TSLA Market Action: 2018 Investor Roundtable

[jeewee3000]

Well first time they had to setup all the assembly lines which we know went overly well. Once you know how a line is setup (like the one from Grohmann that is being installed at GF then its more or less copy/paste somewhere else which should be way, way faster than initial setup.

I agree, but knowing Elon he won't just copy paste a current assembly line without trying to improve upon it (which is easier when you start from scratch, but takes a bit longer than just copy-pasting).

 

[YasB]

Well first time they had to setup all the assembly lines which we know went overly well. Once you know how a line is setup (like the one from Grohmann that is being installed at GF then its more or less copy/paste somewhere else which should be way, way faster than initial setup.

That leaves me wondering why the other automakers, who did the exact same thing dozens of times are needing 3 years or more for a completely new production plant. We will probably not be able to solve that riddle today, but I would still like to hear what timeframe Tesla bulls are estimating for the start of Model Y and / or semi volume production. Let's say something like 1000 Model Ys or 100 Semis a week. As mentioned earlier, I'll go with early 2022 for the Model Y. A bit earlier ... maybe a year or so for the semi truck, which would be early 2021.

 

[mongo]

That leaves me wondering why the other automakers, who did the exact same thing dozens of times are needing 3 years or more for a completely new production plant. We will probably not be able to solve that riddle today, but I would still like to hear what timeframe Tesla bulls are estimating for the start of Model Y and / or semi volume production. Let's say something like 1000 Model Ys or 100 Semis a week. As mentioned earlier, I'll go with early 2022 for the Model Y. A bit earlier ... maybe a year or so for the semi truck, which would be early 2021.

Tesla in-sourced building GF1 and the 3 line (then added the Grohmann team). So they do not need to deal with bidding/quoting/contacting/waiting for/coordinating an outside construction firm. If Y follows the 3 platform, then much can be reuse which also cuts build time. Think of the company that build McDonald's locations, optimized cookie cutter operations. Even GF1 is module based.

 

[bambam4171]

I agree, but knowing Elon he won't just copy paste a current assembly line without trying to improve upon it (which is easier when you start from scratch, but takes a bit longer than just copy-pasting).

Agree with that. The bit about Model Y being revolutionary made me cringe. This sounds very, very much like the stuff he said before Model 3 launch and we know how that went. I was hoping they would only change Model 3 lightly to make a Model Y so they DON'T have to go through all this again, but alas.

 

[mongo]

Agree with that. The bit about Model Y being revolutionary made me cringe. This sounds very, very much like the stuff he said before Model 3 launch and we know how that went. I was hoping they would only change Model 3 lightly to make a Model Y so they DON'T have to go through all this again, but alas.

I'd say the 3 is revolutionary in terms of electrical consolidation and end market/ build agnosticism. The issues have been mainly with the manufacturing line. Y will likely be another huge step in electrical distribution with only power feeds and communication lines to the actuator/lighting endpoints. If they reuse the pack design, 80% of their current production issues are eliminated. If they reuse the drive units, then tack on other 2% of issue elimination. Plus, they have another year of 3 manufacturing before Y line setup, allowing for even more optimization to occur.

 

[jelloslug]

That leaves me wondering why the other automakers, who did the exact same thing dozens of times are needing 3 years or more for a completely new production plant. We will probably not be able to solve that riddle today, but I would still like to hear what timeframe Tesla bulls are estimating for the start of Model Y and / or semi volume production. Let's say something like 1000 Model Ys or 100 Semis a week. As mentioned earlier, I'll go with early 2022 for the Model Y. A bit earlier ... maybe a year or so for the semi truck, which would be early 2021.

Because nobody just "cuts and pastes" production lines. Every production line is made from scratch with no accounting for what may or may not be there already.

 

[bambam4171]

Because nobody just "cuts and pastes" production lines. Every production line is made from scratch with no accounting for what may or may not be there already.

Why would you do that? You have a working design and throw it away and start from scratch? You are building a new factory, why not to it the same way the already optimized one works? Ok, if you have things you want to improve you sure change that but you certainly don't start from scratch.

 

[Todd Burch]

Why would you do that? You have a working design and throw it away and start from scratch? You are building a new factory, why not to it the same way the already optimized one works? Ok, if you have things you want to improve you sure change that but you certainly don't start from scratch.

I think that was sarcasm . (Jello is the most sarcastic of all foods).

 

[Irishjugg]

And Barclays, Jeffries, Morgan Stanley, UBS and Goldman are lining up behind Moody's. As are most people who can read balance sheets and cashflow statements.

There is a $2bn hole in the financials. If Musk has some secret plan to fill it, he should tell us. Even if they manage to eke out a positive cashflow in Q3 and/or Q4, there's no way it will be big enough to fill the hole.

He seems to be saying they will cut back capex spending to only what's absolutely and immediately needed, which is a start - forget about the 10,000 per week, or the semi, or the Y or the Roadster or any of that stuff for at least a year - that may get him $3-400 million. He may have another 2-300 million of ZEVs squirreled away. As for the rest, if he was counting on a high stock price to bail him out on the convertibles, I think he may have blown that last night.

Your error comes in the "eek out" part. Your numbers are low, particularly for Q4.

 

[Irishjugg]

"Folks who benefit from Tesla having to raise capital say Tesla must raise capital."

News at 11.

That list of Banks is also a whos who list of Banks that really sucked at understanding debt and such in 2007.

Same goes for Moody's

 

[mongo]

Started new thread for this topic:

General discussion of plant building timelines (including non-Tesla)

5 months to pick a spot and setup partnership, 3 years to build after that.
For Mazda and Toyota, why the rush to Alabama?

Why would you do that? You have a working design and throw it away and start from scratch? You are building a new factory, why not to it the same way the already optimized one works? Ok, if you have things you want to improve you sure change that but you certainly don't start from scratch.

 

[jelloslug]

Why would you do that? You have a working design and throw it away and start from scratch? You are building a new factory, why not to it the same way the already optimized one works? Ok, if you have things you want to improve you sure change that but you certainly don't start from scratch.

Because after 5 to 7 years, everything on that assembly line is either worn out, out of date, incompatible with the new product, or some combination of those things.

 

[Todd Burch]

Because after 5 to 7 years, everything on that assembly line is either worn out, out of date, incompatible with the new product, or some combination of those things.

I see what you're saying, but WRT something like Model 3 and Model Y drivetrain--if they share the same design (and Tesla saw little need for improvement), Tesla would just copy the Model 3 drivetrain equipment over for the Model Y.

 

[SteveG3]

Elon is discussing Wednesday's call now. Mentions shorts, actual investors, in the background misinformation about Tesla...

Seems like a great opportunity to voice any suggestions we have about Tesla/Elon improving communications and/or responding to misinformation.

You can tweet now, email IR later,

You can "like" any tweet you agree with so it is more prominent for Elon and/or Tesla to see,

More details recently posted here, including sample tweet to join in conversation...

Investor CONSTRUCTIVE Suggestions and/or Requests of Tesla

 

[bambam4171]

Because after 5 to 7 years, everything on that assembly line is either worn out, out of date, incompatible with the new product, or some combination of those things.

Of course it is worn out but you are building a new line with new bots. Reinventing the wheel every time provided you don't see huge benefit does not make sense.

 

[Todd Burch]

Getting stormy, and I'm not talking about Daniels!

Elon Musk on Twitter


For the newer shorts around here, the last time Elon tweeted something like this, shorts lost billions of dollars in TSLA.

You've been warned. Multiple times.

 

[Irishjugg]

There are and i'm one of them. Of course i can't be certain that this will happen, but from my point of view it's a very realistic possibility. Lets's assume Tesla reaches a sustainable rate of 5k a week in July and keeps selling Model S+X at the current rate. How would you argument, that a share price above $350 is justified and below $300 is not enough, without refering to the past share price? From a bearish perspective that sharesprice wasn't justified at any moment in time and Tesla was trading at a pretty high hope-multiplicator. The story was fully intact and the outlook was something like this:

1. 500k Model 3 per year exit rate in 2018
2. Gross margin of 25% on those and above standard automation
3. Hope for Semi-Truck scale production start in 2019*
   
4. Hope for Model Y production by 2019 or 2020**
   
5. Hope for a refresh of Model S and / or Model X this year
   
6. Demonstration of huge advances in Autopilot development by the end of the year
7. Announcement of several new factories by end of the year 2017

Things have changed quite a bit since then and sentiment seems to turn around. In other places that is, not here of course. ;-)

Personally i have no problem with Tesla reaching break-even or posting a net profit with Model 3 this year, if they continue to postpone the other stuff. At first i was a bit surprised and rattled by Q1 numbers, since i assumed losses would be a bit higher and production rate guidance would be lowered again. That said, further reducing and delaying CapEx calmed me a bit down. This is not the stuff you want to see from a growth company, that is partially trading on a first-mover-advantage compared to incoming competition.

From my point of view the most bearish things i took from the update letter and conference call were:

• Not providing a schedule and financing plan for investments in Semi production.
• Stating CapEx for Model Y will be spent only from 2019 onward.

I'm not an industry expert, but after researching for a while, I've not found a single car production plant that was build in less than 3 years from construction start to production start. That would delay Model Y scale production until late 2021 or 2022. Until then it seems Tesla would be constrained at something like 500k Model 3 / 100k Model S+X in the most optimistic scenario i'm willing to consider. That's a lot of time for competing companies to try catching up, for sentiment or for macros to change and for a lot of things to just go wrong. And more importantly, it's not enough to support a valuation of $50 billion from a fundamental perspective.

* https://electrek.co/2017/06/07/tesla-semi-production-elon-musk/
** https://electrek.co/2017/08/02/tesla-model-y-coming-sooner/

Wanted to correct something for you.

They did say on the call that they are already spending capex on model Y right now.

The quote was that it wouldn't be substantial or a relevant percentage of the calle budget until 19.

Subtle but I think important distinction

 

[LordAstinus]

"...Oh and uh short burn of the century comin soon. Flamethrowers should arrive just in time.
..."

Elon Musk on Twitter

I would be running to the hills if I was a short.

 

[Dan Detweiler]

Getting stormy, and I'm not talking about Daniels!

Elon Musk on Twitter


For the newer shorts around here, the last time Elon tweeted something like this, shorts lost billions of dollars in TSLA.

You've been warned. Multiple times.

I'm gonna guess that they announce attainment of 4000 cars per week production.

Dan

 

[Mich]

I'm gonna guess that they announce attainment of 4000 cars per week production.

Dan

No. Flamethrowers mean GF 3, 4 and 5 are in production much faster than anybody expects. My guess is that chinese Model 3 production is already well prepared and just months ahead.