TSLA Market Action: 2018 Investor Roundtable

[tivoboy]

AH Stock price went right back to 15 minutes after market close..$315. I hope it goes to 420 tomorrow.

 

[Carl Raymond]

I always say, I'd be perfectly happy to give someone 35 cents to get a free and easy dollar.. I wouldn't worry about the short term tax implications, take the money.

It will definitely help with my Model 3 purchase. There's a nice little self perpetuating cycle there - with a lot of the stock gains funding car purchases. Cheers.

 

[SigNC]

I hear the Q3 replaying now. The recording must be available!

 

[Ulmo]

Along these lines, someone here previous mentioned starting the Tesla Network early, with people driving manually for now, and using that to essentially drive further demand in addition to profits. That still sounds like a fantastic idea to me.

I love that type of initialization idea because it really does open things up and iron out details, but it's the type of thing that Tesla typically hasn't been doing; their approach is to do it their way on launch.

 

[sauce]

So it sounds like batteries are no longer the bottleneck. What’s holding them back from 6 to 7 k per month. Paint?

They will continue to improve on cost (man-hours, capex, etc) as they ramp. There's a balance to be reached between efficiencies and ramp. Too much of one sacrifices the other.

 

[azaz]

analyst upgrades are what's gonna move the price now.

Tesla executed better than anyone could've imagined, now we wait.

 

[Thekiwi]

He said that worldwide BMW M3 sales are about 500,000.
Then he said he could make 500,000 Tesla M3s (to take all of those sales).

He did say that model 3 was outselling M3 in current markets where available, and so used that as a bare minimum, but also mentioned the VW Golf at 1 million units as another example of a comparable sales rate

(1 million = ~20k a week - which sounds possible once China & Europe factories are both cranking)

 

[SOULPEDL]

This is what you, and practically everyone else, has missed. I do NOT want a "self-driving" car which is as crappily incompetent as the average American driver!!!! And neither does anyone else. There are stupid, incompetent, dangerous things which *the majority* of American drivers do. How are we going to train the car to not do that?

My limited understanding of AI and Python is that you need to tell the computer what is a pass or fail which is called Supervised Learning. I think you're describing Unsupervised Learning which would result in the average Joe schmoe out there. I believe you just need to throw out the bad behaviors, and maybe there's an algorithm for that even... when the car wrecks

 

[UnknownSoldier]

analyst upgrades are what's gonna move the price now.

Tesla executed better than anyone could've imagined, now we wait.

I'm curious how the media will attempt to spin it as negative tomorrow too. They constructed such a perfect anti-Tesla narrative and it blew up in their faces today.

 

[EngRyan]

I forget when we were expecting Model Y exactly but it has been internally approved for production prototype (forget his actual words) and we are still 5 months out from March Model Y unveiling. Elon also said we won't be seeing VOLUME production until 2020 which I found curious instead of just saying production. I wonder with his new found 'give reasonable estimates' and speak carefully if we are going to see the Y a bit sooner than we think. With GF1 producing it and if he's expecting a ramp somewhat like the 3 maybe we start to see the production trickle start in 19H2. That would be cool.

 

[Mkorpal]

I'm curious how the press will attempt to spin it as negative tomorrow too.

I half expect them to quote something about the next big Bay Area quake being overdue. Sell sell, the factory is going to be destroyed.

 

[Ulmo]

AH falling To what is a stellar CC.

Yes, as with every TSLA CC AH.

 

[tivoboy]

He said that worldwide BMW M3 sales are about 500,000.
Then he said he could make 500,000 Tesla M3s (to take all of those sales).

No way bmw m3 sales worldwide are 500k. Maybe 3 series. Not M3

 

[MarcusMaximus]

Hmm looks to me like putting in the “very minimal capex” to get to 7k/wk, at 20% margins assuming a (very conservative) $50k ASP nets an additional $240 million per quarter.

 

[RobStark]

Per year, clearly.

And we know CUVs have grown in popularity, so probably 2-3x for Model Y.

And at least in the US, pickup demand is likely to be obscene.

 

[BioSehnsucht]

Not that I know of, but Tesla is alluding that FSD (full autonomous) is going to somehow be able to compete with other ride share services and I don't see that for 3+ years at least. Now, it COULD be they are planning to disinter-mediate UBER ride coordination, letting tesla OWNERS be DRIVERS and take less than the 25% spiff that Uber takes. that could occur I think, use your Tesla (with lower operating costs) to do ride share service, but if they haven't built that technology YET, I see that as 12-18 months out. It would be pretty cool though, for those tesla owners that have extra time on their hands.

I am thinking it's more that Tesla expects FSD to be competitive with whatever general purpose autonomous solutions Uber and Lyft want to field (via assumed clear superiority once FSD is ready), and on a longer timeline to be able to offer FSD autonomy vs human driver Uber/Lyft as well, though that will have some additional issues (such as dealing with drunk and disorderly passengers, cleanup, etc) beyond just the driving aspect. It seems probably they also go the route of letting Tesla owners participate in a ride hailing service like Uber/Lyft human vs human, and just take a smaller cut and/or some other benefit (perhaps free SC for every kWh spent in the Network).

I will admit I've always found the obsession (not just regarding Tesla) with autonomous taxis, and a future with a huge drop off in personal vehicle ownership, to be a bit cart-before-the-horse. "Blank-as-a-Service" is already out of control in the IT world, I'm really skeptical of it regarding physical things.

Not that I'm any kind of analyst, but if I was, I'd keep valuing the value of the Tesla Network at zero until it actually exists, because it's not just about self driving, but all the other issues that go with unattended people using you car and that some percentage of humans are terrible.

I'd value FSD as some kind of potential future thing, that I'm reasonably sure comes eventually, but not as an enabler for Tesla Network but to allow people to go on road trips while reading / watching movies / sleeping (hopefully), or having your car park itself and return to pick you up at the office/mall/etc (probably), etc - that has a value to the owners of the vehicles.

On the other hand, the oft ignored (outside of TMC) TE side of the business is clearly a huge thing just waiting to take off when given the chance.

But a lot of these uber-bull theses seem predicated on this future where "Millenials" never buy cars and just take ride hailing service everywhere, and thus see Tesla Network as some kind of golden goose. While I can see ownership decreasing among younger people become a trend, as you grow older and start a family you're going to want your own car. So I don't think the Tesla Network is going to be that big of a factor in the long run, compared to actual products (vehicles, TE, etc). It'll be some nice gravy on the side, but it's not the steak or the potatoes.

 

[Thekiwi]

So my ears perked up quite a bit when Elon mentioned postive free cashflow going forward, then said except where a major debt payment is due, like in Q1. But then went on to say somethign to the effect of: But even in Q1 we should still approach positive cashflow even with that large payment.

Basically implying Q1 cashflow will probably be higher than the almost $1 Billion payment due in Q1.

 

[sundaymorning]

Gene Munster: it’s not a rabbit out of a hat, they’ve said they were going to do this. Love it.

Gene Munster: If Tesla CEO Elon Musk didn't 'mess it up,' the stock would be over $400

 

[RobStark]

Only if there are no other customers waiting for higher priced versions.

I.e. the $35k car should be made from excess capacity, not from oversubscribed capacity.

If so then there is a fair chance it is never made.

Accusations of bait'n switch.

How about 5% of production dedicated to $35k M3 when it achieves 15% GM?

 

[Ulmo]

Frankly, I can't even see that as possible. The VOLUME of vehicles is soon going to be Model 3, all under warranty so there is basically no service revenue. They have a lot of legacy S and X in the market, but it will soon be DWARFED by the Model 3 in the marketplace, USA at least. So, how do they see Service revenue going up significantly? I mean, are they expecting to launch a model 3 service contract, that will add 500-900$ per car in revenue, for maybe 40% of buyers and with less than that amount in spend?

I don't know; I'm not Tesla. But I'm guessing:

1. Improved service efficiency. They are doing a bunch of things to change how service works right now. For instance: mobile service, new service centers, time for parts to service center, new body shop service, and improvements on car designs, as well as experience and other things they haven't told us.
2. There are a huge number of older Teslas on the roads today, and they're about to leave warranty coverage in massive droves. There's whole sectors of car buyers who either keep cars well past warranty or sell them to other buyers who like having highly depreciated cars and repairing them as needed when they can, some portion of which will not squeeze service costs as much as others. Whenever I look at Teslas on the roads such as during my commute or at SuperChargers, a huge portion are pre-refresh Model S's, post-refresh Model S & X, and Model 3. That means there will be a continuous introduction of non-warranty cars starting to come out in a massive way soon. We've barely started to get a hint of that so far, and it's been highly muted, but it's coming. There's already lots of initial examples on TMC and elsewhere.