TSLA Market Action: 2018 Investor Roundtable

[gene]

Those end of quarter pushes are epic. I’ll take a vid next week of the NJ showroom

I’ll be helping out deliveries at Santa Barbara the 30th and 31st.

 

[Carl Raymond]

since I always presume economists are wrong just about every time, I’m thinking 2019 is a Global recession year (the FED will overcorrect although I don’t blame them for correcting since central bankers have flooded the world with easy money for too long).

Real estate markets are slowing in the US and rising interest rates/tax policy will continue to add drag.

Having said that, Tesla will do well, but perhaps not as strongly as many of us are forecasting today.

You wrote Tesla will do well, not TSLA will do well. It is possible for the markets to slow down TSLA. For as long as Tesla remain production constrained, markets cannot slow Tesla. Eventually the wider economy comes to grips with the new reality (the end of fossils) and recovers, taking TSLA to where it belongs, king of the hill.

That said, I see no reason to forecast or fear recession. In the absence of a bubble, the only thing to fear is fear itself.

Edit: indeed, a weak wider economy can advantage Tesla. Suppliers are keen and will negotiate. Labour is readily available without exorbitant rates. Factories may be sitting there, ripe for taking. What we are looking at is a transition economy. Weak if looking at the old, strong if looking at the new.

 

[brian45011]

I'm pointing out the absurdity of allowing someone to drive away with a $60,000+ product before having received the money. What if that person just disappears? What if they were using a fake identity? What if the financing was fake? etc.

For most business-to-consumer transactions, the consumer doesn't get the product until it's been paid for.
.

 

[tivoboy]

Unrealized losses are the best kind of losses.

Book em. Buy back later.

 

[Fact Checking]

Europeans keep telling me they prefer hatchbacks/shooting brakes/station wagons and don't like sedans very much

As a European who preferred hatchbacks in the past, the main source of dislike for sedans is:

• Trunk space on small sedans is really small,
• the trunk on sedans is often isolated from passenger space, so it cannot be extended for larger items by folding the back seats,
• the trunk lid is often just a fold-up manual lid to a hard(er) to access 'hole' you have to put stuff 'into' (like the frunk), which is inconvenient for many types of cargo.

The Model 3 not only has a frunk as well which offers the smell isolation feature of classic sedan trunk space, but also its trunk has none of the above disadvantages of sedans:

• Trunk volume is generous, comparable to hatchback trunk volume, or smaller station wagon trunk volume,
• rear seats can be folded flat, which extends trunk volume if necessary. You can even transport bycicles.
• the Model 3 trunk lid opens almost like a hatchback lid, allowing easy access to trunk space, very similar to a hatchback.

So I believe about 80% of hatchback users in Europe will find the Model 3's trunk space more than enough. Preference for hatchbacks and station wagons is mostly about extensibility of cargo space.

There's still <20% of customers who will indeed prefer a station wagon or a larger hatchback for more complex uses: transporting dogs, larger cargo for business purposes, the totally flatbed access or preferring the aesthetics. I believe the taller Model Y is going to convert most of those customers as well, and SUVs have additional advantages as well.

But for most European hatchback or station wagon users Model 3 cargo space usability and dimensions is going to be a pleasant surprise.

 

[wipster]

Sometimes I wonder if this is because small cars have been so just dull, and Tesla Model 3 changes that equation.

Yet it didn't make the Car & Driver 10 best list for 2018 because the Performance version didn't cost $35k. Who cares that it outperformed all vehicles that did and also outsold all of them in the 3rd quarter?

Guess we know what industry owns that rag. Also know they ain't getting any more of my money...

 

[StealthP3D]

Tesla sales numbers in above very large European markets are horrible.

Funny. That's only because all Tesla offerings to date have been larger than the Model 3. The Model 3 is the absolute largest car many Europeans would even consider (and still too large for those who regularly visit very tight cities).

The Model 3 will be a runaway success in most of Europe.

 

[Carl Raymond]

As a European who preferred hatchbacks in the past, the main source of dislike for sedans is:

• Trunk space on small sedans is really small,
• the trunk on sedans is often isolated from passenger space, so it cannot be extended for larger items by folding the back seats,
• the trunk lid is often just a fold-up manual lid to a hard(er) to access 'hole' you have to put stuff 'into' (like the trunk), which is inconvenient for many types of cargo.

The Model 3 not only has a frunk as well which offers the smell isolation feature of classic sedan trunk space, but also its trunk has none of the above disadvantages of sedans:

• Trunk volume is generous, comparable to hatchback trunk volume, or smaller station wagon trunk volume,
• rear seats can be folded flat, which extends trunk volume if necessary. You can even transport bycicles.
• the Model 3 trunk lid opens like a hatchback lid, allowing easy access to trunk space, very similar to a hatchback.

So I believe about 80% of hatchback users in Europe will find the Model 3's trunk space more than enough. Preference for hatchbacks and station wagons is mostly about extensibility of cargo space.

There's still <20% of customers who will indeed prefer a station wagon or a larger hatchback for more complex uses: transporting dogs, larger cargo for business purposes, the totally flatbed access or preferring the aesthetics. I believe the taller Model Y is going to convert most of those customers as well, and SUVs have additional advantages as well.

But for most European hatchback or station wagon users Model 3 cargo space usability and dimensions is going to be a pleasant surprise.

One more for your list of reasons the Model 3 will do well in Europe...

Europeans are more likely to have a clear understanding of climate change, and more likely to be part of a regime that incents decarbonisation. (No offence to readers of this thread, which is by and large well informed ).

 

[hacer]

It's not possible to go very negative, though. There does come a point at which people exercise their right to demand their cash in the form of banknotes, which carry a 0 interest rate -- the point at which the negative interest rate exceeds the cost of storing the banknotes in a vault with guards, basically. If they try to devalue the banknotes, that's when people start hoarding commodities. So there really is a practical lower limit, even if it's -1% rather than 0%.

And the federal reserve member banks that enjoy the privilege of borrowing at that -1% rate get free money which angers those who aren't eligible to borrow at negative rates.

 

[Artful Dodger]

Any guesses on director picks? Richard Branson + Larry Ellison would make even Chanos cover

Hi,

It can't be Ellison, he owns ~$2B in TSLA. Settlement calls for two "Independant" Directors, so can't be a significant owner.

BTW, he was my pick for Chairman but sounds like Elon want to phase out the role in 3 years. Maybe Robin will become COO if she likes being full-time at Tesla.

Cheers!

 

[ggr]

Hi,

It can't be Ellison, he owns ~$2B in TSLA. Settlement calls for two "Independant" Directors, so can't be a significant owner.

BTW, he was my pick for Chairman but sounds like Elon want to phase out the role in 3 years. Maybe Robin will become COO if she likes being full-time at Tesla.

Cheers!

Sorry, incorrect. To be independent, the director can't have direct contractual or family relationships with the corporation or its officers. Investment doesn't count. Ellison would, IMHO, be eligible. (I don't care, don't want him.)

 

[Brando]

I stopped reading WIRED Tesla stories.
All made up nonsense for clicks.

Unsubscribed from WIRED in Apple News.
Too much making up.
Not enough reporting.

So happy to see WIRED support those Diesel making/cheating German firm and NOT that BS California Firm that refuses to offer clean diesels. </sarcasm> what gives??

 

[Cattledog]

So they're at 81% when we're about 86% through Q4. Definitely possible to complete, but going to be cutting it close. I don't like the end of quarter pushes that Tesla always does.

I don't either but this is a slam dunk.

Data point. I am trading in my LR RWD Model 3 for AWD. Finished the trade-in process a week or so ago and got an email that asked which day from 12/23-12/31 could I not pick up the new Model 3. It said deliveries would be happening 6AM-Midnight those days. Paid the remaining balance today and now await my delivery timeslot.

We're getting to 100%, and I think it's going to be 100% of a big number.

 

[Fact Checking]

Yes Tesla is American, and it's wonderful that foreign folks actually want to buy an American made car for a change. I think you'll be surprised by sales numbers in EU by end of next year.

I expect the Model 3 to be a run away success in Europe for the following reasons:

• The median wages are lower than in the U.S., with average new car prices about 10% lower.
• Most Tesla Model S models in Germany cost +20%-40% compared to U.S. prices - AutoPilot is 40% more expensive. Part of it is the 19% VAT, but also logistics costs.
• I.e. the relative price levels are 30-50% higher than in the U.S., which reduces the effective Model S addressable market dramatically - it's about half of that as in the U.S.
• The Model 3 changes all that:
  • LR AWD starts at around €58k, versus €108k for a 100D with similar range.
  • Performance Model 3 at €68k versus €145k for a P100D.
  • BMW is in trouble: the highest performance BMW M2, which is a smaller 2-door coupé, costs €74k+ in comparable configuration, the M3 and M4 cost €70-80k in Germany - and none comes close to the acceleration and handling of the PM3.
  • The Model 3 also offers features unmatched by any BMW:
    • Remote start/heating is illegal in most of Europe for ICE cars
    • AutoPilot is unmatched,
    • Interior is generous even for tall people and there's no drive shaft running in the middle like on AWD ICE cars,
    • Remote cooling is unmatched and will be a hit as non-garage street parking is a lot more common in Europe, so hot cars in the summer are a real problem in all but Scandinavian countries.
    • Frunk space.
    • Frameless doors look "luxury American car" and are impressive AF. Only the highest end European sedans are frameless, and it's a rarity in general.
    • Tesla back seats are foldable flat, offering camping sleeping space with air conditioning and dehumidification. "Camper Mode" under a Glass Roof is something most Europeans don't even know exists, but will value a lot, because the denser urban environments are more removed from nature than the more generous living spaces in most of the U.S.
  • There's a few luxury and convenience features BMW offers that the Model 3 doesn't (such as surround camera view or high end luxury interior trims) - but none is major.
  • I.e. the Model 3 expands the addressable market much more in Europe than it did in the U.S., even at the current $66k+ entry price for the LR AWD.

I expect European Model 3 sales to be crazy strong in 2019-2020. Tesla won't be able to make enough of them.

 

[Artful Dodger]

Sorry, incorrect. To be independent, the director can't have direct contractual or family relationships with the corporation or its officers. Investment doesn't count. Ellison would, IMHO, be eligible. (I don't care, don't want him.)

Yeah, thought I'd get pushback on this, but here's the NYSE and NASDAQ position:

NYSE: "no director qualifies as 'independent' unless the board of directors affirmatively determines that the director has 'no material relationship' with the listed company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the company."[4]​

Nasdaq's rules say that an independent director must not be an officer or employee of the company or its subsidiaries or any other individual having a relationship that, in the opinion of the company's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.[4]​

Cheers!

EDIT: the Reference cited above ends in a stale link, so here's the "Wayback Machine" copy:

Just What is an Independent Director Anyway? | The Conference Board Governance Center Blog

EDIT2: Found a source document from NASDAQ: "Market Rule 4200(a)(15)"

 

[oneday]

Yeah, thought I'd get pushback on this, but here's the NYSE and NASDAQ position:

NYSE: "no director qualifies as 'independent' unless the board of directors affirmatively determines that the director has 'no material relationship' with the listed company, either directly or as a partner, shareholder or officer of an organization that has a relationship with the company."[4]​

Nasdaq's rules say that an independent director must not be an officer or employee of the company or its subsidiaries or any other individual having a relationship that, in the opinion of the company's board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.[4]​

So you may state your opinion on what constitutes an "Independant Director", but this citation directly contradicts your statement that investments don't count.

Do you have a reference? Thanks.

Cheers!

If you read the NYSE one again. It says , "shareholder or officer of an organization that has a relationship with the company." So for example: a major shareholder or officer of Panasonic would not be considered "Independent."

 

[1101011]

If you read the NYSE one again. It says , "shareholder or officer of an organization that has a relationship with the company." So for example: a major shareholder or officer of Panasonic would not be considered "Independent."

Beat me to it. I agree with this reading of the NYSE one.

 

[Artful Dodger]

If you read the NYSE one again. It says , "shareholder or officer of an organization that has a relationship with the company." So for example: a major shareholder or officer of Panasonic would not be considered "Independent."

Thanks for that. I've found a reference to a NASDAQ source document:

(NASDAQ Market Rule 4200(a)(15) – Definition of “Independent Director”: (PDF - 15.6 kb)

http://media.corporate-ir.net/media_files/irol/87/87823/corpgov/nasdaq_marketplace_rule_4200.pdf

 

[UnknownSoldier]

I don't either but this is a slam dunk.

Data point. I am trading in my LR RWD Model 3 for AWD. Finished the trade-in process a week or so ago and got an email that asked which day from 12/23-12/31 could I not pick up the new Model 3. It said deliveries would be happening 6AM-Midnight those days. Paid the remaining balance today and now await my delivery timeslot.

We're getting to 100%, and I think it's going to be 100% of a big number.

Out of curiosity, how much was the depreciation on the RWD after what I presume was only a few months of ownership?

 

[M3Rider]

Book em. Buy back later.

Are you betting we're going another 10% down? Otherwise, why buy later?
With everybody saying resession is scheduled for 2020, what reasons do you have to believe that the slide will continue prior to 2020?
Also, with those analysts claiming that you might miss 5-10% growth in 2019 if you quit the market early, seems to be a a ridiculous argument if we're poised to keep losing 10% per week.

If you're giving an advice to sell, it'd be appropriate to rationalize it somehow, otherwise it is reading as a BS.