TSLA Market Action: 2018 Investor Roundtable

[oneday]

Perhaps he should just have purchased 2k Model 3s so the margin repays Tesla the money.

Yes, this is what he should have done. And given it to all his supporters dangling from his nut sack over here at TMC.

 

[AlexS]

so Panasonic earnings announcement is Oct 31, Tesla is usually some days later

 

[BioSehnsucht]

I think this article about extending the EV tax credit is relevant to tsla, as well as a competing bill to end all credits. Does anyone have a url or process to contact your congressman or senator to support the bill?

U.S. Senate bill sponsored by Nevada's Dean Heller could give Tesla, GM desired tax credit boost for electric cars — Business Insider

I believe we're up to 3 active bills regarding this now.

1 by a Democrat, to extend it for 10 years regardless of number of vehicles sold
1 by a Republican, to end it regardless of number of vehicles sold and tax EVs further (granted, they're not paying their share of road tax due to not paying gas taxes, but perhaps a tire tax across all vehicles would be more equitable, and gas vehicles aren't paying their fair share regardless from a carbon / climate perspective)
1 by a Republican, to extend it for 4 years regardless of number of vehicles sold

I'd prefer the first or last one, definitely not the middle one. I know some will say that a lack of incentive is a boon to Tesla competitively, but we should be thinking about the survival of the human race (among other creatures on this planet), not the bottom line. We need to help those fossil manufacturers drag themselves into motion, to survive the coming change, and dropping the incentives isn't helping that happen. Tesla will be competitive no matter what, the fossils are so far behind.

 

[BioSehnsucht]

GF1 is production limited as it is with lines meant for TE putting out Model 3 cells. New lines from Panasonic can be installed in GF3 just as quickly as GF1 (once it exists). The cell lines are also easier to set up than the vehicle line, so should get done first.

During the 3 ramp, TE may have been limited in their module assembly so shifting early production to TE, while helpful later in having stock, would have resulted in increased inventory costs and storage requirements.

They're adding GF1 cell lines now, but they could have done that previously and put the excess into TE instead of strangling TE. And they can likely add more lines yet to GF1 even without another building 'module' being erected, but if not, well, it might be a tight race but I think they can add a module to GF1 to add cell lines faster than from scratch (including bringing in utilities to the site, etc) build a module of GF3 in China to add cell lines there.

They should have just been printing money with TE for the past ~2 years until Model 3 finally ramped instead of letting GF1 cell production become a bottleneck right when it was needed (instead of shifting cell production from TE to Model 3 as needed). And if they had done that, and kept expanding GF1 accordingly to keep TE going, they could then shift some TE in the future to China and do Tilburg style assembly while they finish building GF3.

Instead, they can't, because they were too obsessed with Model 3 ramp to the exclusion of all else.

 

[Tslynk67]

But that is not what the incentive does. This has already been discussed here, but it is significantly less than half the households who could get the full incentive. There was a proposal to make the incentive a rebate at point of sale. That would be an incentive.

This would clearly be better, but you know what, let's scrap the EV incentives, but add on the real cost of ICE vehicles - we can start with +$7500 at point of sale, but I suspect the cost to society should be much higher than that?

 

[tivoboy]

so Panasonic earnings announcement is Oct 31, Tesla is usually some days later

I don't think the two are coordinating earnings announcements.

 

[Fact Checking]

My preference would be that they get both Panasonic and Samsung at minimum set up in GF3 (and GF1, and all future GFs), and buy cells from both. Or LG, or ... The point being that I'd like to have some supplier redundancy at scale for the cells. I don't care who it is so long as they're building it to spec reliably.

At the GF1 Tesla isn't just buying 2170 cells from Panasonic: they are capital leasing the Panasonic equipment, which should be Tesla's property at the end of the lease term.

 

[cheshire cat]

My favorite seeking alpha short now touting Jaguar I-Pace is destroying Tesla in Norway, and thus starts the inevitable demise of the company

I don' t know how, there are already rumblings of some dissatisfaction re: Range and recharge ability

 

[dc_h]

...but that advantage only accrues to the wealthier part of the population. I could afford to buy a Bolt because the selling price is a quite a bit less than any Tesla. Yeah, eventually there will be a $35,000 M3, but not today.

I'm not saying the wealthy don't benefit from the incentive (a friend of mine's ears perked up when I told him about it), but it seems generally accepted by other than bears that its lack won't meaningfully impact their ability to move EVs. Probably because the value proposition is so much better. I could buy a Bolt, but I have no interest in them.

From a fairness perspective, I don't see how a 200,000 limit isn't fair. In fact, it seems very equitable. Just not a real incentive for EV adoption -- but that is a matter of differing goals.

The point of the incentives are to encourage new technology that make us safer, wealthier and more scalable as consumers. That last item may sound shallow, but anyone here born In the early 1960’s or 50’s might recall one car families, one black and white TV and a world where that was the developed luckiest of lucky world. A world of 150 million middle class people, few of them living in the standard that over a billion live in today. Speeding adoption of clean tech is critical to get the next 2 billion into our middle class world. No, they’re not getting a model S, but if it speeds up sustainable transportation by a decade, it will have a dramatic impact on everyone.
EV makes America safer from foreign energy dependence. Imagine some foreign despot murdering journalists and getting away with it, cause he’s got our electricity? Whether you like EV’s for national security, clean air, global warming or because they kick ass, it doesn’t really matter. The incentive cost is minor relative to the long term gains.
I do wonder if 7500 is a big incentive through 2022, maybe 5000 up to 500,000 and 2500 after that and let states add on, if they have special pollution challenges.

 

[ValueAnalyst]

Dilution?! You will still receive 99.96% of the value of the business allotted to your shares prior to the issuance. That means you are out a whopping $400 for every million you make. Probably should sell your shares after this daylight robbery.

How would you propose that Elon repay Tesla for the $20m he cost them? Buying shares on the open market just gives money to the seller of the shares, not Tesla. A loan would need to be recorded as a liability and have to be repaid at some point. Perhaps he should just have purchased 2k Model 3s so the margin repays Tesla the money.

Tesla should have fined Elon, as I stated many times. Instead of acknowledging my suggestion, you instead decided to "play to the crowds” with a straw man.

Have fun with the many likes and funnies you received but please don't waste my time if you won't move the conversation forward.

 

[Tslynk67]

tt's not about the money (not to be funny) but about the WHY for the trivial announcement. Frankly, if I were paying for the companys' fine based on my rogue action, I'd probably just try and slip it into the federal filing and be done with it.

Musk buying 20M of stock is really trivial, the company accounting of that too is trivial. to me at least (and only apparently) it almost seems like they're trying to indicate some interest or confidence in the stock and therefore lets make some announcement.

the market seems to have chosen though as well as the mkt has pretty much totally recovered and TSLA is trading on the lows for the day.

Who announced it? AFAIK it was picked up from the filing and run by the news agencies?

 

[MarcusMaximus]

Dilution?! You will still receive 99.96% of the value of the business allotted to your shares prior to the issuance. That means you are out a whopping $400 for every million you make. Probably should sell your shares after this daylight robbery.

How would you propose that Elon repay Tesla for the $20m he cost them? Buying shares on the open market just gives money to the seller of the shares, not Tesla. A loan would need to be recorded as a liability and have to be repaid at some point. Perhaps he should just have purchased 2k Model 3s so the margin repays Tesla the money.

He could have had Boring Co. buy some electric skates at some grossly inflated prices.

 

[MarcusMaximus]

I believe we're up to 3 active bills regarding this now.

1 by a Democrat, to extend it for 10 years regardless of number of vehicles sold
1 by a Republican, to end it regardless of number of vehicles sold and tax EVs further (granted, they're not paying their share of road tax due to not paying gas taxes, but perhaps a tire tax across all vehicles would be more equitable, and gas vehicles aren't paying their fair share regardless from a carbon / climate perspective)
1 by a Republican, to extend it for 4 years regardless of number of vehicles sold

I'd prefer the first or last one, definitely not the middle one. I know some will say that a lack of incentive is a boon to Tesla competitively, but we should be thinking about the survival of the human race (among other creatures on this planet), not the bottom line. We need to help those fossil manufacturers drag themselves into motion, to survive the coming change, and dropping the incentives isn't helping that happen. Tesla will be competitive no matter what, the fossils are so far behind.

Agreed. The other benefit of moving to time-based expiration is it forces the other players to push EV’s *right now*, rather than just waiting and knowing they’ll get the same subsidies for their first 200k cars regardless of when they start making them.

 

[ggies07]

The point of the incentives are to encourage new technology that make us safer, wealthier and more scalable as consumers. That last item may sound shallow, but anyone here born In the early 1960’s or 50’s might recall one car families, one black and white TV and a world where that was the developed luckiest of lucky world. A world of 150 million middle class people, few of them living in the standard that over a billion live in today. Speeding adoption of clean tech is critical to get the next 2 billion into our middle class world. No, they’re not getting a model S, but if it speeds up sustainable transportation by a decade, it will have a dramatic impact on everyone.
EV makes America safer from foreign energy dependence. Imagine some foreign despot murdering journalists and getting away with it, cause he’s got our electricity? Whether you like EV’s for national security, clean air, global warming or because they kick ass, it doesn’t really matter. The incentive cost is minor relative to the long term gains.
I do wonder if 7500 is a big incentive through 2022, maybe 5000 up to 500,000 and 2500 after that and let states add on, if they have special pollution challenges.

Exactly.

 

[hacer]

I fully understand the transaction. You don’t seem to think independently from management. Have you ONCE criticized the management for the numerous mistakes made in the last year? This isn’t about the level of dilution; it’s the principle: Elon f’ed up, and Tesla should have fined him, instead of enriching him at the expense of existing shareholders. I’m not going to get into this with blind-faith followers.

Perhaps you'd feel better if you think of the stock as compensation in lieu of the executive pay for all the years Elon hasn't had an executive salary. He'd still have very low pay relative to CEOs in the industry.

 

[MXWing]

Yes, but they also have inefficiencies of design and production lines, which need tuned to reduce costs, so they have higher costs initially.
If the government wants to be fair to all manufacturers, they all need time to perfect their technology and that time is however long it takes them to make 200k cars.

If the government wants to further create an incentive for EV over ICE choice to reduce pollution, then it can be a separate rebate.

But I think it's unfair to say other manufacturers don't deserve extra help/time to perfect their technology, which Tesla had.

Probably would make sense to only support U.S. brands and let Germany, Japan support theirs. In my opinion.

Which statement I need to re-evaluate?

If the government wants to be fair to all manufacturers, they need to limit the entire industry to a certain date or a certain number of vehicles they can all compete for.

The current structure is not only unfair, it is BIASED against Tesla. They make EV's only and first mover has to expend XXXXX effort to bring a product to market. 2nd mover expends XXXX. 3rd mover expends XXX, etc.

The time it takes Jaguar to produce and sell 200,000 iPaces might be infinite but each iPace has an unfair advantage over a Model 3, S and X.

I can’t believe this is needing to be elaborated and expanded on..

 

[CorneliusXX]

Tesla should have fined Elon, as I stated many times. Instead of acknowledging my suggestion, you instead decided to "play to the crowds."

Have fun with the many likes and funnies you received but please don't waste my time if you won't move the conversation forward.

Edit: or just label your post up top, and say, "I'm not actually looking to contribute to the conversation, this is just to satisfy my ego," and I'll just avoid reading/replying. Fair enough?

My comment does move the conversation forward by putting it into perspective. The issue is less than marginal and should be treated as such. However because of your inability to weight an issue we have had the thread derailed for several pages.

I have been a lurker here for a long time, and certainly since before you started posting. Initially you posted wildly optimistic posts around production of the M3 and ignored responses that tried to temper your enthusiasm - then you became cynically disillusioned with Musk and thought he was full of it because those expectations were not met. Several times there have been comments like today's where there seems to be no capacity to weight the outcome of an event to the event itself. I'm honestly starting to question whether you are an analyst and exactly where you supposedly find value.

At least you have stopped hawking your Seeking Alpha articles - so props for that.

 

[Fact Checking]

I've always been baffled why Model 3 was focused on at the expense of TE, since the slowdown in Model 3 could have been used to build more storage, and ramping storage should be far easier than Model 3.

A couple of good reasons:

• The Model 3 expansion was very capital intensive, and when the ramp-up got delayed by 6 month future capex spending was a done deal.
• The Model 3 had to ramp up and start earning money, to pay for itself and to grow revenue.
• Tesla Energy on the other hand is a lot less capex intensive and thus was easier to mothball temporarily.
• Had they ramped up TE instead the Model 3 capex flow would still have happened.
• So they had to move the Model 3 to beyond the break-even point.
• They were also cell output limited, to about 20 GWh/year. The Model 3 is a +500% value-add to every 2170 cell made, so in the short run it was a much better platform to leverage revenue up.
• Tesla also has big, valuable, 100% profit margin software products (AutoPilot) with large, constant R&D overhead. The best platform to leverage this investment is Model 3 sales.
• Tesla Energy will have high growth, a lot of customers arrive over a car purchase. So the route to scale up PowerWall demand is via increasing automotive unit sales: I.e. the Model 3.
• Tesla being in part a "story" stock, a lot depended on scaling up the Model 3.
• About half a million reservations with half a billion in cash already paid - had the Model 3 not ramped up people would have requested the deposit back.
• Half a million reservations maps to at least 20 billion future revenue - this was a lot more certain than a TE scale up of demand.

Really, there was no other option but to make the Model 3 work.

Now that cell production expands dramatically by the end of the year I'd expect a lot more focus on Tesla Energy.

 

[SpaceCash]

Tesla should have fined Elon, as I stated many times. Instead of acknowledging my suggestion, you instead decided to "play to the crowds."

Have fun with the many likes and funnies you received but please don't waste my time if you won't move the conversation forward.

I fully agree with your assessment of this situation

 

[ValueAnalyst]

My comment does move the conversation forward by putting it into perspective. The issue is less than marginal and should be treated as such. However because of your inability to weight an issue we have had the thread derailed for several pages.

I have been a lurker here for a long time, and certainly since before you started posting. Initially you posted wildly optimistic posts around production of the M3 and ignored responses that tried to temper your enthusiasm - then you became cynically disillusioned with Musk and thought he was full of it because those expectations were not met. Several times there have been comments like today's where there seems to be no capacity to weight the outcome of an event to the event itself. I'm honestly starting to question whether you are an analyst and exactly where you supposedly find value.

At least you have stopped hawking your Seeking Alpha articles - so props for that.

I have already stated that it is the principle, which many are missing by calculating the minute dilutive effect, and how this adds to the bigger picture problem I pointed out.

You have avoided addressing my point, again, and instead personally attacked me with generalizations. I see no use in responding to you. Good luck with your investment.