TSLA Market Action: 2018 Investor Roundtable

[defc0n]

I'm looking for $317.

 

[bdy0627]

The EC was simply not the venue to lay out a road map to 1 million vehicles. But my concern is that this is slipping from a once 2020 target to maybe 2022 reality. I hope I am wrong, and they are simply holding cards close to chest.

An important part of this reality is that Tesla has become the single largest EV maker in the world including PHEVs. By the end of Q3 their YTD numbers will prove this out. I believe that their July numbers already show this lead.

So this is going to mean a massive reframing of Tesla's leadership in the EV industry. Not only do they lead on tech, but they lead on scale too. Musk himself is starting to talk about how the bigness of Tesla is making it hard to move fast. I've set up a thread on EV Market Share just to deal with this emerging reality for Tesla.

We really do need some clarity on building out GF capacity. Here they definitely need to hold cards close to chest, but I am concerned that facility planning is already a hard constraint on growth out to 2022. This also frustrates me around raising capital. To delay capacity build out until it can be funded by internal cash really makes the planning narrow and contingent. A shortfall in cash one year can delay capacity needed 3 or 4 years out. But a surplus of cash the next year can't speed things back up. Just barely being cash positive does not put you in a position to fund 50% annual growth.

So we'll see how Musk lays out a plan for the next 2 to 4 years.

My take is 1M is doable in 2021, or at least BY 2022. 2020 looks exceedingly optimistic knowing what we know now. Perhaps the wildcard is the semi-truck program. However, there is nothing concrete around a timeline for production there yet.

 

[Lhan]

Can't wait for the next Chanos performance on CNBC.

 

[scaesare]

Am I the only Microsoft fan here?

Like most companies, they do some things well, others not so much. I'm a pretty big admirer of the NT underpinnings...

 

[MP3Mike]

EOY 2021 could look like:

600K S/X/3 Fremont
250K 3 Shanghai
700K Y Location TBD

1.55 M S/3/X/Y

Unlikely that GF4 will have a higher production rate than GF3 (Shanghai) by that time. But GF3 will probably be closer to 500k by the end of 2021.

 

[MartinAustin]

Can't wait for the next Chanos performance on CNBC.

And... Bob Lutz

Hmmm TSLA has recovered from $323 to $332. Nice strength.

There *have* to be some shorts closing out their positions IMO

 

[Krugerrand]

Yes, ultimately it is the whole supply chain that must be built out. There are bottlenecks all along the way. It think Musk is recognizing that being intimately involved in just about every step is critical to sustaining a high growth rate. This is all part of the experience or learning curve. At each higher scale everything becomes more difficult and finding efficiency is key. The way we typically talk about the experience curve is that as cumulative production doubles the cost per unit falls 10% to 20%. Thus, we often think of falling prices as a consequence of scale. But efficiency is really the driver of cost savings. So one could also think of the doubling of production as a consequence of efficiency gains all along the supply curve. So what Elon's team must focus on is how to get those efficiency gains as quickly as possible. This in turn will be key to doubling production at a quick clip, and it will drive down cost too. They are doing this too. Every time they iterate and figure out how to speed production, they are learning new efficiency, cutting costs, and driving up production. You can't just throw money at it, you actually need talent that can simplify and shorten the path.

Result: going from 5k-10k/wk just got way cheaper than 0-5k/wk which is exactly opposite to what they’ve thought for the past year+. That’s a huge revelation and cost decrease. Time frame remained the same per the call but I’ve got a feeling they’re going to try and compress it.

 

[EVMeister]

I'm looking for $317.

Sorry, the auction ended. You weren't the winner.

 

[scaesare]

a

It seems like just yesterday that Munro was amazed at the quailty of the Nvidia based boards he found in the M3. I would love to see video of him looking at the new TPU.

I'd bet it doesn't look that different actually... unless they are going with smaller discrete packaging for smaller groups of cores and therefore there are a lot more chips on the board (unlikely given bandwidth requirements) , one chip package doesn't look a lot different than the rest....

 

[ggr]

I'm looking for $317.

That's what rear-view mirrors are for!

 

[Lhan]

That mini MMD was so cute.

 

[EVMeister]

Mini Morning Dip?

 

[Causalien]

Oh Oh. Loooks like short covering just started.

 

[Lhan]

Mini Morning Dip?

Yes.

 

[mickificki]

Paging Mr Einhorn! Mr Einhorn?!?!?

 

[jelloslug]

Paging Mr Einhorn! Mr Einhorn?!?!?

He is probably trying to get a Model 3 right now...

 

[LoveTSLA]

That mini MMD was so cute.

IT IS A “W” — Winning...

 

[Mich]

Upper bb is at 333.36...

 

[SebastianR]

An important part of this reality is that Tesla has become the single largest EV maker in the world including PHEVs. By the end of Q3 their YTD numbers will prove this out. I believe that their July numbers already show this lead.

So this is going to mean a massive reframing of Tesla's leadership in the EV industry. Not only do they lead on tech, but they lead on scale too. Musk himself is starting to talk about how the bigness of Tesla is making it hard to move fast.

I hear you. Thanks for spelling this out. My team hates me for my analogies so here goes: in this case really what we see is Tesla's transformation from a speedy roadster into being a massive Semi truck: Much harder to steer, not as nimble, but very powerful, and able to haul a metric ton of stuff. So while I think that growth in the Tesla universe in the past used to (mainly) come from new and innovative products and in spurts / chunks, I think that we will have two types of growth going forward: New stuff (Semi, Roadster, Model Y, next version of the Solar roof etc.) and growth from existing products (Model S, X, 3 etc.).

A lot of the short-thesis discussions used to be that none of the existing stuff is sustainable and that on the flimsy promise of future scale, Tesla is throwing one new product after the other onto the market (and raises capital for that).

This has changed: We haven't really seen much of that growth from Model S / X this year (battery constraints) but I'm convinced we will see lots of growth from incremental improvements going forward. The market is simply no where close to being saturated. And as scale comes into play, I'm wondering how much money these incremental sources of growth will cost. I'm convinced (also after EMs comments that it is cheaper to go from 5k to 10k than from 0 to 5k cars / week) that there is a ton of consolidation / growth potential in the existing product portfolio. Then again, of course there are limits to that...

[...] I am concerned that facility planning is already a hard constraint on growth out to 2022. This also frustrates me around raising capital. To delay capacity build out until it can be funded by internal cash really makes the planning narrow and contingent. A shortfall in cash one year can delay capacity needed 3 or 4 years out. But a surplus of cash the next year can't speed things back up. Just barely being cash positive does not put you in a position to fund 50% annual growth.

If this was the case (delaying growth to manage it organically rather than raising funds), I would agree. From the call I gather that the problem right now is not to be solved by "more money" (i.e. one silver bullet) but rather by "many many bigger and smaller bottlenecks in a long and complex supply chain (i.e. many lead bullets)

 

[bdy0627]

I've got quite a few AUG17, SEP, and J19 calls. I find it much more difficult to figure out the exit point on climbs than adding on dips. I know I know, it's a rather good problem to have but still.