TSLA Market Action: 2018 Investor Roundtable

[neroden]

By the way...welcome back Neroden

I've been run ragged dealing with various things for the last week -- today I have a chance to sit down and spend six hours (!) catching up on any possible Tesla news nuggets.

I tell people investing in Tesla isn't a full-time job, and then...

 

[electracity]

Dude, we were told outright by Panasonic that Tesla was cell constrained.

What we know for sure is that Tesla is taking orders now for 2018 delivery in North America. So this tells us the North America demand at the $50K plus price point. This is why they are easing the price point down to stimulate NA demand.

They have invested in NA distribution and they want to keep the volume up here while adding more markets.

 

[bdy0627]

The stupidity of said reporters really is baffling. Either that or they know they're lying. Either way, it's trash.

Yet, to try to understand and anticipate the stock movement, you pretty much have to watch that crap just to know what the media is serving the masses about Tesla. I can't stand it.

 

[Todd Burch]

Anecdotal info on how the medium range M3 may affect Tesla's margins:

I have a friend (middle class income level) who reserved a Model 3 in-store on the first day of reservations way back when. She was waiting for the standard range pack to come out but just pulled the trigger on a lemur.

 

[Unpilot]

Yet, to try to understand and anticipate the stock movement, you pretty much have to watch that crap just to know what the media is serving the masses about Tesla. I can't stand it.

I wish there was a guaranteed way to have the opposite effect one feels from reading either SA or twitter.

Wait ....there is....if you own a Tesla go for a drive...always works for me!

 

[electracity]

Yeah, they did ***** up the construction of the assembly line, didn't they? There was some warning of that, and I saw the warning (I knew you shouldn't pack all the stations together supertight like Musk was planning to, as it incurs massive expense if you need to replace one station) and I blithely figured that they'd work it out, which I guess they did.

It's too bad more bulls refuse to pay attention to the Munro video on Bloomberg. It really is generally positive, but is very critical of the chassis design for manufacturing. What was have learned from the chassis and the GA line failure is that Tesla is not been very good at mechanical and industrial engineers so far. This not only shows in the M3 teardown, but the fact that Fremont has too many production workers and too many robots.

These areas of expertise are furthest from Musk's experience, and he really has caused some unforced errors. But these areas are also fixable, unlike major errors in product design or core technologies.

 

[brian45011]

I think it could be in the region of $200 - $300 million so maybe too much for the attorneys (although they are California attorneys........).

But that's just from 5 minutes looking at the filings so I could be off. Will take a closer look tomorrow.

Can Tesla use some of the deferred revenue for attorneys fees and $5.4 MM for damages in this settlement https://www.courtlistener.com/recap/gov.uscourts.cand.310416/gov.uscourts.cand.310416.50.0.pdf
or does Q4 SG&A absorb the hit?

 

[SpudLime]

View attachment 345111[/QUOTE]

Psss, Trump hasn't invaded Canada and made it the 51st State yet.

Puerto Rico and Washington D.C are going to be PISSED!

 

[brian45011]

Plus, all those FSD pre-payments could only earn interest, they couldn't count the payments themselves as revenue/cashflow until FSD is delivered, right?

Revenue no; cash flow yes.

 

[dc_h]

Nobody is going to announce major projects with the saudis this week. Any announcement would be delayed, if not cancelled.

 

[M3Rider]

Tesla currently produces the Model 3 at an average rate of just over 5k/week (I'll assume this is correct).

I do not believe there's any confirmation of this being sustained yet. We heard 5,300+ in the last week of Sept and right after that 7,400 in the first 11 days of Oct, which is 4,700/week.

 

[EVMeister]

Anecdotal info on how the medium range M3 may affect Tesla's margins:

I have a friend (middle class income level) who reserved a Model 3 in-store on the first day of reservations way back when. She was waiting for the standard range pack to come out but just pulled the trigger on a lemur.

I expect this to be observed more broadly. Just thinking of which variant I'd go for here in the UK, for example, I consider the LR too expensive and not necessary for my needs and was originally going to plump for an SR (+premium etc.) But I would strongly consider switching to the MR. I know from discussions on UK-centric EV forums that a lot of people are feeling the same over here.

 

[Chickenlittle]

It's too bad more bulls refuse to pay attention to the Munro video on Bloomberg. It really is generally positive, but is very critical of the chassis design for manufacturing. What was have learned from the chassis and the GA line failure is that Tesla is not been very good at mechanical and industrial engineers so far. This not only shows in the M3 teardown, but the fact that Fremont has too many production workers and too many robots.

These areas of expertise are furthest from Musk's experience, and he really has caused some unforced errors. But these areas are also fixable, unlike major errors in product design or core technologies.

Yes tesla should learn how to make less safe cars from the rest of the industry.

 

[CuriousSunbird]

Can Tesla use some of the deferred revenue for attorneys fees and $5.4 MM for damages in this settlement https://www.courtlistener.com/recap/gov.uscourts.cand.310416/gov.uscourts.cand.310416.50.0.pdf
or does Q4 SG&A absorb the hit?

Basically deferred revenue is money you owe to your customers for stuff you've promised and haven't done yet. If the settlement reduced/removed the amount/obligations owed to the customers by less than the amount allocated to them in deferred revenue, then the excess could be released to revenue, but that sounds unlikely - presumably there was a lawsuit because Tesla said they had done what they needed to (and had therefore released the relevant deferred revenue) and the customers disagreed.

I think the attorneys' fees have to go through SG&A.

 

[lascavarian]

TSLA has a unique 2 months ahead due to the tax credits. The Limited Edition Mid Range LEMR package is an opportunity to pump out more volume for the 4th QTR.

My suspicion is that drive units and cells are a bit constrained. This package allows them to move a higher volume of VINs to customers at just the right time. If you order now and receive in December and file taxes in January then your tax incentives arrive almost before your first payment. What a nice sweet spot for the US market buyer.

Additionally important is just moving product. To maximize profit it is about working the float. If rear drive unit are piling up a bit then they have to be paid for before they are sold. This seems like a cagy plan to benefit both customers and stockholders.

Another point is the FSD. I think this has the market concerned. FSD is part of the valuation of the stock and removing it from the offering is a bit of a reason to pause. I expect there will be many questions at the earnings call about removing FSD. It does clean things up a bit by removing it as it seems a forward liability in some ways.

However, I am stoked about the ability to stop before stationary objects. I had this happen yesterday and it confused me since it seemed to be a new behavior when in EAP. Good stuff if it is what I think it is.

 

[Joe F]

VW is building an all-electric vehicle factory for 300,000 cars per year in China

Does that mean they'll stop killing monkeys? The Lemurs will be happy if so.

Shorts in control today with volume on track for slightly less than the 10 day volume at 6M+ shares at 1:50 PM. Can't wait for Q3 earnings call.

 

[davecolene0606]

I am pretty sure, that if I ask the question "is it just me", that everyone will certainly pile on and says "YES!",, but

Is it just me that doesn't think that this latest announcement about the "31K$ Mid Range Model 3" is a good thing.?

As I look at it, we weren't expecting ANY lower cost car for many months, because the demand and delivery of the HIGHER priced cars was strong enough to fill ALL that Tesla could produce. And, why wouldn't you just sell those cars to at least DOMESTIC buyers, when the tax credit is the highest for at least the next couple months? It's same vehicle deliveries - hopefully, MAX production and it's going to be higher revenue and margin overall.

Now, we get the announcement that one can order NOW and GET that new CHEAPER car with the FULL tax credit (and the funky/fuzzy math they use to indicate the price is only 31K ((IN CA mind you and IF you factor in five years or gas savings - I've ALWAYS hated how they present pricing that way))..

Add to that that it is IMHO MOST likely that this is the same battery pack, not just the same size and shape but with the same cells. They have done this before its fine, but the input costs are the SAME. They just turn off access to some capacity. Like they are turning off access to some performance as well. And yet, it's COSTS them the same so the margin on these vehicles will be compressed a bit. Small bit, but every bit counts.

So, again - most likely JUST ME but I see this as a DEMAND problem for now. At least seasonally, if not overall. If they already have to somehow lower market pricing to move vehicles at the production rate they have risen to or the supply they have produced, well then we have a much bigger problem. Not one that can't be fixed, but in the near term - it would be a problem.

Let the flames begin.

Again, higher through put at Fremont than G1 make cells match pack and vehicle capacity = more units to market, more happy campers more word of mouth exposure more future business for when cell capacity catches up.

Fire Away!

 

[wipster]

;-).. I think many of us would just PEE! And I'm already missing a prostate!

That would be a yellow wave...

 

[avoigt]

It's too bad more bulls refuse to pay attention to the Munro video on Bloomberg. It really is generally positive, but is very critical of the chassis design for manufacturing. What was have learned from the chassis and the GA line failure is that Tesla is not been very good at mechanical and industrial engineers so far. This not only shows in the M3 teardown, but the fact that Fremont has too many production workers and too many robots.

These areas of expertise are furthest from Musk's experience, and he really has caused some unforced errors. But these areas are also fixable, unlike major errors in product design or core technologies.

I politely disagree. So far I could not find a single argument where Munro criticized the 3 and been proven correct.

• Build quality, he teared down an early model that was old when he worked on it. So it was just not correct to call it bad unless he had a current VIN. Not to mention that I hear not have seen any gaps since a while
• Criticized the chassis to be too heavy and stiff, argued useless waste of material. Well the safety test ratings, handling, consumption and other talk a very different talk
• Critics around you can't escape from the back door as no manual door handle exists. Well thats with most cars the case and frankly said from what I have seen from the crash test the safest place is inside and not outside of the 3

All other I heard have been debunked as well.

As some of you know a German Engineering company did a tear down of a 3 here in Germany as well and they are experts as well.Actually they did have 2 cars. They did not found the points Munro found bad to be an issue. No mention about build quality, weight, stiffness ect only that they are pretty impressed and found some really smart solutions applied.

So in short I believe Munro is heavily overrated if it comes to EV tear downs. His main problem is the perception to compare an EV to an ICE. This he did with all EVs he looked at and its an apple to oranges comparison. Also I doubt that he understands a lot of the energy concept of an EV beside the mechanics of it.

Also the entire story with him forced to stop talking positively and the UBS connection smells really fishy.

He may be good with ICEs but for EVs he is just not the qualified person. He should be ignored in that respect as EVs are not his field of expertise.

Think about it he sold a report for I believe it was $70.000 and later said he was wrong with it.

 

[CuriousSunbird]

Another point is the FSD. I think this has the market concerned. FSD is part of the valuation of the stock and removing it from the offering is a bit of a reason to pause. I expect there will be many questions at the earnings call about removing FSD. It does clean things up a bit by removing it as it seems a forward liability in some ways.

I think you're right about this. Jonas in particular will have to revise his analysis.