TSLA Market Action: 2018 Investor Roundtable

[lklundin]

"Gated" actually means MORE complete than "produced". "Produced" could need rework; "gated" cannot. The disinformation media, of course, wants to claim that it's the other way around

I have to imagine that Tesla wanted to defer the necessary deliveries into Q3 in a manner where they would not risk that the IRS (or whichever the responsible agency) would take Tesla to court and claim that those deferred deliveries were to be counted as Q2 deliveries (with a significant impact on the tax credit, hence IRS), since the owner of the vehicle is already known, with the vehicle built to their personal specification (never mind that there is not much to choose from), and with the buyers' commitment to the purchase via the binding and non-refundable (partial) payment, all of that having taken place in or before Q2.

This is pure speculation, but this could explain why the wording was far from e.g. 'being delivered', which could otherwise have made Tesla's statement on Q2 seem closer to their guidance (and various estimates) regarding their deliveries.

 

[Sudre]

I wouldn't put it past them that a significant chunk of those cars were as good as finished earlier and just got the last touch on them in the 'important' week to make them count towards the 5000. O well, we'll see.

That has got to be the most (well I can't think of a polite way to say this without getting banned so I'll stop)...

There is no room in the factory for GA4 line but, OH YAH, Elon has room to park 1000 Model 3 in the corners so he can wheel them out at the end of the week.

 

[SOULPEDL]

and just got the last touch on them in the 'important' week to make them count towards the 5000. O well, we'll see.

In fact we'll see in 4 weeks with 6K. So all the ones on trucks were also almost done too and they actually made >5K the weeks before? It's a factory line, as in conveyor, so not sure that's even possible... just insert them at the end? Not buying that theory at all. Shop Floor Control would be a nightmare!

 

[mongo]

I have to imagine that Tesla wanted to defer the necessary deliveries into Q3 in a manner where they would not risk that the IRS (or whichever the responsible agency) would take Tesla to court and claim that those deferred deliveries were to be counted as Q2 deliveries (with a significant impact on the tax credit, hence IRS), since the owner of the vehicle is already known, with the vehicle built to their personal specification (never mind that there is not much to choose from), and with the buyers' commitment to the purchase via the binding and non-refundable (partial) payment, all of that having taken place in or before Q2.

This is pure speculation, but this could explain why the wording was far from e.g. 'being delivered', which could otherwise have made Tesla's statement on Q2 seem closer to their guidance (and various estimates) regarding their deliveries.

The EV Credit cut off is based on vehicles sold for use in the US: not produced, reserved, nor ordered.

 

[Waiting4M3]

That has got to be the most (well I can't think of a polite way to say this without getting banned so I'll stop)...

There is no room in the factory for GA4 line but, OH YAH, Elon has room to park 1000 Model 3 in the corners so he can wheel them out at the end of the week.

According to @augkuo the lot at the south side holding the M3s to ship out is ~300 cars. If Tesla is hiding 1000s of M3 in the factory, I don't see where

 

[The Blue Owl]

There is no room in the factory for GA4 line but, OH YAH, Elon has room to park 1000 Model 3 in the corners so he can wheel them out at the end of the week.

No, you don’t get it: the very reason there is no room for GA4 are the stacks of Model 3s they sandbagged to make the target! I actually heard that the current shutdown is needed to disassemble another production line in order to make room for the Model 3s required to get to 6000/wk.

 

[MartinAustin]

I wouldn't put it past them...

We know you wouldn't put it past them. Because you're you.

 

[SW2Fiddler]

420k at 5k/week is a whopping 84 weeks of waiting! Accelerating to 10k/week is needed just to bring this down to less than a year. So the number of reservations could continue to fall until we get to a wait time under 6 months, say 250k at 10k/week.

Opening up SR and international sales will also boost the arrival rate of new reservations, but I would still expect the wait time to fall to less than a 6 month back order.

Fantasy Tesla Announcement for the Fourth of July:
Model 3 reservations also apply to the Model Y.

Excellent contributions this week, jhm!
That reminds me.
Data Point Of One:
My reservation won't be converted until I can order a Model Y (Or when my S becomes unreliable, whichever comes first). After all, I don't need two sedans in the driveway.
See, I reserved in-store before the 3 reveal party. No one could say convincingly that TM wouldn't surprise us by revealing BOTH 3 and Y that night. So, there my reservation sits. For all-in Tents, and poor Pisces, it is a Model Y reservation.

(So. Is that a bullish vote of confidence, or a bearish bite of FUD, ye TV Studio Armchair Analysts, what say ye?

This is why I always mark comments that tea-read the ebb and flow of res numbers as pertinent to demand, FUNNY. As long as res > 100K, it's basically Off The Meter high)

 

[SOULPEDL]

the stacks of Model 3s they sandbagged to make the target!

The Boring company... they're underground! OMG...

 

[Nathan]

The big hoopla is that 'produced' implies you worked on them that week. Gated means you drove them out of the factory that week. With Tesla it's always a word parsing game. I wouldn't put it past them that a significant chunk of those cars were as good as finished earlier and just got the last touch on them in the 'important' week to make them count towards the 5000. O well, we'll see.

Can you please tell me what you mean by a “significant chunk”?
Weren’t you the same person who recently said you thought it was most likely that the 200,000 car was sold in quarter 2? Still waiting to see how accurate that prediction was.

 

[shortburn]

The big hoopla is that 'produced' implies you worked on them that week. Gated means you drove them out of the factory that week. With Tesla it's always a word parsing game. I wouldn't put it past them that a significant chunk of those cars were as good as finished earlier and just got the last touch on them in the 'important' week to make them count towards the 5000. O well, we'll see.

Remember these goals are set by Elon Musk and Tesla themselves. It’s not forced upon them. Saying that they cheated on the 5000/wk goal in this context makes no sense. It’s like if I had a goal to lose 10lbs in a month and then at the end of the month decided to weigh myself on the top of mt Rushmore to “lose” those last couple of pounds. It’s absurdity. Honestly the situation currently is at a point where you feel like these claims are not worth rebutting to avoid giving them even a sliver of legitimacy but at the same time can’t leave them around to fester. The tactic is basically negative distractions on distractions on distractions. I feel like Tesla needs to have their own talking heads and pump out some positive bullhockey of their own to counter this FUD.

 

[bdy0627]

Last year's 4th was on Tuesday, so there was a short day of trading on Monday with markets closed on Tuesday. This year we had a full day of trading Monday with a short day today. Here are the hourly candles of the first 2 trading days of the holiday week. The top chart is last year. Again, note that for last year, this includes a short day of trading before the 4th plus a regular day of trading on the 5th. Coincidence? I think after seeing how easy it was to do this last year, it seemed obvious that they should try it again this year, with very similar results. After 2 trading days last year, TSLA was down 9.4%. This year, it's down again 9.4% after 2 trading days.

 

[lklundin]

The EV Credit cut off is based on vehicles sold for use in the US: not produced, reserved, nor ordered.

Yes.

So Tesla wants to make sure that no one could even claim that a sale had effectively been done in Q2, for a car that left the factory in Q2, after being built to the owners' specification in Q2, with binding and non-refundable (partial) payment in Q2 and where the owner happened to take possession of the car a few days into Q3.

IRS: "Yes, but it doesn't matter that you gave the customer 30 days to make the final payment and it doesn't matter that the owner chose to not pick it up on your factory lot in Fremont, where the car was ready in Q2".

PS. I am only happy to be seen as too pessimistic...

 

[ggr]

Yes. Look up the First Harlem Corner.

Interesting, I'd never heard of that one. Here's a link: The First Harlem Corner (1863)

 

[ggr]

Similarly, if the stock issuing company decides to pay out a dividend, who receives it? (I would presume E, because if not then the shorted share should be sold at a discount, equal to the value of the dividend - and I never heard that shorted shares were sold at a discount. Not that I have heard much).

@neroden already answered most of your questions, but on this one his answer was a bit too terse. Yes, E gets the actual dividend from the company. However part of the arrangement for the shorts to borrow the shares is that they are on the hook for paying any missing dividends, too... So B has to pay the dividend to A, and D has to pay it to C.

 

[bdy0627]

Here's the rest of the holiday week and into the next week from last year. Shorts pulled off a powerful MMD on Monday, July 10th, but it reversed strongly. If this year continues to be similar to last then a strong bounce should not be expected this week. On the other hand, buying after a further dip on Thursday or even waiting until Friday may prove very rewarding for calls. I'm not so sure we will get the strong MMD next Monday but who knows. If we do, I will be buying it.

 

[mongo]

Yes.

So Tesla wants to make sure that no one could even claim that a sale had effectively been done in Q2, for a car that left the factory in Q2, after being built to the owners' specification in Q2, with binding and non-refundable (partial) payment in Q2 and where the owner happened to take possession of the car a few days into Q3.

IRS: "Yes, but it doesn't matter that you gave the customer 30 days to make the final payment and it doesn't matter that the owner chose to not pick it up on your factory lot in Fremont, where the car was ready in Q2".

But it does matter that the vehicle was not acquired for use in Q2 (drivable and title transferred as the state).

This notice also amplifies Notice 2009-54 and Notice 2009-58, 2009-30 I.R.B. 163 (relating to the plug-in electric vehicle credit under § 30) to provide that a vehicle is considered “acquired” when title to that vehicle passes under state law.

Internal Revenue Bulletin: 2009-48 | Internal Revenue Service

Further, the OEMs self report their numbers...

Huh, are most dealerships 'retail dealers'? If so, GM may need to count dealer inventory...

.05 Quarterly Reporting of Sales of Qualified Vehicles. A manufacturer (or, in the case of a foreign vehicle manufacturer, its domestic distributor) that has received an acknowledgment of its certification from the Service must submit to the Service, in accordance with section 6 of this notice, a report of the number of qualified plug-in electric drive motor vehicles sold by the manufacturer (or, in the case of a foreign vehicle manufacturer, its domestic distributor) to consumers or retail dealers during the calendar quarter. The quarterly report must contain the following:

(1) The name, address, and taxpayer identification number of the reporting entity.

(2) The number of qualified vehicles sold by the reporting entity to consumers or retail dealers during the calendar quarter.

(3) The make, model, model year, and any other appropriate identifiers of the qualified vehicles sold during the calendar quarter.

(4) A declaration, applicable to the quarterly report and any accompanying documents, signed by a person currently authorized to bind the manufacturer (or, in the case of a foreign vehicle manufacturer, its domestic distributor) in these matters, in the following form: “Under penalties of perjury, I declare that I have examined this report, including accompanying documents, and to the best of my knowledge and belief, the facts presented in support of this report are true, correct, and complete.”

 

[keydiver]

Wait, so they're angry that Model 3 reservations declined by a number that's almost equivalent to the number of Model 3's sold in that same time period?

They are also not taking into account how many of the reservations turned into S or X sales instead. I have seen quite a few people post that they decided that a CPO Model S was a better deal. As others have said, just wait until 10's of thousands of the Model 3's are on the road, and people realize that the $35,000 Model 3 is not only real, but they can get one within months, not years. Its just so hard to be patient.

 

[SOULPEDL]

After 2 trading days last year, TSLA was down 9.4%. This year, it's down again 9.4% after 2 trading days.

Interesting pattern. And then keeps dropping during the week until Friday's turn around. Got a feeling I'm buying even more later this week. Then the long run-up.

 

[lklundin]

But it does matter that the vehicle was not acquired for use in Q2 (drivable and title transferred as the state).

Thanks, then I will not worry that Tesla could be said to have reached 200k US sales in Q2.