TSLA Market Action: 2018 Investor Roundtable

[Matias]

Market Action............................

What's that?!

 

[Tslynk67]

You don't find it at all worrying that, with over 400k reservations, you were able to purchase THREE Model 3s?

Moody's guidance is based on both 5k/week and the massive reservation list.

5k/week is under seige. Tesla's own guidance is 50k-55k this quarter, or 3800-4200 per week. Electrek published a report that they may miss this target. With many customers experiencing delivery delays (including Fred), this might be very problematic.

And customers like you raise questions as to the validity of the reservation list as a proxy for demand.

Ah FearBird, you're wasted here, seriously, you should be in politics...

400k reservations, let's imagine 200k are for the USA, then I can imagine 75% at least reserved for the base model, which leads 50k for the higher-spec, which are essentially delivered or in the process of.

So no, I think this is totally normal.

So... If the SEC does bring charges against Elon for his tweets (naming a specific share price, saying "funding secured," or "only uncertainty thing is a sharehold vote"), how will your faith in Elon change?

Not at all. I already stated many times that I think Elon's tweet was not worded as well as it could have been, as it left him open for criticism. However, my subsequent reading of events is that the funding was there, in fact it seemed to be over-subscribed according to the NYT article.

Elon has led Tesla from essentially a small garage start-up, to the most desirable global brand, with an increasing production capacity heading towards 600k per year.

Why one one questionable episode, or even several, dent my with in that? What has been achieved is monumental - and all in an environment of extreme hostility.

 

[cheshire cat]

What's that?!

Approx $303 a few minutes ago in Der fatherland

 

[loky]

Today is maybe the last time that we could see closing SP under $300. A lot of good small news from reliable sources about production, for August could be 17-18K M3 at least, Tesla started preparing to peak September deliveries , seems AP beta version was downloaded to some M3, etc...
So, shorts, it is time to start covering..

 

[mongo]

After KrispyKreme's technical assault, I decided I Need to understand the electronics that handles the ai. So I started the search 2 days ago and finally found the thread with AP circuit board teardown and subsequent discussion today. Then took a deep dive into Nvidia's Parker (TA795SA-A2) general purpose gpu architecture and also the discreet Pascal GPU (GP106-510-KC) used. It was a deep dive, but I came out of it understanding that it is possible for Tesla to drop in a chip and enable Full Self driving. I will try to be as non technical and easy to understand as possible.

There were many experts chiming in both on this forum (for the sake of the person doing the teardown, will not link to it) and on Reddit's thread. However, not many have all the specialties required to see the full picture. I happen to have been an ASIC designer, firmware engineer, Machine Vision Application Engineer and in a jam, my managers have forced me to solder and troubleshoot PCBs so I know a bit of that. The only discipline I do not have is chip layout/routing and PCB layout/routing. (yes I jump ship every 3 years, jack of all trade and not an expert in any)

Here's my guess of how they use the hardware from looking at just the architecture.

Nvidia's Parker general purpose GPU is probably what Tesla intends to replace. Contained within is a multipurpose ARM Cpu and a small piece of its Discreet GPU. These GPUs have a bunch of units that process pixels in parallel and shove them into what they call Tensor units. Tensors units are programmable units that can be changed for other operations. I believe that these are used as the "Neurons" in neural network for decision making.

Some GPU parts not needed for AI

Nvidia, probably in a rush to bring a product to market, did not really design a GPU specifically for Neural Network, instead they brought their gaming discreet gpu and stuffed it with some control logics and called it a day. The Processing part of their GPU has a lot of waste. Things specifically made for gaming and displaying images can probably be taken out completely. Also all the calculations can probably be narrowed down to int8 once the neural network is sufficiently trained and the results can be locked down. For simple pre-processing, drawing contours and recognizing an object in an image. a 8 bit black and white image will suffice and TSLA uses the red spectrum to do that. Currently, many calculations passes through 16 bit floating points and 32 bit floating points (most likely necessary for training the neural network). These are very expensive operations and take up a lot of spaces.

AP 2.0 Model S, AP 2.0 Model 3, AP 2.5 Model 3

Model S tear down shows that it has 1 Parker general purpose and 1 discreet gpu. Model 3 tear down from Munroe shows 1 Parker general purpose and 2 discreet gpu. So there's some upgrade there. Then there's a potential AP 2.5 hardware showing up where extra connectors to a potential new board are present. In the future, there may be two board linked together to perform Full Self driving. My own guess is that it will evolve to two of the Nvidia board in parrallel for a while before Tesla have finished designing and testing their own chip. Both of the chips seems drop in replaceable as they both seems to sit on MXM. My guess is that there's a strong chance TSLA replaces both the General purpose and Discreet GPU.

I personally haven't done any calculation on how many chips is necessary to achieve full self driving. Potentially AP 2.0 Model S might have some trouble, but Tesla can just tapeout a chip with 7nm process for the older Model S which effectively doubles the amount of operations it can do. But this probably won't be possible if we stick to Nvidia solutions for the interim.

COST

However, the question is, is it worth it. Nvidia is forging ahead with their new plex 2.0 platform. More power consumption more heat generated, but it'd save TSLA the R&D cost as well as the design and tape out cost + equipment for analysis. I wouldn't be surprised that it will cost 1 mil or 2 to tapeout the first batch of chip (plus ~3$ a chip) and the chip design team of around 20 person x 100k salary (probalby 200k + if TSLA is using the best) x 2 years of time + equipment. On top of that, Taping out is a very rigid process and cannot be modified too much on the fly. There's only so many Engineering Change order you can do before the mass production.

What is so bad with sticking with NVidia and just increase cooling and power consumption, which was the reason why KrispyKreme was attacking Tsla's automated driving electronics. That reasoning is lost to me.

Reply in a different thread:
Tesla Autonomous Driving H/W
https://teslamotorsclub.com/tmc/threads/tesla-autonomous-driving-h-w.127106

 

[Dan Detweiler]

Today is maybe the last time that we could see closing SP under $300. A lot of good small news from reliable sources about production, for August could be 17-18K M3 at least, Tesla started preparing to peak September deliveries , seems AP beta version was downloaded to some M3, etc...
So, shorts, it is time to start covering..

Tell that to FirebirdAlpha.

Dan

 

[Fact Checking]

So, shorts, it is time to start covering..

I'd prefer shorts holding to the (probably) bitter end.

 

[shlokavica22]

If Tesla is cash flow positive in Q3 OR is GAAP profitable in Q3 without ZEVs or other regulatory credits, I will absolutely be covering.

If they have negative cash flow in Q3 in excess of 300M, they won't make it to the end of Q4. Covenants will force chapter 11. Especially true if they still keep 500M+ in planned CapEx for Q4 (1.2B remaining this year iirc).

Do you honestly think that big investors with stake, much larger than the stake shorts put on the line, will allow TSLA to go bankrupt?!

Out of curiosity- what is the position you are holding? Short stock puts, shorts stock+call for hedge?

 

[loky]

I'd prefer shorts holding to the (probably) bitter end.

The message aims to "smartish" shorts, I think the majority of shorts simply cannot cover without serious damage to there's business, losing their job positions or even worse be bankrupt and they will stay to "the bitter end".

 

[FirebirdAlpha]

Do you honestly think that big investors with stake, much larger than the stake shorts put on the line, will allow TSLA to go bankrupt?!

Yes?

First, this isn't a "large stake" for many of those investors. We're talking 7-8% of their portfolios max.

Bankruptcy isn't the end of Tesla? It might even be a good thing for them at this point.

They need to wipe out the SolarCity debt. SolarCity is not a good business for them, and it's one that's felt the brunt of downsizing. They have no competitive advantage in solar, and it is going to be a globally competitive, margin-strained industry. They have lost market share every year.

SolarCity's most innovative product (the solar roof) is still years away from mass production. Their debt is straining Tesla's growth.

As an investor, would you rather...
- Invest 1.2B in Tesla to pay off existing debts?
Or
- Invest 1.2B post-Ch11 to continue to grow and scale the auto business?

GM went through Ch11 just fine.

Out of curiosity- what is the position you are holding? Short stock puts, shorts stock+call for hedge?

Mostly in the money Jan 2020 puts. It's a very small position that represents 3% of my net worth. 91% is in index funds / munis.

I had straight shorts at a cost in 360s from June. Covered those at 320 and shifted to the Puts. I've got some lotto puts in there as well.

Biggest reason for the short position now is that, should Elon's behavior continue, the board will have no choice to fire him.

I also think the SEC investigations (PLURAL) are way more serious than this forum gives credit. The SEC has been aching for a high-profile case for a while to gain back some credibility. They'll be very harsh with Tesla.

 

[FirebirdAlpha]

Also, seriously curious:

- Why did Elon suddenly unfollow Electrek on Twitter today?

- Why is SolarCity's Twitter account set to protected?

 

[shlokavica22]

Mostly in the money Jan 2020 puts. It's a very small position that represents 3% of my net worth. 91% is in index funds / munis.

Thanks for sharing that.
With such a small portion I assume bruised ego will be more painful than eventual monetary loss.

 

[Revhappy2]

Also, seriously curious:

- Why did Elon suddenly unfollow Electrek on Twitter today?

- Why is SolarCity's Twitter account set to protected?

You are providing a very rational account for the bear thesis and kind of balances out the uber positivity on this board. I hope you are allowed to stay here.

 

[Sunlight]

As a small private investor over a few years, I too anguish over the share price and the mean-spirited infantile sociopathic shorts ; the FUD and outright lies and pure nastiness. (I exclude genuine financial shorts who are just money harlots)

But I was putting things in context today - I held gold and silver for over 5 years and initially lost around 30% before it crept back to 'only' 7% down so I sold it all and invested in more Tesla shares barely 3 months ago.

I was ecstatic when the shares went up so much and then in dismay with the roller coaster ride thereafter.

BUT the bottom line is that in less than 3 months (even with all the turmoil) our 'gold' reinvested Tesla shares have actually gone up around 7% (28% pa...theoretically) while I sit on my arse and read TMC Investor section...…..

Meanwhile all at Tesla have been working their buts off and Elon has had to put up with so much BS it would destroy a weaker man.

I owe them all a big vote of thanks!

 

[LordAstinus]

You are providing a very rational account for the bear thesis and kind of balances out the uber positivity on this board. I hope you are allowed to stay here.

That's an example of an informative post. This is an example of the same author posting opinions as facts:

"SolarCity's most innovative product (the solar roof) is still years away from mass production."

Nobody knows if they are ready for mass production, month's away or years' away. So it's basically FUD, hidden amongst facts.

 

[FirebirdAlpha]

"SolarCity's most innovative product (the solar roof) is still years away from mass production."

Nobody knows if they are ready for mass production, month's away or years' away. So it's basically FUD, hidden amongst facts.

Yes, we do know it's years away.

Mass producing something, especially something new, takes a long time to figure out. It takes massive capital expenditures. It takes specialized factories. It takes working with a lot of suppliers.

Above all, it takes time.

Look at the Model 3. It took 2 years from the announcement and prototype demo to reach 1000 cars per week.

 

[LordAstinus]

Yes, we do know it's years away.

Mass producing something, especially something new, takes a long time to figure out. It takes massive capital expenditures. It takes specialized factories. It takes working with a lot of suppliers.

Above all, it takes time.

Look at the Model 3. It took 2 years from the announcement and prototype demo to reach 1000 cars per week.

Again, it's your opinion based on past experience and not unlikely. This is not a fact until confirmed by Tesla or we reach 2020 without mass production.

You try to put the spot on negative facts to change the sentiment. That's within the rules of this forum. But framing your opinion as a fact it's against the rules of this forum, in my opinion, and I expect the administrators to act.

 

[avoigt]

For the record:

Whoever believes Elon will leave the CEO position or Tesla and has developed an investment strategy based on that does not really comprehend and absorb that Elon & Tesla is one single body.

Elon is Tesla and Tesla is Elon. Nobody does understand this better than the Board.

Its an illusion to even consider him to leave or to be left.

That statement is true for the years to come until Tesla does deliver highly profitable vehicles in the millions, his mission is accomplished because the entire oil&gas&car&utility industry shifted direction to sustainable renewable energy and the market cap is large enough to enable him to build a first colony on Mars.

 

[Yggdrasill]

Yes, we do know it's years away.

Mass producing something, especially something new, takes a long time to figure out. It takes massive capital expenditures. It takes specialized factories. It takes working with a lot of suppliers.

Above all, it takes time.

Look at the Model 3. It took 2 years from the announcement and prototype demo to reach 1000 cars per week.

The gigafactory 2 is already ramping up production of the solar roof. How fast or slow the ramp will be remains to be seen, but it's ramping.

 

[K_Dizzle]

Yes?

First, this isn't a "large stake" for many of those investors. We're talking 7-8% of their portfolios max.

Bankruptcy isn't the end of Tesla? It might even be a good thing for them at this point.

They need to wipe out the SolarCity debt. SolarCity is not a good business for them, and it's one that's felt the brunt of downsizing. They have no competitive advantage in solar, and it is going to be a globally competitive, margin-strained industry. They have lost market share every year.

SolarCity's most innovative product (the solar roof) is still years away from mass production. Their debt is straining Tesla's growth.

As an investor, would you rather...
- Invest 1.2B in Tesla to pay off existing debts?
Or
- Invest 1.2B post-Ch11 to continue to grow and scale the auto business?

GM went through Ch11 just fine.



Mostly in the money Jan 2020 puts. It's a very small position that represents 3% of my net worth. 91% is in index funds / munis.

Yes, we do know it's years away.

Mass producing something, especially something new, takes a long time to figure out. It takes massive capital expenditures. It takes specialized factories. It takes working with a lot of suppliers.

Above all, it takes time.

Look at the Model 3. It took 2 years from the announcement and prototype demo to reach 1000 cars per week.

And solar roofs are now being installed to customers. After reaching the first 1000 model 3s it took about a year to produce 80k.