TSLA Market Action: 2018 Investor Roundtable

[bambam4171]

Amount of time spent charging at high temperatures was what Dahn’s tests at Dalhousie found to have a huge, permanent effect on the chemistry of ion migration. Minute changes in chemistry (Musk’s “the right molecule in just the right place,” if you will) were seen to help prevent the degradation, but he said this meant a whole lot more testing was in order to determine how much of what and where, helps the most. Cooling during charging always helps.

Don’t know what he’s come up with since working at Tesla, but the guy sure can science the sugar out of this sugar.

Well Jeff Dahn was one of 2 persons attributed with to discovery NMC type batteries, of course he knows sugerloads about these things.

 

[sundaymorning]

Ok deiselgate is spreading to Mercedes:

Mercedes May Recall 600,000 C, G-Class Autos After Emission Cheating Detailed

C class and G class models for now...

 

[NicoV]

Sorry, that should probably be increasing by 10,500 per quarter, but the point remains the same.

So you really believe the demand for Model 3 is half of the demand for Model S or X?

 

[bambam4171]

I hope you will forgive me for passing on questions I don't think are relevant - as someone up-thread observed, I am a little out-numbered here.

I will make one point and raise one question. The M3 manufacturing rate HAS caught up to the the order growth rate. That was the point I was raising. If, as we all expect, the manufacturing rate continues to grow, the order growth rate will need to do so also.

It seems Tesla is doing the same math I am - that is the reason for the recent 50% reduction in the wait time on new M3 orders. But I think this will also be a mitigant - there is likely some subset of potential M3 customers who felt that 12-18 months was too long to wait but that 6-9 months is acceptable. How large is that subset? I look forward to the July numbers which will shed light on that and on whether the word of mouth from existing customers theory is working.

One big omission is to only consider US Market. The car is right now only available in US and Canada. China will likely be biggest market for M3, Europe is desperately waiting to get a chance to own the car.

 

[CuriousSunbird]

A lot of people are saying: "Well the wait list is already 450,000 people, it's pointless to join the wait list then. I'll just wait for the car to be available to order normally and then order it."

Whenever I tell people admiring my S that the wait list for 3 is this deep, that's often their response. For these people there's no point in being on a wait list that is nearly 2 years now unless you really hate that $1,000 so they just wait. There's way more than 450,000 people who want to buy the 3. Most just don't want to give Tesla $1,000 for no reason really.

Demand is not a problem. It's production. I don't know what the demand will be lifetime for 3 but it will assuredly be way more than 450,000. I would be stupid to assume after the wait list clears, not one car will be sold ever again. If anything after the wait list clears, demand will actually increase when people can just order one and let's hope production is ready for that day.

See my point above on the wait time reduction.

 

[AZRI11]

Lol, 2 years. What has Tesla done in 2 years? Well in just over 2 years? Revealed the 3, gathered 500,000 reservations, pulled production forward 18 months which looks to be more like 12 months and ramped model 3 at light speed compared to S & X.

What do to think is coming next? I'll give you a glimpse. In about 9 months, Tesla will unveil the the model Y. It will more then likely Garner a million reservations given the popularity of the cuv and the huge amount of buzz around the model 3. Tesla will always have way more demand then it can supply. At some point Tesla will have to raise prices, probably starting with the reservations for the Y which should be at least double the model 3.

Production hell part due you say? Given that Tesla will have a firm grip on how to build 500,000 cars from a design and prototype in 2 years, I have no doubt that the Y, being based in the 3 will be much smoother.

The last nail in in the ice coffin? A Tesla pickup that can tow a loaded semi up a mountain faster then the semi could drive itself. Pickups make up something like 60% of every vehicle sold over $50k. Easy pickings for Tesla.

2 years is an eternity for a tech company, it's bare barely enough time for Ford to decide to quit making cuvs then sooner or later pickups.

We need James Bond lotus to hammer that final nail

 

[sundaymorning]

Ok deiselgate is spreading to Mercedes:

Mercedes May Recall 600,000 C, G-Class Autos After Emission Cheating Detailed

C class and G class models for now...

Dieselgate alert:

Mercedes ordered to recall 1.6 million Vito Vans.

Daimler ordered to recall Mercedes Vito diesel van over emissions

Another 600,000 C class and G class May be affected.

Daimler threatened with recall of over 600,000 diesel models: Spiegel

Mercedes poised for massive recall

 

[CuriousSunbird]

This argument is beyond absurd. You’re concerned that Tesla will run out of buyers after going through the 400k currently in the queue, which in turn grows at ‘only’ 8000 per quarter? By this logic, all other manufacturers should be out of business already. How long are the reservation lists for the Camry and the Accord? How fast are those lists growing?

Before Tesla, the very notion of ‘reservation’ for a car was unheard of. If anything, thousands of people adding themselves to a year-long lineup while knowing that almost half a million people are ahead of them, instead of just picking up right now one of the thousands of cars sitting on dealership lots, should strike terror into the heart of every car CEO out there (it very likely does).

A basic concept of queing theory is queue saturation. When the wait time to connect to customer service is too long, people simply hang up and try again later. Queues don’t just grow to infinity. Once the production rate grows and the wait time drops, more people will reserve the car. Essentially, you deduce insufficient demand in the future from the fact that there is insane demand today. Perplexing.

I think DeLorean pioneered reservations, although they called them waiting lists.

The queue is not growing. It is static. The 8/10,000 new orders match the 8,000 deliveries or the 10,000 deliveries plus in transit _ tesla is not clear as to which.

 

[shortburn]

Been reading this thread for a while but this is my first time commenting because I feel like this needs to be said: some people/comments are not worth responding to (or at least not a long explanation). I think you guys know w/o saying who I am referring to. On a separate note, I'm surprised this username wasn't taken.

 

[rameshbende]

Now you're in my (financial) territory, and also into facts rather than speculation/aspiration. With $2.6 billion of accounts payable, $1.9 billion of accrued liabilities, $10.6 billion of debt and about $1.6 billion of lease liabilities, one thing we can certainly say is that their Capex is very far from being "paid for".

Good weekend to all.

Tesla has 650 million dollar of account receivables and 2.6 billion of inventory
Operating lease vehicles 2.3 billion and Solar energy systems, leased and to be leased 6.3 billion
10.6 billion of debt with revenue of 12 billion in 2017 and expected revenue of 22-25 billion for 2018 and 40 to 45 billion for 2019. GM has close to 100 billion debt for revenue of 140 billion. Tesla's debt to revenue ratio is way better.

 

[bambam4171]

I think DeLorean pioneered reservations, although they called them waiting lists.

The queue is not growing. It is static. The 8/10,000 new orders match the 8,000 deliveries or the 10,000 deliveries plus in transit _ tesla is not clear as to which.

I have no issue if the queue keeps being static for the next 5 years

 

[sundaymorning]

I have no issue if the queue keeps being static for the next 5 years

$130 million in new reservations last quarter, that’s about 70,000-100,000 new reservations without any form of advertisement. Pretty static for Tesla’s standards.

 

[bambam4171]

Thing is we don't know really where the money comes from. Is it M3? Semi? Roadster? Or even Powerwall or Roof?

 

[rameshbende]

Thing is we don't know really where the money comes from. Is it M3? Semi? Roadster? Or even Powerwall or Roof?

Model 3 new reservations would not be much in this makes sense because many people wont be putting down for 12-18 months delay. But given that recently in US wait has been reduced to 4-6 months for new reservation holders M3 reservations should pick up. Also by the end of the year as they will open up deliveries in other countries, reservations will start flowing in from there as well.

Demand is not problem for Tesla but production is. There is no need to worry about reservations for M3, same argument was made for S and X after initial EV enthusiast orders will fall.
At some point Tesla will need advertising but I guess that time will be in 2020 or beyond.

 

[CuriousSunbird]

Going by your theory no car manufacturer would ever setup a production line. Because usually they don't have 450k preorders. So what gives? They setup a line because they expect a specific demand. Tesla model 3 fit a spot no other car has: Long distance affordable EV. They don't advertise it but the more this thing is seen and the more people hear how much cheaper it is to run the more demand. W

Why do you think the preorders are still at 450? They where pretty much that high for a year now even though 30 000 cars have been delivered.

I think other manufacturers don't come into it so much because they have lots of history and market knowledge to rely on.

The Tesla cars are new products, So the bulls say "the initial reservations are the early adopters and then the mass acceptance will kick in in and then the sky's the limit". And the bears say, "OK, show us the mass acceptance kicking in". And the bulls say, OK 10,000 per quarter right now, but any day now......."

 

[CuriousSunbird]

Thing is we don't know really where the money comes from. Is it M3? Semi? Roadster? Or even Powerwall or Roof?

Well that is true. If they sell these things cheap enough they will sell a lot. But at a profit?

 

[bambam4171]

I think other manufacturers don't come into it so much because they have lots of history and market knowledge to rely on.

The Tesla cars are new products, So the bulls say "the initial reservations are the early adopters and then the mass acceptance will kick in in and then the sky's the limit". And the bears say, "OK, show us the mass acceptance kicking in". And the bulls say, OK 10,000 per quarter right now, but any day now......."

Ok, lets turn this around: Why would there be no mass acceptance? BEV's are cheaper to run, cheaper to maintain, have better image, better power and they have the envy factor. I can't see a single reason why they would not sell like hot cakes.

 

[bambam4171]

Well that is true. If they sell these things cheap enough they will sell a lot. But at a profit?

They currently sell at a nice profit. Do you have any numbers suggesting otherwise?

 

[CuriousSunbird]

One big omission is to only consider US Market. The car is right now only available in US and Canada. China will likely be biggest market for M3, Europe is desperately waiting to get a chance to own the car.

Certainly looking at that - my rule of thumb is 50% US sales (I know it's 56%, but horseshoes and handgrenades)

 

[CuriousSunbird]

They currently sell at a nice profit. Do you have any numbers suggesting otherwise?

Only their losses.