TSLA Market Action: 2018 Investor Roundtable

[avoigt]

A first real world test of the e-tron from not Audi associates.

The test drive was done in Abu Dhabi where you have moderate weather these days. Better pictures and more important the Battery feels well. Not a coincidence I believe but done by purpose.

• almost 300 km (186 miles) range ( advertised was 400km, they had still 90 km left on display so maybe even less range)
• Battery capacity 95 kwh
• fully charged the display shows a range of 330km
• max torch only for 8 sec
• max performance up to 60 sec
• Top speed 124 m/h
• consumption 28 - 30 kwh/62 miles (2,2 miles/ kwh)
• Charger 150 kw
• base price € 80 k
• delivery start January 2019

If you just get 186 miles out of a 95 kwh Battery than something is wrong. Even worse charging with 150 kw (580 km/h) may have a negative effect on degradation so your range may get even lower. I do admit I trust the engineering department of battery innovation team from Tesla more than any other producer in that respect. If they say its no good than I have my doubts.

The Audi engineers obviously have been aware about this as by purpose they put their fast chargers in a distance of 200km for the test to allow the team not to get in trouble.

Lots of other positive test results and comments but I am concerned about the battery and range. If they did rush with the car and did not get it right then they might create a really bad reputation for Audi EVs. People may still like it for other reasons but if you cannot use it for long distances than the demand will be capped.

https://www.motor-talk.de/news/der-audi-e-tron-laedt-schneller-als-er-faehrt-t6503944.html

 

[tivoboy]

So... predictions please. What's it going to do when the market opens again on Thursday?

Friday?

TIA

Runs for cover...

In a word, UP.

In two words, it depends

Not to be vague but it's really a bit hard to say for THIS week. It's an odd week. Having had the fed last week, G20 last weekend (and all the fake information sent out by OI that all proved to be totally untrue) and with a day in the middle of the week cancelled for trading it makes it pretty hard to predict anything. The Fed policy statement to the Senate was cancelled at the last miniute and we have a final employment quote on Friday. For situations like this, I sit on my hands and watch and review. It's a lot going on.

Tuesday (black tuesday - was that just YESTERDAY) was an anomaly in my opinion and not necessarily indicative of the end of days. Smart money IS moving to fixed income more and more (I've actually increased to my highest positions of FI EVER! 12% in BBB) and that dislocation of capitol from a small market - the stock market - to the bond market - THE LARGEST market there is going to be some real volatility.

We were really moving up in yield on 10's later in the year, and now we're well back to where we were basically at the start of the year. And, well the market is also basically where we were at the begin of the year. AND companies have put in nearly 1 TRILLION into buybacks and many if not most companies are LOWER than they were. Can you say wasted powder? Anyway.

Tesla held up VERY well in that market, there just weren't the sellers and what was resistance (355.5$), has now pretty much become support. Or there abouts. A break DOWN to 346$, would open up 33x amounts. But, I think its up to $370 at this point. And it could be $372. I know we have a bogey out there at 387$ from "take private",, but I usually keep targets like that if they are one time and not tested as outliers. It's the kind of thing were you see it, but take the bottom one off and the top one off and work on everything in the middle. So, it would be something if we got ABOVE it, most likely won't happen till after Q4 earnings release but I don't see it as too significant other than ATH!

So, I think we could push back into the $36x's the rest of this week, short of a giant market puke and push up and constructive to $370 into next week and higher but not $380 higher till some REAL news comes out. Short of bad economic or company news, people will be looking to accumulate into earnings.

I'm not TOO excited about deliveries, I don't think they'll knock it out of the park - which is what would be needed to get a ATH IMHO at this time. At this point, they simply have to DELIVER the high deliveries. We're expecting that, and in this market even if you EXCEED estimates, you only go higher if you REALLY exceed your future estimates - and even then I think the market (computers really) are incorporating a lower growth 2019 into their calculus and that applies to car, all cars. I KNOW they have a backlog, and i KNOW they sell every one they make but we don't really know, this this model how that demand curve would change with more significant market down moves or economic slow down.

If you wanted to know my LONGER range expectation I would say this. If you want to be LONG term (18-24+ months) and don't want to trade the position, over the next 18-24 months I'm am VERY certain there will be a lower entry point for interested long term buyers. So, if you really like this company and want to participate over the history of them changing the world then don't buy everything at this point. Save some powder, maybe build a nice CD ladder with 6-9-12 month horizons, and take the cash on distribution and look for better entries.

 

[EVMeister]

Hmm... Even makes the I-PACE seem efficient. And that's saying something.

 

[Fact Checking]

OT

Sea level Merlins don't get hot enough to glow, they use the cold fuel pumped through the engine bell to keep them cool.

This active cooling is very uniform though, through channels machined into the whole combustion chamber and engine bell.

The inside of the bell and the neck in particular are still close to the melting point - doing it in any other fashion would result in an inefficient engine.

There's also other 'hot' parts of the engine, such as the turbo-pump and its exhaust - only the MVac is recycling turbo-pump exhaust, the sea level engines are discarding it.

So while it might not be glowing, still the rapid, asymmetric cooling from being dunked in cold sea water is not good in general, IMHO.

What breaks a glass when pouring hot water into it is not the temperature but the asymmetric heating - and that's just a ~80K temperature difference.

 

[MarcusMaximus]

Deferring (or eliminating) the marginal production of any vehicle is "green." That was the environmental folly of "cash for clunkers." There is considerable energy consumed (and harmful emissions discharged into the environment) while producing a vehicle, regardless of the means of propulsion. Prematurely destroying the remaining useful life of any vehicle to achieve any political purpose is simply wasteful.

That, presumably, depends on the means of production in question and your definition of "green"(basically, environmentalist vs. climate hawk). If all you care about is reducing CO2, and the company in question uses mostly/all non-CO2 processes for production, then getting the new EV is more "green". Not sure where Fremont is, but GF1 is rapidly moving to solar.

Mining the materials used is locally harmful, but isn't going to result in an end to all human civilization.

 

[Fact Checking]

OT Brexit

You are being a little too logical I think - this is the UK...
The UK (like the EU) don't want to be trapped in the back stop forever.

Ok, so let me try this again: unlike in 1973-1993 when the U.K. was a founding member which established the European single market, the UK has very little negotiation leverage today: it's a troublesome 16% of a much larger EU GDP, and a big chunk of that 16% of GDP will be cannibalized by EU members in the future: the financial services industry and complex manufacturing (cars, planes) in particular will migrate to the EU: Ireland, France, Germany.

The U.K. can wish for unicorns all day, they won't materialize.

The current deal with the EU (which is really just a slow 2-years long crash-out Brexit) is the consequence of this reality. It's "bad" for the U.K. exactly because the U.K. had and has no negotiation leverage. Magical thinking has no effect on someone's negotiation leverage.

The next step in the reality of the situation is a crash-out no-deal Brexit by default, 11pm March 29 2019.

The U.K. is free to remain illogical up to that date: without an EU deal there's no 'backstop': so either on March 30 2019 or by 2021 the EU will be free of the 'backstop'. The timing is up to the U.K.

 

[Fact Checking]

base price € 80 k

I just don't see how the E-Tron can be competitive with Tesla's €50k and lower base price: all the E-Tron EV metrics are worse than the 80 kWh Model 3 LR and battery longevity is a big unknown. How good is Audi's battery warranty?

It will still sell well I believe because EV demand is so high and the E-Tron production levels are comparably low (50k per year?), but will have little effect on effective Tesla demand and pricing.

 

[Cherry Wine]

In a word, UP.

In two words, it depends

Not to be vague but it's really a bit hard to say for THIS week. It's an odd week. Having had the fed last week, G20 last weekend (and all the fake information sent out by OI that all proved to be totally untrue) and with a day in the middle of the week cancelled for trading it makes it pretty hard to predict anything. The Fed policy statement to the Senate was cancelled at the last miniute and we have a final employment quote on Friday. For situations like this, I sit on my hands and watch and review. It's a lot going on.

Tuesday (black tuesday - was that just YESTERDAY) was an anomaly in my opinion and not necessarily indicative of the end of days. Smart money IS moving to fixed income more and more (I've actually increased to my highest positions of FI EVER! 12% in BBB) and that dislocation of capitol from a small market - the stock market - to the bond market - THE LARGEST market there is going to be some real volatility.

We were really moving up in yield on 10's later in the year, and now we're well back to where we were basically at the start of the year. And, well the market is also basically where we were at the begin of the year. AND companies have put in nearly 1 TRILLION into buybacks and many if not most companies are LOWER than they were. Can you say wasted powder? Anyway.

Tesla held up VERY well in that market, there just weren't the sellers and what was resistance (355.5$), has now pretty much become support. Or there abouts. A break DOWN to 346$, would open up 33x amounts. But, I think its up to $370 at this point. And it could be $372. I know we have a bogey out there at 387$ from "take private",, but I usually keep targets like that if they are one time and not tested as outliers. It's the kind of thing were you see it, but take the bottom one off and the top one off and work on everything in the middle. So, it would be something if we got ABOVE it, most likely won't happen till after Q4 earnings release but I don't see it as too significant other than ATH!

So, I think we could push back into the $36x's the rest of this week, short of a giant market puke and push up and constructive to $370 into next week and higher but not $380 higher till some REAL news comes out. Short of bad economic or company news, people will be looking to accumulate into earnings.

I'm not TOO excited about deliveries, I don't think they'll knock it out of the park - which is what would be needed to get a ATH IMHO at this time. At this point, they simply have to DELIVER the high deliveries. We're expecting that, and in this market even if you EXCEED estimates, you only go higher if you REALLY exceed your future estimates - and even then I think the market (computers really) are incorporating a lower growth 2019 into their calculus and that applies to car, all cars. I KNOW they have a backlog, and i KNOW they sell every one they make but we don't really know, this this model how that demand curve would change with more significant market down moves or economic slow down.

If you wanted to know my LONGER range expectation I would say this. If you want to be LONG term (18-24+ months) and don't want to trade the position, over the next 18-24 months I'm am VERY certain there will be a lower entry point for interested long term buyers. So, if you really like this company and want to participate over the history of them changing the world then don't buy everything at this point. Save some powder, maybe build a nice CD ladder with 6-9-12 month horizons, and take the cash on distribution and look for better entries.

Great post.

I think I've asked you this before, but how do you determine points of resistance and support? I believe you said you look back at points in history where the stock has bounced multiple times, is that right? When looking for these points, do you use daily or weekly charts?

Where should I be going to learn more about this type of analysis?

 

[avoigt]

1. VICKI SALVADOR replied
   
   7h7 hours ago
   I would have never imagined when I first started working at Tesla, that we would be making the amount of M3s that we make now. It’s actual insanity how many we are able to produce every day and it makes me so happy! Us factory employees got it in the bag! #tesla
   
   
2. 
   
3. 1h1 hour ago
   We got our record back last night
   
   Twitter. It's what's happening.

 

[Fact Checking]

OT Brexit

It will, I think, become clearer in that time frame whether Brexit was or was not a good move.

It's already certain that it was a bad move: with Brexit the U.K. gave up a privileged position in a large single market for nothing in exchange. The U.K. already had its own currency and issued debt in its own currency, so it was isolated from the worst aspects of the design flaws of the Eurozone and was in a perfect position to reap all the benefits.

The probable economic consequences of Brexit in 2019 or in 2021: a crash in the value of the Pound, a GDP shrinkage of at least 10%, much more if indexed against external currencies. Widespread bankruptcies or consolidation under duress in the over-sized British financial sector which will shrink in ~half. The British economy will eventually recover in 5-10 years because the weakness of the Pound will eventually make exports cheap enough, but living standards will drop significantly.

If the Tories execute the Brexit they'll be done for a generation politically - which is pretty much the only bright side of this epic display of kamikaze politics driven by a non-binding vote of a minority of U.K. citizens who voted on a Brexit in a narrow margin without it being clear how a Brexit would look like (!), a vote significantly influenced by anti-remain and pro-leave lies from Putin's and Murdoch's chaos machinery of propaganda. Also, to add insult to injury, the U.K. citizens who will be disproportionately affected by the costs of a Brexit (young people) voted overwhelmingly against Brexit...

So this will be an injustice remembered for generations and squarely attached to the Tories.

 

[cheshire cat]

OT Brexit



Ok, so let me try this again again: unlike in 1973-1993 when the U.K. was a founding member which established the European single market, the UK has very little negotiation leverage today: it's a troublesome 16% of a much larger EU GDP, and a big chunk of that 16% of GDP will be cannibalized by EU members in the future: the financial services industry and complex manufacturing (cars, planes) in particular will migrate to the EU: Ireland, France, Germany.

The U.K. can wish for unicorns all day, they won't materialize.

The current deal with the EU (which is really just a slow 2-years long crash-out Brexit) is the consequence of this reality. It's "bad" for the U.K. exactly because the U.K. had and has no negotiation leverage. Magical thinking has no effect on someone's negotiation leverage.

The next step in the reality of the situation is a crash-out no-deal Brexit by default, 11pm March 29 2019.

The U.K. is free to remain illogical up to that date: without an EU deal there's no 'backstop': so either on March 30 2019 or by 2021 the EU will be free of the 'backstop'. The timing is up to the U.K.

An interesting view from the other end of the telescope, the two things that really decided in/out for me was the money given to Ford/ Turkey ( NB outside the EU) which enabled them to "steal" UK jobs after thirty years of truck (Transit) production at Southampton . Also the job creation/compensation cash given to sub Saharan people smugglers (hands up who's an out of work people smuggler, we have a pot of cash to get rid of) given by the EU with taxpayers money whilst at the same time bribing Turkey to hang on to/house migrants when the whole thing got out of hand thanks to Ms Merkel. The list of what's wrong with the new EU nobility just goes on and on. I guess you must be happy with this self elevated rabble.

 

[Fact Checking]

OT Brexit:

The list of what's wrong with the new EU nobility just goes on and on.

You need to recognize the following simple facts:

• The EU budget is less than 1% of the EU's GDP. It's "large" compared to a single country and is easy to FUD about, but it is minor in the general scheme of things.
• In concrete numbers the EU has a budget of around 160 billion dollars, which is ~0.7% of the projected 2018 GDP of the EU of 22,000 billion dollars.
  
• The U.K.'s financial sector alone is about as large as the whole EU budget, it was 160 billion dollars in 2017 (!).
  
• Net payments of the U.K to the EU are only 12 billion dollars: about 0.4% of the UK's 2,622 billion dollars GDP. (The U.K. had a privileged position - the big net payer to the EU is actually Germany.)

Even if all the EU's budget was spent for outright corrupt reasons (which it isn't), these are all literally peanuts compared to the losses the U.K. will suffer due to a Brexit. If the EU was a hedge fund and these were hedge fund management fees then the EU would be considered an elite club with ridiculously super low-cost membership fees.

Or consider this comparison:

• To be an earning member of the Apple App Store and to be able to take part in one of the biggest online markets you have to pay 30% of your revenues in membership fees, with which Apple does whatever they want to. Apple can also kick out your app with no notice, with very little justification given. Apple can also compete straight on with your app, or ban/discontinue key features your app relies on.
  
• To be part of the very lucrative European single market the U.K. pays 0.4% of revenue and has over-sized voting and veto rights over what the money is being spent on, and is a primary shaper of economic policy that is being set. Very little EU legislation that the U.K. is opposing seriously can be enacted.

Being part of the EU is obviously a bad deal - not!

With Brexit the U.K. is:

• "Threatening" to transfer much of their financial sector over to EU competitors - as big as the EU budget... The predictable response from French, German and Irish banks is a heartfelt "I love you!" - whispered in silence, because they don't want to interrupt a major competitor committing a fatal mistake.
• German and French carmakers will also be sad about the expected further shrinkage of the carmaker that was once Jaguar - not. (I'd like to note that much of Tata's corporate debt is denoted in dollars/euros and not the pound, and a significant drop in the value of the pound won't help their financial position.)
• The British aerospace industry, an important segment of the U.K. economy, relied on the benefits of the single European market as well, and relied on contracts from EU aided institutions and companies such as Arianespace.

Negotiation leverage this is not, and the EU and much of the rest of the world is puzzled about the irrationality of the U.K. Brexit "position" - but it is what it is, the EU is a voluntary club with benefits, and if Britain caught the Murdoch disinformation disease there's very little the EU can do about it but to step aside. Just 5 years of average EU growth will make up much of the U.K.'s missing GDP contribution.

I'm fairly confident to state that there is no rational economic argument in favor of Brexit for U.K. citizens as a whole, whatsoever, which is actually pretty rare in economics, and I believe the next 5 years are going to demonstrate this in a very sad fashion.

 

[avoigt]

A first real world test of the e-tron from not Audi associates.

The test drive was done in Abu Dhabi where you have moderate weather these days. Better pictures and more important the Battery feels well. Not a coincidence I believe but done by purpose.

• almost 300 km (186 miles) range ( advertised was 400km, they had still 90 km left on display so maybe even less range)
• Battery capacity 95 kwh
• fully charged the display shows a range of 330km
• max torch only for 8 sec
• max performance up to 60 sec
• Top speed 124 m/h
• consumption 28 - 30 kwh/62 miles (2,2 miles/ kwh)
• Charger 150 kw
• base price € 80 k
• delivery start January 2019

If you just get 186 miles out of a 95 kwh Battery than something is wrong. Even worse charging with 150 kw (580 km/h) may have a negative effect on degradation so your range may get even lower. I do admit I trust the engineering department of battery innovation team from Tesla more than any other producer in that respect. If they say its no good than I have my doubts.

The Audi engineers obviously have been aware about this as by purpose they put their fast chargers in a distance of 200km for the test to allow the team not to get in trouble.

Lots of other positive test results and comments but I am concerned about the battery and range. If they did rush with the car and did not get it right then they might create a really bad reputation for Audi EVs. People may still like it for other reasons but if you cannot use it for long distances than the demand will be capped.

https://www.motor-talk.de/news/der-audi-e-tron-laedt-schneller-als-er-faehrt-t6503944.html

For those of you speaking German or want to use a translator here is the related video:

 

[KarenRei]

.

Even worse charging with 150 kw (580 km/h) may have a negative effect on degradation so your range may get even lower.

No need to worry - they'll almost never be charging at that rate.

Even the Ionity network - remember that supposed "350kW" stuff? - is only installing V1 CCS stations, to be upgraded at some "future date". V1 (e.g. essentially everything) caps out at 200A (somewhere around 80kW at normal voltages). Maybe on some stations they'll be able to do double voltage (they do the pack reconfiguration for higher voltages like the Taycan, don't they?).... but even 200A 800+V CCS stations are just not that common.

 

[GaryW]

View attachment 357954 View attachment 357952 View attachment 357938 Birthday wish granted!

Mine was yesterday. Stock green on my birthday AND enjoying my new P3D, which was delivered last week. "She fast AF!"

You went Tuxedo. Black with white interior. Very very nice!

 

[Artful Dodger]

OT

I wonder if they choose to create redundancies within the hydraulics after this.

OT (Con't)

Elon Musk‏Verified account @elonmusk 4h4 hours ago

Pump is single string. Some landing systems are not redundant, as landing is considered ground safety critical, but not mission critical. Given this event, we will likely add a backup pump & lines.​

 

[capster]

OT

OT Brexit

It's already certain that it was a bad move: ...

That may be so, I wouldn't know.

All I suggested is that it's possible that there are (not unlikely) futures in which staying will turn out to have been a worse move.

You have great ideas and excellent analysis, but, no offense and correct me if I am wrong, it seems to me you tend to make what I consider to be a mistake in looking for the one "right" future forecast. BTW, certitude (more?) often raises hackles or suspicions rather than convinces.

There is a better way to forecast. In a nutshell, look for the influencing factors that will matter, tease apart the ways these might evolve, combine these into a handful of scenarios, and identify strategies that work in all the futures. This approach was developed at Shell, oddly enough, and is exposited in Schwartz's "The Art of the Long View." Excellent technique to master, though sometimes hard to communicate results from it.

If nothing else the approach can temper your expectations and rhetoric around what your calculus suggests is the most likely future. It can also help clarify how people who consider different factors or weight some factors differently than you do might reasonably come to a different conclusion than you have.

The other thing to consider is that sometimes these things turn out to matter much less than we think (and, here one of the great dangers, vice versa). As the saying goes it's not so much about making the right decision as making the decision right. People and businesses adapt in surprising ways.

Re: Market Action - From my back of the envelope scenarios, long TSLA is pretty much always a good strategy.

[edit spelling]

 

[EVNow]

OT :

Widespread bankruptcies or consolidation under duress in the over-sized British financial sector which will shrink in ~half.

That would hurt the cosmopolitans - who didn't vote for Brexit.

Basically by making the working class not part of this rich urbanites industry, the working class think they have nothing to lose - and are happy if some banks/FIs close down.

 

[GaryW]

Since they're launching with the white interior... hmm... I've been generally dubious toward getting that (although I won't be decided until I get a chance to experience both, which should be a few weeks from now). If I skipped out on it, that would probably add some delay... which would in turn increase the odds of a tow hitch or air suspension being on offer...

Tempting.

I’ve got to say the white interior is fantastic. Good luck with your decision!

 

[Carl Raymond]

Great post.

I think I've asked you this before, but how do you determine points of resistance and support? I believe you said you look back at points in history where the stock has bounced multiple times, is that right? When looking for these points, do you use daily or weekly charts?

Where should I be going to learn more about this type of analysis?

I made this point the other day and there were no disagrees.

If a trail has been blazed recently, it will be more easily traversed the second time. Anybody who was planning to profit take at a given price will have done so the first time, so second run up there are fewer sellers. It's only when you hit new territory that you run into a new batch of profit takers you get that apparent glass ceiling effect. After a couple of bounces they get mowed down and people reset in their minds where the upper limit belongs, imho.