TSLA Market Action: 2018 Investor Roundtable

[Reciprocity]

Ok, so Model3 should be mostly correct (since sold in US only plus a few in Canada), but did you use US numbers only for S and X unit sales?

Even adjusting S and X for international sales (and generously adding storage batteries) the numbers don’t add up with Elon’s claims.

Here’s CATL alone:

View attachment 321383

Tesla May Be Trampled by CATL in China

Note these numbers were for 2017 and CATL is growing quickly.

How can Tesla then make more GWh of batteries than the rest of the world combined?

Just looking at CATL’s numbers above (from their IPO prospectus) shows that this isn’t the case.

PS: I find it amusing that quoting output numbers from an IPO prospectus is considered trolling now.

Massive battery factories are certainly important. Labor is cheap in China so automation not as valuable. The question you have to ask yourself is, where did the 12GWh of batteries go in 2017? Answer that and you might understand why it's meaningless. It's almost like quoting GWh of camcorder batteries. If 2017 was 12GWh then what was 2018 and where did all the batteries go? Did I miss a mass produced luxury EV? I'll give you a hint because you really don't care about facts, just deception. They are going into people movers. Golf cart sized cars in China. They are not appropriate for anything else. To build a pack at a level that it can power a luxury vehicle for 250k miles, they are going to have to spend billions and years. I am certain they will and by the time they do, Tesla's batteries will be 30% more dense and thus cheaper, which is what happened the last 5 years.

 

[winfield100]

Massive battery factories are certainly important. Labor is cheap in China so automation not as valuable. The question you have to ask yourself is, where did the 12GWh of batteries go in 2017? Answer that and you might understand why it's meaningless. It's almost like quoting GWh of camcorder batteries. If 2017 was 12GWh then what was 2018 and where did all the batteries go? Did I miss a mass produced luxury EV? I'll give you a hint because you really don't care about facts, just deception. They are going into people movers. Golf cart sized cars in China. They are not appropriate for anything else. To build a pack at a level that it can power a luxury vehicle for 250k miles, they are going to have to spend billions and years. I am certain they will and by the time they do, Tesla's batteries will be 30% more dense and thus cheaper, which is what happened the last 5 years.

this seriously gets tiresome
in 2017 Tesla used 54% of Li batteries of the 7,621,101 kWh used
so far in 2018, s of 6/30/2018
Tesla used 70% of Li batteries and entire rest used 30% of the 5,489,915 kWh used
The % will probably go to 75% and 25% after July numbers released

 

[bdy0627]

I'm not going to stress-out with the SP for the coming days.

I do hope that Elon uses the EC to get some good info out there and get us back on an upward trend.

Tesla in a better place than ever, M3 is a massive success, so many happy new owners sharing their joy on social media.

Just a matter of time folks - days, weeks or months, I could say though.

I agree. Yet, the stock is roughly where it was a year and a half ago. Elon's phrase of "a win should feel like a win" continues to prove very elusive with TSLA. If you told me a year and a half ago the stock would be trading below $300 at this point, I would have been pretty shocked. Same goes for a year from now. If it is trading around these levels next summer, I will be shocked. I do think it is a much simpler matter at this point for Tesla continuing to ramp and improve efficiency. It was a totally different situation a year ago.

 

[scaesare]

i would have to slightly disagree and say that they will be at a run rate of 600k vehicles some point next year but unlikely to produce that many next year, my guess would be 500k next year, then just over 600k in 2020 and about 1 million in 2021.

I think you are right.

I realized a while after posted that I had brain-farted on S & X production. I had been thinking "200,000/yr" when the correct rate is "2,000/wk". Such are the perils of quick posts before you head off to bed... and I didn't feel like getting back up to edit the post.

So I suspect 2019 is about 100k too optimistic.

I'd bet the 12 months ending June 2020 might be about right though.

 

[shootformoon]

this seriously gets tiresome
in 2017 Tesla used 54% of Li batteries of the 7,621,101 kWh used
so far in 2018, s of 6/30/2018
Tesla used 70% of Li batteries and entire rest used 30% of the 5,489,915 kWh used
The % will probably go to 75% and 25% after July numbers released

I wonder why people think Chinese EV producers are threat to tsla. imho Chinese ev will flood the low end market in the foreseeable future and tsla will take the high to mid end. They compete in different market sectors so there will be little competition between them. The current major ICE producers should be worried the chinese EV moving up and eating their lunch. They are the ones to be squeezed.

 

[tftf]

I wonder why people think Chinese EV producers are threat to tsla. imho Chinese ev will flood the low end market in the foreseeable future and tsla will take the high to mid end. They compete in different market sectors so there will be little competition between them. The current major ICE producers should be worried the chinese EV moving up and eating their lunch. They are the ones to be squeezed.

I didn't talk about Chinese car makers (except for BYD in passing, they make both cars/bateries, mostly sell commercial vehicles only outside of China). CATL makes batteries and supplies / will supply Western car makers.

That includes high-end customers such as BMW and Daimler / Mercedes:

BMW plans to source 4 billion euros ($4.7 billion) of battery cells from CATL over the next few years, with 1.5 billion euros coming from the new site in Erfurt in eastern Germany, the carmaker’s purchasing head, Markus Duesmann, said.

CATL, the world’s largest maker of battery cells for electric vehicles, said the new factory was just its first step in Europe.

“We want to supply all the OEMs (manufacturers) in Europe,” Chairman Robin Zeng said. “If the Thuringia project is successful then we can consider other locations.”

 

[Todd Burch]

Sentiment is so irrationally negative on TSLA now that we may actually see a big INCREASE after the conference call. Instead of the usual runup before and selloff after, we're seeing the selloff before...

 

[Dan Detweiler]

Not even going to watch. This could be ugly. Incredibly frustrating as always lately. Over all this FUD.

Dan

 

[Todd Burch]

Not even going to watch. This could be ugly. Incredibly frustrating as always lately. Over all this FUD.

Dan

This stuff doesn't bother me anymore. I'm all-in with most of my life savings and totally comfortable. No dry powder. Tired of the games. Truth and rationality comes out in the end.

 

[MissAutobahn]

I agree. Yet, the stock is roughly where it was a year and a half ago. Elon's phrase of "a win should feel like a win" continues to prove very elusive with TSLA. If you told me a year and a half ago the stock would be trading below $300 at this point, I would have been pretty shocked. Same goes for a year from now. If it is trading around these levels next summer, I will be shocked. I do think it is a much simpler matter at this point for Tesla continuing to ramp and improve efficiency. It was a totally different situation a year ago.

Tesla could produce and sell 2 million cars in 2018, even 10millions in 2019:
As long as shorts have the better relations to the press, $TSLA will drop 10% on a trading day on the news "beware! modelS will be total loss when you drive it with 130miles/h against a concrete wall."
They fight like kamikaze until the last short went bankrupt.

 

[StockCynic]

The tech high fliers of the last decade have been taking a beating over the last several trading sessions. I suspect this will continue as we move deeper into the tightening phase of the FED rate cycle. For 10 years the story with NFLX, TSLA, AMZN, GOOG (just a few examples) has always been "its about the future". Well the future is arriving and it is happening quickly, with rising rates increasing the cost of debt service and severely altering the value of future cash flows these types of stocks will be hard pressed to duplicate past performance.

Each of those stocks I listed trades at a ridiculous valuation, Google much less so than the others. If you were to apply a few historical valuation parameters to these companies one would see that some of them could correct 50% and would STILL be incredibly expensive on those terms.

That is why I am not invested in any of these names right now, much too risky. The easy gains have been had while the FED has basically been underwriting the stock market for the last 10 years. No longer the case. No matter how admirably these businesses perform operationally the multiples can contract very very quickly putting long-term capital at risk of permanent impairment.

 

[Drax7]

Market continues to discount the second quarter.
And the subsequent negative second qtr narrative.

Third qtr not remotely in focus until
We get through conference call.

Investors might need assurance of positive eps for 3rd quarter
And beyond Before buying.

 

[ggr]

Sentiment is so irrationally negative on TSLA now that we may actually see a big INCREASE after the conference call. Instead of the usual runup before and selloff after, we're seeing the selloff before...

Certainly the price movement this morning is quite weird. Big jumps in both directions.

 

[neroden]

Are you aware that there are two cases? That fund you linked is to hire attorneys for the lawsuit that Teslas filed against Martin Tripp. That Stuart Meissner guy is not involved in that case. He is handling the formal filing of Martin Tripp with the SEC and, as far as i know, isn't paid anything by Martin Tripp right now. He will be compensated should they succeed. And since i don't think he got involved into all this for twitter bragging rights alone, he probably thinks there is a realistic chance to win.

No, he isn't behaving like the sort of lawyer who thinks he has a realistic chance to win. He's behaving like the sort who's hoping to get a settlement.

 

[CuriousSunbird]

No, he isn't behaving like the sort of lawyer who thinks he has a realistic chance to win. He's behaving like the sort who's hoping to get a settlement.

I think all (civil) lawyers hope to get a settlement.

 

[cricketman]

That is why I am not invested in any of these names right now, much too risky. The easy gains have been had while the FED has basically been underwriting the stock market for the last 10 years. No longer the case. No matter how admirably these businesses perform operationally the multiples can contract very very quickly putting long-term capital at risk of permanent impairment.

I agree. All my shares are currently in Tesla long term and I want to make some investments in something else so have been looking around at the figures.

In my opinion Facebook and Twitter are ridiculously over-valued. I am late 30s and already my friends and I (mostly high earners in London with kids) who joined Facebook 10 years ago have now left Facebook. Sick and tired of fake news and "friends" spouting their stupid opinions. Facebook is only going down from here. And I cant see Twitter growing revenue by much.

Amazon will keep growing but the multiples are enormous. Profits are currently less than 1% of market cap. Apple and Google are better value but cant see much growth unless Google does something amazing with autonomous driving (not holding my breath).

Tesla is the best bet by far. If we remove capex (I know I know), second half of 2018 should see $2-3bn gross annual profits which in 2019 (minus capex) could be $6-8bn. At Amazon valuation, this would mean a market cap of almost $1tn for Tesla. Debt ratios aren't so bad once you are a turning over 500k vehicles ($30bn) per year

Investing in Tesla is a no-brainer. I simply don't see why others cannot see it. If it was up to me, I would push Tesla to raise capital and build 5 gigafactories around the world right now. But of course the investing environment wouldn't let them.

 

[neroden]

So, a simpler question. Forget about Volvo.

When will Tesla cross 600k car units / year?

Fine, I'll take your idiot-bait.

2020 or 2021. Current factories are designed for 500K/year, so the next factory gets them over 600K. Tesla will have access to funding for said factory by 2019, so it'll be operating by 2020 or 2021. Since they can copy most of what they're doing at the existing factory, 2020 is more likely than not.

 

[neroden]

I like to talk about numbers.

Asking about the production rate and rampup of solar capacity at the Buffalo factory, and of battery capacity at the Gigafactory, would be great questions for the investor call. Why don't you try to get on it and ask those questions, since the idiots from the investment banks haven't been asking them?

Musk said Fremont could do 1 million cars a year, but it would probably be a bad idea. I think that's still the case. I can see how you could cram in duplicates of all the lines, but it would make the logistics problems worse.

 

[neroden]

I agree. Yet, the stock is roughly where it was a year and a half ago. Elon's phrase of "a win should feel like a win" continues to prove very elusive with TSLA. If you told me a year and a half ago the stock would be trading below $300 at this point, I would have been pretty shocked.

FWIW I'm not really surprised.

I purchased 2019 calls soon after they were first made available (in late 2016), *because* I thought it was likely that the bears would keep shorting until early 2019. I figured after Model 3 was in mass production and multiple quarters of profit from it were booked, *that* was when they'd give up. Given "Elon Time", I figured the 2018 schedule for that might slip to 2019.

I seem to have been more or less right, though I didn't anticipate the wild volatility in the meantime.

I will be surprised if the stock isn't higher in March 2019.

 

[neroden]

I didn't talk about Chinese car makers (except for BYD in passing, they make both cars/bateries, mostly sell commercial vehicles only outside of China). CATL makes batteries and supplies / will supply Western car makers.

I wish CATL the best of luck. I have considered investing in CATL. They obviously pose no threat to Tesla in the near term. They have to expand massively, and it seems there are practical limits to how fast one can expand. CATL really cannot expand much faster than Tesla. So if the battery supply is 50% Tesla, 50% CATL, what do you think Tesla's competitive position is? Think about it.