TSLA Market Action: 2018 Investor Roundtable

[MP3Mike]

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.

I'm not sure the GM production numbers are equivalent to the Tesla production numbers. Tesla is way more vertically integrated and does more than just assembly. (Which my understanding is that these are mainly assembly plants.)

 

[neroden]

Interesting, I've not paid much attention to theta & vega. I'll do some homework.

When I'm selling options I try to sell during period of elevated IV, and I try to sell strikes with high vega, so that I profit when IV returns to normal, lower levels.
(When buying, I would buy during low IV and buy strikes with low vega.)

When I'm selling options I want nice high theta. (When buying I would want low theta.)

 

[neroden]

This is a sad day. First GM closes Volt. Next Nissan postpones 60 kWh Leaf. They started the plugin rebirth in 2010.

Yeah, this is seriously sad. Tesla was trying to lead other companies. They don't *want* to go it alone. But the damn other companies.

I guess BYD, BAIC, and GAC will be the companies following in their lead. Maybe VW/Porsche/Audi.

Probably shows GM & Nissan are saying they can't compete with Model 3. The only way for them to compete would be to offer 60 kWh cars for about $5k less than Model 3. May be the fact that the tax credit is ending had something to do with Volt closure as well.

 

[Krugerrand]

hahaha, sure I did. Do I now with the Y? Nope. Plus, there were several people on here putting that into their future projections....anyway....The cluster**** was bigger than it should have been.

It appears the cluster was not related to the design of the 3, as it was for the X and lesser of a degree the S. So they did in fact learn from those mistakes and the 3 was easier to manufacture.

The problem was a new set of mistakes in the design of the assembly lines, now rectified and learned from.

The Y should benefit from both sets of previous mistakes. The question is will they make new mistakes in the pursuit of being innovative? I think probably. I’ll just hope they are lesser in severity and fewer in number.

 

[EVNow]

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

Not really. The old wells in KSA are about $10. But they have to now pump in a lot of water to get oil out of many of the wells that has made them more expensive. Still KSA has some of the cheapest wells.

 

[neroden]

Regarding the death of the Volt (which probably deserves its own thread):

Bloomberg - Are you a robot?

P.S. I made a thread

GM killing the Volt, shuttering 3 factories

 

[sundaymorning]

We can probably get one of those Detroit plants for free in 2020 when Model Y is ramping. That state will be on its knees begging for Tesla to knock on its door.

 

[Krugerrand]

Detailed Reuters article about GM restructuring and closing factories:

"GM has begun what is expected to be a long and expensive transition to a new business model that embraces electrified and automated vehicles, many of which will be shared rather than owned.

The No. 1 U.S. automaker signaled the latest belt-tightening in late October when it offered buyouts to 50,000 salaried employees in North America, with the aim of reducing headcount by 18,000. It plans to trim executive ranks by 25 percent, the source said.

With U.S. car sales lagging, several car plants have fallen to just one shift, including its Hamtramck and Lordstown, assembly plant.

A rule of thumb for the automotive industry is that if a plant is running below 80 percent of production capacity, it is losing money. GM has several plants running well below that. Consultancy LMC estimates that Lordstown will operate at just 31 percent of production capacity in 2018."
​

Ouch...

$GM is of course up 5% on the job cuts (which improve margins) - Wall Street missing the forest from the trees again.

I think this moment marks the beginning of the end of the ICE industry as we know it: the more visible part of the long slide down has begun.

Also, are any of these GM sites large enough for a new Gigafactory? Asking for a friend!

Remind me, when Tesla cut jobs by 10% did their SP go up? I really cannot remember. What I do remember is 56 negative articles about the job cuts even while they continued to hire people.

And I’m positive every time a Tesla executive leaves there’s an uproar of negative articles.

 

[Fact Checking]

The remaining channel is bank failures. What junk have the megabanks been throwing their money at? What is going to bankrupt them? That's the question. If we could see Morgan Stanley's balance sheet and Goldman Sachs's and Bank of America's, we'd be able to tell where the crash would come from.

I might end up eating crow, but I see near zero chance for systemic megabank failure in the next 10 years.

2008-2009 was a near death experience for many of them, which experience got burned into institutional memory.

It's also pretty clear that politicians in the next 20 years probably won't allow another Lehmann.

Which leaves two main options for a global crash: crash-out BRExit or a meteorite strike.

 

[tivoboy]

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.

Depending on the company and location there are still a LOT of subsides for new well exploration. Somebody somewhere gets paid. It's a racket - regardless of country or company.

 

[Artful Dodger]

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.

Lol, Doug Ford is Premier of Ontario (he's the jerk that pulled the $14K EV rebate for Tesla-only).

The Prime Minister of Canada is Justin Trudeau, he's pro-environment and supports a national carbon tax.

GM probably doesn't own the Oshawa plant free and clear, especially not after all the government bailouts they've received.

So selling the plant would help GM dispose of a stranded asset.

 

[neroden]

Depending on the company and location there are still a LOT of subsides for new well exploration. Somebody somewhere gets paid. It's a racket - regardless of country or company.

Well, there is always the old Wall Street phrase -- "other people's money". If the fracking company declares bankruptcy and the investors and bondholders lose all their money... the CEO and all the execs still got paid millions.

 

[Fact Checking]

Remind me, when Tesla cut jobs by 10% did their SP go up? I really cannot remember. What I do remember is 56 negative articles about the job cuts even while they continued to hire people.

Yes, there was a marked increase in the $TSLA stock price - but it's unknown to what extent it was triggered by:

• positive sentiment after the annual shareholders meeting,
• the ongoing accumulation of 5% of TSLA shares (7% of the float) by the Saudis,
• the cost cutting (opex) and capex reduction measures, of which the layoffs were part of.

 

[mspohr]

I might end up eating crow, but I see near zero chance for systemic megabank failure in the next 10 years.

2008-2009 was a near death experience for many of them, which experience got burned into institutional memory.

It's also pretty clear that politicians in the next 20 years probably won't allow another Lehmann.

Which leaves two main options for a global crash: crash-out BRExit or a meteorite strike.

Krugman begs to differ:
Nobel-winning economist Paul Krugman warns of a 'real amnesia' around the latest financial crisis — and breaks down why we're poorly prepared to handle the next shock

 

[dmunjal]

Since 2008, money market funds aren't allowed to hold anything except government debt. So *that* channel is closed off. People don't seem to be borrowing that much against stocks or bonds.

The remaining channel is bank failures. What junk have the megabanks been throwing their money at? What is going to bankrupt them? That's the question. If we could see Morgan Stanley's balance sheet and Goldman Sachs's and Bank of America's, we'd be able to tell where the crash would come from.

What about shale companies that are not profitable at sub $40 crude?

 

[tivoboy]

I bought $260 Feb '19 calls at 83 this morning!

nice, probably a decent trade. If that stretches to >124$, I'd probably take the money.

 

[EVNow]

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.

I know you were joking, but, it is actually quite offensive to all of us who come from countries that were decimated by colonialism.

 

[Fact Checking]

Lol, Ford in Premier of Ontario (he's the jerk that pulled the $14K EV rebate for Tesla-only).

Yes, I meant Ford as local government support which is big in such matters - and Justin Trudeau is of the liberal party that lost in Ontario and liberals might be out of power next year federally as well - although polls have improved since then.

We can see it in Nevada and China the local government matters quite a bit, and Tesla would insist on support on all levels, when making an investment.

 

[traxila]

Just wondering, what's the current elevation from sea levels?

Because in the hundreds of years time frame your house would probably have to be at 120m+ elevation to not become an underwater attraction, with very different sources of errosion and stress than you are designing it for.

Much of Reykjavik would be underwater.

No it will not. We are going to stop this carbon mess and then reverse the process.

 

[Fact Checking]

I know you were joking, but, it is actually quite offensive to all of us who come from countries that were decimated by colonialism.

Arguably unlike "modern" colonialism the Roman empire was extremely accommodative to new colonies, leaving population, religion, cultural and economic structures largely intact, so the example of Roman era Judea is probably more historically accurate through the lens of Monty Python than through the lens of the Bible - but I'm getting way off topic here ...

I wouldn't ever joke about any effect of modern colonialism, there's nothing to joke about there.