effects. Just switch from Google to Ecosia, for example.

 

[shlokavica22]

The result for me is that I no longer trust Elon to know what he's doing. I was sure he must have it nailed, but it turned out he was winging it. There are, of course, no first principles when it comes to legal matters; therefore his superpower fails him.

I actually suspect he knows what he is doing, but it doesn't necessary align with the interest of the short term longs (stock/options speculators).
His reaction, at the time the Saudi news break out, was immediate and I'm pretty convinced the idea of that action was to suppress the strong upward momentum. For what reasons? Hard to tell. Is that still relevant? I'm not 100% sure, therefore I cut significantly the short term options play.

 

[avoigt]

Lead with kindness and prove them wrong.

 

[RobStark]

I would keep in mind that Europe is a big place. It has a larger population than the US

European Union- Population 508M
North America(US,Mexico,Canada) - Population 486M

 

[Tslynk67]

I’m kind of an idiot and bought $100k worth of shares at $380 post-halt when he announced the go private deal. I still love Elon but there is no doubt that he misled people and destroyed trust. I’ve been following the stock for a year but the FUD is on another level now. I bought some January calls at the bottom and was actually at breakeven at $315. Wish I cashed out on Monday... I’m only 25 and am starting to see grey hairs lol.

In the years ahead, $380 will seem like a bargain. Have some patience.

 

[Artful Dodger]

There have been issues with servicing. Definitely.

Yes, one of the biggest bottlenecks has been autobody repair, where 3rd party garages are literally holding cars hostage for months to do a few hours of work, then charging 10s of thousands of dollars for basic collision repair.

As is Tesla's goto solution for most problems, they are solving this by going vertical (integraton that is): Tesla owned and operated body shops are already open in 10 U.S. cities. Here's the kind of early results they've been able to provide:

 

[Artful Dodger]

This is why we need Tesla Energy to do its part and ramp-the-hell-up. I'm curious to see what we'll achieve with the 3 additional lines from Panasonic in GF1

Tesla Energy is buying all its 2170 cells from Samsung now, since at least the South Australia/Tesla Big Battery project. Until Panasonic can ramp production at GF1, there is not enough capacity to supply the auto division, nevermind T.E.

They'll get there, it's not just $$ but a labor shortage in the Sparks/Reno region. More automation may help, but patience will be necessary.

Cheers!

 

[Teslie]

Lead with kindness and prove them wrong.

Stock price, bro...

Don‘t cry and be nice...

 

[MissAutobahn]

Next one
Stop selling new petrol and diesel-fuelled cars by 2030: Danish government

It is just a small country, but they are step by step surrounding Germany

 

[sweter]

... a common complaint about Tesla from Europe is those cars are too big for their road....

Well to be direct, thats simply not true. Tesla's are in size not larger than other cars here. Its also not an issue at all in small city streets here. Don't know here this view is coming from. Never heard that complaint from anybody driving the S and X in Europe.

Sorry but that not even a public road! Everybody claiming because of that picture Teslas cars are not usable in Europe are spread wrong information.

Yea, I'm one of those people I don't own S or X but have rented several times for weekends in the UK and the continent and sometimes it's just uncomfortable. Some parking manouvers took me well too long It is a common complaint and definitely not a FUD, but just personal preference. I'm not saying "unusable" but just less comfortable. My brother on the other hand loves big cars and was looking at me suspiciously when I complained about the size. So to each their own, but you gotta admit roads are much more narrow in Europe than US.

 

[CorneliusXX]

I don't have a reference, but I'm reasonably sure that Elon said that they are moving the high capex threshold to after unveil and assessment of demand.

The mistake they made with the Model 3 is that due to exceptionally high demand they changed plans mid flight and compressed the schedule, rushed everything and then changed it all again.

All the while nobody senior thought of verifying the true progress of the Gigafactory battery pack subcontractor's significant software development work but relied on the (as it turned out false or misleading) progress reports ...

Tesla wanted a new baby to be delivered three times faster, by impregnating three women.

Elon doesn't want this "Production Hell" ever again. This is why I think the earliest Model Y large scale capex spending is going to start some time after the unveil: March 15, 2019.

Semi might be more advanced - but requires much less tooling I believe, due to the much lower unit count. I'd also expect assembly to start mostly manual.

I.e. the main capex at this point would be stamping machines for GF1 (or autoclaves if it's mostly carbon fibre), and construction work.

I'd be surprised if the semi isn't the next vehicle in production. It's been getting validated for some time now. Many parts of the drivetrain are sourced from the M3 - which are already produced at scale. Once GF1 has enough battery capacity I wouldn't be surprised if tesla just put up a couple more tents and got cracking on manual production.

 

[KarenRei]

Yea, I'm one of those people I don't own S or X but have rented several times for weekends in the UK and the continent and sometimes it's just uncomfortable. Some parking manouvers took me well too long It is a common complaint and definitely not a FUD, but just personal preference. I'm not saying "unusable" but just less comfortable. My brother on the other hand loves big cars and was looking at me suspiciously when I complained about the size. So to each their own, but you gotta admit roads are much more narrow in Europe than US.

I'm in Europe, and our roads are no more narrow than the US.

I was in Ireland this summer, and I found the roads there uncomfortable to drive on because of how narrow they were. I mean, I got somewhat used to it, but I was glad to be driving on our roads again when I got back home. The fact that I was in a tiny car really didn't seem to make the narrow roads much (if any) better. The concerns weren't that your car is too wide, it's that any drift can put you into traffic or off the road.

Anyway, given that the Model 3 is only 3,5cm wider than a Yaris (the first car that came to mind as an "abundant" vehicle here), I can't see it being an issue for Tesla's "mainstream" flagship.

 

[KarenRei]

I'd be surprised if the semi isn't the next vehicle in production. It's been getting validated for some time now. Many parts of the drivetrain are sourced from the M3 - which are already produced at scale. Once GF1 has enough battery capacity I wouldn't be surprised if tesla just put up a couple more tents and got cracking on manual production.

Indeed, that's the thing about Semi - it can't accelerate with a steep ramp. No fleet is going to just throw out all of their diesel cabs and replace them with Semis overnight. The major operators are all starting with small trial purchases. If they're happy with how those perform during a trial period, they'll start steadily converting out their diesel fleet over the course of subsequent years.

I've seen some analysts bewildered as to why Tesla has pushed for its Semi project so soon. The short of it is, they need to. They need to move out small numbers as soon as possible if they want to move out big numbers down the road.