TSLA Market Action: 2018 Investor Roundtable

[bdy0627]

I did not see the margins data that many seem are so confident about. I think in general S generates 25% gross margin, 3 expected to generate 15% in Q3, 20% closer to EOY and maybe catch up to S in the next year.
So, we were mostly talking about the near future(this year) - that once people test drive a 3, they will put an order in and then everything is super-rosy.
I don't know if P in Q3 will generate >25% margin versus <15% for RWD to average 15.
Some people seem super-confident based on number of likes, so they must have detailed data on how much each option cost and what is the margin on top of that option to be sure that the option's % margin exceeds average margin on the car.

It's true that margins for the 3 aren't there yet, whereas they are with the S. However, Tesla is going to make as many 3s as they can. There really isn't any question that they want the mix of performance 3s to be as high as they can get it.

 

[Webeevdrivers]

It's true that margins for the 3 aren't there yet, whereas they are with the S. However, Tesla is going to make as many 3s as they can. There really isn't any question that they want the mix of performance 3s to be as high as they can get it.

So what is the margin on a model 3. No one seems to know. Is it in any financial anywhere??

 

[bdy0627]

So what is the margin on a model 3. No one seems to know. Is it in any financial anywhere??

This thread has some good info on current and estimated financials:
q2-q4 2018 financial projections

 

[bdy0627]

So your credit is all based on your number of posts and another guy's post?
My source:
https://fintel.io/ss/us/tsla
I do not think 60% of such a huge daily volume being short interests is plausible.

Make no mistake, I am firmly long. I just feel we give too much credit to short's alleged "power". Shorts would be powerless if enough longs want to squeeze them. Just think about VW 08 short squeeze. So my focus is when there are enough longs to make the move.

I looked at the site that you linked and I see why you are asking. That's confusing to me. Here is the site I'm using, which is also used in papafox's thread:
tsla | Volumebot

There is probably an obvious answer for the difference between the sites, but I'm not sure what it is. I do see the trading volume is different. The site you are using shows double the volume that is shown for trading volume on SharpCharts and Yahoo. On the Volumebot site, the volume is half what is shown on SharpCharts. Perhaps it is the difference of whether a single buy/sell transaction is counted as 1 or 2 trades? On the Volumebot site, I think only sales transactions are counted. That must be what is going on. If you use just sales, then percent of sales that were short is 4x what it is on the site you are using. Probably what is most important is the relative change in the percentage of short trading over time.

 

[Webeevdrivers]

This thread has some good info on current and estimated financials:
q2-q4 2018 financial projections

Thank you.

 

[shootformoon]

I looked at the site that you linked and I see why you are asking. That's confusing to me. Here is the site I'm using, which is also used in papafox's thread:
tsla | Volumebot

There is probably an obvious answer for the difference between the sites, but I'm not sure what it is. I do see the trading volume is different. The site you are using shows double the volume that is shown for trading volume on SharpCharts and Yahoo. On the Volumebot site, the volume is half what is shown on SharpCharts. Perhaps it is the difference of whether a single buy/sell transaction is counted as 1 or 2 trades? On the Volumebot site, I think only sales transactions are counted. That must be what is going on. If you use just sales, then percent of sales that were short is 4x what it is on the site you are using. Probably what is most important is the relative change in the percentage of short trading over time.

Interesting explanation. I compared two charts and they have very similar pattern and is about 4* percentage-wise. And the volume of my site is 2* of the real trading volume and your site is 1/2. Their short volume seems exactly the same. So the real short percentage is 2* mine or 1/2 of yours?

 

[BioSehnsucht]

The hardware for EAP is included in all cars. So if we grant that somewhere between 5k/week and 10k/week the 35k car becomes profitable (even if only barely) on it's own, then at that point, if not before (I feel like there could be some philosophical argument over this), that means that EAP and FSD fees can be assumed to be essentially 100% margin (R&D being separate yadda yadda).

 

[ValueAnalyst]

Oh geez. At current market rates, Elon does not want to raise money, but if someone waved a ten year $1B bond at 3% interest, he would take it. Got it?

SpaceX or other related parties could easily provide Tesla with $1B at 3% cost, if needed, but it is not, because capital is not the limiting factor. Tesla has $2B+ cash on hand, additional liquidity on its credit lines, and is now generating annualized $4B from its Model 3 program as of July, rising by annualized $500m with each 1000 increase in the weekly production rate. Tesla does not need to, nor does it “specifically” want to, raise capital. Why is this so complicated?

 

[ValueAnalyst]

I think the point is, tsla can use 10B interest free loan right now. But given the current market rate to tsla, elon refused to borrow at this cost.

I understand the point, and I disagree with it. Capital is not the limiting factor for Tesla’s growth, so why would Tesla borrow money for it to sit there on its balance sheet?

 

[Quesder]

What happened to AH SP? Dropped to 316
And not only TSLA. I saw same thing on MSFT and AMZN

 

[ValueAnalyst]

What happened to AH SP? Dropped to 316
And not only TSLA. I saw same thing on MSFT and AMZN

Trump threatened new tariffs escalating trade war.

 

[SteveG3]

SpaceX or other related parties could easily provide Tesla with $1B at 3% cost, if needed, but it is not, because capital is not the limiting factor. Tesla has $2B+ cash on hand, additional liquidity on its credit lines, and is now generating annualized $4B from its Model 3 program as of July, rising by annualized $500m with each 1000 increase in the weekly production rate. Tesla does not need to, nor does it “specifically” want to, raise capital. Why is this so complicated?

my recollection of long-term net margin targets discussed by Tesla for the Model 3 is something like 10-12%. unless I missed a major update from Tesla, assuming the annual run rate as of July is 250K, it looks like you think Tesla heavily sandbagged those projections... can you share your assumptions for normalized (post ramp) Model 3 ASP and net margins? wondering what you are basing any numbers substantially different than guidance on.

 

[Cosmacelf]

SpaceX or other related parties could easily provide Tesla with $1B at 3% cost, if needed, but it is not, because capital is not the limiting factor. Tesla has $2B+ cash on hand, additional liquidity on its credit lines, and is now generating annualized $4B from its Model 3 program as of July, rising by annualized $500m with each 1000 increase in the weekly production rate. Tesla does not need to, nor does it “specifically” want to, raise capital. Why is this so complicated?

Well, let’s just say I disagree. While we don’t know how much cash SpaceX has on hand since it is a private company, it is very unlikely it has $1B sitting around.

When you say “capital isn’t a limiting factor”, limiting factor for what? Today, Tesla is not building the Shanghai factory. It is not building a factory for the Semi. It is not building a factory for a Tesla pickup truck. It is not building a European factory. It is not manufacturing the Model Y, nor the Roadster 2. I would venture that Tesla could do all these things today if it had the money to do so, but it doesn’t.

 

[Singer3000]

What an odd turn this thread has suddenly taken. I’m frankly amazed that anyone can simultaneously hold the two views that global transportation is on the verge of Big Bang electrification and yet can’t recognise that Tesla, a small but leading player in the field, does not face at least an impediment to its medium term growth from its high bond yields and speculative credit rating.

It is also true that there are other sources of capital beyond NASDAQ and the international bond market. Not least the great blob of Chinese household savings that is forecibly kept onshore and recycled through the state owned banks and securities houses. And then allocated to a quite surprising extent according to communist party strategy. Hopefully this is what Mr Musk had in mind when he said he “specifically did not want to” do a capital raise. Because the Chinese blob represents dumb, stable and cheap money when the right state official is on your side and could turbo charge progress towards Tesla being a multimillion unit producer.

 

[Singer3000]

Yes spot on. If you don’t think Tesla could use additional R&D funds efficiently or have an immediate market for their product pipeline, I’m at a loss why you would buy the stock at this valuation.

Well, let’s just say I disagree. While we don’t know how much cash SpaceX has on hand since it is a private company, it is very unlikely it has $1B sitting around.

When you say “capital isn’t a limiting factor”, limiting factor for what? Today, Tesla is not building the Shanghai factory. It is not building a factory for the Semi. It is not building a factory for a Tesla pickup truck. It is not building a European factory. It is not manufacturing the Model Y, nor the Roadster 2. I would venture that Tesla could do all these things today if it had the money to do so, but it doesn’t.

 

[WarpedOne]

Tesla incorporated Tesla (Shanghai) Co Ltd in May.
What stops this China entity to issue new shares on china stock market to fund china GF?

All WS analysit get to do with that is they can cry about it.

 

[ValueAnalyst]

Well, let’s just say I disagree. While we don’t know how much cash SpaceX has on hand since it is a private company, it is very unlikely it has $1B sitting around.

When you say “capital isn’t a limiting factor”, limiting factor for what? Today, Tesla is not building the Shanghai factory. It is not building a factory for the Semi. It is not building a factory for a Tesla pickup truck. It is not building a European factory. It is not manufacturing the Model Y, nor the Roadster 2. I would venture that Tesla could do all these things today if it had the money to do so, but it doesn’t.

Ok. Let’s agree to disagree then. I’m sure we can copy/paste Elon to do all of those things simultaneously.

 

[oneday]

SpaceX or other related parties could easily provide Tesla with $1B at 3% cost, if needed, but it is not, because capital is not the limiting factor. Tesla has $2B+ cash on hand, additional liquidity on its credit lines, and is now generating annualized $4B from its Model 3 program as of July, rising by annualized $500m with each 1000 increase in the weekly production rate. Tesla does not need to, nor does it “specifically” want to, raise capital. Why is this so complicated?

It’s complicated because I don’t think most of us agree with your analysis:

1. SpaceX can’t easily provide $1B to Tesla, do you know what kind of money they need to achieve their goals.

2. Tesla isn’t generating $4B annualized profit as of July. You’re uber optimist financial/future projections aren’t believed by most of us here.

3. Elon said he didn’t want to raise capital for different reasons than you’re assuming.

My view/opinion is he wants to get a lot of the haters off his back by showing profit. This is totally different from not being able to utilize additional capital if it didn’t mean he had to continue to rely on the snake pit of Wall Street.

Seriously, just like SpaceX Tesla has HUGE goals. If $10B was handed to him he’d advance those goals with it. I think he is sacrificing the mission right now to shut up the burning cash trolls, because it has spread like cancer.

 

[ValueAnalyst]

my recollection of long-term net margin targets discussed by Tesla for the Model 3 is something like 10-12%. unless I missed a major update from Tesla, assuming the annual run rate as of July is 250K, it looks like you think Tesla heavily sandbagged those projections... can you share your assumptions for normalized (post ramp) Model 3 ASP and net margins? wondering what you are basing any numbers substantially different than guidance on.

In the longer term, I expect Tesla to drop ASP per its mission, but only after profitability is proven and shorts are squeezed. Until then: 3Q: $60,000+ ASP, $30,000 COGS (German third-party estimate), 5,000 to 6,000 weekly avg, no incremental OpEx needed.

 

[oneday]

Ok. Let’s agree to disagree then. I’m sure we can copy/paste Elon to do all of those things simultaneously.

So what are you saying is the limiting factor, Elon can’t multitask enough so he doesn’t want to do everything at once?