TSLA Market Action: 2018 Investor Roundtable

[ValueAnalyst]

I'm not disputing that bears skewed your result or that the people who have voted mostly clicked the $3,000 per share option.
I'm disputing that "The results show the vast majority of retail shareholders are invested in Tesla's longer term future."
is a valid conclusion to be drawn from a survey on the Twitter of a perma-bull offering options from $1,000 and higher. ;-)

Oh, now I'm back in the perma-bull camp? Just three months ago, I was predicted to be soon shorting the stock by certain bears. The fact is that I have always been invested in the longer term future of Tesla, while at times being critical of the company and decisions made. I understand that some are invested in Tesla's mission and have faith in management, and my approach is best described as a love-hate relationship, because I'm an outside investor with responsibility to my readers and clients, and I take that responsibility seriously.

I provided three options below $3,000, which was the highest option, and the majority still picked the highest option. The conclusion is valid.

 

[gavine]

Anyone care the speculate on the 0-60 time of the model 3 P?

There's a thread/poll on this:

Model 3P-D 0-60 prediction?

 

[Krugerrand]

I am afraid you haven‘t understood why the German car manufacturers incl. the suppliers like Bosch and Conti do not want to invest in battery production. Firstly they are not yet convinced that BEVs are the real solution and don‘t want to risk money as long as government subsidized Chinese companies are ready to deliver. And secondly the battery technology is developing and they don‘t want to get stuck with a huge investment in old technology. The statements from Panasonic also went into the same direction. They won‘t invest in 2170 cells or a further capacity increase in GF1 without Tesla going to pay for it ("take or pay" contract).

Oh, we understand what they’re thinking. We just think it’s stupid thinking.

 

[bambam4171]

To put the situation in the car industry in the right prospective:

In April 2018 3171 BEVs were sold in Germany. This was 1% of total car sales in that month.
Out of these 3171 BEVs only 106 were made by Tesla. Tesla sales went down 36% in Germany and 31% in Switzerland during Jan-April 2018.

You see the need for urgency for German car manufacturers ?

Lets just look shortly at another market, shall we? How about the US?

Do you understand the urgency for German car manufacturers now?

 

[Yonki]

I provided three options below $3,000, which was the highest option, and the majority still picked the highest option. The conclusion is valid.

I agree with your conclusion (I am a huge bull), but YasB's premise is that without a "less than $1000" choice, anyone who would sell at some price less than $1000 probably would not respond to the poll at all, skewing the results (both the initial 90% and the final 60%) higher than they would have been, and he's... he's... he's right! Of course if there was a "less than $1000" or a "0" option, the bears would have been speed-clicking it, also skewing the polls. But if there had been more granularity in the poll, we probably would have seen a bimodal distribution, with the bulls represented by the high value peak and the bears by the peak closer to $0.

Polls are hard.

 

[trentbridge]

To put the situation in the car industry in the right prospective:

In April 2018 3171 BEVs were sold in Germany. This was 1% of total car sales in that month.
Out of these 3171 BEVs only 106 were made by Tesla. Tesla sales went down 36% in Germany and 31% in Switzerland during Jan-April 2018.

You see the need for urgency for German car manufacturers ?

I would draw your attention to the following remarks: from latest Shareholder Update Letter

1. We are in the process of changing the quarterly production pattern of Model S and X vehicles for the various worldwide regions to ensure a more linear flow of deliveries through the quarter. We believe this will provide a better customer experience and reduce the stress on our delivery system.
   
   This is not to say your comment was incorrect, but it is dangerous to assume that Tesla sales were not constrained by supply.
   
   

 

[DurandalAI]

Lets just look shortly at another market, shall we? How about the US?
View attachment 301749

Do you understand the urgency for German car manufacturers now?

Oh man, can you imagine what this graph will look like in July? Oooooooh boy.

 

[TheTalkingMule]

LOL....Goldman getting desperate on the short side.

Goldman Sachs: Tesla may need to raise $10 billion in 2 years to keep going

 

[Unpilot]

Oil up to 80 dollars a barrel.

Oil rises to $80 a barrel for the first time since 2014

 

[The Blue Owl]

I am afraid you haven‘t understood why the German car manufacturers incl. the suppliers like Bosch and Conti do not want to invest in battery production. Firstly they are not yet convinced that BEVs are the real solution and don‘t want to risk money as long as government subsidized Chinese companies are ready to deliver.

Waiting for others to prove what the solution is by taking your customers and not risking money to invent the future are the best ways to compete, obviously. Smart companies use only technology proven to work, and if it actually doesn't work, they just write superior emissions testing software.

And secondly the battery technology is developing and they don‘t want to get stuck with a huge investment in old technology.

Yes, it's much better to be stuck with a huge investment in internal combustion engines. That is the future.

 

[ValueAnalyst]

I agree with your conclusion (I am a huge bull), but YasB's premise is that without a "less than $1000" choice, anyone who would sell at some price less than $1000 probably would not respond to the poll at all, skewing the results (both the initial 90% and the final 60%) higher than they would have been, and he's... he's... he's right! Of course if there was a "less than $1000" or a "0" option, the bears would have been speed-clicking it, also skewing the polls. But if there had been more granularity in the poll, we probably would have seen a bimodal distribution, with the bulls represented by the high value peak and the bears by the peak closer to $0.

Polls are hard.

Ah got it, that makes sense. Thank you for clarifying for me. If Twitter allowed it, I would certainly put in more options, but for the purposes of this poll, I was more interested in what my followers would do, and I know from ongoing interactions that most of them are invested in the longer term potential of Tesla and believe the stock will increase substantially in the coming years. This is also reflected in the replies to the tweet.

 

[ValueAnalyst]

Oil up to 80 dollars a barrel.

Oil rises to $80 a barrel for the first time since 2014

This is just the third inning. Energy prices will surge in the coming months.

 

[Dan Detweiler]

I would like to approach the stock side from a different angle and would like your honest input. I realize responses will be all over the map but I am interested in your thoughts.

Let's assume a reservation holder had say, $20,000 saved for a down payment on his Model 3. The money saved isn't necessarily do or die when it comes to getting his car so if he lost all of it he would still get the car (just not be very happy about it!). He was late to the reservation line and doesn't expect his invite to configure to come before August. With the current state of the stock price and everything we have heard regarding production increases, China opening up, etc. etc. Would it be wise to invest some/all of that money in Tesla stock at this point? If so, how much would you put on the line?

Curious to see what people would do.

Dan

 

[Tslynk67]

I would like to approach the stock side from a different angle and would like your honest input. I realize responses will be all over the map but I am interested in your thoughts.

Let's assume a reservation holder had say, $20,000 saved for a down payment on his Model 3. The money saved isn't necessarily do or die when it comes to getting his car so if he lost all of it he would still get the car (just not be very happy about it!). He was late to the reservation line and doesn't expect his invite to configure to come before August. With the current state of the stock price and everything we have heard regarding production increases, China opening up, etc. etc. Would it be wise to invest some/all of that money in Tesla stock at this point? If so, how much would you put on the line?

Curious to see what people would do.

Dan

Personally I'd use all $20k on buying more TSLA, but I'm a hugely bullish long and wouldn't recommend anyone else to do that.

Not an advice.

 

[ZsoZso]

What concerns me is that the large players like Daimler, BMW, VW and Bosch believe they do not need to manufacture batteries to succeed. It seems like they consider owning just the pack assembly and batterie management system as sufficient to compete against Tesla but I do not believe that this is a strategy that will work out. To consider batterie production an assembly a commodity is a huge mistakes and it looks like they have not (yet) understood the fundamental differentiation it makes for the consumer of EVs. This has implications on their future to be release cars in terms of costs as well as specs.

Not exactly true. Both BMW and VW is looking into producing their own cells using next level nanotechnology anodes, providing better "chemistry" (faster charging / higher energy density / more cycles due to less degradation) than what is currently employed in the Panasonic cells used by Tesla, see here:
March 19, 2018 News of the Day: Sila Nano Announces Partnership With BMW for the Next Generation of Lithium-Ion Batteries, Mercedes Benz Working on Car Subscription Program for the U.S. - FutureCar.com.

Their problem is that such deals with startups like Sila Nano take a long time to turn into massive cell production, see this quote:

BMW plans to incorporate Sila's silicon anode technology in a plug-in electric vehicle by 2023.

Tesla did not make a deal with Sila nano, not because they did not like the technology, but because they want something available in large scale now, not in 5 years. So the Germans are taking EVs seriously, but their time-line is still long in the future, i.e. Tesla still has a 5+ year moat against them.

 

[Unpilot]

Not exactly true. Both BMW and VW is looking into producing their own cells using next level nanotechnology anodes, providing better "chemistry" (faster charging / more cycles due to less degradation) than what is currently employed in the Panasonic cells used by Tesla, see here:
March 19, 2018 News of the Day: Sila Nano Announces Partnership With BMW for the Next Generation of Lithium-Ion Batteries, Mercedes Benz Working on Car Subscription Program for the U.S. - FutureCar.com.

Their problem is that such deals with startups like Sila take a long time to turn into massive cell production, see this quote:


Tesla did not make a deal with Sila nano, not because they did not like the technology, but because they want something available in large scale now, not in 5 years. So the Germans are taking EVs seriously, but their time-line is still long in the future, i.e. Tesla still has a 5+ year moat against them.

Plus lab breakthrough's in battery technology have a nasty habit of not scaling very well.
I have lost count of the different "breakthrough technology" batteries I have read about.

 

[Dan Detweiler]

Personally I'd use all $20k on buying more TSLA, but I'm a hugely bullish long and wouldn't recommend anyone else to do that.

Not an advice.

Of course. None of the comments here should be taken as advice. Everyone's different. I appreciate your input. Thanks

Dan

 

[Waiting4M3]

I would like to approach the stock side from a different angle and would like your honest input. I realize responses will be all over the map but I am interested in your thoughts.

Let's assume a reservation holder had say, $20,000 saved for a down payment on his Model 3. The money saved isn't necessarily do or die when it comes to getting his car so if he lost all of it he would still get the car (just not be very happy about it!). He was late to the reservation line and doesn't expect his invite to configure to come before August. With the current state of the stock price and everything we have heard regarding production increases, China opening up, etc. etc. Would it be wise to invest some/all of that money in Tesla stock at this point? If so, how much would you put on the line?

Curious to see what people would do.

Dan

I think it depends a lot on what the exit strategy is. It's too short term to guarantee any gain, Tesla could stay volatile for another 1-2 quarters easily. Getting in at ~$280 is a pretty good entry point. But if the stock price doesn't go up in the next 3 months, or down a little to say $260, will he be willing to sell at little to no gain to buy the car? or will he be happy sitting on it waiting for some gain to exit, if so, what is the exit point? If the share price continues to rise past the exit point, will he regret selling too early?

 

[plug&play]

@Dan Detweiler

I would put in half if you are only staying in it for 4-5 months. Worst case you loose a grand or two. Best case you make few grand it that time frame.

I am doing something similar excepts my time frame is at least 2-3 years. I put in $15k and I am going to hold on until it grows enough to buy $40k Model 3 (AWD SR). Hopefully it will happen in the next few years.

 

[ValueAnalyst]

I would like to approach the stock side from a different angle and would like your honest input. I realize responses will be all over the map but I am interested in your thoughts.

Let's assume a reservation holder had say, $20,000 saved for a down payment on his Model 3. The money saved isn't necessarily do or die when it comes to getting his car so if he lost all of it he would still get the car (just not be very happy about it!). He was late to the reservation line and doesn't expect his invite to configure to come before August. With the current state of the stock price and everything we have heard regarding production increases, China opening up, etc. etc. Would it be wise to invest some/all of that money in Tesla stock at this point? If so, how much would you put on the line?

Curious to see what people would do.

Dan

Are you asking for a friend? I'm in the invest in TSLA camp, given currently depressed price, but each person's framework will be different.