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Like most journalist (and most people, actually), I think the negativity is a natural reaction to Elon's self-acknowledge hubris. The biggest fans keep the faith because we deeply care to the end-game (full transition to renewable energy). Those who don't are frequently disappointed (cause the media loves to exagerate and antagonize) and people end up disillusioned... until Elon proves (once again) that he cares more about where humanity is going than $$$.
It's fine that you don't find it convincing. You question the timing of the downgrade and the changes over the last few months. This shows a lack of understanding on your part of the process of rating bonds and ignoring what the original rating was based on. The previous rating was issued at the time the bonds were issued, and used 5k/week by the end of 2017 as the basis for rating them. Bonds are not rerated constantly on the whim of a lone analyst the way stocks are. If your criticism is valid, it is only valid in that they should have made the downgrade as soon as Tesla revised their delivery schedule. Instead, they gave Tesla ample time to show they could rectify the situation, but it didn't happen, and ultimately, they downgraded the bonds.
As far as the criticism of credit rating agencies generally, the criticism is centered on the inherent conflict that makes them prone to overrate bonds, not underrate them. They have every reason to give a bond a higher rating than it deserves, and none to give lower ratings.
I'm not a bond investor or analyst, but I think it is wise to consider the more careful and methodical approach of the bond market generally and not ignore them. I don't know what Tesla's bonds should be rated, nor that they necessarily need a capital raise, but I'm not ignoring Moody's, and I would recommend you don't either.
And the stock is headed down again... Don't think sophisticated investors will go for the "burst rate" shenanigans, again. They are looking for the rate that is currently sustainable.Here is the email from Musk.
Waiting4M3
Active Member
Elon saying 10k/wk by end of 2018 is old news. In Feb Q4ER, when asked about going to 10k/wk, Elon and co said that the target is in 2019 now. Link to it below, relevant discussion around 40-41 min mark
Tesla Q4 Conference Call In Its Entirety - Video
engle
Member
All I can tell everyone is that it came from an employee through trusted intermediaries.
If I were Elon, I might consider Apple’s secrecy strategy. Reading the email, it’s pretty obvious that it is genuine from the content.
Of course, we will all get validation in a day or two.
I’m hoping they announce preliminary numbers after market close today since we’re taking another bath right now!
Don’t know if they will or not thou - but I sure would if I were EM!
Any internally generated company email would have a "CONFIDENTIAL" stamp at the bottom of the email, especially one as sensitive as this. With the 2000/wk statement, this email invites all news organizations to post a headline, "TESLA MISSES ON DELIVERIES AGAIN". I'm still not convinced it's legit.
sundaymorning
Active Member
Your conservativeness makes sense. I think we will all get to see how strong Tesla’s M3 reservation will be once AWD makes it to market. If demand continues at a slower than expected rate, then a conservative 7.5k/ week “squeezing out efficiency” might make sense. If demand continues to climb and cancellations are below 15%, then 10k makes a lot of sense, but only in 2019. Right now I would not touch the 10k hurdle just yet, we need to gain investor confidence by getting to cash flow positive first.
I am afraid but thats not enough to make me believe that this is a real mail. There are a couple of reasons for it that create question marks for me. However I can be wrong and for that reason I consider it as neutral, maybe real maybe not therefore I will disregard it and wait for the official letter.
I expect the letter to be released today after market close though too.
Unless he wanted it shared. News orgs were already expecting something way below 2k so it should be a positive from their current expectations.....and whether he said this in an email or something official you're still inviting news orgs to give that message....so not sure I see your point.
engle
Member
What I received was cutoff so any confidential label would not be visible. Also, note it was sent 3 am PDT so EM probably too tired.
The reason I’m confident in sourcIng although there is indirection involved is because I also received the Doug Field and Peter Hochlinger emails too through same channel. I didn’t bother posting them cuz others beat me to that leak.
I take the email so seriously that I did not buy any TSLA options or shares after I read it to avoid insider trading. Remember Martha Stewart? I’m not even sure if it’s legal to trade on it now after posting it here? Did that make it “public” enough? Any attorneys care to comment? What if I post it on SA also?
Thanks!
I wouldn't count on that. It's pretty clear (to me, at least) at this point that Tesla/Musk have no credible idea where they'll be at nine months from now--recall that they had no idea where they'd be at now fewer than two months ago on the Q4 conference call (2,500/week with high confidence). And that that confident revised estimate was revising another prior estimate that Elon was pretty confident in.
Fully agreed on these two. I'm happy to see that this end-of-quarter writeup will likely reference actual production during an actual seven-day period rather than a number extrapolated from various lines over a subset of a week.
I also believe that they are much more likely to hit today's projections than they were to hit the end-2017 guidance, their revised Q1 guidance, and their revised revised Q1 guidance. As the ramp progresses, it seems likely that their handle on what they need to do in order to continue to ramp will become more solid--especially when they get to 5k and are effectively re-creating what already works. But I must advise caution--let's let them hit, I don't know, a single Model 3-related ramp estimate before accepting guidance for end of 2018.
Recall that I made some guesstimates back at the beginning of January using the then-current guidance, and then revised my guesstimates at the end of January based on the new then-current guidance. I was told by many that both these guesstimates were conservative, and they've both turned out to be wildly optimistic. Here is my summary of the 1/3 estimates:...and the 1/26 estimates were 16k in Q1, 47k in Q2, 75k in Q3, and 92k in Q4 for a total of 234k. I think we can all agree that 234k is unpossible now, and 200k highly unlikely. I updated my guesses today using what is probably a high-end Q1 production count along with relatively slow and steady ramping from 2k this week to 6k at the end of the year, and that yields 13k in Q1, 36k in Q2, 53k in Q3, and 66k in Q4 for a total of 170k Model 3s produced through 2018.
At this point I'd be quite happy with that level of Model 3 production and 100k sustained rate on S/X for the year. That's still around a 160% increase in total vehicles produced YoY. Which is nuts. But I'm not expecting them to hit that 170k number by the end of the year. Much like my Model 3 arriving by the end of its current March-May window: I'd be happy with that, but I've learned over the years not to expect Tesla to hit any goal related to timing on the first, second, or third try. (See also: Autopilot features, FSD release timeline, last weekend's tweet promising updated map engine rollout by Easter weekend.)
engle
Member
I agree. EM knew the previous emails from Fields and Hochlinger were leaked so could assume this one would be, too.
He does want the positive news out ASAP. It’s unlikely he had reportable accurate production numbers at 3 am((!) so this was probably the next best thing. He’s a true visionary genius of our times, a master of the spin and setting expectations too high, unfortunately...
He does want the positive news out ASAP. It’s unlikely he had reportable accurate production numbers at 3 am((!) so this was probably the next best thing. He’s a true visionary genius of our times, a master of the spin and setting expectations too high, unfortunately...
sundaymorning
Active Member
We are finally losing less than AMZN in percentage
TheTalkingMule
Distributed Energy Enthusiast
I love how a completely unsubstantiated email posted on a nonsense blog has turned into a "cited report" on Bloomberg. Is there any verification threshold for news anymore?
Waiting4M3
Active Member
I think there are lot of ifs to go through before we take the 8000 MS/X/3 per week by end of 2018 as "guidance".But I must advise caution--let's let them hit, I don't know, a single Model 3-related ramp estimate before accepting guidance for end of 2018.
If the letter is real
If we think Elon's rally letter to employees is the same as what they would guide to investors
If we think what they would guide is exactly what the management is targeting
If what they're targeting will stay the same after introducing AWD and/or SR
If the introduction of AWD/SR will be more or less complex than rampong LR+RWD
Waiting4M3
Active Member
TMC cited it, what else do you need?
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