TSLA Market Action: 2018 Investor Roundtable

[neroden]

Not caught up, so this may be redundant. Rivian looks like a great pickup. It makes me wonder if Tesla should just cede that segment and put capital into semis etc. That might advance the mission more than competing with Rivian.

If Rivian ever gets off the ground. Or if Bollinger does.

 

[Dwdnjck]

One more answer to the question: "What have the Romans ever done for us?"... besides roads, of course....

Baths?

 

[Fact Checking]

Oshawa can draw from the entire Toronto workforce and has excellent transportation connections. The GO station is within pedestrian-bridge distance if someone would bother to build one, or in employee-shuttle distance if you want to be wasteful.

I bet GM won't sell the plant, just to spite Tesla, but it actually would be a great location.

They would probably find it hard to refuse the hundreds of millions of reasons Tesla could offer, plus the big PR headache GM would get itself rid of.

The bigger problem is Koch influence I suspect, which is particularly present in the current Canadian government? PM Ford would never support Tesla in Canada, I suspect.

 

[RFernatt]

Obviously it’s a matter of personal perspective, except in this case we bloody well know Elon is going to show us the attic, every single time.

So stop acting surprised, outraged, disappointed, perturbed et al... He’s going to take us by the hand and walk us up the hidden staircase to the attic and then down to the basement, it’s just a matter of time. If this is something you don’t want to see, know or hear then get out. Get out and never come back.

You have no basis to complain about that which you know is going to happen. It’s like being annoyed you’re getting rained on when you walked out the door, saw the thinder clouds and opted to not grab an umbrella.

Nothing wrong with preferring that he didn't overshare and making that preference known, especially if a statement could potentially have some regulatory side effect or give ammunition to lawyers. I'm not complaining and in the long run (pun intended) it likely doesn't matter much, but Elon does create more than a few cringeworthy moments.

 

[Unpilot]

Baths?

Not a lot of monty python fans in the room I'm guessing.

 

[Chocochip]

Obviously it’s a matter of personal perspective, except in this case we bloody well know Elon is going to show us the attic, every single time.

So stop acting surprised, outraged, disappointed, perturbed et al... He’s going to take us by the hand and walk us up the hidden staircase to the attic and then down to the basement, it’s just a matter of time. If this is something you don’t want to see, know or hear then get out. Get out and never come back.

Except this is something he can change. I get that he likes to mention how difficult things get sometimes for him, it's probably cathartic. And I really don't mind him mentioning how Tesla nearly died in 2008. I do have a problem when he mentions Tesla nearly dying in 2018... in 2018! Too damn soon!

 

[UnknownSoldier]

One more answer to the question: "What have the Romans ever done for us?"... besides roads, of course....

Not sure if serious, but:

Calendar, alphabet and writing system, governmental systems (excepting of course having an emperor), justice system and rule of law, systems of taxation, running water systems, the actual influence of the Roman Empire today underpins almost all of our modern civilization.

 

[neroden]

If we match up marginal costs of crude oil extraction with a 90% demand filter sliding down to 16% in a few years then there's oversupply even at $40:

This process will accelerate as the price drops: some of the cheapest to extract sources of crude oil are rate limited - so once demand drops below 50% they'll be able to outprice competitors.

Note the decades of supply even at $30 price levels.

The true bottom is probably between $25-$30 - but maybe lower: current extraction techniques are not very well optimized in the low extraction cost regions and costs are probably overstated.

The interesting thing about this (somewhat out of date) chart is this: even $50/bbl oil knocks out most of the supply. Mexico, China, Russia, Saudi Arabia, Libya, and "Other Middle East" are all that's really left. I know cost-cutting has improved since 2007 meaning that *some* of the "other" is profitable, but there should be a serious supply crunch coming just on a production-cost basis. This has been avoided by setting fire to investor money in unprofitable hole-drilling, as far as I can tell. So the financial crash of oil companies should come before the supply crunch. The supply crunch will be temporary as demand crashing will take care of it.

 

[neroden]

It's cost of production not extraction. Saudi extraction cost is closer to 5$.

In other words, that chart is cost of driling new wells, not of pumping existing wells. It's clear that from a financial POV, nobody should have been drilling any new wells outside the Middle East, Russia, and China (and maybe Mexico) since 2007; but a lot of people believed that oil prices would go through the roof, and gambled on that. All those new wells were drilled with borrowed money which won't be paid back.

 

[lascavarian]

Sorry to nitpick, but the word you're looking for is 'segue'.

And segue it is... in this case to GM and if we have a confirming tell of the ICE brigade. We have seen Ford pull back from sedans and now we get confirmation from GM that they are pulling back as well. Volt is likely no more and ... Bolt???. Has a strategy been confirmed? No charging network, no sedans and retreat to what's left of higher margin products and no mention of mobility services (saving that development cost).

What of the dealer network? Auto Nation (AN)? Is this what they want? Who gets to have the mobility services business? Will they be leasing and only used vehicles?

Could the strategy be to cut losses, make trucks and SUVs while in a sliding retreat to a credible EV strategy. Now the writing is on the wall in blinking lights. Do they remove objection to direct sales in exchange for gifting the dealers the mobility services franchise? Do they buy the dealers or just perhaps structure financing for an expanded leasing program that replaces sales. Is there a survival case for the dealers as only delivery and repair services with some used sales?

In the end, this is a short term disaster but may be the confirmation that EVs are present in the larger automotive world in a more substantive form and this model of transformation may be a path to that end. Retreat, restructure/leasing, electrify and reappear?

Impact on Tesla.... lots of available resources appear and reduced competitive pressure in the short term.

 

[Unpilot]

In other words, that chart is cost of driling new wells, not of pumping existing wells. It's clear that from a financial POV, nobody should have been drilling any new wells outside the Middle East, Russia, and China (and maybe Mexico) since 2007; but a lot of people believed that oil prices would go through the roof, and gambled on that. All those new wells were drilled with borrowed money which won't be paid back.

If true...and from your analysis I think it is...ouch!

 

[tivoboy]

In other words, that chart is cost of driling new wells, not of pumping existing wells. It's clear that from a financial POV, nobody should have been drilling any new wells outside the Middle East, Russia, and China (and maybe Mexico) since 2007; but a lot of people believed that oil prices would go through the roof, and gambled on that. All those new wells were drilled with borrowed money which won't be paid back.

yes, and a 10 year old chart at a very different time for the US oil sector is hard data to interpret vs. current data. The last 10 years in the US (yes, under the prior administration mostly) the US has altered their production and cost structure more than at any time in US history.

 

[neroden]

Perhaps, but part of the deal to build the battery Gigafactory in Nevada, was repeal of the prohibition of Tesla stores and service centers.

That lawsuit against Michigan was filed by Tesla in federal court 26 months ago. It is somewhat puzzling that this has taken so long. If may be that the judge is hoping for a settlement, such as one that may develop to entice Tesla to buy a GM plant that's closing in Michigan.

We can hope. The Hamtramck site is actually quite cramped. Tesla could easily expand by buying up the neighboring urban prarie, but there would be holdouts who would complain -- bad press. The public transportation to the site sucks. And Detroit is not a popular town to live in. On top of that, the UAW would probably be way more hostile and cause way more damage to a non-UAW factory in Detroit (even if it was unionized) than they could be in Oshawa. And GM would probably be even more hostile.

Hamtramck is one of the oldest car manufacturing locations in Detroit, it's a pretty big deal that it's closing.

 

[Fact Checking]

Not a lot of monty python fans in the room I'm guessing.

There's a lot of us here, but we are all members of the Judean People's Front and are finding that scene of the internal deliberations of the People's Front of Judea particularly offensive.

I motion TMC to add a "Very Offensive" comment rating button.

 

[neroden]

yes, and a 10 year old chart at a very different time for the US oil sector is hard data to interpret vs. current data. The last 10 years in the US (yes, under the prior administration mostly) the US has altered their production and cost structure more than at any time in US history.

True -- drilling new wells is still generally unprofitable, however. I don't really know why they keep doing it; my best analysis is that it's a psychological problem. They want to be "oilmen" and so they want to drill wells whether profitable or not.

Pumping old wells is definitely still a profitable activity, but that doesn't excite the macho sentiment of the "oilman", or something.

 

[EVNow]

Bloomberg - Are you a robot?

Lordstown Ohio was capable at one point recently of 5,000+ a week production, Oshawa 7,000+ a week , and Detroit-Hamtramck about 4,000 a week. Lordstown or Oshawa could probably host a MY line.

Fremont is getting up there numbers wise, I'd actually bet now, because of the higher ASP and vertical integration, that the Tesla Fremont plant is the highest producing plant in North America in terms of dollar value added, perhaps by a considerable margin as well.

Tesla should announce that between MI & OH they will "buy" the plant and start operating it within x months - if the state govt arranges zero interest, 20 year loan to buy the plant.

 

[anthonyj]

“The mother of all bull flags”

Golden cross forming on significant volume.

 

[neroden]

Volt production will stop in March:

GM to kill Chevy Volt production in 2019 (Updated)

Wow, that's pathetic. The Volt is easily the best plug-in hybrid out there. GM never misses an opportunity to miss an opportunity, does it?

 

[Tifighter]

Not a lot of monty python fans in the room I'm guessing.

That’s what I was thinking too...

 

[Unpilot]

Wow, that's pathetic. The Volt is easily the best plug-in hybrid out there. GM never misses an opportunity to miss an opportunity, does it?

Yes the volt was great...I still have a 2014 average mpg over 200.