TSLA Market Action: 2018 Investor Roundtable

[bdy0627]

I believe Sparks is supposed to cost $5 billion altogether. Tesla should have somewhere around $2 billion on hand right now. There is still some capital investments needed for model 3, lots of capital needed for model Y (another factory). It will be interesting to see how they raise all this money. I do think it’s already been figured out though.

The one thing speaking against that idea is that Musk has stated that Tesla must sell the higher optioned Model 3 right now instead of the less expensive versions or Tesla will "die." I don't know that he would say that if funding was lined up at this point.

 

[K_Dizzle]

The one thing speaking against that idea is that Musk has stated that Tesla must sell the higher optioned Model 3 right now instead of the less expensive versions or Tesla will "die." I don't know that he would say that if funding was lined up at this point.

You’re reading too much into this tweet. He’s simply explaining in layman twitter terms why it’s important to produce the high margin car first and while not taking heat for promising $35k car

 

[defc0n]

You’re reading too much into this tweet. He’s simply explaining in layman twitter terms why it’s important to produce the high margin car first and while not taking heat for promising $35k car

That’s pretty much how I interpreted it. Although I do think Tesla would essentially die if they did so something as stupid as not sell their higher margin cars first right now

Elon seems way too confident to me to not have big things lined up.

 

[sundaymorning]

I see Tencent buying another 5%-10%

Tencent was showing off Tesla in China a couple weeks ago from what I remember, they’re also testing out self driving cars.

 

[Richard007]

Bought 20 more shares today. Almost at 800 sh. !

I don’t think we’ll see these low prices ever again after Q2.

Cheers,
Richard

 

[wipster]

Bought 20 more shares today. Almost at 800 sh. !

I don’t think we’ll see these low prices ever again after Q2.

Cheers,
Richard

Good on you mate!

 

[Krugerrand]

I'm being careful with my expectations for the annual meeting, since I've attended or watched a bunch of them and they typically end up being a lovefest for Tesla, or some small group such as the non-leather seat gang makes a big appearance and tries to steer the agenda a bit (and sometimes succeeds).

That said, Musk is tired of the media BS and the manipulations by shorts. If he ever lets a big cat out of the bag at an annual meeting, this would be the one.

I will be watching with bated breath because I want to know if the bike was returned or still MIA. If still MIA, I demand to know what Elon is going to to about it.

 

[MartinAustin]

This article is really important because it highlights:
* Tesla has already achieved a production rate of 500 M3s/day (3,500/wk)
* A major bottleneck, the battery/chassis marriage station has already been fixed and is above the 5,000/wk pace
* As production rate increases, shorts have been holding or increasing their positions, leading to extremely crowded shorting at a time right before potential catalysts send the SP much higher

Bottom line: it's a really bad time to be a TSLA short (hint, hint to our few resident shorts) and a good time to be positioned in the stock as a long. All depends upon Tesla delivering on the 5,000/wk M3 production rate. As Elon would say, "place your bets!"

And this is before the installation of the Grohmann Line!

A couple of negative risks... 1) installation does not go smoothly and/or production is halted during the downtime, obviously. 2) after the line has started up, it begins production at a lower level than the semi-manual process that preceded it, and so they produce less than 500/day.

The positives - 1) production may increase slightly... I think Elon might be keeping this in his pocket. Grohmann Line may be one of the catalysts to get to 714/day. 2) workers will be re-allocated elsewhere at the Gigafactory on other work, so productivity will go up somewhere, hard to say what on - and the cost per Model 3 battery pack will fall, so, since we're half-way through the quarter, Q2 will see a decent jump in profitabilty over Q1. (but Q3 will be the real doozie)

 

[wipster]

And this is before the installation of the Grohmann Line!

A couple of negative risks... 1) installation does not go smoothly and/or production is halted during the downtime, obviously. 2) after the line has started up, it begins production at a lower level than the semi-manual process that preceded it, and so they produce less than 500/day.

The positives - 1) production may increase slightly... I think Elon might be keeping this in his pocket. Grohmann Line may be one of the catalysts to get to 714/day. 2) workers will be re-allocated elsewhere at the Gigafactory on other work, so productivity will go up somewhere, hard to say what on - and the cost per Model 3 battery pack will fall, so, since we're half-way through the quarter, Q2 will see a decent jump in profitabilty over Q1. (but Q3 will be the real doozie)

Time to accentuate the positives!

 

[Zhelko Dimic]

That’s pretty much how I interpreted it. Although I do think Tesla would essentially die if they did so something as stupid as not sell their higher margin cars first right now

Elon seems way too confident to me to not have big things lined up.

He's also been known to bluff in the past.
Some of the comments from Q1 conf. call made me _almost_ sure they didn't figure out yet the financing for new factories and timing for Y. He sounded like someone who hasn't given much thoughts to it, as there were more immediate issues to handle... The only thing he was sure of, it wasn't going to be Freemont. You can still find CC archived, should you want to get to the source...

 

[Teslie]

* Tesla has already achieved a production rate of 500 M3s/day (3,500/wk)

Tesla uses the X,000/week number for production rate. Why are they "announcing" a daily rate now ? If they are able to produce 3,000/week they should say it or nobody wll take serious any extrapolated numbers given their credibility.

 

[NicoV]

He's also been known to bluff in the past.
Some of the comments from Q1 conf. call made me _almost_ sure they didn't figure out yet the financing for new factories and timing for Y. He sounded like someone who hasn't given much thoughts to it, as there were more immediate issues to handle... The only thing he was sure of, it wasn't going to be Freemont. You can still find CC archived, should you want to get to the source...

It was only since the last CC that Tesla has stated that Model Y wouldn’t be built in Fremont. In the past they claimed that Fremont might go to 1M cars. By the end of 2018 (or whenever they are at the 10K/week M3 rate) they will be at 600K. I seriously doubt that they only figured out last month that would max out Fremont. The only explanation I can imagine for the sudden statement that Model Y will not be produced in Fremont is to use remaining space for more Model 3 production. Which could mean Model 3 production could go to 1M in 2019/2020. There you have the financing for Model Y gigafactory: 25% margin on an extra 500K Model 3s.
An new gigafactory for Model Y would also explain the Model Y delay to 2020, as building a new fab would need more time than installing equipment in Fremont.

 

[BioSehnsucht]

Rather than 1M from Fremont, I'd prefer to see a new GF in Europe to build 3/Y/TE products, and another in China to do the same.

Getting 1M from Fremont might be cheaper than GF in Europe (we already know China is happening), but only relatively...

The logistics of getting 1M vehicles a year physically transported out of Fremont will be difficult.

 

[WarpedOne]

The logistics of getting 1M vehicles a year physically transported out of Fremont will be difficult.

$5B difficult?
"Dealing with european worker unions" difficult?
"Dealing with european politics" difficult?
"Dealing with endangered european establishment" difficult?
I rather doubt it.
Best course of action is to produce oustide Europe and wait for old Europe to suffocate itself into its own grave. I'm writing this as a 'proud EU citizen'.
Tesla needs to pick their fights very carefuly.

 

[neroden]

The price action is totally insane. I am going to buy shares and give them to friends now. Unremitting good news, price drop. I guess my prediction of FUD ramped to 11 was correct. This could last until Q3 numbers come out, or it could change early in Q3.

 

[cricketman]

Rather than 1M from Fremont, I'd prefer to see a new GF in Europe to build 3/Y/TE products, and another in China to do the same.

Getting 1M from Fremont might be cheaper than GF in Europe (we already know China is happening), but only relatively...

The logistics of getting 1M vehicles a year physically transported out of Fremont will be difficult.

I've been thinking about whether and where there will be a Gigafactory in Europe. I think the big question is where they will find the talent to work in the next gen Gigafactory which will mainly require software engineers who will also need to speak good English.

It will be impossible to find those people in Southern Europe. I live in Spain, and here, young people hardly know what software engineering is. Couple to that, the influence of the trade unions, 35 hour weeks and a government hostile to solar energy and innovation then it is not an attractive place at all for Tesla. France and Italy are similar.

Germany has more talent but also high wages, strong trade unions and now car workers are asking for 28 hour weeks. And then you have BMW and VW influencing the politics, Tesla is always going to come off second best there. I think Tesla are finding all those problems with the Grohmann engineering plant when workers immediately threatened strike action.

So Tesla may find it better to send cars to Europe from the China Gigafactory, at least in the mid-term. Maybe when Europe catches up with California and China in terms of skills and attitudes to electric cars then they will reassess

 

[neroden]

I don't believe it matters if the shareholders held the stock and made money, if the stock dropped in a time period associated with the merger the plaintiffs can claim losses.

Instead, the plaintiffs face an uphill battle because the CEO abstained from the vote, the decision was not clearly out of line with "good for tesla", and that is what they need to prove: that the decision to merge was not in the best faith for the TSLA shareholders. I don't believe there is a need to show that other companies are better to purchase (as some have claimed), but rather to show that it was a decision that hurt shareholders and had no obvious benefit to tesla. I think the courts allow quite a bit of leeway in letting companies run themselves....

But I'm no expert.

I have been in these class action lawsuits regarding stock price. Only stockholders who actually lost money can get anything. Given the massive weakness of the case to start, and the subsequent price action, this is going nowhere material.

 

[cousinHub]

It will be impossible to find those people in Southern Europe. I live in Spain, and here, young people hardly know what software engineering is. Couple to that, the influence of the trade unions, 35 hour weeks and a government hostile to solar energy and innovation then it is not an attractive place at all for Tesla. France and Italy are similar.

What about in Portugal ?

Renewable Energy Meets 100% Of Portugal's March Electricity Needs | CleanTechnica

http://lithium.today/lithium-supply-by-countries/lithium-supply-portugal/

 

[cricketman]

What about in Portugal ?

Renewable Energy Meets 100% Of Portugal's March Electricity Needs | CleanTechnica

http://lithium.today/lithium-supply-by-countries/lithium-supply-portugal/

Yes Portugal would be a good choice because of the sun, very cheap land and labour. And actually the Portuguese speak good English, better than the Spanish anyway, but you still have the skills problem.

There are rumours that the Gigafactory in Nevada has had problems because of a lack of skills. People just don't know how to work in a Gigafactory. It has the word "factory" in it, but it is mainly a software engineering plant. Outside of California, software engineers are scarce and in Europe, very scarce.

The skills problem is rarely talked about. In traditional car factories, you just need people with arms and legs who can lift stuff and learn a simple skill after watching someone for a day or two. That's not the case when you are building smartphones on wheels which are constantly being improved and new innovations happening in real time.

If Tesla wants to be a company that continues to innovate at all its Gigafactories on everything they do, this business model seems super difficult to me. I think a better model would be to have an innovation centre at Freemont/Nevada and then the other Gigafactories will simply "copy" what the guys do over there i.e. the Chinese model. Heck, maybe the software engineering for the Portugal Gigafactory could be done remotely in the US, and you staff it out in Portugal with robot technicians/maintainance guys. That may be more realistic. You could train one of these guys in maybe a few months...

 

[Causalien]

Yes Portugal would be a good choice because of the sun, very cheap land and labour. And actually the Portuguese speak good English, better than the Spanish anyway, but you still have the skills problem.

There are rumours that the Gigafactory in Nevada has had problems because of a lack of skills. People just don't know how to work in a Gigafactory. It has the word "factory" in it, but it is mainly a software engineering plant. Outside of California, software engineers are scarce and in Europe, very scarce.

The skills problem is rarely talked about. In traditional car factories, you just need people with arms and legs who can lift stuff and learn a simple skill after watching someone for a day or two. That's not the case when you are building smartphones on wheels which are constantly being improved and new innovations happening in real time.

If Tesla wants to be a company that continues to innovate at all its Gigafactories on everything they do, this business model seems super difficult to me. I think a better model would be to have an innovation centre at Freemont/Nevada and then the other Gigafactories will simply "copy" what the guys do over there i.e. the Chinese model. Heck, maybe the software engineering for the Portugal Gigafactory could be done remotely in the US, and you staff it out in Portugal with robot technicians/maintainance guys. That may be more realistic. You could train one of these guys in maybe a few months...

I vote for Eindhoven, Netherland.